Rule2026-05459
Program Fraud Civil Remedies Act Regulations Statutory Updates
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 19, 2026
Effective
May 4, 2026
Issuing agencies
Small Business Administration
Abstract
The United States Small Business Administration (SBA) is amending the Program Fraud Civil Remedies Act regulations in 13 CFR part 142 to reflect changes made to the Program Fraud Civil Remedies Act of 1986 by the Administrative False Claims Act of 2023. These changes, among other things, revise the name of the administrative action from "Program Fraud Civil Remedies" to "Administrative False Claims" and increase the threshold for a claim from $150,000 to $1,000,000. The Administrative False Claims Act mandates that the Agency issue regulations to update part 142 and this direct final rule conforms the regulations to the Administrative False Claims Act by adopting the new statutory requirements without change.
Full Text
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<title>Federal Register, Volume 91 Issue 53 (Thursday, March 19, 2026)</title>
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[Federal Register Volume 91, Number 53 (Thursday, March 19, 2026)]
[Rules and Regulations]
[Pages 13217-13219]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-05459]
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 142
RIN 3245-AI29
Program Fraud Civil Remedies Act Regulations Statutory Updates
AGENCY: U.S. Small Business Administration.
ACTION: Direct final rule.
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SUMMARY: The United States Small Business Administration (SBA) is
amending the Program Fraud Civil Remedies Act regulations in 13 CFR
part 142 to reflect changes made to the Program Fraud Civil Remedies
Act of 1986 by the Administrative False Claims Act of 2023. These
changes, among other things, revise the name of the administrative
action from ``Program Fraud Civil Remedies'' to ``Administrative False
Claims'' and increase the threshold for a claim from $150,000 to
$1,000,000. The Administrative False Claims Act mandates that the
Agency issue regulations to update part 142 and this direct final rule
conforms the regulations to the Administrative False Claims Act by
adopting the new statutory requirements without change.
DATES: This rule is effective May 4, 2026, without further action,
unless significant adverse comment is received by April 20, 2026. If
significant adverse comment is received, SBA will publish a timely
withdrawal of the rule in the Federal Register.
ADDRESSES: You may submit comments, identified by number SBA-2026-0067
or RIN 3245-AI29, in the Federal eRulemaking Portal: <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the instructions for submitting comments.
SBA will post all comments on <a href="http://www.regulations.gov">www.regulations.gov</a>. If you wish to
submit confidential business information (CBI) as defined in the User
Notice at <a href="http://www.regulations.gov">www.regulations.gov</a>, please send an email to Kandace Zelaya
at <a href="/cdn-cgi/l/email-protection#fbb09a959f9a989ed5a19e979a829abb88999ad59c948d"><span class="__cf_email__" data-cfemail="c883a9a6aca9abade692ada4a9b1a988bbaaa9e6afa7be">[email protected]</span></a> and highlight the information that you
consider to be CBI and explain why you believe SBA should hold this
information as confidential. SBA will review the information and make
the final determination whether it will publish the information. All
other comments must be submitted through the Federal eRulemaking Portal
described above.
FOR FURTHER INFORMATION CONTACT: Kandace Zelaya, Office of General
Counsel, (504) 589-2033, <a href="/cdn-cgi/l/email-protection#7f341e111b1e1c1a51251a131e061e3f0c1d1e51181009"><span class="__cf_email__" data-cfemail="074c666963666462295d626b667e664774656629606871">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
This direct final rule implements regulatory changes required by
the Administrative False Claims Act of 2023 (AFCA), Public Law 118-159,
sec. 5203, 138 Stat. 2440 (December 23, 2024). The specific regulatory
changes are further described below.
II. Description of Regulatory Changes
SBA is revising the title of part 142 from ``Program Fraud Civil
Remedies Act Regulations'' to ``Administrative False Claims Act
Regulations.'' In addition, SBA is revising all references to ``Program
Fraud Civil Remedies'' within part 142 to ``Administrative False
Claims.''
