Federal Register / Vol. 79, No. 218 / Wednesday, November 12, 2014 / Rules and Regulations 67079 

DELEGATION STATUS FOR PART 63 STANDARDS—STATE OF ARKANSAS 1—Continued 

Subpart Source category ADEQ 2

YYYYY .............. Electric Arc Furnace Steelmaking Area Sources ................................................................................................. X 

ZZZZZ ............... Iron and Steel Foundries Area Sources ............................................................................................................... ........................

AAAAAA ........... (Reserved) ............................................................................................................................................................ ........................

BBBBBB ........... Gasoline Distribution Bulk Terminals, Bulk Plants, and Pipeline Facilities .......................................................... ........................

CCCCCC .......... Gasoline Dispensing Facilities .............................................................................................................................. ........................

DDDDDD .......... Polyvinyl Chloride and Copolymers Production Area Sources ............................................................................ ........................

EEEEEE ........... Primary Copper Smelting Area Sources .............................................................................................................. X 

FFFFFF ............ Secondary Copper Smelting Area Sources ......................................................................................................... X 

GGGGGG ......... Primary Nonferrous Metals Area Sources: Zinc, Cadmium, and Beryllium ......................................................... X 

HHHHHH .......... Paint Stripping and Miscellaneous Surface Coating Operations at Area Sources .............................................. ........................

IIIIII .................... (Reserved) ............................................................................................................................................................ ........................

JJJJJJ ............... Industrial, Commercial, and Institutional Boilers: Area Sources .......................................................................... ........................

KKKKKK ........... (Reserved) ............................................................................................................................................................ ........................

LLLLLL .............. Acrylic and Modacrylic Fibers Production Area Sources ..................................................................................... ........................

MMMMMM ........ Carbon Black Production Area Sources ............................................................................................................... X 

NNNNNN .......... Chemical Manufacturing Area Sources: Chromium Compounds ........................................................................ X 

OOOOOO ......... Flexible Polyurethane Foam Production and Fabrication Area Sources ............................................................. ........................

PPPPPP ........... Lead Acid Battery Manufacturing Area Sources .................................................................................................. ........................

QQQQQQ ......... Wood Preserving Area Sources ........................................................................................................................... ........................

RRRRRR .......... Clay Ceramics Manufacturing Area Sources ....................................................................................................... ........................

SSSSSS ........... Glass Manufacturing Area Sources ..................................................................................................................... X 

TTTTTT ............ Secondary Nonferrous Metals Processing Area Sources .................................................................................... ........................

UUUUUU .......... (Reserved) ............................................................................................................................................................ ........................

VVVVVV ........... Chemical Manufacturing Area Sources ................................................................................................................ X 

WWWWWW ..... Plating and Polishing Operations Area Sources .................................................................................................. ........................

XXXXXX ........... Nine Metal Fabrication and Finishing Categories Area Sources ......................................................................... ........................

YYYYYY ........... Ferroalloys Production Facilities Area Sources ................................................................................................... ........................

ZZZZZZ ............ Aluminum, Copper, and Other Nonferrous Foundries Area Sources .................................................................. ........................

AAAAAAA ......... Asphalt Processing and Asphalt Roofing Manufacturing Area Sources .............................................................. ........................

BBBBBBB ......... Chemical Preparations Industry Area Sources .................................................................................................... ........................

CCCCCCC ....... Paints and Allied Products Manufacturing Area Sources .................................................................................... ........................

DDDDDDD ....... Prepared Feeds Manufacturing Area Sources ..................................................................................................... ........................

EEEEEEE ......... Gold Mine Ore Processing and Production Area Sources .................................................................................. ........................

FFFFFFF .......... Reserved .............................................................................................................................................................. ........................

GGGGGGG ...... Reserved .............................................................................................................................................................. ........................

HHHHHHH ....... Polyvinyl Chloride and Copolymers Production ................................................................................................... X 

1Program delegated to Arkansas Department of Environmental Quality (ADEQ). 

2Authorities which may not be delegated include: § 63.6(g), Approval of Alternative Non-Opacity Emission Standards; § 63.6(h)(9), Approval of 

Alternative Opacity Standards; § 63.7(e)(2)(ii) and (f), Approval of Major Alternatives to Test Methods; § 63.8(f), Approval of Major Alternatives to 

Monitoring; § 63.10(f), Approval of Major Alternatives to Recordkeeping and Reporting; and all authorities identified in the subparts (e.g., under 

‘‘Delegation of Authority’’) that cannot be delegated. 3This subpart was vacated and remanded to EPA by the United States Court of Appeals for the District of Columbia Circuit. See, Mossville 

Environmental Action Network v. EPA, 370 F. 3d 1232 (D.C. Cir. 2004). Because of the DC Court’s holding, this subpart is not delegated to 

ADEQ at this time 4This subpart was issued a partial vacatur on October 29, 2007 (72 FR 61060) by the United States Court of Appeals for the District of Columbia Circuit. 5Final rule. See 78 FR 7138 (January 31, 2013). 

6This subpart was vacated and remanded to EPA by the United States Court of Appeals for the District of Columbia Circuit. See, Sierra Club 

v. EPA, 479 F. 3d 875 (D.C. Cir. 2007). Because of the DC Court’s holding, this subpart is not delegated to ADEQ at this time. 7 Initial Final Rule. See 77 FR 9304 (February 16, 2012). Final on reconsideration of certain new source issues. See 78 FR 24073 (April 24, 

2013). Portions of this subpart are in proposed reconsideration pending final action. See 78 FR 38001 (June 25, 2013). 

(ii) [Reserved] 

* * * * * 

[FR Doc. 2014–25948 Filed 11–10–14; 8:45 am] 

BILLING CODE 6560–50–P 

NATIONAL FOUNDATION FOR THE 

ARTS AND HUMANITIES 

National Endowment for the Arts 

45 CFR Part 1149 

RIN 3135–AA28 

Implementing the Program Fraud Civil 

Remedies Act 

AGENCY: National Endowment for the 

Arts. 

ACTION: Final rule. 

SUMMARY: The National Endowment for 

the Arts (NEA) implements the Program 

Fraud Civil Remedies Act of 1986 

(PFCRA). Any person who makes, 

submits, or presents a false, fictitious, or 

fraudulent claim or written statement to 

the agency causing such fraudulent 

actions to occur is subject to civil 

penalties and assessments. The 

regulations authorizes the NEA to 

impose civil penalties and assessments 

through administrative adjudication. 

The regulations also establish the 

procedures the NEA will follow in 

implementing the provisions of the 

PFCRA and specifies the hearing and 

appeal rights of persons subject to 

penalties and assessments under the 

PFCRA. 

DATES: Effective December 12, 2014. 


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ADDRESSES: You may submit requests to 

examine any material available for 

public inspection or any inquiries 

regarding this final rule by any of the 

following methods: 

1. Email: generalcounsel@arts.gov. 

Include RIN 3135–AA28 in the subject 

line of the message. 

2. Fax: (202) 682–5572. 

3. Mail: Office of the General Counsel, 

National Endowment for the Arts, 400 

7th Street SW., Washington, DC 20506. 

4. Hand Delivery/Courier: Office of 

the General Counsel, National 

Endowment for the Arts, 400 7th Street 

SW., Washington, DC 20506. 

FOR FURTHER INFORMATION CONTACT: 

Aswathi Zachariah, Office of the 

General Counsel, National Endowment 

for the Arts, 400 7th Street SW., 

Washington, DC 20506, Telephone: 

202–682–5418. 

SUPPLEMENTARY INFORMATION: 

Background 

In October 1986, Congress enacted the 

PFCRA, Public Law 99–509 (codified at 

31 U.S.C. sec. 3801–3812). The PFCRA 

established an administrative remedy 

against any person who makes a false 

claim or written statement to any of 

certain Federal agencies and against any 

person causing such fraudulent actions. 

In brief, it requires the affected Federal 

agencies to follow certain procedures in 

recovering penalties and assessments 

against people who file false claims or 

statements for which the liability is 

$150,000 or less. Initially, the PFCRA 

did not apply to the NEA. However, 

pursuant to section 10 of the Inspector 

General Reform Act of 2008 (Pub. L. 

110–409), the scope of PFCRA’s 

coverage has been expanded to include 

NEA. 

The PFCRA requires each affected 

agency to promulgate rules and 

regulations necessary to implement its 

provisions. Following the PFCRA’s 

enactment, at the request of the 

President’s Council on Integrity and 

Efficiency (PCIE), an interagency task 

force was established under the 

leadership of the Department of Health 

and Human Services to develop model 

regulations for implementation of the 

PFCRA by all affected agencies. This 

action was in keeping with the stated 

desire of the Senate Governmental 

Affairs Committee that ‘‘the regulations 

would be substantially similar 

throughout the government.’’ (S. Rep. 

No. 99–212, 99th Cong., 1st Sess. 12 

(1985)). The PCIE recommended 

adoption of the model rules by all 

affected agencies. Anyone desiring 

further explanation of the PCIE’s model 

regulations should see the more detailed 

discussion of the model rules found in 

the promulgations of several of the 

agencies that adopted them earlier, 

including those of the Departments of 

Justice (53 FR 4034; February 11, 1988 

and 53 FR 11645; April 8, 1988); Health 

and Human Services (52 FR 27423; July 

21, 1987 and 53 FR 11656, April 8, 

1988); and Transportation (52 FR 36968; 

October 2, 1987 and 53 FR 880, January 

14, 1988). 

