Office of the Secretary, HUD.
Final rule.
This final rule amends HUD's regulations implementing the Program Fraud Civil Remedies Act of 1986 (PFCRA), which were codified in 1996 and were amended in 2003 to include inflation adjustments. This final rule more closely conforms the PFCRA regulations with the PFCRA statutory language, to incorporate additional definitions into the PFCRA regulations, and to add an additional item to the list of factors that HUD shall consider in determining the amount of penalties and assessments to be imposed. This final rule follows publication of a September 8, 2008, proposed rule, but makes no changes at this final rule stage.
Dane Narode, Associate General Counsel for Program Enforcement, Office of General Counsel, Department of Housing and Urban Development, 1250 Maryland Avenue, SW., Suite 200, Washington, DC 20024–0500; telephone number 202–708–2350 (this is not a toll-free number); e-mail address
On June 24, 1988, at 53 FR 24000, HUD published its regulations implementing the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801) (PFCRA). PFCRA established 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 HUD or its agents. HUD's regulations implementing PFCRA are located at 24 CFR part 28. On September 24, 1996, at 61 FR 50208, HUD issued a final rule further streamlining the PFCRA regulations at part 28.
On September 8, 2008, at 73 FR 52130, HUD published a rule that proposed to amend HUD's PFCRA regulations in 24 CFR part 28 to more closely conform the regulations with the PFCRA statutory language, to incorporate additional definitions into the PFCRA regulations, and to add an additional item to the list of factors that HUD shall consider in determining the amount of penalties and assessments to be imposed. In addition to these amendments, the September 8, 2008, rule proposed to move the disclosure of documents regulatory provisions from HUD's regulations in part 28 to HUD's regulations in 24 CFR part 26 (“Hearing Procedures”). The preamble to the September 8, 2008, proposed rule at 73 FR 52130 describes in more detail the amendments that HUD proposed to make to the regulations in part 28.
The September 8, 2008, proposed rule provided a 60-day public comment period. HUD received two public comments from individuals by the close of the public comment period on November 7, 2008.
One commenter expressed strong support for the changes that HUD proposed to make to the part 28 regulations. The commenter expressed support for adding “ability to pay” as an additional factor to determine penalties and assessments, and stated that the appropriate penalty should be commensurate with an individual's income.
The second commenter stated that, unless the commenter misunderstood the proposed rule, the proposed rule was eliminating, by its streamlining procedures, complaints filed by the general public. With respect to the latter comment, the commenter does misunderstand the September 8, 2008, proposed rule. The regulations in 24 CFR part 28 solely address the procedures or penalties against persons who make, submit, present, or cause to be made, submitted, or presented, false, fictitious, or fraudulent claims or written statements to HUD or HUD's agents. The regulations in 24 CFR part 28 do not affect valid claims or complaints presented to HUD, which, depending upon the nature of the complaint, will be addressed by the appropriate HUD office with jurisdiction over the matter in the claim or complaint, or by HUD's Office of Inspector General.
At this final rule stage, HUD adopts the proposed rule without change.
With respect to enforcement actions undertaken pursuant to this rule, HUD is cognizant that section 222 of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104–121) (SBREFA) requires the Small Business and Agriculture Regulatory Enforcement Ombudsman to “work with each agency with regulatory authority over small businesses to ensure that small business concerns that receive or are subject to an audit, on-site inspection, compliance assistance effort, or other enforcement related communication or contact by agency personnel are provided with a means to comment on the enforcement activity conducted by this personnel.” To implement this statutory provision, the Small Business Administration has requested that federal agencies include the following language in agency publications and notices that are provided to small business concerns at the time the enforcement action is undertaken. The language is as follows:
The Small Business and Agriculture Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were established to receive comments from small businesses about federal agency enforcement actions. The Ombudsman will annually evaluate the enforcement activities and rate each agency's responsiveness to small business. If you wish to comment on the enforcement actions of [insert agency name], you will find the necessary comment forms at
In accordance with its notice describing HUD's actions on the implementation of SBREFA, which was published on May 21, 1998 (63 FR 28214), HUD will include the language cited above on notices implementing enforcement actions, to ensure that small entities have the full means to comment on the enforcement activity conducted by HUD.
