[Federal Register Volume 64, Number 125 (Wednesday, June 30, 1999)]
[Rules and Regulations]
[Pages 34968-34976]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16369]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of Federal Housing Enterprise Oversight

12 CFR Part 1730

RIN 2550-AA07


Debt Collection

AGENCY: Office of Federal Housing Enterprise Oversight, HUD.

ACTION: Interim regulation with request for comments.

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SUMMARY: The Office of Federal Housing Enterprise Oversight (OFHEO) is 
issuing an interim regulation that sets forth procedures for use by 
OFHEO in collecting debts owed to the Federal Government. The Federal 
Claims Collection Act of 1966, as amended by the Debt Collection Act of 
1982 and the Debt Collection Improvement Act of 1996, requires agencies 
to issue a regulation on their debt collection procedures. The interim 
regulation includes procedures for collection of debts through salary 
offset, administrative offset, and tax refund offset. OFHEO requests 
comments on the interim regulation.

DATES: The interim regulation is effective June 30, 1999. Written 
comments on the interim regulation must be received by August 30, 1999.

ADDRESSES: Send written comments concerning the interim regulation to 
Anne E. Dewey, General Counsel, Office of Federal Housing Enterprise 
Oversight, Fourth Floor, 1700 G Street, NW., Washington, DC 20552. 
Written comments may also be sent to Ms. Dewey by electronic mail at 
[email protected].

FOR FURTHER INFORMATION CONTACT: Isabella W. Sammons, Associate General 
Counsel, telephone (202) 414-3751 (not a toll-free number); or Gail 
Palestine, Financial Management Officer, telephone (202) 414-3816 (not 
a toll-free number), Office of Federal Housing Enterprise Oversight, 
Fourth Floor, 1700 G Street, NW., Washington, DC 20552. The telephone 
number for the Telecommunications Device for the Deaf is (800) 877-
8339.

SUPPLEMENTARY INFORMATION:

Discussion of the Interim Regulation

    The interim regulation implements the requirements of the Federal 
Claims Collection Act, Pub. L. 89-508, 80 Stat. 308 (1966), as amended 
by the Debt Collection Act of 1982, Pub. L. 97-365, 96 Stat. 1749 
(1982), and the Debt Collection Improvement Act of 1966, Pub. L. 104-
134, 110 Stat. 1321 (1996). The interim regulation provides that OFHEO 
will attempt to collect debts owed to the Federal Government either 
directly or by salary offset, administrative offset, or tax refund 
offset.
    Subpart A of the interim regulation addresses the collection of 
debts in general and incorporates the debt collection procedures of the 
Federal Claims Collection Standards (FCCS) at 4 CFR chapter II. A 
revised FCCS has been proposed jointly by the Department of Justice and 
the Department of the Treasury. 62 FR 68476-01, Dec. 31, 1997. OFHEO 
will amend, as necessary, its Debt Collection regulation after the 
revised FCCS has been issued as a final regulation.
    Subpart A also provides, in accordance with applicable law and 
regulations, that OFHEO will transfer debts that are delinquent for 
over 180 days to the Secretary of the Department of the Treasury for 
collection or other appropriate action. It further provides that debts 
that are delinquent for less than 180 days may be referred to debt 
collection centers for collection.
    Subpart B of the interim regulation sets forth the procedures that 
will be used by OFHEO to collect debts owed to the Federal Government 
by OFHEO employees and former OFHEO employees who are employed by other 
agencies. When an employee of an agency is indebted to the Federal 
Government, the agency may collect the debt by salary offset, that is, 
by deductions from the current pay account of the employee. 5 U.S.C. 
5514(a)(1).
    The procedures for salary offset are governed by 5 U.S.C. 5514, and 
by Office of Personnel Management (OPM) regulations at 5 CFR part 550, 
subpart K (63 FR 72098, Dec. 31, 1998). Agencies are required to 
promulgate their own salary offset regulations, 5 U.S.C. 5514(b)(1), 
that must conform with the OPM regulations and be approved by OPM 
before they become effective. 5 CFR 550.1105(a)(1). The salary offset 
provisions of subpart B of the interim regulation have been reviewed 
and approved by OPM.
    Subpart C of the interim regulation sets forth the procedures that 
OFHEO will use to collect debts by administrative offset, if salary 
offset is not applicable or appropriate. Under this method of 
collection, an agency collects a debt from a debtor by withholding 
money that is either payable to the debtor or held by the Federal 
Government for the debtor. 31 U.S.C. 3716. Subpart C is consistent with 
the procedures of administrative offset set forth in 31 U.S.C. 3716 and 
the FCCS.
    Subpart D of the interim regulation sets forth the procedures used 
for collection by the tax refund offset. If collection by salary offset 
or administrative offset is not feasible, an agency must seek to 
recover monies owed it by requesting that the Internal Revenue Service 
reduce a tax refund to a debtor by the amount of the debt and pay such 
monies to the agency. 31 U.S.C. 3720A, 26 CFR 301.6402-6. In order to 
use the tax refund offset method of collection, the Internal Revenue 
Service requires that the agency promulgate temporary or permanent 
regulations covering all three collection methods: salary offset, 
administrative offset, and tax refund offset. 31 U.S.C. 3720A(b)(4), 26 
CFR 301.6402-6(b). The publication of this interim regulation satisfies 
that requirement.

Effective Date and Request for Comments

    OFHEO has determined that this interim regulation pertains to 
agency practice and procedure and is interpretative in nature. The 
procedures contained in the interim regulation for salary offset, 
administrative offset, and tax refund offset are mandated by law and by 
regulations promulgated by OPM, jointly by the Department of the 
Treasury and the Department of Justice, and by the IRS. Therefore, the 
interim regulation is not subject to the Administrative Procedure Act 
(APA) and the requirements of the APA for a notice and comment period 
and for a delayed effective date. 5 U.S.C. 553(b) and (c). 
Nevertheless, OFHEO requests comments from the public and will take all 
comments into consideration before promulgating the final regulation. 
Copies of all comments received will be available for examination by 
the public at the Office of Federal Housing Enterprise Oversight, 
Fourth Floor, 1700 G Street, NW., Washington, DC 20552.