Statutory and Regulatory Analysis 

Under the PFCRA, false claims and 

statements subject to its provisions are 

to be investigated by an agency’s 

investigating official. The results of the 

investigation are then reviewed by an 

agency reviewing official who 

determines whether there is adequate 

evidence to believe that you are liable 

under the PFCRA. Upon an affirmative 

finding of adequate evidence, the 

reviewing official sends to the U.S. 

Attorney General a written notice of the 

official’s intent to refer the matter to a 

presiding officer for an administrative 

hearing. The agency may institute 

administrative proceedings against you 

only if the Attorney General, or his/her 

designee, approves. Any penalty or 

assessment imposed under the PFCRA 

may be collected by the Attorney 

General through the filing of a civil 

action, or by offsetting amounts, other 

than tax refunds, you owe the Federal 

government. 

The regulations designate the NEA’s 

Inspector General or his or her designee 

as the agency’s investigating official and 

the General Counsel or his or her 

designee as the agency’s reviewing 

official. Any administrative 

adjudication under the PFCRA will be 

presided over by an Administrative Law 

Judge (ALJ) and any appeals from the 

ALJ’s decision will be decided by the 

Chairman of the NEA or his/her 

designee. 

E-Government Act of 2002 (44 U.S.C. 

Sec. 3504) 

Section 206 of the E-Government Act 

requires agencies, to the extent 

practicable, to ensure that all 

information about that agency required 

to be published in the Federal Register 

is also published on a publicly 

accessible Web site. All information 

about the NEA required to be published 

in the Federal Register may be accessed 

at http://www.regulations.gov. 

Finally, the E-Government Act 

requires, to the extent practicable, that 

agencies ensure that a publicly 

accessible Federal Government Web site 

contains electronic dockets for 

rulemakings under the Administrative 

Procedure Act of 1946 (5 U.S.C. sec. 551 

et seq.). Under this Act, an electronic 

docket consists of all submissions under 

section 553(c) of title 5, United States 

Code; and all other materials that by 

agency rule or practice are included in 

the rulemaking docket under section 

553(c) of title 5, United States Code, 

whether or not submitted electronically. 

The Web site http://

www.regulations.gov contains electronic 

dockets for the NEA’s rulemakings 

under the Administrative Procedure Act 

of 1946. 

Executive Order 12866 

Executive Order 12866 established a 

process for review of rules by the Office 

of Information and Regulatory Affairs, 

which is within the Office of 

Management and Budget. Only 

‘‘significant’’ proposed and final rules 

are subject to review under this 

Executive Order. ‘‘Significant,’’ as used 

in E.O. 12866, means ‘‘economically 

significant,’’ and refers to rules with an 

impact on the economy of $100 million 

or that (1) were inconsistent or 

interfered with an action taken or 

planned by another agency; (2) 

materially altered the budgetary impact 

of entitlements, grants, user fees, or loan 

programs; or (3) raised novel legal or 

policy issues. 

This rule is not a significant policy 

change and the Office of Management 

and Budget has not reviewed this rule 

under E.O. 12866. We have made the 

assessments required by E.O. 12866 and 

have determined that this departmental 

policy: (1) Will not have an effect of 

$100 million or more on the economy. 

It will not adversely affect in a material 

way the economy, productivity, 

competition, jobs, the environment, 

public health or safety, or State, local, 

or Tribal governments or communities. 

(2) Will not create a serious 

inconsistency or otherwise interfere 

with an action taken or planned by 

another agency. (3) Does not alter the 

budgetary effects of entitlements, grants, 

user fees, or loan programs or the rights 

or obligations of their recipients. (4) 

Does not raise novel legal or policy 

issues. 

Federalism (Executive Order 13132) 

This rule does not have Federalism 

implications, as set forth in E.O. 13132. 

As used in this order, Federalism 

implications mean ‘‘substantial direct 

effects on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government.’’ The NEA 

has determined that this rule will not 

have Federalism implications within the 

meaning of E.O. 13132. 


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Improving Regulations and Regulatory 

Review (Executive Order 13563) 

The NEA has written this rule in 

compliance with E.O. 13563 by ensuring 

its accessibility, consistency, simplicity 

of language, and overall 

comprehensibility. In addition, the 

public participation goals of this order 

are also satisfied by the NEA’s 

participation in a process in which its 

views and information are made public 

to the extent feasible, and before any 

decisions are actually made. This allows 

the public the opportunity to react to 

the comments, arguments, and 

information of others during the 

rulemaking process. The NEA initiated 

its participation in an open exchange by 

posting the regulation and its 

rulemaking docket on http://

www.regulations.gov. 

By modeling this rule on the PCIE’s 

model rules and PFCRA regulations 

promulgated by other agencies, the NEA 

advances E.O. 13563’s goals of 

simplifying and harmonizing 

regulations and promoting 

predictability, certainty, and innovation. 

Paperwork Reduction Act of 1995 (44 

U.S.C., Chapter 35) 

This rule will not impose any 

‘‘information collection’’ requirements 

under the Paperwork Reduction Act. 

Under the act, information collection 

means the obtaining or disclosure of 

facts or opinions by or for an agency by 

10 or more nonfederal persons. 

Plain Writing Act of 2010 (5 U.S.C. Sec. 

301) 

Under this Act, the term ‘‘plain 

writing’’ means writing that is clear, 

concise, well-organized, and follows 

other best practices appropriate to the 

subject or field and intended audience. 

To ensure that this rule has been written 

in plain and clear language so that it can 

be used and understood by the public, 

the NEA has modeled the language of 

this rule on the Federal Plain Language 

Guidelines. 

Regulatory Flexibility Act of 1980 (5 

U.S.C. Sec. 605(b)) 

This rule will not have a significant 

adverse impact on a substantial number 

of small entities, including small 

businesses, small governmental 

jurisdictions, or certain small not-forprofit organizations. 

Unfunded Mandates Act of 1995 

(Section 202, Pub. L. 104–4) 

This rule does not contain a Federal 

mandate that will result in the 

expenditure by State, local, and tribal 

governments, in the aggregate, or by the 

private sector of $100 million or more 

in any one year. 

List of Subjects in 45 CFR Part 1149 

Administrative practice and 

procedure, Claims, Fraud, 

Investigations, Organization and 

function (government agencies), 

Penalties. 

For the reasons stated in the 

preamble, the National Endowment for 

the Arts adds a new part 1149 to 

Chapter XI of Title 45 of the Code of 

Federal Regulations to read as follows: 

PART 1149—PROGRAM FRAUD CIVIL 

REMEDIES ACT REGULATIONS 

Subpart A—Purpose and Definitions 

Sec. 

1149.1 Purpose. 

1149.2 Definitions. 

Subpart B—Claims and Statements 

1149.3 What is a claim? 

1149.4 When is a claim made? 

1149.5 What is a false claim? 

1149.6 What is a statement? 

1149.7 What is a false statement? 

Subpart C—Basis for Liability 

1149.8 What kind of conduct results in 

program fraud enforcement? 

1149.9 What civil penalties and 

assessments may I be subjected to? 

Subpart D—Procedures Leading to the 

Issuance of a Complaint 

1149.10 How is program fraud investigated? 

1149.11 May the investigating official issue 

a subpoena? 

1149.12 What happens if program fraud is 

suspected? 

1149.13 When may NEA issue a complaint? 

1149.14 What is contained in a complaint? 

1149.15 How will the complaint be served? 

1149.16 What constitutes proof of service? 

Subpart E—Procedures Following Service 

of a Complaint 

1149.17 How do you respond to the 

complaint? 

1149.18 May I file a general answer? 

1149.19 What happens once an answer is 

filed? 

1149.20 What must the notice of hearing 

include? 

1149.21 When must the ALJ serve the 

notice of oral hearing? 

1149.22 What happens if you fail to file an 

answer? 

1149.23 May I file a motion to reopen my 

case? 

1149.24 What happens if my motion to 

reopen is denied? 

1149.25 When, if ever, will time be tolled? 

Subpart F—Hearing Procedures 

1149.26 What kind of hearing is 

contemplated? 

1149.27 What is the role of the ALJ? 

1149.28 What does the ALJ have the 

authority to do? 

1149.29 What rights do you have at the 

hearing? 

1149.30 How are the functions of the ALJ 

separated from those of the investigating 

official and the reviewing official? 

1149.31 Can the reviewing official or the 

ALJ be disqualified? 

1149.32 Do you have a right to review 

documents? 

1149.33 What type of discovery is 

authorized and how is it conducted? 

1149.34 How are motions for discovery 

handled? 

1149.35 When may an ALJ grant a motion 

for discovery? 

1149.36 How are depositions handled? 

1149.37 Are witness lists and exhibits 

exchanged before the hearing? 

1149.38 Can witnesses be subpoenaed? 

1149.39 Who pays the costs for a subpoena? 

1149.40 When may I file a motion to quash 

a subpoena? 

1149.41 Are protective orders available? 

1149.42 What does a protective order 

protect? 

1149.43 How are documents filed and 

served with the ALJ? 

1149.44 What must documents filed with 

the ALJ include? 

1149.45 How is time computed? 

1149.46 Where is the hearing held? 

1149.47 How will the hearing be 

conducted? 

1149.48 Who has the burden of proof? 

1149.49 How is evidence presented at the 

hearing? 

