Procedures for the Collection of Debts by Administrative Offset

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

29 CFR Part 1650

RIN 3046-AA45

Procedures for the Collection of Debts by Administrative Offset

AGENCY: Equal Employment Opportunity Commission.

ACTION: Interim rule.

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SUMMARY: The Debt Collection Act of 1982, as amended by the Debt

Collection Improvement Act of 1996, requires Federal agencies prior to

collecting a claim owed to the Government by administrative offset to

either adopt Department of Justice, the General Accounting Office or

the Department of Treasury administrative offset regulations without

change or to prescribe their own regulations for collecting claims by

administrative offset which are consistent with Department of Justice,

the General Accounting Office or Department of Treasury regulations.

This interim rule establishes Commission regulations for the collection

of debts by administrative offset.

DATES: This rule will become effective on June 17, 1997. Written

comments on the interim rule must be received on or before August 18,

1997.

ADDRESSES: Comments should be submitted to the Office of the Executive

Secretariat, Equal Employment Opportunity Commission, 1801 L Street,

N.W., Washington D.C. 20507. Copies of comments submitted by the public

will be available for review at the Commission's library, room 6502,

1801 L Street, N.W., Washington, D.C. between the hours of 9:30 a.m.

and 5:00 p.m.

FOR FURTHER INFORMATION CONTACT: Kassie A. Billingsley, Director

Financial and Resource Management Services, Equal Employment

Opportunity Commission, 1801 L Street, N.W., Room 2001, Washington,

D.C. 20507, (202) 663-4200 or 202 (663)-4074 (TDD). A copy of the

interim rule may be obtained by contacting Ms. Billingsley. This

interim rule is also available in the following formats: large print,

braille, audio tape and electronic file on computer disk. Requests for

this interim rule in an alternative format should be made to the

Publications Center at 1-800-669-3362.

SUPPLEMENTARY INFORMATION: The Commission is publishing Subpart C

(Secs. 1650.301 through 1650.309) as an interim rule to provide for the

continued collection of debts by administrative offset. The Commission

will consider all comments received on Subpart C and, if necessary,

will publish a revised final rule.

Promulgation of these regulations pursuant to the Debt Collection

Improvement Act of 1996 (31 U.S.C. 3716) ensures that the public is

informed of the Federal Government's debt collection policies,

reaffirms the Government's commitment to collect debts due it, and

reiterates the public's obligation to repay amounts owed to the Federal

Government. The regulations provide a debtor the appropriate due

process rights such as the ability to verify, challenge and compromise

claims and access to an administrative appeal procedure which is

reasonable, while at the same time protecting the Government's

interests.

Executive Order 12866

In promulgating the interim rules implementing the administrative

offset provisions of the Debt Collection Improvement Act of 1996, the

Commission has adhered to the regulatory philosophy and the applicable

principles of regulation set forth in section 1 of Executive Order

12866, Regulatory Planning and Review. In addition, it has been

determined that this regulation is not a significant regulatory action

within the meaning of section 3(f).

Regulatory Flexibility Act

As Chairman of the Equal Employment Opportunity Commission, I

certify under the Regulatory Flexibility Act (5 U.S.C. chapter 6) that

this interim rule will have no economic impact on small entities

because it establishes Commission procedures for the collection of

debts owed to the Government by its current and former employees.

Paperwork Reduction Act

The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply

to this interim rule because it does not contain information collection

requirements that require the approval of the Office of Management and

Budget.

List of Subjects in 29 CFR Part 1650

Administrative practice and procedure, Claims, Government

employees, Income taxes.

Dated: May 16, 1997.

For the Commission.

Gilbert F. Casellas,

Chairman.

For the reasons set forth in the preamble, title 29, chapter XIV of

the Code of Federal Regulations is amended as follows:

PART 1650--DEBT COLLECTION

1. The authority citation for Part 1650 is revised to read as

follows:

Authority: 5 U.S.C. 5514; 31 U.S.C. 3716, 3720A; 5 CFR 550.1101.

2. Subpart C, consisting of Secs. 1650.301 through 1650.309, is

added to Part 1650 to read as follows:

Subpart C--Procedures for Collection of Debts by Administrative Offset

Sec.