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This rule does not direct, provide for assistance or loan and mortgage insurance for, or otherwise govern or regulate real property acquisition, disposition, leasing, rehabilitation, alteration, demolition, or new construction; or establish, revise, or provide for standards for construction or construction materials, manufactured housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321
Executive Order 13132 (entitled “Federalism”) prohibits, to the extent practicable and permitted by law, an agency from promulgating a regulation that has federalism implications and either imposes substantial direct compliance costs on state and local governments and is not required by statute, or preempts state law, unless the relevant requirements of Section 6 of the Executive Order are met. This rule does not have federalism implications and does not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order.
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1531–1538) establishes requirements for federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments and the private sector. This rule does not impose any federal mandates on any state, local, or tribal government or the private sector within the meaning of UMRA.
Administrative practice and procedure; Claims; Fraud; Penalties.
28 U.S.C. 2461 note; 31 U.S.C. 3801–3812; 42 U.S.C. 3535(d).
(b) Specifies the hearing and appeal rights of persons subject to allegations of liability for such penalties and assessments. Hearings under this part shall be conducted in accordance with the Administrative Procedure Act pursuant to part 26, subpart B, of this chapter.
(a) The terms
(b) The terms
(c)
(d)
(e)
(f) The
(g)
(a)
(i) Is false, fictitious, or fraudulent;
(ii) Includes or is supported by a written statement which asserts a material fact which is false, fictitious, or fraudulent;
(iii) Includes or is supported by any written statement that:
(A) Omits a material fact;
(B) Is false, fictitious, or fraudulent as a result of the omission; and
(C) Is a statement in which the person making, presenting, or submitting such statement has a duty to include such material fact; or
(iv) Is for payment for the provision of property or services which the person has not provided as claimed.
(b)
(i) The person knows or has reason to know:
(A) Asserts a material fact which is false, fictitious, or fraudulent; or
(B) (
(
(ii) In the case of a statement described in (b)(1)(A)(ii) of this section, is a statement in which the person making, presenting, or submitting such statement has a duty to include such material fact; and
(iii) Contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement.
(a) If the General Counsel or designee determines that the Report of Investigation supports an action under this part, he or she must submit a written request to the Department of Justice for approval to issue a complaint under § 28.25.
(b) The request shall include a description of the claims or statements at issue; the evidence supporting the allegations; an estimate of the amount of money or the value of property, services, or other benefits requested or demanded in violation of § 28.10; any exculpatory or mitigating circumstances that may relate to the claims or statements; and a statement that there is a reasonable prospect of collecting an appropriate amount of penalties and assessments.
(a)
(b)
(1) The allegations of liability against the respondent, including the statutory basis for liability, the claims or statements at issue, and the reasons why liability arises from those claims or statements;
(2) A statement that the required approval to issue the complaint was received from the Department of Justice as required by 24 CFR 28.20;
(3) The amount of penalties and assessments for which the respondent may be held liable;
(4) A statement that the respondent may request a hearing by submitting a written response to the complaint;
(5) The addresses to which a response must be sent in accordance with § 26.38 of this title; and
(6) A statement that failure to submit an answer within 30 days of receipt of the complaint may result in the imposition of the maximum amount of penalties and assessments sought without right of appeal.
(c)
(d)
(a) The respondent may file a written response to the complaint, in accordance with § 26.30 of this title, within 30 days of service of the complaint. The response shall be deemed to be a request for a hearing. The response must include the admission or denial of each allegation of liability made in the complaint; any defense on which the respondent intends to rely; any reasons why the penalties and assessments should be less than the amount set forth in the complaint; and the name, address, and telephone number of the person who will act as the respondent's representative, if any.
(b)
The statute of limitations for commencing hearings under this part shall be tolled:
(a) If the hearing is commenced in accordance with 31 U.S.C. 3803(d)(2)(B) within 6 years after the date on which the claim or statement is made; or
(b) If the parties agree to such tolling.
(a)
(b)
(17) The respondent's ability to pay, and
(18) Any other factors that in any given case may mitigate or aggravate the seriousness of the false claim or statement.