1149.50 How is witness testimony 

presented? 

1149.51 How can I exclude a witness? 

1149.52 Will the hearing proceedings be 

recorded? 

1149.53 Are ex parte communications 

between a party and the ALJ permitted? 

1149.54 Are there sanctions for 

misconduct? 

1149.55 What happens if I fail to comply 

with an order? 

1149.56 Are post-hearing briefs required? 

Subpart G—Decisions and Appeals 

1149.57 How is the case decided? 

1149.58 When will the ALJ serve the initial 

decision? 

1149.59 How are penalty and assessment 

amounts determined? 

1149.60 What factors are considered in 

determining the amount of penalties and 

assessments to impose? 

1149.61 Can a party request reconsideration 

of the initial decision? 

1149.62 When does the initial decision of 

the ALJ become final? 

1149.63 What are the procedures for 

appealing the ALJ decision? 

1149.64 What happens if an initial decision 

is appealed? 

1149.65 Are there any limitations on the 

right to appeal to the authority head? 

1149.66 How does the authority head 

dispose of an appeal? 

1149.67 Who represents the NEA on an 

appeal? 

1149.68 What judicial review is available? 

1149.69 Can the administrative complaint 

be settled voluntarily? 

1149.70 How are civil penalties and 

assessments collected? 

1149.71 Is there a right to administrative 

offset? 


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1149.72 What happens to collections? 

1149.73 What if the investigation indicates 

criminal misconduct? 

1149.74 How does the NEA protect your 

rights? 

Authority: 31 U.S.C. 3801–3812; 5 U.S.C. 

App. 8G(a)(2). 

Subpart A—Purpose and Definitions 

§ 1149.1 Purpose. 

This part implements the Program 

Fraud Civil Remedies Act of 1986, 31 

U.S.C. 3801–3812 (PFCRA). The PFCRA 

provides the NEA, and other Federal 

agencies, with an administrative remedy 

to impose civil penalties and 

assessments against you if you make or 

cause to be made false, fictitious, or 

fraudulent claims or written statements 

to the NEA. The PFCRA also provides 

due process protections to you if you are 

subject to administrative proceedings 

under this part. 

§ 1149.2 Definitions. 

For the purposes of this part— 

Authority means the National 

Endowment for the Arts. 

Authority Head means the 

Chairperson/head of the National 

Endowment for the Arts or the 

Chairperson/authority head/s designee. 

Benefit means anything of value, 

including but not limited to, any 

advantage, preference, privilege, license, 

permit, favorable decision, ruling, 

status, or loan guarantee. 

Defendant means any person alleged 

in a complaint to be liable for a civil 

penalty or assessment pursuant to the 

PFCRA. 

Government means the United States 

Government. 

Group of related claims submitted at 

the same time means only those claims 

arising from the same transaction (such 

as a grant, loan, application, or contract) 

which are submitted together as part of 

a single request, demand, or submission. 

Initial decision means the written 

decision of the Administrative Law 

Judge (ALJ), and includes a revised 

initial decision issued following a 

remand or a motion for reconsideration. 

Investigating official means: 

(1) The NEA Inspector General; or 

(2) A designee of the NEA Inspector 

General. 

Knows or has reason to know means 

that a person: 

(1) Has actual knowledge that the 

claim or statement is false, fictitious, or 

fraudulent; or 

(2) Acts in deliberate ignorance of the 

truth or falsity of the claim or statement; 

or 

(3) Acts in reckless disregard of the 

truth or falsity of the claim or statement. 

Makes, whenever it appears, must 

include the terms presents, submits, and 

causes to be made, presented, or 

submitted. As the context requires, 

making or made must likewise include 

the corresponding forms of such terms. 

Person means any individual, 

partnership, corporation, association, or 

private organization, and includes the 

plural of that term. 

Representative means an attorney 

who is in good standing of the bar of 

any State, Territory, or possession of the 

United States, or of the District of 

Columbia, or the Commonwealth of 

Puerto Rico, or any other individual 

designated in writing by you. 

Reviewing official means the General 

Counsel of the NEA or the General 

Counsel’s designee. 

Subpart B—Claims and Statements 

§ 1149.3 What is a claim? 

(a) Claim means any request, demand, 

or submission: 

(1) Made to the NEA for property, 

services, or money (including money 

representing grants, loans, insurance or 

benefits); 

(2) Made to a recipient of property or 

services from the NEA, or to a party to 

a contract with the NEA for property or 

services if the United States: 

(i) Provided such property or services; 

(ii) Provided any portion of the funds 

for the purchase of such property or 

services; or 

(iii) Will reimburse such recipient or 

party for the purchase of such property 

or services; 

(3) Made to the NEA for the payment 

of money (including money 

representing grants, loans, insurance, or 

benefits) if the United States: 

(i) Provided any portion of the money 

requested or demanded; or 

(ii) Will reimburse such recipient or 

party for any portion of the money paid 

on such request or demand; or 

(4) Made to the NEA which has the 

effect of decreasing an obligation to pay 

or account for property, services, or 

money. 

(b) A claim can relate to grants, loans, 

insurance, or other benefits, and 

includes the NEA guaranteed loans 

made by participating lenders. 

(c) Each voucher, invoice, claim form, 

or individual request or demand for 

property, services, or money constitutes 

a separate claim. 

§ 1149.4 When is a claim made? 

A claim is made to the NEA, when 

such claim is actually made to: 

(a) An agent, fiscal intermediary, or 

other person or entity, including any 

State or political subdivision of a State, 

acting for or on behalf of the NEA; or 

(b) A recipient of property, services, 

or money from the Government, or the 

party to a contract with the NEA. 

§ 1149.5 What is a false claim? 

(a) A claim submitted to the NEA is 

‘‘false’’ if it: 

(1) Is false, fictitious or fraudulent; 

(2) Includes or is supported by a 

written statement which asserts or 

contains a material fact which is false, 

fictitious, or fraudulent; 

(3) Includes or is supported by a 

written statement which is false, 

fictitious or fraudulent because it omits 

a material fact that you have a duty to 

include in the statement; or 

(4) Is for payment for the provision of 

property or services which you have not 

provided as claimed. 

(b) [Reserved] 

§ 1149.6 What is a statement? 

(a) A statement means any written 

representation, certification, affirmation, 

document, record, or accounting or 

bookkeeping entry made with respect to 

a claim (including relating to eligibility 

to make a claim) or to obtain the 

approval or payment of a claim 

(including relating to eligibility to make 

a claim); or with respect to (including 

relating to eligibility for) a contract, bid 

or proposal for a contract with the NEA, 

or a grant, loan or other benefit from the 

NEA, including applications and 

proposals for such grants, loans, or other 

benefits, if the United States 

Government provides any portion of the 

money or property under such contract 

or for such grant, loan or benefit, or if 

the Government will reimburse any 

party for any portion of the money or 

property under such contract or for such 

grant, loan, or benefit. 

(b) A statement is made, presented, or 

submitted to the NEA when such 

statement is actually made to an agent, 

fiscal intermediary, or other person or 

entity acting for or on behalf of the NEA, 

including any State or political 

subdivision of a State, acting for or on 

behalf of the NEA; or the recipient of 

property, services, or money from the 

Government; or the party to a contract 

with the NEA. 

§ 1149.7 What is a false statement? 

(a) A statement submitted to the NEA 

is a false statement if you make the 

statement, or cause the statement to be 

made, while knowing or having reason 

to know that the statement: 

(1) Asserts a material fact that is false, 

fictitious, or fraudulent; or 

(2) Is false, fictitious, or fraudulent 

because it omits a material fact that you 

have a duty to include in the statement 

and contains or is accompanied by an 


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express certification or affirmation of 

the truthfulness and accuracy of the 

contents of the statement. 

(b) Each written representation, 

certification, or affirmation constitutes a 

separate statement. 

Subpart C—Basis for Liability 

§ 1149.8 What kind of conduct results in 

program fraud enforcement? 

If you make false claims or false 

statements, you may be subject to civil 

penalties and assessments under the 

PFCRA. 

§ 1149.9 What civil penalties and 

assessments may I be subjected to? 

(a) In addition to any other penalties 

that may be prescribed by law, the 

PFCRA may subject you to the 

following: 

(1) A civil penalty of not more than 

$5,000 for each false, fictitious or 

fraudulent statement or claim; and 

(2) If the NEA has made any payment, 

transferred property, or provided 

services in reliance on a false claim, you 

are also subject to an assessment of not 

more than twice the amount of the false 

claim. This assessment is in lieu of 

damages sustained by the NEA because 

of the false claim. 

(b) Each false, fictitious, or fraudulent 

claim for property, services, or money is 

subject to a civil penalty regardless of 

whether such property, services, or 

money is actually delivered or paid. 

(c) No proof of specific intent to 

defraud is required to establish liability 

under this section for either false claims 

or false statements. 

(e) In any case in which it is 

determined that more than one person 

is liable for making a false, fictitious, or 

fraudulent claim or statement under this 

section, each such person may be held 

liable for a civil penalty and assessment 

under this section. 

(f) In any case in which it is 

determined that more than one person 

is liable for making a claim under this 

section on which the Government has 

made payment (including transferred 

property or provided services), an 

assessment may be imposed against any 

such person or jointly and severally 

against any combination of persons. 

Subpart D—Procedures Leading to the 

Issuance of a Complaint 

§ 1149.10 How is program fraud 

investigated? 

