[Federal Register Volume 66, Number 197 (Thursday, October 11, 2001)]
[Rules and Regulations]
[Pages 51867-51868]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-25602]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 285

RIN 1510-AA87


Administrative Wage Garnishment

AGENCY: Financial Management Service, Fiscal Service, Treasury.

ACTION: Final rule.

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SUMMARY: This rule makes technical amendments to the regulations issued 
by the Department of the Treasury concerning implementation of the 
administrative wage garnishment provisions of the Debt Collection 
Improvement Act of 1996.

DATES: This rule is effective October 11, 2001.

FOR FURTHER INFORMATION CONTACT: Gerry Isenberg, Financial Program 
Specialist, Debt Management Services, at (202) 874-6660, or Ronda Kent, 
Senior Attorney, at (202) 874-6680, Financial Management Service, 
Department of the Treasury, 401 14th Street SW, Washington, DC 20227. 
This document is available for downloading from the Financial 
Management Service web site at the following address:
http://www.fms.treas.gov/debt.

SUPPLEMENTARY INFORMATION:

Background

    On May 6, 1998, the Department of the Treasury's Financial 
Management Service (FMS) issued a final rule (63 FR 25136) concerning 
implementation of the administrative wage garnishment provisions in 
section 31001(o) of the Debt Collection Improvement Act of 1996 (DCIA), 
Pub. L. 104-134, 110 Stat. 1321-358 (Apr. 26, 1996), codified at 31 
U.S.C. 3720D. FMS published a technical amendment to the rule on April 
28, 1999 (64 FR 22905), which deleted the requirement that Federal 
agencies issue an administrative wage garnishment order on agency 
letterhead. The requirement to issue the order on a form prescribed by 
the Secretary of the Treasury remains unchanged. This rule makes 
further technical amendments to the regulations concerning 
administrative wage garnishment, which are codified at 31 CFR 285.11.

Technical Amendments

Section 285.11(b)  Scope

    In Sec. 285.11(b)(3), the citation to the Federal Claims Collection 
Standards (FCCS) is updated to reflect the revised FCCS published on 
November 22, 2000 (65 FR 70390). The revised FCCS are found at 31 CFR 
parts 900-904.

Section 285.11(c)  Definitions

    In Sec. 285.11(c), the term ``certificate of service'' is replaced 
with the term ``evidence of service.'' Conforming changes are made in 
Secs. 285.11(e)(3) and 285.11(g)(3). Unlike a certificate of service, 
evidence of service does not need to be in the form of a document 
signed by an agency official. The purpose of evidence of service is the 
same as that of the certificate of service, that is, to retain evidence 
that a document has been sent to the debtor or employer for wage 
garnishment purposes. Evidence of service may be retained 
electronically or otherwise, so long as the manner of retention is 
sufficient for evidentiary purposes.

Section 285.11(g)  Wage Garnishment Order

    Section 285.11(g)(1) is amended to clarify the time frame within 
which an agency is required to issue a wage garnishment order after 
sending notice to the debtor of the agency's intent to do so. While 
agencies are encouraged to issue the wage garnishment order within the 
30 day time period suggested, nothing in this rule is intended to imply 
that any wage garnishment order issued after such 30 day period is 
invalid.
    Section 285.11(g)(2) is amended to allow the wage garnishment order 
to contain either the signature of, or the image of the signature of, 
the agency official authorized to issue the wage garnishment order. For 
purposes of this rule, the lack of an original signature on the wage 
garnishment order does not necessarily prove that the agency did not 
authorize the wage garnishment order. Evidence of such approval to 
garnish a debtor's wages may be retained by the agency electronically 
or otherwise, so long as the manner of retention is sufficient for 
evidentiary purposes. Employers must comply with a wage garnishment 
order that contains an original, or image of an original, signature.

Regulatory Analysis

    This rule is not a significant regulatory action as defined in 
Executive Order 12866. Because no notice of proposed rulemaking is 
required for this rule, the provisions of the Regulatory Flexibility 
Act do not apply.

Special Analysis

    FMS is promulgating this final rule without opportunity for prior 
public comment and without a delayed effective date pursuant to the 
Administrative Procedure Act, 5 U.S.C. 553 (the ``APA''). FMS has 
determined that a comment period and a delayed effective date are 
unnecessary because nothing in this rule impacts the rights or 
obligations of debtors or changes the authorities under which Federal 
agencies collect debt.

List of Subjects in 31 CFR Part 285

    Administrative practice and procedure, Claims, Debts, Garnishment 
of wages, Hearing and appeal procedures, Salaries, Wages.

