This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

7891

Vol. 60, No. 28

Friday, February 10, 1995

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Part 185

RIN 3206–AF43

Implementation of the Program Fraud

Civil Remedies Act of 1986

AGENCY: Office of Personnel

Management.

ACTION: Final rule.

SUMMARY: The Office of Personnel

Management (OPM) is publishing

regulations to implement the Program

Fraud Civil Remedies Act (PFCRA).

Publication of these regulations will

enable OPM to institute administrative

proceedings against persons who have

presented false claims or statements to

OPM.

EFFECTIVE DATE: March 13, 1995.

FOR FURTHER INFORMATION CONTACT:

Murray M. Meeker, Attorney, Office of

the General Counsel, (202) 606–1980.

SUPPLEMENTARY INFORMATION: On

October 21, 1986, Congress enacted the

Program Fraud Civil Remedies Act

(PFCRA), Public Law 99–509, 31 U.S.C.

3801–3812. Public Law 99–509 provides

a statutory right for the Federal

Government to take direct action against

fraud, provided that proper notification

is provided and that the procedures

provided for in this part are followed.

On May 12, 1994, OPM published these

regulations as a proposed rule. 59 FR

24661. OPM received several oral

comments from officials of other Federal

agencies who were unclear about the

scope of OPM’s PFCRA regulations, i.e.,

they did not know whether the

proposed regulations had Governmentwide applicability. These commenters

were advised that the proposed

regulations were limited to programs

administered by OPM. One commenter

noted that on November 5, 1990,

Congress enacted section 101(c)(1)(A)(ii)

of Public Law 101–509 which provides

that any reference outside of title 5 of

the United States Code to ‘‘the

minimum rate of pay for grade GS–16 of

the General Schedule’’ shall be

considered a reference to the minimum

rate payable under section 5376 of title

5 of the United States Code. We have

amended the definition of reviewing

official in section 185.102 of the

proposed regulations to reflect this

enactment. OPM also received a written

comment from an employee

organization in which the organization

commented that the proposed

regulations were inconsistent with

judicial decisions which have held that

actions may only be taken against

bargaining unit members in accordance

with negotiated grievance procedures.

In response to this comment, OPM

requested guidance from the Justice

Department and was advised that in

implementing the PFCRA, there was no

need to make an exception for

bargaining unit employees, and that

unlike overtime pay disputes, PFCRA

proceedings are not processed as

grievances. The Department of Justice

did confirm the organization’s

recommendation that proposed section

185.108(a) refer to Rule 4 of the Federal

Rules of Civil Procedure rather than

Rule 4(d). This change has been made

in the final regulations.

Executive Order 12866, Regulatory

Review

This rule has been reviewed by the

Office of Management and Budget in

accordance with Executive Order 12866.

Regulatory Flexibility Act

I certify that these regulations will not

have a significant economic impact on

a substantial number of small entities

because the effects are limited primarily

to federal employees and other entities

who do business with OMB.

List of Subjects in 5 CFR Part 185

Claims.

Office of Personnel Management.

Lorraine A. Green,

Deputy Director.

Accordingly, OPM is adding part 185

of title 5, Code of Federal Regulations as

follows:

PART 185—PROGRAM FRAUD CIVIL

REMEDIES

Sec.

185.101 Purpose.

185.102 Definitions.

185.103 Basis for civil penalties and

assessments.

185.104 Investigation.

185.105 Review by the reviewing official.

185.106 Prerequisites for issuing a

complaint.

185.107 Complaint.

185.108 Service of complaint.

185.109 Answer.

185.110 Default upon failure to file an

answer.

185.111 Referral of complaint and answer

to the ALJ.

185.112 Notice of hearing.

185.113 Location of hearing.

185.114 Parties to the hearing.

185.115 Separation of functions.

185.116 Ex parte contacts.

185.117 Disqualification of reviewing

official or ALJ.

185.118 Rights of parties.

185.119 Authority of the ALJ.

185.120 Prehearing conferences.

185.121 Disclosure of documents.

185.122 Discovery.

185.123 Exchange of witness lists,

statements and exhibits.

185.124 Subpoenas for attendance at

hearing.

185.125 Protective order.

185.126 Evidence.

185.127 Fees.

185.128 Form, filing and service of papers.

185.129 Computation of time.

185.130 Motions.

185.131 Sanctions.

185.132 The hearing and burden of proof.

185.133 Determining the amount of

penalties and assessments.

185.134 Witnesses.

185.135 The record.

185.136 Post-hearing briefs.

185.137 Initial decision.

185.138 Reconsideration of initial decision.

185.139 Appeal to authority head.

185.140 Stays ordered by the Department of

Justice.

185.141 Stay pending appeal.

185.142 Judicial review.

185.143 Collection of civil penalties and

assessments.

185.144 Right to administrative offset.

185.145 Deposit in Treasury of the United

States.

185.146 Compromise or settlement.

185.147 Limitations.

Authority: 31 U.S.C. 3801–3812.

§ 185.101 Purpose.

This subpart implements the Program

Fraud Civil Remedies Act of 1986,

Public Law 99–509, 6101–6104, 100

Stat. 1874 (October 21, 1986), codified
7892 Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Rules and Regulations

at 31 U.S.C. 3801–3812. Section 3809

requires each authority head to

promulgate regulations necessary to

implement the provisions of the statute.

The subpart establishes administrative

procedures for imposing civil penalties

and assessments against persons who

make, submit, or present, or cause to be

made, submitted, or presented, false,

fictitious, or fraudulent claims or

written statements to authorities or to

their agents, and specifies the hearing

and appeal rights of persons subject to

allegations of liability for such penalties

and assessments. The moneys collected

as a result of these procedures are

deposited as miscellaneous receipts in

the Treasury of the United States.

§ 185.102 Definitions.

For the purposes of this part—

ALJ means an Administrative Law

Judge in the authority appointed

pursuant to 5 U.S.C. 3105 or detailed to

the authority pursuant to 5 U.S.C. 3344.

Authority means the Office of

Personnel Management (OPM).

Authority head means the Director of

the Office of Personnel Management or

the Director’s designee.