The Inspector General, or his/her 

designee, is the investigating official 

responsible for investigating allegations 

that you have made a false claim or 

statement. 

§ 1149.11 May the investigating official 

issue a subpoena? 

(a) Yes. The Inspector General has 

authority to issue administrative 

subpoenas for the production of records 

and documents. If an investigating 

official concludes that a subpoena is 

warranted, he/she may issue a 

subpoena. 

(1) The issued subpoena must notify 

you of the authority under which it is 

issued and must identify the records or 

documents sought; 

(2) The investigating official may 

designate a person to act on his or her 

behalf to receive the documents sought; 

and 

(3) You are required to tender to the 

investigating official, or the person 

designated to receive the documents, a 

certification that: 

(i) The documents sought have been 

produced; 

(ii) Such documents are not available 

and the reasons therefore; or 

(iii) Such documents, suitably 

identified, have been withheld based 

upon the assertion of an identified 

privilege. 

(b) Nothing in this section precludes 

or limits an investigating official’s 

discretion to refer allegations within the 

Department of Justice for suit under the 

False Claims Act or other civil relief, or 

to defer or postpone a report or referral 

to the reviewing official to avoid 

interference with a criminal 

investigation or prosecution. 

(c) Nothing in this section modifies 

any responsibility of an investigating 

official to report violations of criminal 

law to the appropriate component of the 

Department of Justice. 

§ 1149.12 What happens if program fraud 

is suspected? 

(a) If the investigating official 

concludes that an action under this part 

is warranted, the investigating official 

submits a report containing the findings 

and conclusions of the investigation to 

the reviewing official. 

(b) If the reviewing official determines 

that the report provides adequate 

evidence that you have made a false, 

fictitious or fraudulent claim or 

statement, the reviewing official shall 

transmit to the Attorney General written 

notice of an intention to refer the matter 

for adjudication, with a request for 

approval of such referral. This notice 

will include the reviewing official’s 

statements concerning: 

(1) The reasons for the referral; 

(2) The claims or statements upon 

which liability would be based; 

(3) The evidence that supports 

liability; 

(4) An estimate of the amount of 

money or the value of property, 

services, or other benefits requested or 

demanded in the false claim or 

statement; 

(5) Any exculpatory or mitigating 

circumstances that may relate to the 

claims or statements known by the 

reviewing official or the investigating 

official; and 

(6) A statement that there is a 

reasonable prospect of collecting an 

appropriate amount of penalties and 

assessments. 

(c) If, at any time, the Attorney 

General or his or her designee requests 

in writing that this administrative 

process be stayed, the authority head 

must stay the process immediately. The 

authority head may order the process 

resumed only upon receipt of the 

written authorization of the Attorney 

General. 

§ 1149.13 When may the NEA issue a 

complaint? 

The NEA may issue a complaint: 

(a) If the Attorney General, or his/her 

designee, approves the referral of the 

allegations for adjudication in a written 

statement; and 

(b) In a case of submission of false 

claims, if the amount of money or the 

value of property or services demanded 

or requested in a false claim, or a group 

of related claims submitted at the same 

time, does not exceed $150,000. 

§ 1149.14 What is contained in a 

complaint? 

(a) A complaint is a written statement 

giving you notice of the specific 

allegations being referred for 

adjudication and of your right to request 

a hearing regarding those allegations. 

(b) The reviewing official may join in 

a single complaint, false claims or 

statements that are unrelated, or that 

were not submitted simultaneously, so 

long as each claim made does not 

exceed the amount provided in 31 

U.S.C. 3803(c). 

(c) The complaint must state that the 

NEA seeks to impose civil penalties, 

assessments, or both, against you and 

will include: 

(1) The allegations of liability against 

you, including the statutory basis for 

liability, identification of the claims or 

statements involved, and the reasons 

liability allegedly arises from such 

claims or statements; 

(2) The maximum amount of penalties 

and assessments for which you may be 

held liable; 

(3) A statement that you may request 

a hearing by filing an answer and may 

be represented by a representative; 

(4) Instructions for filing such an 

answer; and 

(5) A warning that failure to file an 

answer within 30 days of service of the 


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complaint will result in imposition of 

the maximum amount of penalties and 

assessments. 

(d) The reviewing official must serve 

you with any complaint and, if you 

request a hearing, provide a copy to the 

ALJ assigned to the case. 

§ 1149.15 How will the complaint be 

served? 

(a) The complaint must be served on 

you as an individual directly, on a 

partnership through a general partner, 

and on corporations or on 

unincorporated associations through an 

executive officer or a director. Service 

may also be made on any person 

authorized by appointment or by law to 

receive process for you or a legal entity. 

(b) The complaint may be served 

either by: 

(1) Registered or certified mail; or 

(2) Personal delivery by anyone 18 

years of age or older. 

(c) The date of service is the date of 

personal delivery or, in the case of 

service by registered or certified mail, 

the date of postmark. 

§ 1149.16 What constitutes proof of 

service? 

(a) Proof of service is established by 

the following: 

(1) When service is made by 

registered or certified mail, the return 

postal receipt will serve as proof of 

service. 

(2) When service is made by personal 

delivery, an affidavit of the individual 

serving the complaint, or written 

acknowledgment of your receipt or of 

receipt by a representative, will serve as 

proof of service. 

(b) When served with the complaint, 

the serving party must also serve you 

with a copy of this part and 31 U.S.C. 

3801–3812. 

Subpart E—Procedures Following 

Service of a Complaint 

§ 1149.17 How do you respond to the 

complaint? 

(a) You may respond to the complaint 

by filing an answer with the reviewing 

official within 30 days of service of the 

complaint. A timely answer will be 

considered a request for an oral hearing. 

(b) In the answer, you— 

(1) Must admit or deny each of the 

allegations of liability contained in the 

complaint (a failure to deny an 

allegation is considered an admission); 

(2) Must state any defense on which 

you intend to rely; 

(3) May state any reasons why you 

believe the penalties, assessments, or 

both should be less than the statutory 

maximum; and 

(4) Must state the name, address, and 

telephone number of the person 

authorized by you to act as your 

representative, if any. 

§ 1149.18 May I file a general answer? 

(a) If you are unable to file a timely 

answer which meets the requirements 

set forth in § 1149.17(b), you may file 

with the reviewing official a general 

answer denying liability, requesting a 

hearing, and requesting an extension of 

time in which to file a complete answer. 

A general answer must be filed within 

30 days of service of the complaint. 

(b) If you file a general answer 

requesting an extension of time, the 

reviewing official must promptly file 

with the ALJ the complaint, the general 

answer, and the request for an extension 

of time. 

(c) For good cause shown, the ALJ 

may grant you up to 30 additional days 

within which to file an answer meeting 

the requirements of paragraph (b) of this 

section. You must file the answer with 

the ALJ and serve a copy on the 

reviewing official. 

§ 1149.19 What happens once an answer 

is filed? 

(a) When the reviewing official 

receives an answer, he/she must 

simultaneously file the complaint, the 

answer, and a designation of the NEA’s 

representative with the ALJ. 

(b) When the ALJ receives the 

complaint and the answer, he/she will 

promptly serve a notice of hearing upon 

you and the NEA representative, in the 

same manner as the complaint. At the 

same time, the ALJ must send a copy of 

such notice to the reviewing official or 

his designee. 

§ 1149.20 What must the notice of hearing 

include? 

The notice must include: 

(a) The tentative time, place, and 

nature of the hearing; 

(b) The legal authority and 

jurisdiction under which the hearing is 

being held; 

(c) The matters of fact and law to be 

asserted; 

(d) A description of the procedures for 

the conduct of the hearing; 

(e) The name, address, and telephone 

number of your representative and the 

NEA’s representative; and 

(f) Such other matters as the ALJ 

deems appropriate. 

§ 1149.21 When must the ALJ serve the 

notice of oral hearing? 

Unless the parties agree otherwise, the 

ALJ must serve the notice of oral 

hearing within six years of the date on 

which the claim or statement is made. 

§ 1149.22 What happens if you fail to file 

an answer? 

(a) If you do not file any answer 

within 30 days after service of the 

complaint, the reviewing official may 

refer the complaint to the ALJ. 

(b) Once the complaint is referred, the 

ALJ will promptly serve on you a notice 

that he/she will issue an initial 

decision. 

(c) The ALJ will assume the facts 

alleged in the complaint are true. If such 

facts establish liability under the statute, 

the ALJ will issue an initial decision 

imposing the maximum amount of 

penalties and assessments allowed 

under the PFCRA. 

(d) Except as otherwise provided in 

this section, when you fail to file a 

timely answer, you waive any right to 

further review of the penalties and 

assessments imposed in the initial 

decision. This initial decision will 

become final and binding 30 days after 

it is issued. 

§ 1149.23 May I file a motion to reopen my 

case? 

(a) You may file a motion with the 

ALJ asking him/her to reopen the case 

at any time before an initial decision 

becomes final. The ALJ may only reopen 

a case if, in this motion, he/she 

determines that you set forth 

extraordinary circumstances that 

prevented you from filing a timely 

answer. The initial decision will be 

stayed until the ALJ makes a decision 

on your motion to reopen. The 

reviewing official may respond to the 

motion. 

(b) If the ALJ determines that you 

have demonstrated extraordinary 

circumstances excusing your failure to 

file a timely answer, the ALJ will 

withdraw the initial decision and grant 

you an opportunity to answer the 

complaint. 