[[Page 34969]]

Regulatory Impact

Executive Order 12866, Regulatory Planning and Review

    This interim regulation is not classified as a significant rule 
under Executive Order 12866 because it will not result in (1) an annual 
effect on the economy of $100 million or more; (2) a major increase in 
costs or prices for consumers, individual industries, Federal, State, 
or local government agencies, or geographic regions; or (3) significant 
adverse effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based enterprises to 
compete with foreign-based enterprises in domestic or foreign markets. 
Accordingly, no regulatory impact assessment is required and this 
interim regulation has not been submitted to the Office of Management 
and Budget for review.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that 
a regulation that has a significant economic impact on a substantial 
number of small entities, small businesses, or small organizations must 
include an initial regulatory flexibility analysis describing the 
regulation's impact on small entities. Such an analysis need not be 
undertaken if the agency has certified that the regulation will not 
have a significant economic impact on a substantial number of small 
entities. 5 U.S.C. 605(b). OFHEO has considered the impact of this 
interim regulation under the Regulatory Flexibility Act. Of the few 
debts that have been owed to OFHEO, most have been owed by individuals 
rather than business entities. Therefore, the General Counsel of OFHEO 
certifies that the interim regulation is not likely to have a 
significant economic impact on a substantial number of small business 
entities.

Paperwork Reduction Act

    This interim regulation does not contain any information collection 
requirements that require the approval of the Office of Management and 
Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).

Unfunded Mandates Reform Act of 1995

    This interim regulation does not require the preparation of an 
assessment statement in accordance with the Unfunded Mandates Reform 
Act of 1995, 2 U.S.C. 1531. Assessment statements are not required for 
regulations that incorporate requirements specifically set forth in 
law. As explained in the preamble, this regulation implements specific 
statutory requirements. In addition, this regulation does not include a 
Federal mandate that may result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more (adjusted annually for inflation) in any one year.

Submission to Congress and the General Accounting Office

    Under 5 U.S.C. 801(a)(1)(A), OFHEO has submitted a report 
containing this interim regulation and other required information to 
each House of Congress and the Comptroller General of the United States 
before publication of this interim regulation in the Federal Register. 
The interim regulation is not a major rule as defined at 5 U.S.C. 
804(2).

List of Subjects in 12 CFR Part 1730

    Administrative practice and procedure, Debt collection.

    For the reasons stated in the preamble, part 1730 is added to 
chapter XVII, title 12 of the Code of Federal Regulations to read as 
follows:

PART 1730--DEBT COLLECTION

Subpart A--General

Sec.
1730.1  Authority and scope.
1730.2  Definitions.
1730.3  Collection of debts and referrals to the Department of the 
Treasury.
1730.4--1730.19  [Reserved]

Subpart B--Salary Offset

1730.20  Authority and scope.
1730.21  Notice requirements before salary offset where OFHEO is the 
creditor agency.
1730.22  Review of OFHEO records related to the debt.
1730.23  Opportunity for a hearing where OFHEO is the creditor 
agency.
1730.24  Certification when OFHEO is the creditor agency.
1730.25  Voluntary repayment agreements as alternative to salary 
offset where OFHEO is the creditor agency.
1730.26  Special review where OFHEO is creditor agency.
1730.27  Notice of salary offset where OFHEO is the paying agency.
1730.28  Procedures for salary offset where OFHEO is the paying 
agency.
1730.29  Coordinating salary offset with other agencies.
1730.30  Interest, penalties, and administrative costs.
1730.31  Refunds.
1730.32  Request from a creditor agency for the services of a 
hearing official.
1730.33  Non-waiver of rights by payment.
1730.34-1730.39  [Reserved]

Subpart C--Administrative Offset

1730.40  Authority and scope.
1730.41  Offset prior to completion of procedures.
1730.42  Procedures.
1730.43  Interest.
1730.44  Refunds.
1730.45  Requests for administrative offset to other Federal 
agencies.
1730.46  Requests for administrative offset from other Federal 
agencies.
1730.47  Administrative offset against amounts payable from Civil 
Service Retirement and Disability Fund.
1730.48--1730.49  [Reserved]

Subpart D--Tax Refund Offset

1730.50  Authority and scope.
1730.51  Definitions.
1730.52  Procedures.

    Authority: 5 U.S.C. 5514; 26 U.S.C. 6402(d); 31 U.S.C. 3701-
3720A.

Subpart A--General


Sec. 1730.1  Authority and scope.

    (a) Authority. The Office of Federal Housing Enterprise Oversight 
(OFHEO) issues this part 1730 under the authority of 5 U.S.C. 5514 and 
31 U.S.C. 3701-3720A, and in conformity with the FCCS at 4 CFR chapter 
II; the regulations on salary offset issued by the Office of Personnel 
Management at 5 CFR part 550, subpart K; and the regulations on tax 
refund offset issued by the Internal Revenue Service at 26 CFR 
301.6402-6.
    (b) Scope. (1) This part 1730 applies to debts that are owed to the 
Federal Government by Federal employees, other persons, organizations, 
or entities that are indebted to OFHEO, and by Federal employees of 
OFHEO who are indebted to other agencies, except for those debts listed 
in paragraph (b)(2) of this section.
    (2) Subparts B and C of this part 1730 do not apply to:
    (i) Debts or claims arising under the Internal Revenue Code (26 
U.S.C. 1 et seq.) or the tariff laws of the United States;
    (ii) Any case to which the Contract Disputes Act (41 U.S.C. 601 et 
seq.) applies;
    (iii) Any case where collection of a debt is explicitly provided 
for or provided by another statute, e.g. travel advances under 5 U.S.C. 
5705 and employee training expenses under 5 U.S.C. 4108, or, as 
provided for by title 11 of the United States Code, when the claims 
involve bankruptcy;
    (iv) Any debt based in whole or in part on conduct in violation of 
the antitrust laws or involving fraud, the presentation of a false 
claim, or misrepresentation on the part of the debtor or any party 
having an interest in the claim, unless the Department of

[[Page 34970]]

Justice authorizes OFHEO to handle the collection;
    (v) Claims between agencies; or
    (vi) A claim that has been outstanding for more than 10 years after 
the creditor agency's right to collect the debt first accrued, unless 
facts material to the Federal Government's right to collect were not 
known and could not reasonably have been known by the officials charged 
with the responsibility for discovery and collection of such debts.
    (3) Nothing in this part 1730 precludes the compromise, suspension, 
or termination of collection actions, where appropriate under the FCCS, 
or the use of alternative dispute resolution methods if they are not 
inconsistent with applicable law and regulations.
    (4) Nothing in this part 1730 precludes an employee from requesting 
waiver of an erroneous payment under 5 U.S.C. 5584, 10 U.S.C. 2774, or 
32 U.S.C. 716, or from questioning the amount or validity of a debt, in 
the manner set forth in this part 1730.


Sec. 1730.2  Definitions.