Authority and Issuance

    For the reasons set forth in the preamble, 31 CFR 285.11 is amended 
as follows:

PART 285--DEBT COLLECTION AUTHORITIES UNDER THE DEBT COLLECTION 
IMPROVEMENT ACT OF 1996

    1. The authority citation for part 285 continues to read as 
follows:


[[Page 51868]]


    Authority: 26 U.S.C. 6402; 31 U.S.C. 321, 3701, 3711, 3716, 
3720A, 3720B, 3720D; E.O. 13019; 3 CFR, 1996 Comp., p. 216.


    2. Section 285.11 is amended by revising paragraphs (b)(3), (c), 
(e)(3), and (g) to read as follows:


285.11  Administrative wage garnishment.

* * * * *
    (b) Scope.
* * * * *
    (3) Nothing in this section precludes the compromise of a debt or 
the suspension or termination of collection action in accordance with 
applicable law. See, for example, the Federal Claims Collection 
Standards (FCCS), 31 CFR parts 900-904.
* * * * *
    (c) Definitions. As used in this section the following definitions 
shall apply:
    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. 
For purposes of this section, agency means either the agency that 
administers the program that gave rise to the debt or the agency that 
pursues recovery of the debt.
    Business day means Monday through Friday. For purposes of 
computation, the last day of the period will be included unless it is a 
Federal legal holiday.
    Day means calendar day. For purposes of computation, the last day 
of the period will be included unless it is a Saturday, a Sunday, or a 
Federal legal holiday.
    Debt or claim means any amount of money, funds or property that has 
been determined by an appropriate official of the Federal Government to 
be owed to the United States by an individual, including debt 
administered by a third party as an agent for the Federal Government.
    Delinquent nontax debt means any nontax debt that has not been paid 
by the date specified in the agency's initial written demand for 
payment, or applicable agreement, unless other satisfactory payment 
arrangements have been made. For purposes of this section, the terms 
``debt'' and ``claim'' are synonymous and refer to delinquent nontax 
debt.
    Debtor means an individual who owes a delinquent nontax debt to the 
United States.
    Disposable pay means that part of the debtor's compensation 
(including, but not limited to, salary, bonuses, commissions, and 
vacation pay) from an employer remaining after the deduction of health 
insurance premiums and any amounts required by law to be withheld. For 
purposes of this section, ``amounts required by law to be withheld'' 
include amounts for deductions such as social security taxes and 
withholding taxes, but do not include any amount withheld pursuant to a 
court order.
    Employer means a person or entity that employs the services of 
others and that pays their wages or salaries. The term employer 
includes, but is not limited to, State and local Governments, but does 
not include an agency of the Federal Government.
    Evidence of service means information retained by the agency 
indicating the nature of the document to which it pertains, the date of 
mailing of the document, and to whom the document is being sent. 
Evidence of service may be retained electronically so long as the 
manner of retention is sufficient for evidentiary purposes.
    Garnishment means the process of withholding amounts from an 
employee's disposable pay and the paying of those amounts to a creditor 
in satisfaction of a withholding order.
    Withholding order means any order for withholding or garnishment of 
pay issued by an agency, or judicial or administrative body. For 
purposes of this section, the terms ``wage garnishment order'' and 
``garnishment order'' have the same meaning as ``withholding order.''
* * * * *
    (e) Notice requirements.
* * * * *
    (3) The agency will retain evidence of service indicating the date 
of mailing of the notice.
* * * * *
    (g) Wage garnishment order. (1) Unless the agency receives 
information that the agency believes justifies a delay or cancellation 
of the withholding order, the agency should send, by first class mail, 
a withholding order to the debtor's employer:
    (i) Within 30 days after the debtor fails to make a timely request 
for a hearing (i.e., within 15 business days after the mailing of the 
notice described in paragraph (e)(1) of this section), or,
    (ii) If a timely request for a hearing is made by the debtor, 
within 30 days after a final decision is made by the agency to proceed 
with garnishment, or,
    (iii) As soon as reasonably possible thereafter.
    (2) The withholding order sent to the employer under paragraph 
(g)(1) of this section shall be in a form prescribed by the Secretary 
of the Treasury. The withholding order shall contain the signature of, 
or the image of the signature of, the head of the agency or his/her 
delegatee. The order shall contain only the information necessary for 
the employer to comply with the withholding order. Such information 
includes the debtor's name, address, and social security number, as 
well as instructions for withholding and information as to where 
payments should be sent.
    (3) The agency will retain evidence of service indicating the date 
of mailing of the order.
* * * * *

    Dated: September 28, 2001.
Richard L. Gregg,
Commissioner.
[FR Doc. 01-25602 Filed 10-11-01; 8:45 am]
BILLING CODE 4810-35-P