SBA is revising 13 CFR 142.1 by adding a reference to the
Administrative False Claims Act of 2023, Public Law 118-159, sec. 5203,
138 Stat. 2440 (2024).
The AFCA expanded the list of claims that a Federal agency can
pursue by imposing liability for submissions of ``reverse false
claims.'' A reverse false claim is when a person acts improperly--not
to obtain money from the Government--but to avoid having to pay money
to the Government. Thus, SBA is revising the definition of a ``claim''
in 13 CFR 142.3 by modifying paragraph (a)(2) to state that a claim
includes any request, demand, or submission made to SBA which ``has the
effect of concealing or improperly avoiding or decreasing an obligation
to pay or transmit property, services, or money.'' Additionally, the
AFCA adopted the definition of ``obligation'' from the Federal False
Claims Act (FCA) (31 U.S.C. 3729-3733). Thus, SBA is adding a
parenthetical to paragraph (a)(2) to explain that ``obligation'' has
the meaning given the term in 31 U.S.C. 3729(b).
The AFCA also adopted the definition of ``material'' from the FCA.
Therefore, SBA is revising 13 CFR 142.5(a)(2) to include a
parenthetical explaining that ``material'' has the meaning given the
term in 31 U.S.C. 3729(b).
SBA is revising 13 CFR 142.7 to replace ``the Program Fraud Civil
Remedies Act'' with ``the Administrative False Claims Act.''
SBA is revising 13 CFR 142.9 to increase the threshold for a claim
or a group of related claims from $150,000 to $1,000,000. Additionally,
SBA is restructuring the existing text into a new paragraph (a) and
adding two new paragraphs. SBA is adding a new paragraph (b) to this
regulation to provide that the maximum amount of a claim or a group of
related claims shall be adjusted for inflation in the same manner and
to the same extent as civil monetary penalties under the Federal Civil
Penalties Inflation Adjustment Act (28 U.S.C. 2461 note). SBA is adding
a new paragraph (c) to this regulation to incorporate the revised
statute of limitations included in the AFCA. The AFCA revised the
statute of limitations for bringing an action to the later of 6 years
after the date of the violation or 3 years after the date on which
facts material to the action are known or reasonably should have been
known by
[[Page 13218]]
the agency head, but in no event more than 10 years after the
violation.
SBA is making two minor technical corrections to 13 CFR 142.12. In
paragraph (a), SBA is replacing ``the Office of Hearings and Appeals''
with ``OHA'' because the term is defined previously in Sec. 142.10. In
paragraph (d), SBA is replacing ``the ALJ'' with ``OHA.''
As discussed above, the AFCA revised the statute of limitations for
bringing a claim and, thus, SBA is revising 13 CFR 142.9 to state when
SBA will bring an action by issuing a complaint and incorporating the
new timeframes set in the AFCA. Consequently, SBA is revising 13 CFR
142.14(b) to remove the six-year limitation on serving the notice of
oral hearing, which incorporated the previous statutory language in 31
U.S.C. 3808(a) that was stricken and replaced under the AFCA. The
requirement that the ALJ promptly serve a notice of oral hearing upon
receipt of the complaint and answer will remain.
The AFCA added a requirement that the reviewing official notify the
Attorney General in writing not later than 30 days before entering into
any agreement to compromise or settle allegations of liability under
the AFCA and before the date on which the reviewing official is
permitted to refer allegations of liability to a presiding officer. SBA
is revising 13 CFR 142.38 by adding the new notification requirement to
paragraph (b).
Finally, SBA is revising 13 CFR 142.39 to add language from the
statute that states that a civil action to recover a penalty or
assessment under this part shall be commenced within 3 years after the
date on which the determination of liability for such penalty or
assessment becomes final.
III. Justification for Direct Final Rule
In general, SBA publishes a rule for public comment before issuing
a final rule in accordance with the Administrative Procedure Act. 5
U.S.C. 553. The Administrative Procedure Act provides an exception to
this standard rulemaking process, however, where an agency finds good
cause to adopt a rule without prior public participation. 5 U.S.C.
553(b)(B). The good cause requirement is satisfied when prior public
participation is impracticable, unnecessary, or contrary to the public
interest.