    The following definitions apply to the terms used in this part 
1730, unless the term is defined elsewhere in this part 1730.
    (a) Administrative offset means an action, pursuant to 31 U.S.C. 
3716, in which the Federal Government withholds funds payable to, or 
held by the Federal Government for a person, organization, or other 
entity in order to collect a debt from that person, organization, or 
other entity. Such funds include funds payable by the Federal 
Government on behalf of a State Government.
    (b) Agency means a department, agency, court, court administrative 
office, or instrumentality in the executive, judicial, or legislative 
branch of the Federal Government, including government corporations.
    (c) Claim or debt (used interchangeably in this part 1730) means 
any amount of funds or property that has been determined by an agency 
official to be due the Federal Government by a person, organization, or 
entity, except another agency. It also means any amount of money, 
funds, or property owed by a person to a State, the District of 
Columbia, American Samoa, Guam, the United States Virgin Islands, the 
Commonwealth of the Northern Mariana Islands, or the Commonwealth of 
Puerto Rico. A claim or debt includes:
    (1) Funds owed on account of loans made, insured, or guaranteed by 
the Federal Government, including any deficiency or any difference 
between the price obtained by the Federal Government in the sale of a 
property and the amount owed to the Federal Government on a mortgage on 
the property;
    (2) Expenditures of non-appropriated funds;
    (3) Overpayments, including payments disallowed by audits performed 
by the Inspector General of the agency administering the program;
    (4) Any amount the Federal Government is authorized by statute to 
collect for the benefit of any person;
    (5) The unpaid share of any non-Federal partner in a program 
involving a Federal payment, and a matching or cost-sharing payment by 
the non-Federal partner;
    (6) Any fines or penalties assessed by an agency; and
    (7) Other amounts of money or property owed to the Federal 
Government.
    (d) Certification means a written statement received by a paying 
agency from a creditor agency that request the paying agency to offset 
the salary of an employee and specifies that required procedural 
protections have been afforded the employee.
    (e) Compromise means the settlement or forgiveness of a debt.
    (f) Creditor agency means the agency to which the debt is owed, 
including a debt collection center when acting in behalf of a creditor 
agency in matters pertaining to the collection of a debt.
    (g) Debt. See Claim or debt in paragraph (c) of this section.
    (h) Debt collection center means the Department of the Treasury or 
any other agency or division designated by the Secretary of the 
Treasury with authority to collect debts on behalf of creditor agencies 
in accordance with 31 U.S.C. 3711(g).
    (i) Debtor means the person, organization, or entity owing money to 
the Federal Government.
    (j) Disposable pay means that part of current basic pay, special 
pay, incentive pay, retired pay, or retainer pay (or in the case of an 
employee not entitled to basic pay, other authorized pay) remaining 
after the deduction of any amount required by law to be withheld (other 
than deductions to execute garnishment orders in accordance with 5 CFR 
parts 581 and 582). Among the legally required deductions that OFHEO 
must apply first to determine disposable pay are levies pursuant to the 
Internal Revenue Code (title 26, United States Code) and deductions 
described in 5 CFR 581.105 (b) through (f), as follows:
    (1) Federal employment taxes;
    (2) Amounts withheld for the United States Soldiers' and Airmen's 
Home;
    (3) Amounts deducted for Medicare;
    (4) Fines and forfeiture ordered by a court-martial or by a 
commanding officer;
    (5) Federal, State, or local income taxes to the extent authorized 
or required by law, but no greater than would be the case if the 
employee claimed all dependents to which her or she is entitled and 
such additional amounts for which the employee presents evidence of a 
tax obligation supporting the additional withholding;
    (6) Health insurance premiums;
    (7) Normal retirement contributions, including employee 
contributions to the Thrift Savings Plan; and
    (8) Normal life insurance premiums, e.g., Serviceman's Group Life 
Insurance and ``Basic Life'' Federal Employee's Group Life Insurance 
premiums, not including amounts deducted for supplementary coverage.
    (k) Employee means a current employee of OFHEO or other agency, 
including a current member of the Armed Forces or a Reserve of the 
Armed Forces of the United States.
    (l) FCCS means the Federal Claims Collection Standards at 4 CFR 
chapter II.
    (m) Hearing official means an individual who is responsible for 
conducting any hearing with respect to the existence or amount of a 
debt claimed and for rendering a decision on the basis of such hearing. 
A hearing official may not be under the supervision or control of the 
Director of OFHEO when OFHEO is the creditor agency but may be an 
administrative law judge.
    (n) Notice of Intent means a written notice of a creditor agency to 
a debtor that states that the debtor owes a debt to the creditor agency 
and apprises the debtor of the applicable procedural rights.
    (o) Notice of salary offset means a written notice from the paying 
agency to an employee after a certification has been issued by a 
creditor agency that informs the employee that salary offset will begin 
at the next officially established pay interval.
    (p) Paying agency means an agency of the Federal Government that 
employs the individual who owes a debt to an agency of the Federal 
Government.
    (q) Salary offset means an administrative offset to collect a debt 
under 5 U.S.C. 5514 by deductions at one or more officially established 
pay intervals from the current pay account of an employee without his 
or her consent.
    (r) Waiver means the cancellation, remission, forgiveness, or non-
recovery of a debt allegedly owed by an employee

[[Page 34971]]

to OFHEO or another agency as permitted or required by 5 U.S.C. 5584 or 
8346(b), 10 U.S.C. 2774, 32 U.S.C. 716, or any other law.


Sec. 1730.3  Collection of debts and referrals to the Department of the 
Treasury.

    (a) Collection activity. The collection of debts directly and by 
offset shall be pursued in accordance with this part 1730. This part 
1730 incorporates all applicable debt collection provisions of the FCCS 
and supplements the FCCS by the prescription of procedures necessary 
and appropriate for the operations of OFHEO.
    (b) Referral of delinquent debts. (1) OFHEO shall transfer to the 
Secretary of the Department of the Treasury any past due, legally 
enforceable nontax debt that has been delinquent for a period of 180 
days or more so that the Secretary may take appropriate action to 
collect the debt or terminate collection action in accordance with 31 
U.S.C. 3716, 5 U.S.C. 5514, the FCCS, 5 CFR 550.1108, and 31 CFR part 
285.
    (2) OFHEO may transfer any past due, legally enforceable nontax 
debt that has been delinquent for less than a period of 180 days to a 
debt collection center for collection in accordance with 31 U.S.C. 
3716, 5 U.S.C. 5514, 5 CFR 550.1108, 31 CFR part 285, and the FCCS.


Secs. 1730.4-1730.19  [Reserved]

Subpart B--Salary Offset


Sec. 1730.20  Authority and scope.