Benefit is very broad, and is intended

to cover anything of value, including

but not limited to any advantage,

preference, privilege, license, permit,

favorable decision, ruling, status or loan

guarantee.

Claim means any request, demand, or

submission—

(a) Made to the authority for property,

services, or money (including money

representing benefits, grants, loans or

insurance);

(b) Made to a recipient of property,

services, or money from the authority or

to a party to a contract with the

authority:

(1) 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; or

(2) 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

(c) Made to the authority which has

the effect of decreasing an obligation to

pay or account for property, services, or

money.

Complaint means the administrative

complaint served by the reviewing

official on the defendant under

§ 185.107.

Defendant means any person alleged

in a complaint under § 185.107 to be

liable for a civil penalty or assessment

under § 185.103.

Government means the United States

Government.

Individual means a natural person.

Initial decision means the written

decision of the ALJ required by

§ 185.110 or § 185.137, and includes a

revised initial decision issued following

a remand or a motion for

reconsideration.

Investigating Official means the

Inspector General or the Inspector

General’s designee.

Knows or has reason to know means

that a person, with respect to a claim or

statement:

(a) Has actual knowledge that the

claim or statement is false, fictitious, or

fraudulent;

(b) Acts in deliberate ignorance of the

truth or falsity of the claim or statement;

or

(c) Acts in reckless disregard of the

truth or falsity of the claim or statement.

Makes shall include the terms

presents, submits, and causes to be

made, presented, or submitted. As the

context requires, making or made, shall

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 other individual

designated in writing by the defendant.

Reviewing Official means the General

Counsel of OPM or the General

Counsel’s designee. For the purposes of

§ 185.105 of these rules, the General

Counsel personally, or members of the

General Counsel’s immediate staff, shall

perform the functions of the reviewing

official provided that such person or

persons serve in a position for which

the rate of basic pay is not less than the

minimum rate payable under section

5376 of title 5 of the United States Code.

All other functions of the reviewing

official, including administrative

prosecution under these rules, shall be

performed on behalf of the General

Counsel by members of the Office of the

General Counsel.

Statement means any representation,

certification, affirmation, document,

record, or accounting or bookkeeping

entry made:

(a) With respect to a claim or to obtain

the approval or payment of a claim

(including relating to eligibility to make

a claim); or

(b) With respect to (including relating

to eligibility for):

(1) A contract with, or a bid or

proposal for a contract with; or

(2) A grant, loan, or benefit from, the

authority, or any State, political

subdivision of a State, or other party, 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 such State, political

subdivision, or party for any portion of

the money or property under such

contract or for such grant, loan, or

benefit.

§ 185.103 Basis for civil penalties and

assessments.

(a) In addition to any other remedy

that may be prescribed by law, any

person shall be subject to a civil penalty

of not more than $5,000, where the

person makes a claim and knows or has

reason to know that the claim:

(1) In false, fictitious, or fraudulent;

(2) Includes, or is supported by, any

written statement which asserts a

material fact which is false, fictitious, or

fraudulent;

(3) Includes, or is supported by, any

written statement that:

(i) Omits a material fact;

(ii) Is false, fictitious, or fraudulent as

a result of such omission; and

(iii) Is a statement in which the

person making such statement has a

duty to include such material fact; or

(4) Is for payment for the provision of

property or services which the person

has not provided as claimed.

(b) Each voucher, invoice, claim form,

or other individual request or demand

for property, services, or money

constitutes a separate claim.

(c) A claim shall be considered made

to the authority, recipient, or party

when such claim is actually made to an

agent, fiscal intermediary, or other

entity, including any State or political

subdivision thereof, acting for or on

behalf of the authority, recipient, or

party.

(d) Each 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.

(e) If the Government has made any

payment (including transferred property

or provided services) on a claim, a

person subject to a civil penalty under

paragraph (a)(1) of this section may also

be subject to an assessment of not more

than twice the amount of such claim or
Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Rules and Regulations 7893

that portion thereof that is determined

to be in violation of paragraph (a)(1) of

this section. Such assessment shall be in

lieu of damages sustained by the

Government because of such claim.

(f) Any person who makes a written

statement that:

(1) The person knows or has reason to

know:

(i) Asserts a material fact which is

false, fictitious, or fraudulent; or

(ii) Is false, fictitious, or fraudulent

because it omits a material fact that the

person making the statement has a duty

to include in such statement; and

(2) Contains, or is accompanied by, an

express certification or affirmation of

the truthfulness and accuracy of the

contents of the statement may be

subject, in addition to any other remedy

that may be prescribed by law, to a civil

penalty of not more than $5,000 for each

such statement.

(g) Each written representation,

certification, or affirmation constitutes a

separate statement.

(h) A statement shall be considered

made to the authority when such

statement is actually made to an agent,

fiscal intermediary, or other entity,

including any State or political

subdivision thereof, acting for or on

behalf of the authority.

(i) No proof of specific intent to

defraud is required to establish liability

under this section.

(j) In any case in which it is

determined that more than one person

is liable for making a claim or statement

under this section, each such person

may be held liable for a civil penalty

under this section.

(k) 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 such

persons.

§ 185.104 Investigation.

(a) If an investigating official

concludes that a subpoena pursuant to

the authority conferred by 31 U.S.C.

3804(a) is warranted, he or she may

issue a subpoena.

(1) The subpoena so issued shall

notify the person to whom it is

addressed of the authority under which

the subpoena is issued and shall

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) The person receiving such

subpoena shall be 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 therefor; or

(iii) Such documents, suitably

identified, have been withheld based

upon the assertion of an identified

privilege.

(b) If the investigating official

concludes that an action under the

Program Fraud Civil Remedies Act may

be warranted, the investigating official

shall submit a report containing the

findings and conclusions of such

investigation to the reviewing official.

(c) Nothing in this section shall

preclude or limit an investigating

official’s discretion to refer allegations

directly to 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.

(d) Nothing in this section modifies

any responsibility of an investigating

official to report violations of criminal

law to the Attorney General.

§ 185.105 Review by the reviewing official.

If, based on the report of the

investigating official under § 185.104(b),

the reviewing official determines that

there is adequate evidence to believe

that a person is liable under § 185.103,

the reviewing official shall transmit to

the Attorney General a written notice of

the reviewing official’s intention to have

a complaint issued under § 185.107.

