[Federal Register Volume 62, Number 116 (Tuesday, June 17, 1997)]
[Rules and Regulations]
[Pages 32685-32687]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14805]


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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.

[[Page 32686]]

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

[[Page 32687]]

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