    (a) Authority. OFHEO may collect debts owed by employees to the 
Federal Government by means of salary offset under the authority of 5 
U.S.C. 5514, 5 CFR part 550, subpart K, and this subpart B.
    (b) Scope. (1) The procedures set forth in this subpart B apply to 
situations where OFHEO is attempting to collect a debt by salary offset 
that is owed to it by an individual employed by OFHEO or by another 
agency; or where OFHEO employs an individual who owes a debt to another 
agency.
    (2) The procedures set forth in this subpart B do not apply to:
    (i) Any routine intra-agency adjustment of pay that is attributable 
to clerical or administrative error or delay in processing pay 
documents that have occurred within the four pay periods preceding the 
adjustment, or any adjustment to collect a debt amounting to $50 or 
less. However, at the time of any such adjustment, or as soon 
thereafter as possible, OFHEO or its designated payroll agent shall 
provide the employee with a written notice of the nature and the amount 
of the adjustment and a point of contact for contesting such 
adjustment.
    (ii) Any negative adjustment to pay that arises from an employee's 
election of coverage or a change in coverage under a Federal benefits 
program that requires periodic deductions from pay, if the amount to be 
recovered was accumulated over four pay periods or less. However, at 
the time the such adjustment is made, OFHEO or its payroll agent shall 
provide in the employee's earnings statement a clear and concise 
statement that informs the employee of the previous overpayment.


Sec. 1730.21  Notice requirements before salary offset where OFHEO is 
the creditor agency.

    (a) Notice of Intent. Deductions from an employee's salary may not 
be made unless OFHEO provides the employee with a Notice of Intent a 
minimum of 30 calendar days before the salary offset is initiated.
    (b) Contents of Notice of Intent. The Notice of Intent shall advise 
the employee of the following:
    (1) OFHEO has reviewed the records relating to the claim and has 
determined that the employee owes the debt;
    (2) OFHEO intends to collect the debt by deductions from the 
employee's current disposable pay account;
    (3) The amount of the debt and the facts giving rise to the debt;
    (4) The frequency and amount of the intended deduction (stated as a 
fixed dollar amount or as a percentage of pay not to exceed 15 percent 
of disposable pay), and the intention to continue the deductions until 
the debt and all accumulated interest are paid in full or otherwise 
resolved;
    (5) The name, address, and telephone number of the person to whom 
the employee may propose a written alternative schedule for voluntary 
repayment, in lieu of salary offset. The employee shall include a 
justification for the alternative schedule in his or her proposal. If 
the terms of the alternative schedule are agreed upon by the employee 
and OFHEO, the alternative written schedule shall be signed by both the 
employee and OFHEO;
    (6) An explanation of OFHEO's policy concerning interest, 
penalties, and administrative costs, including a statement that such 
assessments must be made unless excused in accordance with the FCCS;
    (7) The employee's right to inspect and copy all records of OFHEO 
pertaining to his or her debt that are not exempt from disclosure or to 
receive copies of such records if he or she is unable personally to 
inspect the records as the result of geographical or other constraints;
    (8) The name, address, and telephone number of the OFHEO employee 
to whom requests for access to records relating to the debt must be 
sent;
    (9) The employee's right to a hearing conducted by an impartial 
hearing official with respect to the existence and amount of the debt 
claimed or the repayment schedule i.e., the percentage of disposable 
pay to be deducted each pay period, so long as a request is filed by 
the employee as prescribed in Sec. 1730.23; the name and address of the 
office to which the request for a hearing should be sent; and the name, 
address, and telephone number of a person whom the employee may contact 
concerning procedures for requesting a hearing;
    (10) The filing of a request for a hearing on or before the 15th 
calendar day following receipt of the Notice of Intent will stay the 
commencement of collection proceedings and a final decision on whether 
a hearing will be held (if a hearing is requested) will be issued at 
the earliest practical date;
    (11) OFHEO shall initiate certification procedures to implement a 
salary offset unless the employee files a request for a hearing on or 
before the 15th calendar day following receipt of the Notice of Intent;
    (12) Any knowingly false or frivolous statement, representations, 
or evidence may subject the employee to:
    (i) Disciplinary procedures appropriate under 5 U.S.C. chapter 
LXXV, 5 CFR part 752, or any other applicable statutes or regulations;
    (ii) Penalties under the False Claims Act, 31 U.S.C. 3729-3731, or 
under any other applicable statutory authority; or
    (iii) Criminal penalties under 18 U.S.C. 286, 287, 1001, and 1002, 
or under any other applicable statutory authority;
    (13) Any other rights and remedies available to the employee under 
statutes or regulations governing the program for which the collection 
is being made;
    (14) Unless there are applicable contractual or statutory 
provisions to the contrary, amounts paid on or deducted from debts that 
are later waived or found not to be owed to the Federal Government 
shall be promptly refunded to the employee; and
    (15) Proceedings with respect to the debt are governed by 5 U.S.C. 
5514.


Sec. 1730.22  Review of OFHEO records related to the debt.

    (a) Request for review. An employee who desires to inspect or copy 
OFHEO records related to a debt owed by the employee to OFHEO must send 
a letter

[[Page 34972]]

to the individual designated in the Notice of Intent requesting access 
to the relevant records. The letter must be received in the office of 
that individual within 15 calendar days after the employee's receipt of 
the Notice of Intent.
    (b) Review location and time. In response to a timely request 
submitted by the employee, the employee shall be notified of the 
location and time when the employee may inspect and copy records 
related to his or her debt that are not exempt from disclosure. If the 
employee is unable personally to inspect such records as the result of 
geographical or other constraints, OFHEO shall arrange to send copies 
of such records to the employee.


Sec. 1730.23  Opportunity for a hearing where OFHEO is the creditor 
agency.