1650.301 Purpose.

1650.302 Scope.

1650.303 Definitions.

1650.304 Notice of administrative offset.

1650.305 Agency review.

1650.306 Written repayment agreement.

1650.307 Administrative offset.

1650.308 Accelerated procedures.

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1650.309 Additional administrative procedures.

Subpart C--Procedures for Collection of Debts by Administrative

Offset

Sec. 1650.301 Purpose.

This subpart sets forth the procedures to be followed in the

collection by administrative offset of debts owed to the United States.

Sec. 1650.302 Scope.

(a) Applicability. (1) The procedures in this subpart apply to the

collection by administrative offset of debts owed to the Commission or

other Federal agencies by former or current Commission employees under

the authority of 31 U.S.C. 3716, common law, or any other applicable

statutory authority, e.g., training expenses under 5 U.S.C. 4108, debts

of employees removed for cause under 5 U.S.C. 5511, amounts owed by

accountable officers under 5 U.S.C. 5512, advances of pay under 5

U.S.C. 5522, temporary duty travel advances under 5 U.S.C. 5705, and

relocation advances under 5 U.S.C. 5724.

(2) The procedures in this subpart also apply to offset of debts

owed to the Commission or other Federal agencies by the Commission's

contractors and grant recipients.

(b) Non-applicability. (1) The procedures in this subpart do not

apply where collection by administrative offset of the debt involved is

explicitly provided for or prohibited by another statute.

(2) The procedures in this subpart also do not apply to debts owed

to the Commission by other Federal agencies or debts owed to the

Commission or other Federal agencies by a State or local government.

(c) Waiver requests and claims to the GAO. The procedures in this

subpart do not preclude a debtor from requesting waiver of an erroneous

payment of pay, travel, transportation, or relocation expenses under 5

U.S.C. 5584 or any other provision of law or from questioning the

amount or validity of a debt by submitting a subsequent claim to the

U.S. Government Accounting Office.

(d) Compromise, suspension, or termination under the Federal Claims

Collection Standards. Nothing in this subpart precludes the compromise,

suspension, or termination of administrative offset collection actions,

where appropriate, in accordance with the Federal Claims Collection

Standards in 4 CFR chapter II.

Sec. 1650.303 Definitions.

For purposes of this subpart, the term administrative offset means

the withholding of money payable by the Commission to, or held by the

Commission for, a person to satisfy a debt the person owes to the

Government. The term person means a natural person or persons, profit

or non-profit corporation, partnership, association, trust, estate,

consortium, or other entity which is capable of owing a debt to the

United States Government except that the term does not include an

agency of the United States Government or any State or a unit of a

general local government. The terms agency, creditor agency, debt,

employee, FCCS, FRMS and waiver shall have the meanings set forth in

subpart A of this part.

Sec. 1650.304 Notice of administrative offset.

(a) Advance notice. At least 30 days in advance of collecting any

debt by administrative offset, notice of the Commission's intent to

offset shall be given to the debtor by certified mail, return receipt

requested, at the most current address that is available to the

Commission. The notice shall provide:

(1) A description of the nature and amount of the debt and the

Commission's intention to collect the debt through administrative

offset;

(2) An opportunity to inspect and copy the records of the

Commission with respect to the debt;

(3) An opportunity to request review of the Commission's

determinations with respect to the debt; and

(4) An opportunity to enter into a written agreement for the

repayment of the amount of the debt.

(b) Exception to the advance notice requirement. When the

procedural requirements in this subpart have been previously provided

to a debtor in connection with the same debt under another statutory or

regulatory authority, such as for salary offset or pursuant to a notice

of audit disallowance, the Commission is not required to duplicate

those procedures before initiating collection of the debt by

administrative offset.

Sec. 1650.305 Agency review.

(a) A debtor may dispute the existence of the debt, the amount of

the debt, or the terms of repayment. The request to review the disputed

debt must be received by the Director of the Financial Management

Division within 30 calendar days of the debtor's receipt of the pre-

offset notice.

(b) If the debtor requests an opportunity to inspect or copy the

Commission's records concerning the debt, then the debtor will have 10

business days from the date of inspection or from receipt of the mailed

documents for review.

