31 U.S.C. § 3902 — Interest penalties
submitted 43 years ago by Pub. L. 97-452 to r/title-31-MONEY-AND-FINANCE · 989 words · no verdicts yet
This section requires interest penalties when agencies make covered payments late and provides related rules.
(a) Under the section 3903 rules, an agency head who does not pay a business for each complete delivered item or service by the required date must pay interest on the amount due. The rate is the Treasury Secretary’s rate published for the cited prompt-payment statute and in effect when the agency incurs the late-payment interest obligation. (b) Interest runs from the day after the required date through payment. (c) A business is owed penalties of at least $1 without requesting them, and each payment must state the penalty, rate, and period. If an agency fails to pay an owed penalty with a later payment or within 10 days, and the business makes a written demand within 40 days, the business gets the original penalty plus the additional percentage penalty set by OMB regulations, subject to the regulatory maximum. (d) Lack of funds does not remove the duty to pay interest. (e) An unpaid penalty after 30 days becomes principal and earns further penalty. (f) This section does not authorize extra appropriations; the agency pays from program funds. (g) A grant recipient may promise such interest in its own contract under its usual practices and State and local law, but cannot use agency grant money for it, count it toward matching, or make it a United States obligation. (h) The section applies to contracts under the cited 1948 Act. For Agricultural Act agreements, producers receive interest when payment misses the required payment or loan-closing date, on the amount due and for the late period. The listed dates apply to purchase agreements, loans, refunds, land-diversion payments, and deficiency payments. Those penalties come from the cited Commodity Credit Corporation funds, and section 3907 does not apply.
Under regulations prescribed under section 3903 of this title, the head of an agency acquiring property or service from a business concern, who does not pay the concern for each complete delivered item of property or service by the required payment date, shall pay an interest penalty to the concern on the amount of the payment due. The interest shall be computed at the rate of interest established by the Secretary of the Treasury, and published in the Federal Register, for interest payments under section 7109(a)(1) and (b) of title 41, which is in effect at the time the agency accrues the obligation to pay a late payment interest penalty.
The interest penalty shall be paid for the period beginning on the day after the required payment date and ending on the date on which payment is made.
A business concern shall be entitled to an interest penalty of $1.00 or more which is owed such business concern under this section, and such penalty shall be paid without regard to whether the business concern has requested payment of such penalty.
Each payment subject to this chapter for which a late payment interest penalty is required to be paid shall be accompanied by a notice stating the amount of the interest penalty included in such payment and the rate by which, and period for which, such penalty was computed.
If a business concern—
is owed an interest penalty by an agency;
is not paid the interest penalty in a payment made to the business concern by the agency on or after the date on which the interest penalty becomes due;
is not paid the interest penalty by the agency within 10 days after the date on which such payment is made; and
makes a written demand, not later than 40 days after the date on which such payment is made, that the agency pay such a penalty,
such business concern shall be entitled to an amount equal to the sum of the late payment interest penalty to which the contractor is entitled and an additional penalty equal to a percentage of such late payment interest penalty specified by regulation by the Director of the Office of Management and Budget, subject to such maximum as may be specified in such regulations.
The temporary unavailability of funds to make a timely payment due for property or services does not relieve the head of an agency from the obligation to pay interest penalties under this section.
An amount of an interest penalty unpaid after any 30-day period shall be added to the principal amount of the debt, and a penalty accrues thereafter on the added amount.
This section does not authorize the appropriation of additional amounts to pay an interest penalty. The head of an agency shall pay a penalty under this section out of amounts made available to carry out the program for which the penalty is incurred.
A recipient of a grant from the head of an agency may provide in a contract for the acquisition of property or service from a business concern that, consistent with the usual business practices of the recipient and applicable State and local law, the recipient will pay an interest penalty on amounts overdue under the contract under conditions agreed to by the recipient and the concern. The recipient may not pay the penalty from amounts received from an agency. Amounts expended for the penalty may not be counted toward a matching requirement applicable to the grant. An obligation to pay the penalty is not an obligation of the United States Government.
This section shall apply to contracts for the procurement of property or services entered into pursuant to section 4(h) of the Act of June 29, 1948 (15 U.S.C. 714b(h)).
In the case of a payment to which producers on a farm are entitled under the terms of an agreement entered into under the Agricultural Act of 1949 (7 U.S.C. 1421 et seq.), an interest penalty shall be paid to the producers if the payment has not been made by the required payment or loan closing date. The interest penalty shall be paid—
on the amount of payment or loan due; and
for the period beginning on the first day beginning after the required payment or loan closing date and ending on the date the amount is paid or loaned.
As used in this subsection, the “required payment or loan closing date” means—
for a purchase agreement, the 30th day after delivery of the warehouse receipt for the commodity subject to the purchase agreement;
for a loan agreement, the 30th day beginning after the date of receipt of an application with all requisite documentation and signatures, unless the applicant requests that the disbursement be deferred;
for refund of amounts received greater than the amount required to repay a commodity loan, the first business day after the Commodity Credit Corporation receives payment for such loan;
for land diversion payments (other than advance payments), the 30th day beginning after the date of completion of the production adjustment contract by the producer;
for an advance land diversion payment, 30 days after the date the Commodity Credit Corporation executes the contract with the producer;
for a deficiency payment (other than advance payments) based upon a 12-month or 5-month period, 91 days after the end of such period; or
for an advance deficiency payment, 30 days after the date the Commodity Credit Corporation executes the contract with the producer.
Payment of the interest penalty under this subsection shall be made out of funds available under section 8 of the Act of June 29, 1948 (15 U.S.C. 714f).
Section 3907 of this title shall not apply to interest penalty payments made under this subsection.
Source credit: (Added Pub. L. 97–452, § 1(18)(A), Jan. 12, 1983, 96 Stat. 2475; amended Pub. L. 98–216, § 1(6), Feb. 14, 1984, 98 Stat. 4; Pub. L. 100–496, § 3, Oct. 17, 1988, 102 Stat. 2456; Pub. L. 105–362, title XIII, § 1301(c)(2)(B), Nov. 10, 1998, 112 Stat. 3293; Pub. L. 111–350, § 5(h)(7), Jan. 4, 2011, 124 Stat. 3849.)
- 1983Enacted · Pub. L. 97-452 · 96 Stat. 2475
- 1984Amended · Pub. L. 98-216 · 98 Stat. 4
- 1988Amended · Pub. L. 100-496 · 102 Stat. 2456
- 1998Amended · Pub. L. 105-362 · 112 Stat. 3293
- 2011Amended · Pub. L. 111-350 · 124 Stat. 3849
A history note hasn’t been published yet. The record shows enactment by Pub. L. 97-452 on 1983-01-12.
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