    (a) Request for a hearing. (1) Time-period for submission. An 
employee who requests a hearing on the existence or amount of the debt 
held by OFHEO or on the salary-offset schedule proposed by OFHEO, must 
send such request to OFHEO. The request for a hearing must be received 
by OFHEO on or before the 15th calendar day following receipt by the 
employee of the Notice of Intent.
    (2) Failure to submit timely. If the employee files a request for a 
hearing after the expiration of the 15th calendar day, OFHEO may accept 
the request if the employee can show that the delay was the result of 
circumstances beyond his or her control or that he or she failed to 
receive actual notice of the filing deadline.
    (3) Contents of request. The request for a hearing must be signed 
by the employee and must fully identify and explain with reasonable 
specificity all the facts, evidence, and witnesses, if any, that the 
employee believes support his or her position. The employee must also 
specify whether he or she requests an oral hearing. If an oral hearing 
is requested, the employee should explain why a hearing by examination 
of the documents without an oral hearing would not resolve the matter.
    (4) Failure to request a hearing. The failure of an employee to 
request a hearing will be considered an admission by the employee that 
the debt exits in the amount specified in the Notice of Intent that was 
provided to the employee under Sec. 1730.21(b).
    (b) Obtaining the services of a hearing official. (1) Debtor is not 
OFHEO employee. When the debtor is not an OFHEO employee and OFHEO 
cannot provide a prompt and appropriate hearing before an 
administrative law judge or other hearing official, OFHEO may request a 
hearing official from an agent of the paying agency, as designated in 5 
CFR part 581, appendix A, or as otherwise designated by the paying 
agency.
    (2) Debtor is OFHEO employee. When the debtor is an OFHEO employee, 
OFHEO may contact any agent of another agency, as designated in 5 CFR 
part 581, appendix A, or as otherwise designated by the agency, to 
request a hearing official.
    (c) Procedure. (1) Notice of hearing. After the employee requests a 
hearing, the hearing official shall notify the employee of the form of 
the hearing to be provided. If the hearing will be oral, the notice 
shall set forth the date, time, and location of the hearing, which must 
occur no more than 30 calendar days after the request is received, 
unless the employee requests that the hearing be delayed. If the 
hearing will be conducted by an examination of documents, the employee 
shall be notified within 30 calendar days that he or she should submit 
evidence and arguments in writing to the hearing official.
    (2) Oral hearing. (i) An employee who requests an oral hearing 
shall be provided an oral hearing if the hearing official determines 
that the matter cannot be resolved by an examination of the documents 
alone, as for example, when an issue of credibility or veracity is 
involved. The oral hearing need not be an adversarial adjudication and 
rules of evidence need not apply. Witnesses who testify in an oral 
hearing shall do so under oath or affirmation.
    (ii) Oral hearings may take the form of, but are not limited to:
    (A) Informal conferences with the hearing official in which the 
employee and agency representative are given full opportunity to 
present evidence, witnesses, and argument;
    (B) Informal meetings in which the hearing examiner interviews the 
employee; or
    (C) Formal written submissions followed by an opportunity for oral 
presentation.
    (3) Hearing by examination of documents. If the hearing official 
determines that an oral hearing is not necessary, he or she shall make 
the determination based upon an examination of the documents.
    (d) Record. The hearing official shall maintain a summary record of 
any hearing conducted under this section.
    (e) Decision. (1) The hearing official shall issue a written 
opinion stating his or her decision, based upon all evidence and 
information developed during the hearing, as soon as practicable after 
the hearing, but not later than 60 calendar days after the date on 
which the request was received by OFHEO, unless the hearing was delayed 
at the request of the employee, in which case the 60-day decision 
period shall be extended by the number of days by which the hearing was 
postponed.
    (2) The decision of the hearing official shall be final and is 
considered to be an official certification regarding the existence and 
the amount of the debt for purposes of executing salary offset under 5 
U.S.C. 5514. If the hearing official determines that a debt may not be 
collected by salary offset, but OFHEO finds that the debt is still 
valid, OFHEO may seek collection of the debt through other means in 
accordance with applicable law and regulations.
    (f) Content of decision. The written decision shall include:
    (1) A summary of the facts concerning the origin, nature, and 
amount of the debt;
    (2) The hearing official's findings, analysis, and conclusions; and
    (3) The terms of any repayment schedules, if applicable.
    (g) Failure to appear. If, in the absence of good cause shown, such 
as illness, the employee or the representative of OFHEO fails to 
appear, the hearing official shall proceed with the hearing as 
scheduled, and make his or decision based upon the oral testimony 
presented and the documentation submitted by both parties. At the 
request of both parties, the hearing official may schedule a new 
hearing date. Both parties shall be given reasonable notice of the time 
and place of the new hearing.


Sec. 1730.24  Certification where OFHEO is the creditor agency.

    (a) Issuance. OFHEO shall issue a certification in all cases where 
the hearing official determines that a debt exists or the employee 
admits the existence and amount of the debt, as for example, by failing 
to request a hearing.
    (b) Contents. The certification must be in writing and state:
    (1) That the employee owes the debt;
    (2) The amount and basis of the debt;
    (3) The date of the Federal Government's right to collect the debt 
first accrued;
    (4) The date the employee was notified of the debt, the action(s) 
taken pursuant to OFHEO's regulations, and the dates such actions were 
taken;
    (5) If the collection is to be made by lump-sum payment, the amount 
and date such payment will be collected;
    (6) If the collection is to be made in installments, the amount or 
percentage of disposable pay to be collected in each installment and, 
if OFHEO wishes, the

[[Page 34973]]

desired commencing date of the first installments, if a date other than 
the next officially established pay period; and
    (7) A statement that OFHEO's regulation on salary offset has been 
approved by the Office of Personnel Management pursuant to 5 CFR part 
550, subpart K.


Sec. 1730.25  Voluntary repayment agreements as alternative to salary 
offset where OFHEO is the creditor agency.

    (a) Proposed repayment schedule. In response to a Notice of Intent, 
an employee may propose to repay the debt voluntarily in lieu of salary 
offset by submitting a written proposed repayment schedule to OFHEO. 
Any proposal under this section must be received by OFHEO within 15 
calendar days after receipt of the Notice of Intent.
    (b) Notification of decision. In response to a timely proposal by 
the employee, OFHEO shall notify the employee whether the employee's 
proposed repayment schedule is acceptable. OFHEO has the discretion to 
accept, reject, or propose to the employee a modification of the 
proposed repayment schedule.
    (1) If OFHEO decides that the proposed repayment schedule is 
unacceptable, the employee shall have 15 calendar days from the date he 
or she received notice of the decision in which to file a request for a 
hearing.
    (2) If OFHEO decides that the proposed repayment schedule is 
acceptable or the employee agrees to a modification proposed by OFHEO, 
an agreement shall be put in writing and signed by both the employee 
and OFHEO.


Sec. 1730.26  Special review where OFHEO is the creditor agency.

    (a) Request for review. (1) An employee subject to salary offset or 
a voluntary repayment agreement may, at any time, request a special 
review by OFHEO of the amount of the salary offset or voluntary 
repayment, based on materially changed circumstances, including, but 
not limited to, catastrophic illness, divorce, death, or disability.
    (2) The request for special review must include an alternative 
proposed offset or payment schedule and a detailed statement, with 
supporting documents, that shows why the current salary offset or 
payments result in extreme financial hardship to the employee and his 
or her spouse and dependents. The detailed statement must indicate:
    (i) Income from all sources;
    (ii) Assets;
    (iii) Liabilities;
    (iv) Number of dependents;
    (v) Expenses for food, housing, clothing, and transportation;
    (vi) Medical expenses; and
    (vii) Exceptional expenses, if any.
    (b) Evaluation of request. OFHEO shall evaluate the statement and 
supporting documents and determine whether the original offset or 
repayment schedule imposes extreme financial hardship on the employee. 
OFHEO shall notify the employee in writing within 30 calendar days of 
such determination, including, if appropriate, a revised offset or 
payment schedule. If the special review results in a revised offset or 
repayment schedule, OFHEO shall provide a new certification to the 
paying agency.


Sec. 1730.27  Notice of salary offset where OFHEO is the paying agency.