(c) Pending review of the disputed debt, transactions in any of the

debtor's account(s) maintained in the Commission may be temporarily

suspended to the extent of the debt that is owed. Depending on the type

of transaction, the suspension could preclude payment, withdrawal, or

transfer, as well as prevent the payment of interest or discount due

thereon. Should the dispute be resolved in the debtor's favor, the

suspension will be lifted immediately.

(d) During the review period, interest, penalties, and

administrative costs authorized under the Federal Claims Collection Act

of 1966, as amended (31 U.S.C. 3711), will continue to accrue.

Sec. 1650.306 Written repayment agreement.

A debtor may request an opportunity to negotiate a written

agreement for the repayment of the debt. If the financial position of

the debtor does not support the ability to pay in one lump-sum,

reasonable installments may be considered. No installment arrangement

will be considered unless the debtor submits a financial statement,

executed under penalty of perjury, reflecting the debtor's assets,

liabilities, income, and expenses. The financial statement must be

submitted within 10 business days of the Commission's request for the

statement. At the Commission's option, a confess-judgment note or bond

of indemnity with surety may be required for the installment agreement.

Notwithstanding the provisions of this section, any reduction or

compromise of a claim will be governed by 4 CFR part 103 and 31 U.S.C.

3711.

Sec. 1650.307 Administrative offset.

(a) If the debtor does not timely exercise his right to review or,

as a result of the review, it is determined that the debt is due and no

written agreement is executed, then administrative offset shall be

ordered in accordance with these regulations without further notice.

(b) The Director of the Financial Management Division of Financial

and Resource Management Services or designee, after attempting to

collect a debt from a person under the Federal Claims Collection Act of

1966, as amended (31 U.S.C. 3711), may collect the debt by

administrative offset subject to the following:

(1) The debt is certain in amount; and

(2) It is in the best interest of the United States to collect the

debt by administrative offset because it is less

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costly and speeds repayment of the debt.

(c) If the 6-year period for bringing action on a debt provided in

28 U.S.C. 2415 has expired, then administrative offset may be used to

collect the debt only if the costs of bringing such action are likely

to be less than the amount of the debt.

(d) No collection by administrative offset shall be made on any

debt that has been outstanding for more than 10 years unless facts

material to the Government's right to collect the debt were not known,

and reasonably could not have been known, by the official or officials

responsible for discovering and collecting such debt.

(e) Request for administrative offset by the Commission to another

Federal agency. The Director of the Financial Management Division, or

designee, may request that funds due and payable to a debtor by a

Federal agency be administratively offset in order to collect a debt

owed to the Commission by that debtor. In requesting administrative

offset the Commission, as creditor, will certify in writing to the

Federal agency holding funds of the debtor:

(1) That the debtor owes the debt;

(2) The amount and basis of the debt; and

(3) That the Commission has complied with the requirements of its

own administrative offset regulations in this subpart, and the

applicable provisions of 4 CFR part 102, including providing any

required hearing or review.

(f) Request for administrative offset from another Federal agency.

Any Federal creditor agency may request the Commission make an

administrative offset from any Commission funds due and payable to a

creditor agency's debtor. The Commission shall initiate the requested

administrative offset only upon:

(1) Receipt of written certification from the creditor agency:

(i) That the debtor owes the debt;

(ii) The amount and basis of the debt;

(iii) That the agency has prescribed regulations for the exercise

of administrative offset; and

(iv) That the agency has complied with its own administrative

offset regulations and with the applicable provisions of 4 CFR part

102, including providing any required hearing or review; and

(2) A determination by the Commission that collection by

administrative offset against funds payable to the debtor by the

Commission would not otherwise be contrary to law.

Sec. 1650.308 Accelerated procedures.

The Commission may make an administrative offset against a payment

to be made to the debtor prior to the completion of the procedures

required by this subpart, if failure to take the offset would

substantially jeopardize the Commission's ability to collect the debt,

and the time before the payment is to be made does not reasonably

permit the completion of those procedures. Such prior offset shall be

promptly followed by the completion of the procedures required by this

subpart. Amounts recovered by offset but later found not to be owed to

the Commission shall be promptly refunded.

Sec. 1650.309 Additional administrative procedures.

Nothing contained in this subpart is intended to preclude the use

of any other administrative remedy which may be available.

[FR Doc. 97-14805 Filed 6-16-97; 8:45 am]

BILLING CODE 6570-06-P