(c) A decision by the ALJ to deny your 

motion to reopen a case is not subject 

to review or reconsideration. 

§ 1149.24 What happens if my motion to 

reopen is denied? 

(a) You may appeal the decision 

denying a motion to reopen to the 

authority head by filing a notice of 

appeal with the authority head within 

15 days after the ALJ denies the motion. 

The timely filing of a notice of appeal 

must stay the initial decision until the 

authority head decides the issue. 

(b) If you file a timely notice of appeal 

with the authority head, the ALJ must 

forward the record of the proceeding to 

the authority head. 

(c) The authority head must decide 

promptly, based solely on the record 

previously before the ALJ, whether 


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extraordinary circumstances excuse 

your failure to file a timely answer. 

(d) If the authority head decides that 

extraordinary circumstances excused 

your failure to file a timely answer, the 

authority head must remand the case to 

the ALJ with instructions to grant you 

an opportunity to answer. 

(e) If the authority head decides that 

your failure to file a timely answer is 

not excused, the authority head must 

reinstate the initial decision of the ALJ, 

which becomes final and binding upon 

the parties 30 days after the authority 

head issues such a decision. 

§ 1149.25 When, if ever, will time be 

tolled? 

Time will be tolled in the following 

instances: 

(a) If you are granted a 30 day 

extension to file your answer, the 30 

days will be tolled to the six year oral 

hearing limitation thereby providing the 

ALJ six years and 30 days to serve the 

notice of oral hearing as discussed in 

§ 1149.18(c); 

(b) If a notice of appeal is filed as 

discussed in § 1149.24(a); 

(c) If a motion is filed to disqualify a 

reviewing official or an ALJ disqualifies 

himself/herself as discussed in 

§ 1149.31(c); or 

(d) In any other instance in which 

time is suspended or delayed as a result 

of an appeal, request for 

reconsideration, untimely filing, or 

extensions. 

Subpart F—Hearing Procedures 

§ 1149.26 What kind of hearing is 

contemplated? 

The hearing is a formal proceeding 

conducted by the ALJ during which you 

will have the opportunity to dispute 

liability, present testimony, and crossexamine witnesses. 

§ 1149.27 What is the role of the ALJ? 

(a) An ALJ, who will be retained by 

the NEA, serves as the presiding officer 

at all hearings. ALJs are selected by the 

Office of Personnel Management. The 

ALJ is assigned to cases in rotation so 

far as practicable, and may not perform 

duties inconsistent with their duties and 

responsibilities as administrative law 

judges. 

(b) The ALJ must conduct a fair and 

impartial hearing, avoid delay, maintain 

order, and assure that a record of the 

proceeding is made. 

§ 1149.28 What does the ALJ have the 

authority to do? 

(a) The ALJ has the authority to— 

(1) Set and change the date, time, and 

place of the hearing upon reasonable 

notice to the parties; 

(2) Continue or recess the hearing, in 

whole or in part, for a reasonable period 

of time; 

(3) Hold conferences to identify or 

simplify the issues or to consider other 

matters that may aid in the expeditious 

disposition of the proceeding; 

(4) Administer oaths and affirmations; 

(5) Issue subpoenas requiring the 

attendance of witnesses and the 

production of documents at depositions 

or at hearings; 

(6) Rule on motions and other 

procedural matters; 

(7) Regulate the scope and timing of 

discovery; 

(8) Regulate the course of the hearing 

and the conduct of representatives and 

parties; 

(9) Examine witnesses; 

(10) Receive, rule on, exclude, or limit 

evidence; 

(11) Upon motion of a party, take 

official notice of facts; 

(12) Upon motion of a party, decide 

cases, in whole or in part, by summary 

judgment where there is no disputed 

issue of material fact; 

(13) Conduct any conference, 

argument or hearing on motions in 

person or by telephone; and 

(14) Exercise such other authority as 

is necessary to carry out the 

responsibilities of the ALJ under this 

part. 

(b) The ALJ does not have the 

authority to find Federal statutes or 

regulations invalid. 

§ 1149.29 What rights do you have at the 

hearing? 

Each party to the hearing has the right 

to: 

(a) Be represented by a representative; 

(b) Request a pre-hearing conference 

and participate in any conference held 

by the ALJ; 

(c) Conduct discovery; 

(d) Agree to stipulations of fact or law 

which will be made a part of the record; 

(e) Present evidence relevant to the 

issues at the hearing; 

(f) Present and cross-examine 

witnesses; 

(g) Present arguments at the hearing as 

permitted by the ALJ; and 

(h) Submit written briefs and 

proposed findings of fact and 

conclusions of law after the hearing, as 

permitted by the ALJ. 

§ 1149.30 How are the functions of the ALJ 

separated from those of the investigating 

official and the reviewing official? 

(a) The investigating official, the 

reviewing official, and any employee or 

agent of the authority who takes part in 

investigating, preparing, or presenting a 

particular case may not, in such case or 

a factually related case: 

(1) Participate in the hearing as the 

ALJ; 

(2) Participate or advise in the review 

of the initial decision by the authority 

head; or 

(3) Make the collection of penalties 

and assessment. 

(b) The ALJ must not be responsible 

to or subject to the supervision or 

direction of the investigating official or 

the reviewing official. 

§ 1149.31 Can the reviewing official or ALJ 

be disqualified? 

(a) A reviewing official or an ALJ may 

disqualify himself or herself at any time. 

(b) Upon motion of any party, the 

reviewing official or ALJ may be 

disqualified as follows: 

(1) The motion must be supported by 

an affidavit containing specific facts 

establishing that personal bias or other 

reason for disqualification exists, 

including the time and circumstances of 

the discovery of such facts; 

(2) The motion must be filed promptly 

after discovery of the grounds for 

disqualification or the objection will be 

deemed waived; and 

(3) The party, or representative of 

record, must certify in writing that the 

motion is made in good faith. 

(c) Once a motion has been filed to 

disqualify the reviewing official or the 

ALJ, the ALJ will halt the proceedings 

until resolving the matter of 

disqualification. If the ALJ determines 

that the reviewing official is 

disqualified, the ALJ will dismiss the 

complaint without prejudice. If the ALJ 

disqualifies himself/herself, the case 

will be promptly reassigned to another 

ALJ. However, if the ALJ denies a 

motion to disqualify, the matter will be 

determined by the authority head only 

during his/her review of the initial 

decision on appeal. 

§ 1149.32 Do you have a right to review 

documents? 

(a) Yes. Once the ALJ issues a hearing 

notice, and upon written request to the 

reviewing official, you may: 

(1) Review any relevant and material 

documents, transcripts, records, and 

other materials that relate to the 

allegations set out in the complaint and 

upon which the findings and 

conclusions of the investigating official 

are based, unless such documents are 

subject to a privilege under Federal law. 

Upon payment of fees for duplication, 

you may obtain copies of such 

documents; and 

(2) Obtain a copy of all exculpatory 

information in the possession of the 

reviewing official or investigating 

official relating to the allegations in the 

complaint. You may obtain exculpatory 


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information even if it is contained in a 

document that would otherwise be 

privileged. If the document would 

otherwise be privileged, only that 

portion containing exculpatory 

information must be disclosed. 

(b) The notice sent to the Attorney 

General from the reviewing official is 

not discoverable under any 

circumstances. 

(c) If the reviewing official does not 

respond to your request within 20 days, 

you may file a motion to compel 

disclosure of the documents with the 

ALJ subject to the provisions of this 

section. Such a motion may only be 

filed with the ALJ following the filing of 

an answer. 

§ 1149.33 What type of discovery is 

authorized and how is it conducted? 

(a) The following types of discovery 

are authorized: 

(1) Requests for production of 

documents for inspection and copying; 

(2) Requests for admissions of the 

authenticity of any relevant document 

or of the truth of any relevant fact; 

(3) Written interrogatories; and 

(4) Depositions. 

(b) For the purpose of this section, the 

term documents includes information, 

documents, reports, answers, records, 

accounts, papers, electronic data and 

other data and documentary evidence. 

Nothing contained herein must be 

interpreted to require the creation of a 

document. 

(c) Unless mutually agreed to by the 

parties, discovery is available only as 

ordered by the ALJ. The ALJ must 

regulate the timing of discovery. 

§ 1149.34 How are motions for discovery 

handled? 

Motions for discovery must be 

handled according to the following: 

(a) A party seeking discovery may file 

a motion with the ALJ. Such a motion 

must be accompanied by a copy of the 

requested discovery, or in the case of 

depositions, a summary of the scope of 

the proposed deposition. 

(b) Within 10 days of service, a party 

may file an opposition to the motion 

and/or a motion for protective order. 

§ 1149.35 When may an ALJ grant a 

motion for discovery? 

(a) The ALJ may grant a motion for 

discovery only if he/she finds that the 

discovery sought— 

(1) Is necessary for the expeditious, 

fair, and reasonable consideration of the 

issues; 

(2) Is not unduly costly or 

burdensome; 

(3) Will not unduly delay the 

proceeding; and 

(4) Does not seek privileged 

information. 

(b) The burden of showing that 

discovery should be allowed is on the 

party seeking discovery. 

(c) The ALJ may grant discovery 

subject to a protective order. 

§ 1149.36 How are depositions handled? 