Such notice shall include:

(a) A statement of the reviewing

official’s reasons for issuing a

complaint;

(b) A statement specifying the

evidence that supports the allegations of

liability;

(c) A description of the claims or

statements upon which the allegations

of liability are based;

(d) An estimate of the amount of

money, or the value of property,

services, or other benefits, requested or

demanded in violation of § 185.103;

(e) A statement of any exculpatory or

mitigating circumstances that may relate

to the claims or statements known by

the reviewing official or the

investigating official; and

(f) A statement that there is a

reasonable prospect of collecting an

appropriate amount of penalties and

assessments.

§ 185.106 Prerequisites for issuing a

complaint.

(a) The reviewing official may issue a

complaint under § 185.107 only if:

(1) The Department of Justice

approves the issuance of a complaint in

a written statement described in section

3803(b)(1) of title 31 of the United States

Code, and

(2) In the case of allegations of

liability under § 185.103(a) with respect

to a claim, the reviewing official

determines that, with respect to such

claim or a group of related claims

submitted at the same time such claim

is submitted (as defined in paragraph (b)

of this section), the amount of money,

or the value of property or services,

demanded or requested in violation of

§ 185.103(a) does not exceed $150,000.

(b) For the purposes of this section, a

related group of claims submitted at the

same time shall include only those

claims arising from the same transaction

(e.g., grant, loan, application, or

contract) that are submitted

simultaneously as part of a single

request, demand, or submission.

(c) Nothing in this section shall be

construed to limit the reviewing

official’s authority to join in a single

complaint against a person, claims that

are unrelated or were not submitted

simultaneously, regardless of the

amount of money, or the value of

property or services, demanded or

requested.

§ 185.107 Complaint.

(a) On or after the date the

Department of Justice approves the

issuance of a complaint in accordance

with section 3803(b)(1) of title 31 of the

United States Code, the reviewing

official may serve a complaint on the

defendant, as provided in § 185.108.

(b) The complaint shall state the

following:

(1) The allegations of liability against

the defendant, including the statutory

basis for liability, an identification of

the claims or statements that are the

basis for the alleged liability, and the

reasons why liability allegedly arises

from such claims or statements;

(2) The maximum amount of penalties

and assessments for which the

defendant may be held liable;

(3) Instructions for filing an answer,

including a specific statement of the

defendant’s right to request a hearing

and to be represented by a

representative; and

(4) The fact that failure to file an

answer within 30 days of service of the

complaint will result in the imposition

of the maximum amount of penalties

and assessments without right to appeal,

as provided in § 185.110.
7894 Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Rules and Regulations

(c) At the same time the reviewing

official serves the complaint, he or she

shall serve the defendant with a copy of

these regulations.

§ 185.108 Service of complaint.

(a) Service of a complaint must be

made by certified or registered mail or

by delivery in any manner authorized

by Rule 4 of the Federal Rules of Civil

Procedure. Service is complete upon

receipt.

(b) Proof of service, stating the name

and address of the person on whom the

complaint was served, and the manner

and date of service, may be made by:

(1) Affidavit of the individual serving

the complaint by delivery;

(2) A United States Postal Service

return receipt card acknowledging

receipt; or

(3) Written acknowledgment of

receipt by the defendant or his or her

representative.

§ 185.109 Answer.

(a) The defendant may request a

hearing in the answer filed with the

reviewing official within 30 days of

service of the complaint.

(b) In the answer, the defendant:

(1) Shall admit or deny each of the

allegations of liability made in the

complaint;

(2) Shall state any defense on which

the defendant intends to rely;

(3) May state any reasons why the

defendant contends that the penalties

and assessments should be less than the

statutory maximum; and

(4) Shall state the name, address, and

telephone number of the person

authorized by the defendant to act as

defendant’s representative, if any.

(c) If the defendant is unable to file an

answer meeting the requirements of

paragraph (b) of this section within the

time provided, the defendant may,

before the expiration of 30 days from

service of the complaint, file with the

reviewing official a general answer

denying liability and requesting a

hearing, and a request for an extension

of time within which to file an answer

meeting the requirements of paragraph

(b) of this section. The reviewing official

shall file promptly with the ALJ the

complaint, the general answer denying

liability, and the request for an

extension of time as provided in

§ 185.110. For good cause shown, the

ALJ may grant the defendant up to 30

additional days within which to file an

answer meeting the requirements of

paragraph (b) of this section. The ALJ

shall decide expeditiously whether the

dependent shall be granted an

additional period of time to file such

answer.

§ 185.110 Default upon failure to file an

answer.

(a) If the defendant does not file an

answer within the time prescribed in

§ 185.109(a), the reviewing official may

refer the complaint to the ALJ.

(b) Upon the referral of the complaint,

the ALJ shall promptly serve on the

defendant in the manner prescribed in

§ 185.108, a notice that an initial

decision will be issued under this

section.

(c) The ALJ shall assume the facts

alleged in the complaint to be true and,

if such facts establish liability under

§ 185.103, the ALJ shall issue an initial

decision imposing the maximum

amount of penalties and assessments

allowed under the statute.

(d) Except as otherwise provided in

this section, by failing to file a timely

answer the defendant waives any right

to further review of the penalties and

assessments imposed under paragraph

(c) of this section and the initial

decision shall become final and binding

upon the parties 30 days after it is

issued.

(e) If, before such an initial decision

becomes final, the defendant files a

motion with the ALJ seeking to reopen

on the grounds that extraordinary

circumstances prevented the defendant

from filing an answer, the initial

decision shall be stayed pending the

ALJ’s decision on the motion.

(f) If, on such motion, the defendant

can demonstrate extraordinary

circumstances excusing the failure to

file a timely answer, the ALJ shall

withdraw the initial decision in

paragraph (c) of this section, if such a

decision has been issued, and shall

grant the defendant an opportunity to

answer the complaint.

(g) A decision of the ALJ denying a

defendant’s motion under paragraph (e)

of this section is not subject to

reconsideration under § 185.138.

(h) The defendant may appeal to the

authority head the decision denying a

motion to reopen 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

shall stay the initial decision until the

authority head decides the issue.