    (a) Notice. Upon issuance of a proper certification by OFHEO (for 
debts owed to OFHEO) or upon receipt of a proper certification from 
another creditor agency, OFHEO shall send the employee a written notice 
of salary offset.
    (b) Content of notice. Such written notice of salary offset shall 
advise the employee of the:
    (1) Certification that has been issued by OFHEO or received from 
another creditor agency;
    (2) Amount of the debt and of the deductions to be made; and
    (3) Date and pay period when the salary offset will begin.
    (c) If OFHEO is not the creditor agency, OFHEO shall provide a copy 
of the notice of salary offset to the creditor agency and advise the 
creditor agency of the dollar amount to be offset and the pay period 
when the offset will begin.


Sec. 1730.28  Procedures for salary offset where OFHEO is the paying 
agency.

    (a) Generally. OFHEO shall coordinate salary deductions under this 
section and shall determine the amount of an employee's disposable pay 
and the amount of the salary offset subject to the requirements in this 
section. Deductions shall begin the pay period following the issuance 
of the certification by OFHEO or the receipt by OFHEO of the 
certification from another agency, or as soon thereafter as possible.
    (b) Types of collection. (1) Lump-sum payment. If the amount of the 
debt is equal to or less than 15 percent of the employee's disposable 
pay, such debt ordinarily will be collected in one lump-sum payment.
    (2) Installment deductions. Installment deductions will be made 
over a period not greater than the anticipated period of employment. 
The size and frequency of installment deductions will bear a reasonable 
relation to the size of the debt and the employee's ability to pay. 
However, the amount deducted for any pay period will not exceed 15 
percent of the disposable pay from which the deduction is made unless 
the employee has agreed in writing to the deduction of a greater 
amount. The installment payment should normally be sufficient in size 
and frequency to liquidate the debt in no more than three years. 
Installment payments of less than $50 should be accepted only in the 
most unusual circumstances.
    (3) Lump-sum deductions from final check. In order to liquidate a 
debt, a lump-sum deduction exceeding 15 percent of disposable pay may 
be made pursuant to 31 U.S.C. 3716 from any final salary payment due a 
former employee, whether the former employee was separated voluntarily 
or involuntarily.
    (4) Lump-sum deductions from other sources. Whenever an employee 
subject to salary offset is separated from OFHEO, and the balance of 
the debt cannot be liquidated by offset of the final salary check, 
OFHEO may offset any later payments of any kind to the former employee 
to collect the balance of the debt pursuant to 31 U.S.C. 3716.
    (c) Multiple debts. (1) Where two or more creditor agencies are 
seeking salary offset, or where two or more debts are owed to a single 
creditor agency, OFHEO may, at his or her discretion, determine whether 
one or more debts should be offset simultaneously within the 15 percent 
limitation.
    (2) In the event that a debt owed OFHEO is certified while an 
employee is subject to salary offset to repay another agency, OFHEO 
may, at its discretion, determine whether the debt to OFHEO should be 
repaid before the debt to the other agency is repaid, repaid 
simultaneously with the other debt, or repaid after the debt to the 
other agency.
    (3) A levy pursuant to the Internal Revenue Code of 1986 shall take 
precedence over other deductions under this section, as provided in 5 
U.S.C. 5514(d).


Sec. 1730.29  Coordinating salary offset with other agencies.

    (a) Responsibility of OFHEO as the creditor agency. (1) OFHEO shall 
be responsible for:
    (i) Arranging for a hearing upon proper request by a Federal 
employee;
    (ii) Preparing the Notice of Intent consistent with the 
requirements of Sec. 1730.21;

[[Page 34974]]

    (iii) Obtaining hearing officials from other agencies pursuant to 
Sec. 1730.23(b); and
    (iv) Ensuring that each certification of debt is sent to a paying 
agency pursuant to Sec. 1730.24(b).
    (2) Upon completion of the procedures set forth in Secs. 1730.24-
1730.26, OFHEO shall submit to the employee's paying agency, if 
applicable, a certified debt claim and an installment agreement or 
other instruction on the payment schedule.
    (i) If the employee is in the process of separating from the 
Federal Government, OFHEO shall submit its debt claim to the employee's 
paying agency for collection by lump-sum deduction from the employee's 
final check. The paying agency shall certify the total amount of its 
collection and furnish a copy of the certification to OFHEO and to the 
employee.
    (ii) If the employee is already separated and all payments due from 
his or her former paying agency have been paid, OFHEO may, unless 
otherwise prohibited, request that money due and payable to the 
employee from the Federal Government be administratively offset to 
collect the debt.
    (iii) When an employee transfers to another paying agency, OFHEO 
shall not repeat the procedures described in Secs. 1730.24--1730.26. 
Upon receiving notice of the employee's transfer, OFHEO shall review 
the debt to ensure that collection is resumed by the new paying agency.
    (b) Responsibility of OFHEO as the paying agency. (1) Complete 
claim. When OFHEO receives a certified claim from a creditor agency, 
the employee shall be given written notice of the certification, the 
date salary offset will begin, and the amount of the periodic 
deductions. Deductions shall be scheduled to begin at the next 
officially established pay interval or as otherwise provided for in the 
certification.
    (2) Incomplete claim. When OFHEO receives an incomplete 
certification of debt from a creditor agency, OFHEO shall return the 
claim with notice that procedures under 5 U.S.C. 5514 and 5 CFR 
550.1104 must be followed, and that a properly certified claim must be 
received before OFHEO will take action to collect the debt from the 
employee's current pay account.
    (3) Review. OFHEO is not authorized to review the merits of the 
creditor agency's determination with respect to the amount or validity 
of the debt certified by the creditor agency.
    (4) Employees who transfer from one paying agency to another 
agency. If, after the creditor agency has submitted the debt claim to 
OFHEO, the employee transfers to another agency before the debt is 
collected in full, OFHEO must certify the total amount collected on the 
debt. One copy of the certification shall be furnished to the employee 
and one copy shall be sent to the creditor agency along with notice of 
the employee's transfer. If OFHEO is aware that the employee is 
entitled to payments from the Civil Service Retirement and Disability 
Fund or other similar payments, it must provide written notification to 
the agency responsible for making such payments that the debtor owes a 
debt (including the amount) and that the requirements set forth herein 
and in 5 CFR part 550, subpart k, have been met.


Sec. 1730.30  Interest, penalties, and administrative costs.

    Where OFHEO is the creditor agency, OFHEO shall assess interest, 
penalties, and administrative costs pursuant to 31 U.S.C. 3717 and the 
FCCS.


Sec. 1730.31  Refunds.

    (a) Where OFHEO is the creditor agency, OFHEO shall promptly refund 
any amount deducted under the authority of 5 U.S.C. 5514 when:
    (1) OFHEO receives notice that the debt has been compromised or 
otherwise found not to be owing to the Federal Government; or
    (2) An administrative or judicial order directs OFHEO to make a 
refund.
    (b) Unless required by law or contract, refunds under this section 
shall not bear interest.