Agencies typically utilize direct final rulemakings for routine,
non-controversial regulatory actions that are unlikely to receive
adverse comments. In direct final rulemaking, an agency publishes a
final rule with a statement that the rule will go into effect unless
the agency receives significant adverse comment within a specified
period. Significant adverse comments are comments that provide strong
justifications why the rule should not be adopted or for changing the
rule. If the agency receives no significant adverse comment in response
to the direct final rule, the rule goes into effect on the date listed
in the DATES section without further notice. If the agency receives
significant adverse comment, the agency will withdraw the direct final
rule prior to the effective date and may instead issue a proposed
rulemaking.
SBA has determined that prior public participation is unnecessary,
because the regulatory changes addressed in this direct final
rulemaking are routine, non-controversial, and not likely to result in
adverse comments. SBA is implementing changes required by statute which
are already in effect and is merely updating the regulations in order
to conform to the statute. Because the changes in this rule are
prescribed by statute, SBA does not expect significant adverse
comments.
Compliance With Executive Orders 12866, 12988, 13132, 13175, 13563,
14192, the Congressional Review Act (5 U.S.C. 801-808), Paperwork
Reduction Act (44 U.S.C., Ch. 35), and the Regulatory Flexibility Act
(5 U.S.C. 601-612)
Executive Orders 12866 and 13563
Executive Order 12866, Regulatory Planning and Review, requires
agencies to provide a Regulatory Impact Analysis assessing costs and
benefits and addressing available alternatives for any ``significant
regulatory action.'' The Office of Management and Budget has determined
that this direct final rule does not constitute a ``significant
regulatory action.''
Executive Order 13563, Improving Regulation and Regulatory Review,
reaffirms the principles of Executive Order 12866 and requires agencies
to adopt regulations through a process that involves public
participation and, to the extent feasible, base regulations on the open
exchange of information and perspectives from affected stakeholders and
the public as a whole. SBA has developed this direct final rule in a
manner consistent with these requirements. Moreover, Executive Order
13563 requires agencies to assess the benefits and costs of any
regulations and address available alternatives to direct regulation.
This rule implements statutory changes and is not expected to have an
annual effect on the economy of $100 million or more or adversely
affect in a material way the economy, a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or State, local, or tribal governments or communities. As a
result, no Regulatory Impact Analysis is required.
Executive Order 14192
This rule is not an Executive Order 14192 regulatory action because
it is not significant under Executive Order 12866.
Executive Order 12988
This action meets the applicable standards set forth in sections
3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to
minimize litigation, eliminate ambiguity, and reduce burden. The action
does not have preemptive effect or retroactive effect.
Executive Order 13132
This rule does not have federalism implications as defined in
Executive Order 13132. It will not have substantial direct effects on
the States, on the relationship between the National Government and the
States, or on the distribution of power and responsibilities among the
various levels of government, as specified in the Executive Order. As
such it does not warrant the preparation of a Federalism Assessment.
Executive Order 13175
This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.
Congressional Review Act, 5 U.S.C. 801-808
This rule has been determined not to meet the criteria set forth in
5 U.S.C. 804(2). SBA will submit the rule to Congress and the
Government Accountability Office consistent with the Congressional
Review Act's requirements.
Paperwork Reduction Act, 44 U.S.C. Ch. 35
SBA has determined that this rule does not impose additional
reporting or recordkeeping requirements under the Paperwork Reduction
Act, 44 U.S.C., Chapter 35.
[[Page 13219]]
Regulatory Flexibility Act, 5 U.S.C. 601-612
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires
administrative agencies to consider the effect of their actions on
small entities, small nonprofit enterprises, and small local
governments. Pursuant to the RFA, when an agency issues a rulemaking,
the agency must prepare a regulatory flexibility analysis which
describes the impact of the rule on small entities. However, the RFA
requires such analysis only where notice and comment rulemaking is
required. As discussed above, SBA has found good cause that notice and
public comment are impracticable, unnecessary, or contrary to the
public interest. Accordingly, SBA is not required to conduct a
regulatory flexibility analysis and is publishing this rule as a direct
final rule without advance notice and public comment.
List of Subjects in 13 CFR Part 142
Administrative practice and procedure, Claims, Fraud, Penalties.