(i) If the defendant files a timely

notice of appeal with the authority

head, the ALJ shall forward the record

of the proceeding to the authority head.

(j) The authority head shall decide

expeditiously whether extraordinary

circumstances excuse the defendant’s

failure to file a timely answer based

solely on the record before the ALJ.

(k) If the authority head decides that

extraordinary circumstances excused

the defendant’s failure to file a timely

answer, the authority head shall remand

the case to the ALJ with instructions to

grant the defendant an opportunity to

answer.

(l) If the authority head decides that

the defendant’s failure to file a timely

answer is not excused, the authority

head shall reinstate the initial decision

of the ALJ, which shall become final

and binding upon the parties 30 days

after the authority head issues such

decision.

§ 185.111 Referral of complaint and

answer to the ALJ.

Upon receipt of an answer, the

reviewing official shall file the

complaint and answer with the ALJ.

§ 185.112 Notice of hearing.

(a) When the ALJ receives the

complaint and answer, the ALJ shall

promptly serve a notice of hearing upon

the defendant in the manner prescribed

by § 185.108. At the same time, the ALJ

shall send a copy of such notice to the

reviewing official or his or her designee.

(b) Such notice shall include:

(1) The tentative time and place, and

the nature of the hearing;

(2) The legal authority and

jurisdiction under which the hearing is

to be held;

(3) The matters of fact and law to be

asserted;

(4) A description of the procedures for

the conduct of the hearing;

(5) The name, address, and telephone

number of the representative of the

Government and of the defendant, if

any; and

(6) Such other matters as the ALJ

deems appropriate.

§ 185.113 Location of hearing.

(a) The hearing may be held:

(1) In any judicial district of the

United States in which the defendant

resides or transacts business;

(2) In any judicial district of the

United States in which the claim or

statement in issue was made; or

(3) In such other place as may be

agreed upon by the parties and the ALJ.

(b) Each party shall have the

opportunity to present argument with

respect to the location of the hearing.

(c) The hearing shall be held at the

place and at the time ordered by the

ALJ.

§ 185.114 Parties to the hearing.

(a) The parties to the hearing shall be

the defendant and OPM.

(b) Except where the authority head

designates another, OPM shall be

represented by the members of the

Office of the General Counsel.

(c) Pursuant to section 3730(c)(5) of

title 31, United States Code, a private
Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Rules and Regulations 7895

plaintiff under the False Claims Act may

participate in these proceedings to the

extent authorized by the provisions of

that Act.

§ 185.115 Separation of functions.

(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 initial

decision or the review of the initial

decision by the authority head, except

as a witness or a representative in

public proceedings; or

(3) Make the collection of penalties

and assessments under section 3806 of

title 31, United States Code.

(b) The ALJ shall not be responsible

to or subject to the supervision or

direction of the investigating official or

the reviewing official.

§ 185.116 Ex parte contacts.

No party or person (except employees

of the ALJ’s office) shall communicate

in any way with the ALJ on any matter

at issue in a case, unless on notice and

opportunity for all parties to participate.

This provision does not prohibit a

person or party from inquiring about the

status of a case or asking routine

questions concerning administrative

functions or procedures.

§ 185.117 Disqualifications of reviewing

official or ALJ.

(a) A reviewing official or ALJ in a

particular case may disqualify himself

or herself at any time.

(b) A party may file with the ALJ a

motion for disqualification of a

reviewing official or an ALJ. Such

motion shall be accompanied by an

affidavit alleging personal bias or other

reason for disqualification.

(c) Such motion and affidavit shall be

filed promptly upon the party’s

discovery of reasons requiring

disqualification, or such objections shall

be deemed waived.

(d) Such affidavit shall state specific

facts that support the party’s belief that

personal bias or other reason for

disqualification exists and the time and

circumstances of the party’s discovery

of such facts. It shall be accompanied by

a certificate of the representative of

record that it is made in good faith.

(e) Upon the filing of such a motion

and affidavit, the ALJ shall proceed no

further in the case until he or she

resolves the matter of disqualification in

accordance with this section.

(1) If the ALJ determines that a

reviewing official is disqualified, the

ALJ shall dismiss the complaint without

prejudice.

(2) If the ALJ disqualifies himself or

herself, the case shall be reassigned

promptly to another ALJ.

(3) If the ALJ denies a motion to

disqualify, the authority head may

determine the matter only as part of his

or her review of the initial decision

upon appeal, if any.

§ 185.118 Rights of parties.

Except as otherwise limited by this

part, all parties may:

(a) Be accompanied, represented, and

advised by a representative;

(b) Participate in any conference held

by the ALJ;

(c) Conduct discovery as provided

under § 185.122;

(d) Agree to stipulations of fact or law,

which shall 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 oral 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.

§ 185.119 Authority of the ALJ.

(a) The ALJ shall conduct a fair and

impartial hearing, avoid delay, maintain

order, and assure that a record of the

proceeding is made.

(b) 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.

(c) The ALJ does not have the

authority to find Federal statutes or

regulations invalid.

§ 185.120 Prehearing conferences.

(a) The ALJ may schedule prehearing

conferences as appropriate.

(b) Upon the motion of any party, the

ALJ shall schedule at least one

prehearing conference at a reasonable

time in advance of the hearing.

(c) The ALJ may use prehearing

conferences to discuss the following:

(1) Simplification of the issues;

(2) The necessity or desirability of

amendments to the pleadings, including

the need for a more definite statement;

(3) Stipulations and admissions of fact

or as to the contents and authenticity of

documents;

(4) Whether the parties can agree to

submission of the case on a stipulated

record;

(5) Whether a party chooses to waive

appearance at an oral hearing and to

submit only documentary evidence

(subject to the objection of other parties)

and written argument;

(6) Limitation of the number of

witnesses;

(7) Scheduling dates for the exchange

of witness lists and of proposed

exhibits;

(8) Discovery;

(9) The time and place for the hearing;

and

(10) Such other matters as may tend

to expedite the fair and just disposition

of the proceedings.

(d) The ALJ may issue an order

containing all matters agreed upon by

the parties or ordered by the ALJ at a

prehearing conference.