Sec. 1730.32  Request from a creditor agency for the services of a 
hearing official.

    (a) OFHEO may provide qualified personnel to serve as hearing 
officials upon request of a creditor agency when--
    (1) The debtor is employed by OFHEO and the creditor agency cannot 
provide a prompt and appropriate hearing before a hearing official 
furnished pursuant to another lawful arrangement; or
    (2) The debtor is employed by the creditor agency and that agency 
cannot arrange for a hearing official.
    (b) Services provided by OFHEO to creditor agencies under this 
section shall be provided on a fully reimbursable basis pursuant to 31 
U.S.C. 1535.


Sec. 1730.33  Non-waiver of rights by payments.

    A debtor's payment, whether voluntary or involuntary, of all or any 
portion of a debt being collected pursuant to this subpart B shall not 
be construed as a waiver of any rights that the debtor may have under 
any statute, regulation, or contract, except as otherwise provided by 
law or contract.


Secs. 1730.34-1730.39  [Reserved]

Subpart C--Administrative Offset


Sec. 1730.40  Authority and scope.

    OFHEO may collect a debt owed to the Federal Government from a 
person, organization, or other entity by administrative offset, 
pursuant to 31 U.S.C. 3716, where:
    (a) The debt is certain in amount;
    (b) Administrative offset is feasible, desirable, and not otherwise 
prohibited;
    (c) The applicable statute of limitations has not expired; and
    (d) Administrative offset is in the best interest of the Federal 
Government.


Sec. 1730.41  Administrative offset prior to completion of procedures.

    Prior to the completion of the procedures described in 
Sec. 1730.42, OFHEO may effect administrative offset if failure to 
offset would substantially prejudice its ability to collect the debt, 
and if the time before the payment is to be made does not reasonably 
permit completion of the procedures described in Sec. 1730.42. Such 
prior administrative offset shall be followed promptly by the 
completion of the procedures described in Sec. 1730.42.


Sec. 1730.42  Procedures.

    Unless the procedures described in Sec. 1730.41 are used, prior to 
collecting any debt by administrative offset or referring such claim to 
another agency for collection through administrative offset, OFHEO 
shall provide the debtor with the following:
    (a) Written notification of the nature and amount of the debt, the 
intention of OFHEO to collect the debt through administrative offset, 
and a statement of the rights of the debtor under this section;
    (b) An opportunity to inspect and copy the records of OFHEO related 
to the debt that are not exempt from disclosure;
    (c) An opportunity for review within OFHEO of the determination of 
indebtedness. Any request for review by the debtor shall be in writing 
and shall be submitted to OFHEO within 30 calendar days of the date of 
the notice of the offset. OFHEO may waive the time limits for 
requesting review for good cause shown by the debtor. OFHEO shall 
provide the debtor with a reasonable opportunity for an oral hearing 
when:
    (1) An applicable statute authorizes or requires OFHEO to consider 
waiver of the indebtedness involved, the debtor requests waiver of the 
indebtedness, and

[[Page 34975]]

the waiver determination turns on an issue of credibility or veracity; 
or
    (2) The debtor requests reconsideration of the debt and OFHEO 
determines that the question of the indebtedness cannot be resolved by 
review of the documentary evidence, as for example, when the validity 
of the debt turns on an issue of credibility or veracity. Unless 
otherwise required by law, an oral hearing under this subpart C is not 
required to be a formal evidentiary hearing, although OFHEO shall 
document all significant matters discussed at the hearing. In those 
cases where an oral hearing is not required by this subpart C, OFHEO 
shall make its determination on the request for waiver or 
reconsideration based upon a review of the written record; and
    (d) An opportunity to enter into a written agreement for the 
repayment of the amount of the claim at the discretion of OFHEO.


Sec. 1730.43  Interest.

    OFHEO shall assess interest, penalties, and administrative costs on 
debts owed to the Federal Government, in accordance with 31 U.S.C. 3717 
and the FCCS. OFHEO may also assess interest and related charges on 
debts that are not subject to 31 U.S.C. 3717 and the FCCS to the extent 
authorized under the common law or other applicable statutory 
authority.


Sec. 1730.44  Refunds.

    OFHEO shall refund promptly those amounts recovered by 
administrative offset but later found not to be owed to the Federal 
Government.


Sec. 1730.45  Requests for administrative offset to other Federal 
agencies.

    (a) OFHEO may request that a debt owed to OFHEO be collected by 
administrative offset against funds due and payable to a debtor by 
another agency.
    (b) In requesting administrative offset, OFHEO, as creditor, shall 
certify in writing to the agency holding funds of the debtor:
    (1) That the debtor owes the debt;
    (2) The amount and basis of the debt; and
    (3) That OFHEO has complied with the requirements of its own 
administrative offset regulations and the applicable provisions of the 
FCCS with respect to providing the debtor with due process.


Sec. 1730.46  Requests for administrative offset from other Federal 
agencies.

    (a) Any agency may request that funds due and payable to a debtor 
by OFHEO be administratively offset in order to collect a debt owed to 
such agency by the debtor.
    (b) OFHEO shall initiate the requested administrative offset only 
upon:
    (1) Receipt of written certification from the creditor agency that:
    (i) The debtor owes the debt, including the amount and basis of the 
debt;
    (ii) The agency has prescribed regulations for the exercise of 
administrative offset; and
    (iii) The agency has complied with its own administrative offset 
regulations and with the applicable provisions of the FCCS, including 
providing any required hearing or review.
    (2) A determination by OFHEO that collection by administrative 
offset against funds payable by OFHEO would be in the best interest of 
the Federal Government as determined by the facts and circumstances of 
the particular case and that such administrative offset would not 
otherwise be contrary to law.


Sec. 1730.47  Administrative offset against amounts payable from Civil 
Service Retirement and Disability Fund.

    (a) Request for administrative offset. Unless otherwise prohibited 
by law, OFHEO may request that monies that are due and payable to a 
debtor from the Civil Service Retirement and Disability Fund (Fund) be 
offset administratively in reasonable amounts in order to collect in 
one full payment or in a minimal number of payments debt owed to OFHEO 
by the debtor. Such requests shall be made to the appropriate officials 
of the Office of Personnel Management in accordance with such 
regulations as may be prescribed by the Director of the Office of 
Personnel Management.
    (b) Contents of certification. When making a request for 
administrative offset under paragraph (a) of this section, OFHEO shall 
include a written certification that:
    (1) The debtor owes OFHEO a debt, including the amount of the debt;
    (2) OFHEO has complied with the applicable statutes, regulations, 
and procedures of the Office of Personnel Management; and
    (3) OFHEO has complied with the requirements of the FCCS, including 
any required hearing or review.
    (c) If OFHEO decides to request administrative offset under 
paragraph (a) of this section, it shall make the request as soon as 
practicable after completion of the applicable procedures. This will 
satisfy any requirement that administrative offset be initiated prior 
to the expiration of the applicable statute of limitations. At such 
time as the debtor makes a claim for payments from the Fund, if at 
least one year has elapsed since the administrative offset request was 
originally made, the debtor shall be permitted to offer a satisfactory 
repayment plan in lieu of administrative offset if he or she 
establishes that changed financial circumstances would render the 
administrative offset unjust.
    (d) If OFHEO collects part or all of the debt by other means before 
deductions are made or completed pursuant to paragraph (a) of this 
section, OFHEO shall act promptly to modify or terminate its request 
for administrative offset under paragraph (a) of this section.