For the reasons set forth in the preamble, the SBA amends 13 CFR
part 142 as follows:
PART 142--ADMINISTRATIVE FALSE CLAIMS ACT REGULATIONS
0
1. The authority citation for part 142 continues to read as follows:
Authority: 15 U.S.C. 634(b); 31 U.S.C. 3803(g)(2).
0
2. The heading for part 142 is revised to read as set forth above.
0
3. Amend Sec. 142.1 by revising the first sentence of paragraph (a) to
read as follows:
Sec. 142.1 Overview of regulations.
(a) * * * This part implements the Program Fraud Civil Remedies Act
of 1986, 31 U.S.C. 3801-3812, as amended by the Administrative False
Claims Act of 2023, Public Law 118-159, sec. 5203, 138 Stat. 2440
(``the Act''). * * *
* * * * *
0
4. Amend Sec. 142.3 by revising paragraph (a)(3) to read as follows:
Sec. 142.3 What is a claim?
(a) * * *
(3) Made to SBA which has the effect of concealing or improperly
avoiding or decreasing an obligation to pay or transmit property,
services, or money (``obligation'' has the meaning given the term in 31
U.S.C. 3729(b)).
* * * * *
0
5. Amend Sec. 142.5 by revising paragraph (a)(2) to read as follows:
Sec. 142.5 What is a false claim or statement?
(a) * * *
(2) Includes or is supported by a written statement which asserts
or contains a material fact which is false, fictitious, or fraudulent
(``material'' has the meaning given the term in 31 U.S.C. 3729(b));
* * * * *
Sec. 142.7 [Amended]
0
6. Amend Sec. 142.7 by removing ``Program Fraud Civil Remedies Act''
and adding in its place ``Administrative False Claims Act''.
0
7. Revise Sec. 142.9 to read as follows:
Sec. 142.9 When will SBA issue a complaint?
(a) SBA will issue a complaint:
(1) If the Attorney General (or designee) approves the referral of
the allegations for adjudication; and
(2) In a case of submission of false claims, if the amount of money
or the value of property or services demanded or requested in a false
claim, or a group of related claims submitted at the same time, does
not exceed $1,000,000. A group of related claims submitted at the same
time includes only those claims arising from the same transaction (such
as a grant, loan, application, or contract) which are submitted
together as part of a single request, demand, or submission.
(b) Adjustment for inflation: the maximum amount in paragraph
(a)(2) shall be adjusted for inflation in the same manner and to the
same extent as civil monetary penalties under the Federal Civil
Penalties Inflation Adjustment Act (28 U.S.C. 2461 note).
(c) The complaint must be served not later than the later of:
(1) 6 years after the date on which such claim or statement is
made; or
(2) 3 years after the date on which facts material to the action
are known or reasonably should have been known by SBA, but in no event
later than 10 years after the date on which the claim or statement was
made.
Sec. 142.12 [Amended]
0
8. Amend Sec. 142.12 as follows:
0
a. In paragraph (a), remove ``the Office of Hearings and Appeals'' and
add in its place ``OHA''; and
0
b. In paragraph (d), remove ``the ALJ'' and add in its place ``OHA''.
Sec. 142.14 [Amended]
0
9. Amend Sec. 142.14 in paragraph (b) by removing the last sentence.
0
10. Amend Sec. 142.38 by adding a sentence to the end of paragraph (b)
to read as follows:
Sec. 142.38 Can the administrative complaint be settled voluntarily?
* * * * *
(b) * * * A reviewing official shall notify the Attorney General in
writing not later than 30 days before entering into an agreement to
compromise or settle allegations of liability under 31 U.S.C. 3802 and
before the date on which the reviewing official is permitted to refer
allegations of liability to a Presiding Officer under 31 U.S.C.
3803(d)(2)(B).
* * * * *
0
11. Amend Sec. 142.39 by adding a sentence at the end to read as
follows:
Sec. 142.39 How are civil penalties and assessments collected?
* * * A civil action to recover a penalty or assessment under this
part shall be commenced within 3 years after the date on which the
determination of liability for such penalty or assessment becomes
final.
Kelly Loeffler,
Administrator.
[FR Doc. 2026-05459 Filed 3-18-26; 8:45 am]
BILLING CODE 8026-09-P
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