§ 185.121 Disclosure of documents.

(a) Upon written request to the

reviewing official, generally prior to the

filing of an answer, the defendant may

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

under § 185.104(b) are based, unless

such documents are subject to a

privilege under Federal law. Upon

payment of fees for duplication, the

defendant may obtain copies of such

documents.

(b) Upon written request to the

reviewing official, the defendant, may
7896 Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Rules and Regulations

also obtain a copy of all exculpatory

information in the possession of the

reviewing official or investigating

official relating to the allegations in the

complaint, 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.

(c) The notice sent to the Attorney

General from the reviewing official as

described in § 185.105 is not

discoverable under any circumstances.

(d) The defendant may file a motion

to compel disclosure of the documents

subject to the provisions of this section.

Such a motion may only be filed with

the ALJ following the filing of an answer

pursuant to § 185.109.

§ 185.122 Discovery.

(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 and

§ 185.123, the term documents includes

information, documents, reports,

answers, records, accounts, papers, and

other data and documentary evidence.

Nothing contained herein shall 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 shall

regulate the timing of discovery.

(d) Motions for discovery are to be

handled according to the following

procedures:

(1) A party seeking discovery may file

a motion with the ALJ. Such a motion

shall be accompanied by a copy of the

requested discovery, or in the case of

depositions, a summary of the scope of

the proposed deposition.

(2) Within 10 days of service, a party

may file an opposition to the motion

and/or a motion for protective order as

provided in § 185.125.

(3) The ALJ may grant a motion for

discovery only if he or she finds that the

discovery sought:

(i) Is necessary for the expeditious,

fair, and reasonable consideration of the

issues;

(ii) Is not unduly costly or

burdensome;

(iii) Will not unduly delay the

proceeding; and

(iv) Does not seek privileged

information.

(4) the burden of showing that

discovery should be allowed is on the

party seeking discovery.

(5) The ALJ may grant discovery

subject to a protective order under

§ 185.125.

(e) Depositions are to be handled in

the following manner:

(1) If a motion for deposition is

granted, the ALJ shall issue a subpoena

for the deponent, which may require the

deponent to produce documents. The

subpoena shall specify the time and

place at which the deposition will be

held.

(2) The party seeking to depose shall

serve the subpoena in the manner

prescribed in § 185.108.

(3) The deponent may file with the

ALJ within 10 days of service a motion

to quash the subpoena or a motion for

a protective order.

(4) The party seeking to depose shall

provide for the taking of a verbatim

transcript of the deposition, which it

shall make available to all other parties

for inspection and copying.

(f) Each party shall bear its own costs

of discovery.

§ 185.123 Exchange of witness lists,

statements and exhibits.

(a) At least 15 days before the hearing

or at such other time as may be ordered

by the ALJ, the parties shall exchange

witness lists, copies of prior statements

of proposed witnesses, and copies of

proposed hearing exhibits, including

copies of any written statements that the

party intends to offer in lieu of live

testimony in accordance with

§ 185.133(b). At the time the above

documents are exchanged, any party

that intends to rely on the transcript or

deposition testimony in lieu of live

testimony at the hearing, if permitted by

the ALJ, shall provide each party with

a copy of the specific pages of the

transcript it intends to introduce into

evidence.

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

admit into evidence the testimony of

any witness whose name does not

appear on the witness list or any exhibit

not provided to the opposing party as

provided above unless the ALJ finds

good cause for the failure or that there

is no prejudice to the objecting party.

(c) Unless another party objects

within the time set by the ALJ,

documents exchanged in accordance

with paragraph (a) of this section shall

be deemed to be authentic for the

purpose of admissibility at the hearing.

§ 185.124 Subpoenas for attendance at

hearing.

(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 shall

file a written request therefor not less

than 15 days before the date fixed for

the hearing unless otherwise allowed by

the ALJ upon a showing of good cause.

Such request shall specify any

documents to be produced and shall

designate the witnesses and describe the

address and location thereof with

sufficient particularity to permit such

witnesses to be found.

(d) The subpoena shall 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

shall serve it in the manner prescribed

in § 185.108. A subpoena on a party or

upon an individual under the control of

a party may be served by first class mail.

(f) A party or the individual to whom

the subpoena is directed may file with

the ALJ a motion to quash the subpoena

within 10 days after service or on or

before the time specified in the

subpoena for compliance if it is less

than 10 days after service.

§ 185.125 Protective order.

(a) A party or a 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 or disclosure of

evidence.

(b) 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:

(1) That the discovery not be had;

(2) That the discovery may be had

only on specified terms and conditions,

including a designation of the time or

place;

(3) That the discovery may be had

only through a method of discovery

other than that requested;

(4) That certain matters not be the

subject of inquiry, or that the scope of

discovery be limited to certain matters;

(5) That discovery be conducted with

no one present except persons

designated by the ALJ;

(6) That the contents of discovery or

evidence be sealed;

(7) That a sealed deposition be

opened only by order of the ALJ;

(8) That a trade secret or other

confidential research, development,
Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Rules and Regulations 7897

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

(9) That the parties simultaneously

file specified documents or information

enclosed in sealed envelopes to be

opened as directed by the ALJ.

§ 185.126 Evidence.

(a) The ALJ shall determine the

admissibility of evidence.

(b) Except as provided in this part, the

ALJ shall not be bound by the Federal

Rules of Evidence. However, the ALJ

may apply the Federal Rules of

Evidence where appropriate, e.g. to

exclude unreliable evidence.

(c) The ALJ shall 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) Evidence concerning offers of

compromise or settlement shall be

inadmissible to the extent provided in

Rule 408 of the Federal Rules of

Evidence.

(g) The ALJ shall permit the parties to

introduce rebuttal witnesses and

evidence.

(h) All documents and other evidence

offered or taken for the record shall be

open to examination by all parties,

unless otherwise ordered by the ALJ

pursuant to § 185.125.

§ 185.127 Fees.

The party requesting a subpoena shall

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 shall accompany the subpoena

when served, except that when a

subpoena is issued on behalf of the

authority, a check for witness fees and

mileage need not accompany the

subpoena.

§ 185.128 Form, filing and service of

papers.