(a) Depositions are to be handled in 

the following manner: 

(1) If a motion for deposition is 

granted, the ALJ must issue a subpoena 

for the deponent, which may require the 

deponent to produce documents. The 

subpoena must specify the time and 

place at which the deposition will be 

held. 

(2) The party seeking to depose must 

serve the subpoena in the manner 

prescribed by § 1149.12. 

(3) The deponent may file with the 

ALJ a motion to quash the subpoena or 

a motion for a protective order within 

10 days of service. 

(4) The party seeking to depose must 

provide for the taking of a verbatim 

transcript of the deposition, which it 

must make available to all other parties 

for inspection and copying. 

(b) Each party must bear its own costs 

of discovery. 

§ 1149.37 Are witness lists and exhibits 

exchanged before the hearing? 

(a) The parties must exchange witness 

lists and copies of proposed hearing 

exhibits at least 15 days before the 

hearing or at such other time as ordered 

by the ALJ. This includes copies of any 

written statements or transcripts of 

deposition testimony that each party 

intends to offer in lieu of live testimony. 

(b) If a party objects, the ALJ will not 

admit into evidence the testimony of 

any witness whose name does not 

appear on the witness list or any exhibit 

not provided to an opposing party in 

advance unless the ALJ finds good cause 

for the omission or concludes that there 

is no prejudice to the objecting party. 

(c) Documents exchanged in 

accordance with this section are deemed 

to be authentic for the purpose of 

admissibility at the hearing unless a 

party objects within the time set by the 

ALJ. 

§ 1149.38 Can witnesses be subpoenaed? 

(a) A party wishing to procure the 

appearance and testimony of any 

individual at the hearing may request 

that the ALJ issue a subpoena. 

(b) A subpoena requiring the 

attendance and testimony of an 

individual may also require the 

individual to produce documents at the 

hearing. 

(c) A party seeking a subpoena must 

file a written request not less than 15 

days before the date of the hearing 

unless otherwise allowed by the ALJ 

upon a showing of good cause. Such 

request must specify any documents to 

be produced, must designate the 

witnesses, and describe the address and 

location of the desired witness with 

sufficient particularity to permit such 

witnesses to be found. 

(d) The subpoena must specify the 

time and place at which the witness is 

to appear and any documents the 

witness is to produce. 

(e) The party seeking the subpoena 

must serve it in the manner prescribed 

in § 1149.11. A subpoena on a party or 

upon an individual under the control of 

a party may be served by first class mail. 

§ 1149.39 Who pays the costs for a 

subpoena? 

The party requesting a subpoena must 

pay the cost of the fees and mileage of 

any witness subpoenaed in the amounts 

that would be payable to a witness in a 

proceeding in United States District 

Court. A check for witness fees and 

mileage must accompany the subpoena 

when served, except that when a 

subpoena is issued on behalf of the 

NEA, a check for witness fees and 

mileage need not accompany the 

subpoena. 

§ 1149.40 When may I file a motion to 

quash a subpoena? 

A party, entity or the person to whom 

the subpoena is directed, may file with 

the ALJ a motion to quash the subpoena: 

(a) Within 10 days after service; or 

(b) On or before the time specified in 

the subpoena for compliance if it is less 

than 10 days after service. 

§ 1149.41 Are protective orders available? 

A party or prospective witness or 

deponent may file a motion for a 

protective order with respect to 

discovery sought by an opposing party 

or with respect to the hearing, seeking 

to limit the availability of an individual 

or disclosure of evidence. 

§ 1149.42 What does a protective order 

protect? 

In issuing a protective order, the ALJ 

may make any order which justice 

requires to protect a party or person 

from annoyance, embarrassment, 

oppression, or undue burden or 

expense, including one or more of the 

following: 

(a) That the discovery not be had; 

(b) That the discovery may be had 

only under specified terms and 

conditions, including a designation of 

the time or place; 

(c) That the discovery may be had 

only through a different method of 

discovery than requested; 


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(d) That certain matters are not 

inquired into, or that the scope of 

discovery is limited to certain matters; 

(e) That only those persons designated 

by the ALJ may be present during 

discovery; 

(f) That the contents of the discovery 

or evidence are sealed; 

(g) That a sealed deposition is opened 

only by order of the ALJ; 

(h) That a trade secret or other 

confidential research, development, 

commercial information, or facts 

pertaining to any criminal investigation, 

proceeding, or other administrative 

investigation not be disclosed or be 

disclosed only in a designated way; or 

(i) That the parties simultaneously file 

specified documents or information 

enclosed in sealed envelopes to be 

opened as directed by the ALJ. 

§ 1149.43 How are documents filed and 

served with the ALJ? 

(a) Documents are considered filed 

when they are mailed. The date of 

mailing may be established by a 

certificate from the party or his/her 

representative, or by proof that the 

document was sent by certified or 

registered mail. 

(b) A party filing a document with the 

ALJ must, at the time of filing, serve a 

copy of such document on every other 

party. When a party is represented by a 

representative, the party’s representative 

must be served in lieu of the party. 

(c) A certificate of the individual 

serving the document by personal 

delivery or mail and setting forth the 

manner of service will be proof of 

service. 

(d) Service upon any party of any 

document other than the complaint 

must be made by delivering a copy or 

by placing a copy in the United States 

mail, postage prepaid and addressed to 

the party’s last known address. 

(e) If a party consents in writing, 

documents may be sent electronically. 

In this instance, service is complete 

upon transmission unless the serving 

party receives electronic notification 

that transmission of the communication 

was not completed. 

§ 1149.44 What must documents filed with 

the ALJ include? 

(a) Documents filed with the ALJ must 

include: 

(1) An original; and 

(2) Two copies. 

(b) Every document filed in the 

proceeding must contain: 

(1) A title, for example, ‘‘motion to 

quash subpoena’’; 

(2) A caption setting forth the title of 

the action; and 

(3) The case number assigned by the 

ALJ. 

(c) Every document must be signed by 

the filer, or his/her representative, and 

contain the address or telephone 

number of that person. 

§ 1149.45 How is time computed? 

(a) In computing any period of time 

under this part or in an order issued 

under it, the time begins with the day 

following the act, event, or default, and 

includes the last day of the period, 

unless it is a Saturday, Sunday, or legal 

holiday observed by the Federal 

government, in which event it includes 

the next business day. 

(1) Time calculating example. If the 

ALJ denies your motion for an appeal on 

Wednesday, December 10th you have 15 

days to file the notice of appeal. Since 

the 15th day falls on Christmas, a legal 

holiday observed by the Federal 

government, the deadline will be the 

next business day, Friday, December 

26th. 

(2) [Reserved] 

(b) When the period of time allowed 

is less than seven days, intermediate 

Saturdays, Sundays, and legal holidays 

observed by the Federal government 

must be excluded from the computation. 

(c) Where a document has been served 

or issued by placing it in the mail, an 

additional five days will be added to the 

time permitted for any response. 

§ 1149.46 Where is the hearing held? 

The ALJ may hold the hearing: 

(a) In any judicial district of the 

United States: 

(b) In which you reside or transact 

business; or 

(c) In which the claim or statement on 

which liability is based was made to the 

NEA; or 

(d) In such other place as agreed upon 

by you and the ALJ. 

§ 1149.47 How will the hearing be 

conducted? 

(a) The ALJ conducts a hearing on the 

record in order: 

(1) To determine whether you are 

liable for a civil penalty, assessment, or 

both; and 

(2) If so, to determine the appropriate 

amount of the penalty and/or 

assessment, considering any aggravating 

or mitigating factors. 

(b) The hearing will be recorded and 

transcribed, and the transcript of 

testimony, exhibits admitted at the 

hearing, and all papers filed in the 

proceeding constitute the record for a 

decision by the ALJ. 

(c) The hearing will be open to the 

public unless otherwise ordered by the 

ALJ for good cause shown. 

§ 1149.48 Who has the burden of proof? 

(a) The NEA must prove your liability 

and any aggravating factors by a 

preponderance of the evidence. 

(b) You must prove any affirmative 

defenses and any mitigating factors by a 

preponderance of the evidence. 

§ 1149.49 How is evidence presented at 

the hearing? 

(a) The ALJ determines the 

admissibility of evidence. 

(b) Except as provided in this part, the 

ALJ is not bound by the Federal Rules 

of Evidence. However, the ALJ may 

choose to apply the Federal Rules of 

Evidence where he/she deems 

appropriate, for example, to exclude 

unreliable evidence. 

(c) The ALJ must exclude irrelevant 

and immaterial evidence. 

(d) Although relevant, evidence may 

be excluded if its probative value is 

substantially outweighed by the danger 

of unfair prejudice, confusion of the 

issues, or by considerations of undue 

delay or needless presentation of 

cumulative evidence. 

(e) Although relevant, evidence may 

be excluded if it is privileged under 

Federal law. 

(f) The following evidence concerning 

offers of compromise or settlement is 

inadmissible when offered to prove 

liability for, invalidity of, or amount of 

a claim that was disputed as to validity 

or amount, or to impeach through a 

prior inconsistent statement or 

contradiction: 

(1) Providing, offer, or promising to 

provide a valuable consideration in 

compromising or attempting to 

compromise the claim; 

(2) Accepting, offering, or promising 

to accept a valuable consideration in 

compromising or attempting to 

compromise the claim; and 

(3) Conduct or statements made in 

compromise negotiations regarding the 

claim, except when offered in a criminal 

case and the negotiations related to a 

claim by a public office or authority in 

the exercise of regulatory, investigative, 

or enforcement authority. 

