Each invoice that is paid late will result in a late payment sanction calculated on that particular invoice. For example, if you pay your January and February invoices late you will receive a separate late payment interest for each invoice.
Because the unpaid amount is a debt owed to the United States, we are required by the Debt Collection Improvement Act (DCIA) to impose interest and to inform you what may happen if you do not pay the full outstanding debt. USAC will charge interest at the annual rate equal to the U.S. prime rate as of the date of delinquency plus 3.5 percent from the date the contribution was due. This interest rate incorporates administrative charges of collection pursuant to 47 C.F.R. Section 54.713. If the debt remains unpaid more than 90 days, you will be charged an additional penalty of six percent a year for any part of the debt that is more than 90 days past due. If the debt remains unpaid, the full amount of the outstanding debt may be transferred to the United States Department of Treasury (“Treasury”) for debt collection, and you will be required to pay the administrative costs of processing and handling a delinquent claim as set by the Treasury (currently 28 percent of the debt) However, if you pay the full amount of the outstanding debt and associated administrative fees and penalties within 30 days of the due date, the DCIA interest will be waived. These requirements are set out at 31 U.S.C. Section 3717.
Contributing companies that have fallen behind on USF payments will receive delinquency notices from USAC reminding them of their obligation. Notices are generated monthly. A company could receive more than one notice in one month if they are more than one month behind in paying. Each notice represents one month of unpaid transactions and identifies how aged the balance has become.
The balance due on your USAC statement represents your mandatory contributions to universal service support and constitutes a debt owed to the United States as defined by 31 U.S.C. Section 3701 (the Debt Collection Act of 1982 and the Debt Collection Improvement Act of 1996).
If your invoice balance becomes over 120 days delinquent, USAC will transfer the balance to the Secretary of Treasury (Treasury) for further collections activity. This transfer will be identified on the USAC invoice with a line item called “DCIA Transfer.” At that time, the amount is due for payment to the Treasury directly, rather than to USAC.
Once transferred to the Treasury, the delinquent balance is subject to further interest and penalties.
Additional collections and disbursements rules associated with the Debt Collection Improvement Act, codified at 47 C.F.R. Parts 0 and 1, contain specific provisions and include a rule commonly referred to as the "Red Light Rule." (See sections 1.1112, 1.1116, 1.1161, 1.1167, and 1.1910 of the FCC's rules).
With respect to the universal service fund (USF), when an entity's account becomes delinquent by one day, that entity, as well as any other entity associated through a shared taxpayer identification number (TIN), will be considered in "Red Light" status. USAC will not make any disbursements to the associated entities until the delinquency has been satisfied by the entity or until arrangements for payment, satisfactory to the FCC, have been made such as entering into an approved payment plan. Where possible, USAC will offset the delinquent balance with the pending disbursement, except in instances where a BEAR (Billed Entity Applicant Reimbursement) payment is to be issued to an applicant in the Schools and Libraries Program. USAC does not net against BEAR payments. In addition to USF debt Red Light status, USAC also will take into consideration the Red Light status of each entity at the FCC and will hold disbursements until the Red Light status is resolved at the FCC.
At the time that a disbursement is held because an entity is in Red Light status, USAC will send the entity and/or service provider an email notification. If USAC uses a pending disbursement to offset a USF delinquency, USAC will notify the delinquent entity and/or service provider. More information is available on the netted or withheld disbursements page.