(a) Form. Documents filed with the

ALJ shall include an original and two

copies. Every pleading and paper filed

in the proceeding shall contain a

caption setting forth the title of the

action, the case number assigned by the

ALJ, and a designation of the paper (e.g.,

motion to quash subpoena). Every

pleading and paper shall be signed by,

and shall contain the address and

telephone number of the party or the

person on whose behalf the paper was

filed, or his or her representative.

(b) Filing. Papers are considered filed

when they are mailed. Date of mailing

may be established by a certificate from

the party or its representative or by

proof that the document was sent by

certified or registered mail.

(c) Service. A party filing a document

with the ALJ shall, at the time of filing,

serve a copy of such document on every

other party. Service upon any party of

any document other than those required

to be served as prescribed in § 185.108

shall be made by delivering a copy or

by placing a copy of the document in

the United States mail, postage prepaid

and addressed, to the party’s last known

address. When a party is represented by

a representative, service shall be made

upon such representative in lieu of the

actual party.

(d) Proof of service. A certificate of the

individual serving the document by

personal delivery or by mail, setting

forth the manner of service, shall be

proof of service.

§ 185.129 Computation of time.

(a) In computing any period of time

under this part or in an order issued

thereunder, 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.

(b) When the period of time allowed

is less than 7 days, intermediate

Saturdays, Sundays, and legal holidays

observed by the Federal Government

shall be excluded from the computation.

(c) Where a document has been served

or issued by placing it in the mail, an

additional 5 days will be added to the

time permitted for any response.

§ 185.130 Motions.

(a) Any application to the ALJ for an

order or ruling shall be by motion.

Motions shall state the relief sought, the

authority relied upon, and the facts

alleged, and shall be filed with the ALJ

and served on all other parties.

(b) Except for motions made during a

prehearing conference or at the hearing,

all motions shall be in writing. The ALJ

may require that oral motions be

reduced to writing.

(c) Within 15 days after a written

motion is served, or such other time as

may be fixed by the ALJ, any party may

file a response to such motion.

(d) The ALJ may not grant a written

motion before the time for filing

responses thereto has expired, except

upon consent of the parties or following

a hearing on the motion, but may

overrule or deny such motion without

awaiting a response.

(e) The ALJ shall make a reasonable

effort to dispose or all outstanding

motions prior to the beginning of the

hearing.

§ 185.131 Sanctions.

(a) The ALJ may sanction a person

including any party or representative for

the following reasons:

(1) Failure to comply with an order,

rule, or procedure governing the

proceeding;

(2) Failure to prosecute or defend an

action; or

(3) Engaging in other misconduct that

interferes with the speedy, orderly, or

fair conduct of the proceeding.

(b) Any such sanction, including but

not limited to those listed in paragraphs

(c), (d), and (e) of this section, shall

reasonably relate to the severity and

nature of the failure or misconduct.

(c) 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 request.

(d) 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.

(e) The ALJ may refuse to consider

any motion, request, response, brief or

other document which is not filed in a

timely fashion.

§ 185.132 The hearing and burden of

proof.

(a) Where requested in accordance

with § 185.109 the ALJ shall conduct a

hearing on the record in order to

determine whether the defendant is

liable for a civil penalty or assessment

under § 185.103 and, if so, the

appropriate amount of any such civil

penalty or assessment considering any

aggravating or mitigating factors.
7898 Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Rules and Regulations

(b) The authority shall prove

defendant’s liability and any aggravating

factors by a preponderance of the

evidence.

(c) The defendant shall prove any

affirmative defenses and any mitigating

factors by a preponderance of the

evidence.

(d) The hearing shall be open to the

public unless otherwise closed by the

ALJ for good cause shown.

§ 185.133 Determining the amount of

penalties and assessments.

(a) 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. Because of the intangible costs

of fraud, the expense of investigating

such conduct, and the need to deter

others who might be similarly tempted,

double damages and a significant civil

penalty ordinarily should be imposed.

(b) 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 (i.e., the

false, fictitious, or fraudulent claims or

statements) 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 the defendant’s

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 costs of 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 public confidence

in the management of Government

programs and operations;

(8) Whether the defendant has

engaged in a pattern of the same or

similar misconduct;

(9) Whether the defendant attempted

to conceal the misconduct;

(10) The degree to which the

defendant has involved others in the

misconduct or in concealing it;

(11) Where the misconduct of

employees or agents is imputed to the

defendant, the extent to which the

defendant’s practices fostered or

attempted to preclude such misconduct;

(12) Whether the defendant

cooperated in or obstructed an

investigation of the misconduct;

(13) Whether the defendant assisted

in identifying and prosecuting other

wrongdoers;

(14) The complexity of the program or

transaction, and the degree of the

defendant’s sophistication with respect

to it, including the extent of the

defendant’s prior participation in the

program or in similar transactions;

(15) Whether the defendant has been

found, in any criminal, civil, or

administrative proceeding to have

engaged in similar misconduct or to

have dealt dishonestly with the

Government of the United States or of

a State, directly or indirectly;

(16) The need to deter the defendant

and others from engaging in the same or

similar misconduct; and

(17) The potential impact of the

misconduct on the rights of others.

(c) Nothing in this section shall 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.

§ 185.134 Witnesses.

(a) Except as provided in paragraph

(b) of this section, testimony at the

hearing shall be given orally by

witnesses under oath or affirmation.

(b) At the discretion of the ALJ,

testimony may be admitted in the form

of a written statement or deposition.

Any such written statement must be

provided to all others parties along with

the last known address of such witness,

in a manner which allows sufficient

time for other parties to subpoena such

witness for cross-examination at the

hearing. Prior written statements of

witnesses proposed to testify at the

hearing and deposition transcripts shall

be exchanged as provided in

§ 185.123(a).

(c) The ALJ shall 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 the

ascertainment of the truth,

(2) Avoid needless consumption of

time, and

(3) Protect witnesses from harassment

or undue embarrassment.

(d) The ALJ shall 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 proceedings

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 shall be conducted in the

manner of direct examination and may

proceed by leading questions only if the

witness is a hostile witness, an adverse

party, or a witness identified with an

adverse party.