(g) The ALJ must permit the parties to 

introduce rebuttal witnesses and 

evidence. 

(h) All documents and other evidence 

taken for the record must be open to 

examination by all parties unless 

otherwise ordered by the ALJ. 

§ 1149.50 How is witness testimony 

presented? 

(a) Except as provided in paragraph 

(b) of this section, testimony at the 

hearing must be given orally by 

witnesses under oath or affirmation. 


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(b) At the discretion of the ALJ, 

testimony may be admitted in the form 

of a written statement or deposition. 

(1) Any such statement must be 

provided to all other parties along with 

the last known address of such witness, 

in a manner which allows sufficient 

time for other parties to subpoena the 

witness for cross-examination at the 

hearing. 

(2) Prior written statements of 

witnesses proposed to testify at the 

hearing and deposition transcripts must 

be exchanged. 

(c) The ALJ must exercise reasonable 

control over the mode and order of 

interrogating witnesses and presenting 

evidence so as to: 

(1) Make the interrogation and 

presentation effective for ascertaining 

the truth; 

(2) Avoid needless consumption of 

time; and 

(3) Protect witnesses from harassment 

and undue embarrassment. 

(d) The ALJ must permit the parties to 

conduct such cross examination as may 

be required for a full and true disclosure 

of the facts. 

(e) At the discretion of the ALJ, a 

witness may be cross examined on 

matters relevant to the proceeding 

without regard to the scope of his or her 

direct examination. To the extent 

permitted by the ALJ, cross-examination 

on matters outside the scope of direct 

examination must be conducted in the 

manner of direct examination. Leading 

questions may be used only if the 

witness is a hostile witness, an adverse 

party, or a witness identified with an 

adverse party. 

§ 1149.51 How can I exclude a witness? 

Upon motion of any party, the ALJ 

must order witnesses excluded from the 

hearing room so that they cannot hear 

the testimony of other witnesses. This 

rule does not authorize exclusion of— 

(a) A party who is an individual; 

(b) In the case of a party that is not 

an individual, an officer or employee of 

the party appearing for the entity pro se 

or designated by the party’s 

representative; or 

(c) An individual whose presence is 

shown by a party to be essential to the 

presentation of its case, including an 

individual employed by the 

Government engaged in assisting the 

representative for the Government. 

§ 1149.52 Will the hearing proceedings be 

recorded? 

(a) The hearing will be recorded and 

transcribed. Transcripts may be 

obtained after the conclusion of the 

hearing and at a cost no greater than the 

actual cost of duplication. 

(b) The transcript of testimony, 

exhibits and other evidence admitted at 

the hearing, and all papers and requests 

filed in the proceeding constitute the 

record for the decision by the ALJ and 

the authority head. 

(c) The hearings will be recorded 

either electronically or by a court 

reporter. If the authority does not intend 

to arrange for a court reporter, you can 

arrange for one. If you do, you have to 

pay the reporter’s appearance fees. 

(d) Upon payment of a reasonable fee, 

the record may be inspected and copied 

by anyone, unless otherwise ordered by 

the ALJ. 

§ 1149.53 Are ex parte communications 

between a party and the ALJ permitted? 

Ex parte communications between a 

party and the ALJ are not permitted 

unless the other party consents to such 

a communication taking place. This 

does not prohibit a party from inquiring 

about the status of a case or asking 

routine questions concerning 

administrative functions or procedures. 

§ 1149.54 Are there sanctions for 

misconduct? 

(a) The ALJ may sanction a person, 

including any party or representative, as 

outlined in § 1149.55, for the following: 

(1) Failing to comply with an order, 

rule, or procedure governing the 

proceeding; 

(2) Failing to prosecute or defend an 

action; or 

(3) Engaging in other misconduct that 

interferes with the speedy, orderly, and 

fair conduct of a hearing. 

(b) Any sanction issued under this 

section must reasonably relate to the 

severity and nature of the misconduct. 

§ 1149.55 What happens if I fail to comply 

with an order? 

(a) When a party fails to comply with 

an order, including an order for taking 

a deposition, the production of evidence 

within the party’s control, or a request 

for admission, the ALJ may: 

(1) Draw an inference in favor of the 

requesting party with regard to the 

information sought; 

(2) In the case of requests for 

admission, deem each matter of which 

an admission is requested to be 

admitted; 

(3) Prohibit the party failing to 

comply with such order from 

introducing evidence concerning, or 

otherwise relying upon testimony 

relating to the information sought; and 

(4) Strike any part of the pleadings or 

other submissions of the party failing to 

comply with such a request. 

(b) If a party fails to prosecute or 

defend an action under this part 

commenced by service of a notice of 

hearing, the ALJ may dismiss the action 

or may issue an initial decision 

imposing penalties and assessments. 

(c) The ALJ may refuse to consider 

any motion, request, response, brief or 

other document which is not filed in a 

timely fashion. 

§ 1149.56 Are post-hearing briefs 

required? 

Any party may file a post-hearing 

brief; but, such briefs are not required, 

unless ordered by the ALJ. The ALJ 

must fix the time for filing such briefs, 

not to exceed 60 days from the date the 

parties receive the transcript of the 

hearing or, if applicable, the stipulated 

record. Such briefs may be accompanied 

by proposed findings of fact and 

conclusions of law. The ALJ may permit 

the parties to file reply briefs. 

Subpart G—Decisions and Appeals 

§ 1149.57 How is the case decided? 

(a) The ALJ will issue an initial 

decision based only on the record. The 

record must contain findings of fact, 

conclusions of law, and the amount of 

any penalties and assessments imposed. 

(b) The findings of fact must include 

a finding on each of the following 

issues: 

(1) Whether any one or more of the 

claims or statements identified in the 

complaint, in whole or in part, violate 

this part; and 

(2) If you are liable for penalties or 

assessments, the appropriate amount of 

any such penalties or assessments, 

considering any mitigating or 

aggravating factors that are proven by a 

preponderance of the evidence during 

the hearing. 

§ 1149.58 When will the ALJ serve the 

initial decision? 

(a) The ALJ will serve the initial 

decision on all parties within 90 days 

after the close of the hearing, or within 

90 days after the final post-hearing brief 

was filed. 

(b) At the same time as the initial 

decision, the ALJ must serve a statement 

describing your rights if you are found 

liable for a civil penalty or assessment 

to file a motion for reconsideration with 

the ALJ or a notice of appeal with the 

authority head. 

(c) If the ALJ fails to meet the 

deadline contained in this section, he or 

she must notify the parties of the reason 

for the delay and must set a new 

deadline. 

(d) Unless the initial decision of the 

ALJ is timely appealed to the authority 

head, or a motion for reconsideration of 

the initial decision is timely filed, the 

initial decision must constitute the final 

decision of the authority head and must 


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be final and binding on the parties 30 

days after it is issued by the ALJ. 

§ 1149.59 How are penalty and 

assessment amounts determined? 

In determining an appropriate amount 

of civil penalties and assessments, the 

ALJ and the authority head, upon 

appeal, should evaluate any 

circumstances that mitigate or aggravate 

the violation and should articulate in 

their opinions the reasons that support 

the penalties and assessments they 

impose. 

§ 1149.60 What factors are considered in 

determining the amount of penalties and 

assessments to impose? 

(a) Although not exhaustive, the 

following factors are among those that 

may influence the ALJ and the authority 

head in determining the amount of 

penalties and assessments to impose 

with respect to the misconduct charged 

in the complaint: 

(1) The number of false, fictitious, or 

fraudulent claims or statements; 

(2) The time period over which such 

claims or statements were made; 

(3) The degree of your culpability 

with respect to the misconduct; 

(4) The amount of money or the value 

of the property, services, or benefit 

falsely claimed; 

(5) The value of the Government’s 

actual loss as a result of the misconduct, 

including foreseeable consequential 

damages and the cost of the 

investigation; 

(6) The relationship of the amount 

imposed as civil penalties to the amount 

of the Government’s loss; 

(7) The potential or actual impact of 

the misconduct upon national defense, 

public health or safety, or public 

confidence in the management of 

Government programs and operations, 

especially upon the public confidence 

of those intended to benefit from 

Government programs; 

(8) Whether you have engaged in a 

pattern of the same or similar 

misconduct; 

(9) Whether you attempted to conceal 

the misconduct; 

(10) The degree to which you have 

involved others in the misconduct or in 

concealing it; 

(11) Where the misconduct of 

employees or agents is imputed to you, 

the extent to which your practices 

fostered or attempted to preclude such 

misconduct; 

(12) Whether you cooperated in or 

obstructed an investigation of the 

misconduct; 

(13) Whether you assisted in 

identifying and prosecuting other 

wrongdoers; 

(14) The complexity of the program or 

transaction, and the degree of your 

sophistication with respect to it, 

including the extent of your prior 

participation in the program or in 

similar transactions; 

(15) Whether you have been found, in 

any criminal, civil, or administrative 

proceeding, to have engaged in similar 

misconduct or dealt dishonestly with 

the Government of the United States or 

a state, directly or indirectly; and 

(16) The need to deter you and others 

from engaging in the same or similar 

misconduct. 

(b) Nothing in this section must be 

construed to limit the ALJ or the 

authority head from considering any 

other factors that in any given case may 

mitigate or aggravate the offense for 

which penalties and assessments are 

imposed. 