Secs. 1730.48-1730.49  [Reserved]

Subpart D--Tax Refund Offset


Sec. 1730.50  Authority and scope.

    The provisions of 26 U.S.C. 6402(d) and 31 U.S.C. 3720A authorize 
the Secretary of the Treasury to offset a delinquent debt owed the 
Federal Government from the tax refund due a taxpayer when other 
collection efforts have failed to recover the amount due.


Sec. 1730.51  Definitions.

    (a)(1) Debt means money owed by an individual, organization, or 
entity from sources which include loans insured or guaranteed by the 
Federal Government and all other amounts due the Federal Government 
from fees, leases, services, overpayments, civil and criminal 
penalties, damages, interest, fines, administrative costs, and all 
other similar sources.
    (2) A debt becomes eligible for tax refund offset procedures if:
    (i) It cannot currently be collected pursuant to the salary offset 
procedures of 5 U.S.C. 5514(a)(1);
    (ii) The debt is ineligible for administrative offset under 31 
U.S.C. 3716(a) by reason of 31 U.S.C. 3716(c)(2), or it cannot be 
collected currently by administrative offset under 31 U.S.C. 3716(a); 
and
    (iii) The requirements of this section are otherwise satisfied.
    (3) All judgment debts are past due for purposes of this subpart D. 
Judgment debts remain past due until paid in full.
    (b) Dispute means a written statement supported by documentation or 
other evidence that all or part of an alleged debt is not past due or 
legally enforceable, that the amount is not the amount currently owed, 
that the outstanding debt has been satisfied, or in the case of a debt 
reduced to judgment, that the judgement has been satisfied or stayed.
    (c) Notice means the information sent to the debtor pursuant to 
Sec. 1730.53. The

[[Page 34976]]

date of the notice is that date shown on the notice letter as its date 
of issuance.


Sec. 1730.52  Procedures.

    (a) Referral to the Department of the Treasury. (1) OFHEO may refer 
any past due, legally enforceable nonjudgment debt of an individual, 
organization, or entity to the Department of the Treasury for tax 
refund offset if OFHEO's or the referring agency's rights of action 
accrued more than three months but less than 10 years before the offset 
is made.
    (2) Debts reduced to judgment may be referred at any time.
    (3) Debts in amounts lower than $25 are not subject to referral.
    (4) In the event that more than one debt is owed, the tax refund 
offset procedures shall be applied in the order in which the debts 
became past due.
    (5) OFHEO shall notify the Department of the Treasury of any change 
in the amount due promptly after receipt of payment or notice of other 
reductions.
    (b) Notice. OFHEO shall provide the debtor with written notice of 
its intent to offset before initiating the offset. Notice shall be 
mailed to the debtor at the current address of the debtor, as 
determined from information obtained from the Internal Revenue Service 
pursuant to 26 U.S.C. 6103(m)(2), (4), (5) or maintained by OFHEO. The 
notice sent to the debtor shall state the amount of the debt and inform 
the debtor that:
    (1) The debt is past due;
    (2) OFHEO intends to refer the debt to the Department of the 
Treasury for offset from tax refunds that may be due to the taxpayer;
    (3) OFHEO intends to provide information concerning the delinquent 
debt exceeding $100 to a consumer reporting bureau unless such debt has 
already been disclosed; and
    (4) Before the debt is reported to a consumer reporting agency, if 
applicable, and referred to the Department of the Treasury for offset 
from tax refunds, the debtor has 65 calendar days from the date of 
notice to request a review under paragraph (d).
    (c) Report to consumer reporting agency. If the debtor neither pays 
the amount due nor presents evidence that the amount is not past due or 
is satisfied or stayed, OFHEO will report the debt to a consumer 
reporting agency at the end of the notice period, if applicable, and 
refer the debt to the Department of the Treasury for offset from the 
taxpayer's Federal tax refund. OFHEO shall certify to the Department of 
the Treasury that reasonable efforts have been made by OFHEO to obtain 
payment of such debt.
    (d) Request for review. A debtor may request a review by OFHEO if 
he or she believes that all or part of the debt is not past due or is 
not legally enforceable, or in the case of a judgment debt, that the 
debt has been stayed or the amount satisfied, as follows:
    (1) The debtor must send a written request for review to OFHEO at 
the address provided in the notice.
    (2) The request must state the amount disputed and reasons why the 
debtor believes that the debt is not past due, is not legally 
enforceable, has been satisfied, or if a judgment debt, has been 
satisfied or stayed.
    (3) The request must include any documents that the debtor wishes 
to be considered or state that additional information will be submitted 
within the time permitted.
    (4) If the debtor wishes to inspect records establishing the nature 
and amount of the debt, the debtor must make a written request to OFHEO 
for an opportunity for such an inspection. The office holding the 
relevant records not exempt from disclosure shall make them available 
for inspection during normal business hours within one week from the 
date of receipt of the request.
    (5) The request for review and any additional information submitted 
pursuant to the request must be received by OFHEO at the address stated 
in the notice within 65 calendar days of the date of issuance of the 
notice.
    (6) In reaching its decision, OFHEO shall review the dispute and 
shall consider its records and any documentation and arguments 
submitted by the debtor. OFHEO shall send a written notice of its 
decision to the debtor. There is no administrative appeal of this 
decision.
    (7) If the evidence presented by the debtor is considered by a non-
OFHEO agent or other entities or persons acting on behalf of OFHEO, the 
debtor shall be accorded at least 30 calendar days from the date the 
agent or other entity or person determines that all or part of the debt 
is past due and legally enforceable to request review by OFHEO of any 
unresolved dispute.
    (8) Any debt that previously has been reviewed pursuant to this 
section or any other section of this part, or that has been reduced to 
a judgment, may not be disputed except on the grounds of payments made 
or events occurring subsequent to the previous review or judgment.

    Dated: June 22, 1999.
Mark A. Kinsey,
Acting Director, Office of Federal Housing Enterprise Oversight.
[FR Doc. 99-16369 Filed 6-29-99; 8:45 am]
BILLING CODE 4220-01-U