(f) Upon motion of any party, the ALJ

shall order witnesses excluded so that

they cannot hear the testimony of other

witnesses. This rule does not authorize

exclusion of the following:

(1) A party who is an individual;

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

an individual, an officer or employee of

the party designated by the party’s

representative; or

(3) 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.

§ 185.135 The record.

(a) The hearing shall be recorded and

transcribed. Transcripts may be

obtained following the hearing from the

ALJ at a cost not to exceed 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 record may be inspected and

copied (upon payment of a reasonable

fee) by anyone, unless otherwise

ordered by the ALJ pursuant to

§ 185.125.

§ 185.136 Post-hearing briefs.

The ALJ may require the parties to file

post-hearing briefs. In any event, any

party may file a post-hearing brief. The

ALJ shall 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.

§ 185.137 Initial decision.

(a) The ALJ shall issue an initial

decision based only on the record,

which shall contain findings of fact,

conclusions of law, and the amount of

any penalties and assessments imposed.

(b) The findings of fact shall include

a finding on each of the following

issues:
Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Rules and Regulations 7899

(1) Whether the claims or statements

identified in the complaint, or any

portions thereof, violate § 185.103.

(2) If the person is liable for penalties

or assessments, the appropriate amount

of any such penalties or assessments

considering any mitigating or

aggravating factors that he or she finds

in the case, such as those described in

§ 185.133.

(c) The ALJ shall promptly serve the

initial decision on all parties within 90

days after the time for submission of

post-hearing briefs and reply briefs (if

permitted) has expired. The ALJ shall at

the same time serve all parties with a

statement describing the right of any

defendant determined to be 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. If the ALJ fails to meet the

deadline contained in this paragraph, he

or she shall notify the parties of the

reason for the delay and shall 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 shall constitute the final

decision of the authority head and shall

be final and binding on the parties 30

days after it is issued by the ALJ.

§ 185.138 Reconsideration of initial

decision.

(a) Except as provided in paragraph

(d) of this section, any party may file a

motion for reconsideration of the initial

decision within 20 days of receipt of the

initial decision. If service was made by

mail, receipt will be presumed to be 5

days from the date of mailing in the

absence of contrary proof.

(b) Every such motion must set forth

the matters claimed to have been

erroneously decided and the nature of

the alleged errors. Such motion shall be

accompanied by a supporting brief.

(c) Responses to such motions shall be

allowed only upon request of the ALJ.

(d) No party may file a motion for

reconsideration of an initial decision

that has been revised in response to a

previous motion for reconsideration.

(e) The ALJ may dispose of a motion

for reconsideration by denying it or by

issuing a revised initial decision.

(f) If the ALJ denies a motion for

reconsideration, the initial decision

shall constitute the final decision of the

authority head and shall be final and

binding on all parties 30 days after the

ALJ denies the motion, unless the initial

decision is timely appealed to the

authority head in accordance with

§ 185.139.

(g) 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 in accordance with § 185.139.

§ 185.139 Appeal to authority head.

(a) Any defendant who has filed a

timely answer and who is determined in

an initial decision to be liable for a civil

penalty or assessment may appeal such

decision to the authority head by filing

a notice of appeal with the authority

head in accordance with this section.

(1) A notice of appeal may be filed at

any time within 30 days after the ALJ

issues an initial decision. However, if

another party files a motion for

reconsideration under § 185.138,

consideration of the appeal shall be

stayed automatically pending resolution

of the motion for reconsideration.

(2) If a motion for reconsideration is

timely filed, a notice of appeal shall be

filed within 30 days after the ALJ denies

the motion or issues a revised initial

decision, whichever applies.

(3) If no motion for reconsideration is

timely filed, a notice of appeal must be

filed within 30 days after the ALJ issues

the initial decision.

(4) The authority head may extend the

initial 30-day period for an additional

30 days if the defendant files with the

authority head a request for an

extension within the initial 30-day

period and shows good cause.

(b) If the defendant files a timely

notice of appeal with the authority head

and the time for filing motions for

reconsideration under § 185.138 has

expired, the ALJ shall forward the

record of the proceeding to the authority

head.

(c) A notice of appeal shall be

accompanied by a written brief

specifying exceptions to the initial

decision and reasons supporting the

exceptions.

(d) The representative for OPM may

file a brief in opposition to exceptions

within 30 days of receiving the notice of

appeal and accompanying brief.

(e) There is no right to appear

personally before the authority head.

(f) There is no right to appeal an

interlocutory ruling by the ALJ.

(g) In reviewing the initial decision

the authority head shall not consider

any objection that was not raised before

the ALJ unless the objecting party can

demonstrate extraordinary

(h) If any party demonstrates to the

satisfaction of the authority head that

additional evidence not presented at

such hearing is material and that there

were reasonable grounds for the failure

to present such evidence at such

hearing, the authority head shall

remand the matter to the ALJ for

consideration of such additional

evidence.

(i) The authority head may affirm,

reduce, reverse, compromise, remand or

settle any penalty or assessment

determined by the ALJ in any initial

decision.

(j) The authority head shall promptly

serve each party to the appeal with a

copy of the decision of the authority

head and a statement describing the

right of any person determined to be

liable for a penalty or assessment to seek

judicial review.

(k) Unless a petition for review is filed

as provided in section 3805 of title 31,

United States Code, after a defendant

has exhausted all administrative

remedies under this part and within 60

days after the date on which the

authority head serves the defendant

with a copy of the authority head’s

decision, a determination that a

defendant is liable under § 185.103 is

final and not subject to judicial review.

§ 185.140 Stays ordered by the

Department of Justice.

If, at any time, the Attorney General

or an Assistant Attorney General

designated by the Attorney General

transmits to the authority head a written

finding that continuation of the

administrative process described in this

part with respect to a claim or statement

may adversely affect any pending or

potential criminal or civil action related

to such claim or statement, the authority

head shall stay the process immediately.

The authority head may order the

process resumed only upon receipt of

the written authorization of the

Attorney General or of the Assistant

Attorney General who ordered the stay.

§ 185.141 Stay pending appeal.

(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.

§ 815.142 Judicial review.

Section 3805 of title 31, United States

Code, authorizes judicial review by an

appropriate United States District Court

of a final decision of the authority head

imposing penalties and/or assessments

under this part and specifies the

procedures for such review.