§ 1149.61 Can a party request 

reconsideration of the initial decision? 

(a) Any party may file a motion for 

reconsideration of the initial decision 

with the ALJ within 20 days of receipt 

of the initial decision. If the initial 

decision was served by mail, there is a 

rebuttable presumption that the initial 

decision was received by the party 5 

days from the date of mailing. 

(b) A motion for reconsideration shall 

be accompanied by a supporting brief 

and must specifically describe the issue 

and nature of each allegedly erroneous 

decision. 

(c) Responses to a motion for 

reconsideration will only be allowed if 

it is requested by the ALJ. 

(d) The ALJ will dispose of a motion 

for reconsideration by denying it or by 

issuing a revised initial decision. 

(e) If the ALJ issues a revised initial 

decision upon motion of a party, no 

further motions for reconsideration may 

be filed by any party. 

(f) If the ALJ issues a revised initial 

decision, that decision shall constitute 

the final decision of the authority head 

and shall be final and binding on the 

parties 30 days after it is issued, unless 

it is timely appealed to the authority 

head. 

§ 1149.62 When does the initial decision of 

the ALJ become final? 

(a) The initial decision of the ALJ 

becomes the final decision of the NEA 

and binds all parties 30 days after it is 

issued, unless a party timely files a 

motion for reconsideration or timely 

appeals to the authority head of NEA, as 

set forth in § 1149.64. 

(b) If the ALJ disposes of a motion for 

reconsideration by denying it or by 

issuing a revised initial decision, the 

ALJ’s order on the motion for 

reconsideration becomes the final 

decision of NEA 30 days after the order 

is issued. 

§ 1149.63 What are the procedures for 

appealing the ALJ decision? 

(a) Any defendant who submits a 

timely answer and is found liable for a 

civil penalty or assessment in an initial 

decision may appeal the decision to the 

authority head by filing a notice of 

appeal with the authority head in 

accordance with this section. 

(b) You may file a notice of appeal 

with the authority head within 30 days 

following issuance of the initial 

decision, serving a copy of the notice of 

appeal on all parties and the ALJ. The 

authority head may extend this deadline 

for up to an additional 30 days if an 

extension request is filed within the 

initial 30-day period and shows good 

cause. 

(c) Your appeal will not be considered 

until all timely motions for 

reconsideration have been resolved. 

(d) If a timely motion for 

reconsideration is denied, a notice of 

appeal may be filed within 30 days 

following such denial or issuance of a 

revised initial decision, whichever 

applies. 

(e) A notice of appeal must be 

supported by a written brief specifying 

why the initial decision should be 

reversed or modified. 

(f) The NEA representative may file a 

brief in opposition to the notice of 

appeal within 30 days of receiving your 

appeal and supporting brief. 

(g) If you timely file a notice of 

appeal, and the time for filing 

reconsideration motions has expired, 

the ALJ will forward the record of the 

proceeding to the authority head. 

§ 1149.64 What happens if an initial 

decision is appealed? 

(a) An initial decision is stayed 

automatically pending disposition of a 

motion for reconsideration or of an 

appeal to the authority head. 

(b) No administrative stay is available 

following a final decision of the 

authority head. 

§ 1149.65 Are there any limitations on the 

right to appeal to the authority head? 

(a) You have no right to appear 

personally, or through a representative, 

before the authority head. 

(b) There is no right to appeal any 

interlocutory ruling. 

(c) The authority head will not 

consider any objection or evidence that 

was not raised before the ALJ, unless 

you demonstrate that the failure to 

object was caused by extraordinary 

circumstances. If you demonstrate to the 

satisfaction of the authority head that 


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extraordinary circumstances prevented 

the presentation of evidence at the 

hearing, and that the additional 

evidence is material, the authority head 

may remand the matter to the ALJ for 

consideration of the additional 

evidence. 

§ 1149.66 How does the authority head 

dispose of an appeal? 

(a) The authority head may affirm, 

reduce, reverse, compromise, remand, 

or settle any penalty or assessment 

imposed by the ALJ in the initial 

decision or reconsideration decision. 

(b) The authority head will promptly 

serve each party to the appeal and the 

ALJ with a copy of his or her decision. 

This decision must contain a statement 

describing the right of any person, 

against whom a penalty or assessment 

has been made, to seek judicial review. 

§ 1149.67 Who represents the NEA on an 

appeal? 

The authority head will designate the 

NEA’s representative in the event of an 

appeal. 

§ 1149.68 What judicial review is 

available? 

Section 3805 of title 31, United States 

Code, authorizes Judicial review by the 

appropriate United States District Court 

of any final NEA decision by the 

authority head imposing penalties or 

assessments under this part. To obtain 

judicial review, you must file a petition 

with the appropriate court in a timely 

manner. (See paragraphs (a) through (e) 

of 31 U.S.C. 3805 for a description of 

how judicial review is authorized.) 

§ 1149.69 Can the administrative 

complaint be settled voluntarily? 

(a) Parties may make offers of 

compromise or settlement at any time. 

Any compromise or settlement must be 

in writing. 

(b) The reviewing official has the 

exclusive authority to compromise or 

settle the case anytime after the date on 

which the reviewing official is 

permitted to issue a complaint and 

before the ALJ issues an initial decision. 

(c) The authority head has exclusive 

authority to compromise or settle the 

case anytime after the date of the ALJ’s 

initial decision until the initiation of 

any judicial review or any action to 

collect the penalties and assessments. 

(d) The Attorney General has 

exclusive authority to compromise or 

settle a case once any judicial review or 

any action to recover penalties and 

assessments is initiated. 

(e) The investigating official may 

recommend settlement terms to the 

reviewing official, the authority head, or 

the Attorney General, as appropriate. 

§ 1149.70 How are civil penalties and 

assessments collected? 

(a) Civil actions to recover penalties 

or assessments must commence within 

3 years after the date of a final decision 

determining your liability. 

(b) The Attorney General is 

responsible for judicial enforcement of 

civil penalties or assessments imposed. 

He/she has exclusive authority to 

compromise or settle any penalty or 

assessment during the pendency of any 

action to collect penalties or 

assessments under 31 U.S.C. 3806. 

(c) Penalties or assessments imposed 

by a final decision may be recovered in 

a civil action brought by the Attorney 

General. 

(1) The district courts of the United 

States have jurisdiction of such civil 

actions. 

(2) The United States Court of Federal 

Claims has jurisdiction of any civil 

action to recover any penalty or 

assessment if the cause of action is 

asserted by the government as a 

counterclaim in a matter pending in 

such court. 

(3) Civil actions may be joined and 

consolidated with or asserted as a 

counterclaim, cross-claim, or set off by 

the government in any other civil action 

which includes you and the government 

as parties. 

(4) Defenses raised at the hearing, or 

that could have been raised, may not be 

raised as a defense in the civil action. 

Determination of liability and of the 

amounts of penalties and assessments 

must not be subject to review. 

§ 1149.71 Is there a right to administrative 

offset? 

The amount of any penalty or 

assessment which has become final, or 

for which a judgment has been entered, 

or any amount agreed upon in a 

compromise or settlement, may be 

collected by administrative offset, 

except that an administrative offset may 

not be made under this subsection 

against a refund of an overpayment of 

Federal taxes, then or later owing by the 

United States to you. 

§ 1149.72 What happens to collections? 

All amounts collected pursuant to this 

part must be deposited as miscellaneous 

receipts in the Treasury of the United 

States. 

§ 1149.73 What if the investigation 

indicates criminal misconduct or a violation 

of the False Claims Act? 

(a) Investigating officials may: 

(1) Refer allegations of criminal 

misconduct or a violation of the False 

Claims Act directly to the Department of 

Justice for prosecution and/or civil 

action, as appropriate; 

(2) Defer or postpone a report or 

referral to the reviewing official to avoid 

interference with a criminal or civil 

investigation, prosecution or litigation; 

or 

(3) Issue subpoenas under any other 

statutory authority. 

(b) Nothing in this part limits the 

requirement that NEA employees report 

suspected false or fraudulent conduct, 

claims or statements, and violations of 

criminal law to the NEA Office of 

Inspector General or to the Attorney 

General. 

§ 1149.74 How does the NEA protect your 

rights? 

These procedures separate the 

functions of the investigating official, 

reviewing official, and the ALJ, each of 

whom report to a separate 

organizational authority. Except for 

purposes of settlement, or as a witness 

or a representative in public 

proceedings, no investigating official, 

reviewing official, or NEA employee or 

agent who helps investigate, prepare, or 

present a case may (in such case, or a 

factually related case) participate in the 

initial decision or the review of the 

initial decision by the authority head. 

This separation of functions and 

organization is designed to assure the 

independence and impartiality of each 

government official during every stage 

of the proceeding. The representative for 

the NEA may be employed in the offices 

of either the investigating official or the 

reviewing official. 

Dated: November 3, 2014. 

India J. Pinkney, 

General Counsel. 

[FR Doc. 2014–26507 Filed 11–10–14; 8:45 am] 

BILLING CODE 7537–01–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 648 

[Docket No. 140903748–4748–01] 

RIN 0648–BE45 

Magnuson-Stevens Fishery 

Conservation and Management Act 

Provisions; Fisheries of the 

Northeastern United States; Northeast 

Groundfish Fishery; Gulf of Maine 

Haddock Annual Catch Limit Revision 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 


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