§ 185.143 Collection of civil penalties and

assessments.

Sections 3806 and 3808(b) of title 31,

United States Code, authorize actions
7900 Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Rules and Regulations

for collection of civil penalties and

assessments imposed under this part

and specify the procedures for such

actions.

§ 185.144 Right to administrative offset.

The amount of any penalty or

assessment which has become final, or

for which a judgment has been entered

under § 185.142 or § 185.143, or any

amount agreed upon in a compromise or

settlement under § 185.146, may be

collected by administrative offset under

section 3716 of title 31, United States

Code, except that an administrative

offset may not be made under section

3716 against a refund of an overpayment

of Federal taxes, then or later owing by

the United States to the defendant.

§ 185.145 Deposit in Treasury of the

United States.

All amounts collected pursuant to this

part shall be deposited as miscellaneous

receipts in the Treasury of the United

States, except as provided in section

3806(g) of title 31, United States Code.

§ 185.146 Compromise or settlement.

(a) Parties may make offers of

compromise or settlement at any time.

(b) The reviewing official has the

exclusive authority to compromise or

settle a case under this part at any time

after the date on which the reviewing

official is permitted to issue a complaint

and before the date on which the ALJ

issues an initial decision.

(c) The authority head has exclusive

authority to compromise or settle a case

under this part at any time after the date

on which the ALJ issues an initial

decision, except during the pendency of

any review under § 185.142 or during

the pendency of any action to collect

penalties and assessments under

§ 185.143.

(d) The Attorney General has

exclusive authority to compromise or

settle a case under this part during the

pendency of any review under § 185.142

or of any action to recover penalties and

assessments under section 3806 to title

31, United States Code.

(e) The investigating official may

recommend settlement terms to the

reviewing official, the authority head, or

the Attorney General, as appropriate.

The reviewing official may recommend

settlement terms to the authority head,

or the Attorney General, as appropriate.

(f) Any compromise or settlement

must be in writing.

§ 185.147 Limitations.

(a) The notice of hearing with respect

to a claim or statement must be served

in the manner specified in § 185.108

within 6 years after the date on which

such a claim or statement is made.

(b) If the defendant fails to file a

timely answer, service of a notice under

§ 185.110(b) shall be deemed a notice of

hearing for purposes of this section.

(c) the statute of limitations may be

executed by written agreement of the

parties.

[FR Doc. 95–3347 Filed 2–9–95; 8:45 am]

BILLING CODE 6325–01–M

NUCLEAR REGULATORY

COMMISSION

10 CFR Part 20

RIN 3150–AF08

Frequency of Medical Examinations for

Use of Respiratory Protection

Equipment

AGENCY: Nuclear Regulatory

Commission.

ACTION: Final rule.

SUMMARY: The Nuclear Regulatory

Commission (NRC) is amending its

regulations concerning the frequency at

which medical fitness determinations

are required to ensure the safe use of

respiratory protection equipment.

Section 10 CFR 20.1703(a)(3)(v)

currently requires the determination by

a physician prior to initial fitting of

respirators, and at least every 12 months

thereafter, that the individual user is

physically able to use the respiratory

protection equipment. The amended

rule requires determination by a

physician prior to initial fitting of

respirators and either every 12 months

thereafter or periodically at a frequency

determined by a physician, that the

individual user is medically fit to use

the respiratory protection equipment.

The final rule reduces the burden on

licensees without adversely impacting

public health and safety.

EFFECTIVE DATE: March 13, 1995.

FOR FURTHER INFORMATION CONTACT:

Alan K. Roecklein, Office of Nuclear

Regulatory Research, U.S. Nuclear

Regulatory Commission, Washington,

DC 20555, telephone (301) 415–6223.

SUPPLEMENTARY INFORMATION:

Background

The requirement for an annual

medical examination to ensure safe use

of respiratory equipment has been in the

regulations for some time. The need for

these examinations was reconfirmed by

the American National Standards

Institute (ANSI) in ANSI Z88.2–1992.

However, considerable experience with

implementation of the requirement has

indicated that the annual frequency of

medical examinations is costly and

could be reduced significantly with no

adverse impact on health and safety.

The NRC Regulatory Review Group

reviewed the existing requirement and

concluded that the frequency of medical

examinations could be reduced without

adverse impact on worker safety. This

change was recommended to the

Commission as a candidate for licensee

burden reduction in SECY–94–003 and

supported by the Commission by

memorandum from Samuel J. Chilk to

James M. Taylor dated February 14,

1994.

The ANSI reviewed this issue and, in

ANSI Z88.6 1984, published a

recommendation that the frequency of

medical examination should be

determined by a physician and should

be reduced based on age of the worker.

ANSI recommended an examination

every 5 years up to age 35, every 2 years

up to age 45, and annually thereafter.

ANSI also recommended special

additional evaluations after prolonged

absence from work for medical reasons

or whenever a functional disability has

been identified. These ANSI

recommendations were reconfirmed in

ANSI Z88.2–1992.

A proposed rule was published in the

Federal Register on September 16, 1994

(59 FR 47565), for public comment. Ten

letters of comment were received, all

supporting the proposed rule.

Consequently the NRC is codifying the

rule as it was proposed.

The final rule provides for periodic

medical examinations at either the 12-

month interval as currently required or

optionally at a frequency determined by

a physician. Under this rule, licensees

can elect to have the physician include

in the initial medical examination or at

the next 12-month reexamination, a

determination of when each individual

would need to be reexamined. Part 20

requires written procedures for use of

respiratory protection equipment.

Consequently, current procedures and

license conditions likely include the

annual frequency and a change in

procedures or license conditions will be

needed to implement a change in

frequency of reexamination. The

recommended frequencies contained in

the ANSI standard may provide

guidance on determining an appropriate

frequency of reexamination which may

be useful to physicians in determining

frequency of reexamination. However,

the Commission is not endorsing this

standard. Rather the Commission

believes that the frequency of

reexamination should be determined by

the examining physician.

The final rule uses the terminology

‘‘medically fit’’ rather than ‘‘physically

able’’ to use a respirator. As indicated in