[Federal Register Volume 66, Number 224 (Tuesday, November 20, 2001)]
[Rules and Regulations]
[Pages 58056-58061]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-28693]


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NATIONAL INDIAN GAMING COMMISSION

25 CFR Part 513

RIN 3141-AA25


Debt Collection

AGENCY: National Indian Gaming Commission.

ACTION: Interim rule with request for comments.

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SUMMARY: The National Indian Gaming Commission (Commission) is issuing 
interim regulations that set forth procedures for collecting debts. 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 regulations on their debt collection 
procedures. The interim rule outlines procedures mandated by statutes 
and regulations promulgated jointly by the departments of the Treasury 
and Justice and by the Office of Personnel Management. The rule 
includes procedures for collection of debts through administrative, 
tax, and salary offset and administrative wage garnishment. The 
Commission requests comments on these regulations.

DATES: These regulations are effective on November 20, 2001. Written 
comments on these regulations must be received by January 4, 2002.

ADDRESSES: Send comments to: Debt Collection Standards, National Indian 
Gaming Commission, Suite 9100, 1441 L St., NW., Washington, DC 20005; 
telefax number (202) 632-7066 (not a toll-free number). Public comments 
may be read or delivered between 9 a.m. and 12 p.m. and 2 p.m. and 5 
p.m. Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Cynthia Omberg, at (202) 632-7003 (not 
a toll-free number) or by fax at (202) 632-7066 (not a toll-free 
number).

SUPPLEMENTARY INFORMATION: These regulations implement the requirements 
of the Federal Claims Collection Act of 1966 (Pub. L. 89-508, 80 Stat. 
308) as amended by the Debt Collection Act of 1982 and the Debt 
Collection Improvement Act of 1996 (Pub. L. 104-134, 110 Stat. 1321). 
These regulations are issued in conformity with the Federal Claims 
Collection Standards (31 CFR Ch. IX). Under these regulations, the 
Commission may collect debts owed to it through various methods, 
including administrative offset, tax refund offset, or salary offset.
    Subpart A of the regulation addresses the collection of debts in 
general and incorporates the debt collection

[[Page 58057]]

procedures of the Federal Claims Collection Standards (FCCS) at 31 CFR 
parts 900 to 904. It provides, as mandated by law, that the Commission 
will transfer debts that are delinquent for over 180 days to Treasury 
for collection or other appropriate action. It also provides that debts 
that are delinquent for fewer than 180 days may be referred to 
Treasury.
    Subpart B sets forth the due process procedures the Commission will 
use to collect by administrative and tax refund offset pursuant to 31 
U.S.C. 3716 and 3720A, and 31 CFR 285.2.
    Subpart C sets forth the due process procedures that the Commission 
will use for debts that are to be collected by salary offset. This 
method of debt collection is used when a Federal employee is indebted 
to the Federal Government. The procedures for salary offset are 
governed by: 5 U.S.C. 5514; 31 U.S.C. 3716; Office of Personnel 
Management (OPM) regulations at 5 CFR part 550, subpart K; and 31 CFR 
285.7. Agencies are required to promulgate their own salary offset 
regulations, 5 U.S.C. 5514(b)(1), that must conform to OPM regulations 
and be approved by OPM before they become effective. 5 CFR 
550.1105(a)(1). The Commission's salary offset provisions have been 
reviewed and approved by OPM.
    Subpart D provides for administrative wage garnishment pursuant to 
31 U.S.C. 3720D and 25 CFR 285.11.
    Because these interim rules are merely procedural in nature and 
implement already enacted laws on debt collection, the Commission is 
providing only a 30-day comment period.

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 business, or small organizations 
include an initial regulatory flexibility analysis describing the 
regulation's impact on small entities. Such an analysis is not 
necessary, however, if the agency certifies that the regulation will 
not have a significant economic impact on a substantial number of small 
entities. 5 U.S.C. 605(b).
    The Commission has considered the impact of this interim regulation 
under the Regulatory Flexibility Act. The debts owed to the Commission 
are typically those of tribes or contractors. While these are small 
entities, the economic impact on them is not significant because the 
regulations do not create a new duty to pay debts, but only provide a 
mechanism for collecting debts that are already due.

Paperwork Reduction Act

    The Commission certifies that these regulations do not require 
additional reporting under the criteria of the Paperwork Reduction Act 
(44 U.S.C. 3501 et seq.).

Waiver of Notice of Proposed Rulemaking and 30-Day Delay of 
Effective Date

    The Commission has determined that this regulation pertains to 
agency practice and procedure and is interpretative in nature. The 
procedures contained in the interim regulation for administrative 
offset, salary offset, and tax refund offset are mandated by law and by 
regulations promulgated 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). Nonetheless, the 
Commission requests comments from the public and will take all comments 
into consideration before promulgating the final regulation.

Unfunded Mandates Reform Act of 1995

    Assessment statements in accordance with the Unfunded Mandates 
Reform Act of 1995 (2 U.S.C. 1531 et seq.) are not required for 
regulations that incorporate requirements specifically set forth in 
law. These regulations implement specific statutory requirements. In 
addition, they do not include a Federal mandate that may result in the 
expenditure by the private sector or by State, local, and tribal 
governments of, in the aggregate, $100 million or more in any one year. 
A statement under 2 U.S.C. 1532 is therefore not required.

Submission to Congress and the General Accounting Office

    Under 5 U.S.C. 801(a)(1)(A), Agencies must submit rules to each 
House of Congress and the Comptroller General of the United States 
before publication of this interim regulation in the Federal Register. 
This interim regulation is not a major rule as defined at 5 U.S.C. 
804(3)(c) and is not a major rule as defined at 5 U.S.C. 804(2).

List of Subjects in 25 CFR Part 513

    Claims, Gambling, Government employees, Income taxes, Wages.

    Dated: November 6, 2001.
Montie R. Deer,
Chairman National Indian Gaming Commission.


    Accordingly 25 CFR part 513 is added to read as follows:

PART 513--DEBT COLLECTION

Subpart A--General Provisions

Sec.
513.1   What definitions apply to the regulations in this part?
513.2   What is the Commission's authority to issue these 
regulations?
513.3   What happens to delinquent debts owed to the Commission?
513.4   What notice will the Commission give to a debtor of the 
Commission's intent to collect debts?
513.5   What is the Commission's policy on interest, penalty 
charges, and administrative costs?
513.6   What are the requirements for offset review?
513.7   What is the Commission's policy on revoking a debtor's 
ability to engage in Indian gaming for failure to pay a debt?
Subpart B--Administrative and Tax Refund Offset
513.20   What debts can the Commission refer to Treasury for 
collection by administrative and tax refund offset?
513.21   What notice will a debtor be given of the Commission's 
intent to collect a debt through administrative and tax refund 
offset?
Subpart C--Salary Offset
513.30   When may the Commission use salary offset to collect debts?
513.31   What notice will the Commission, as the creditor agency, 
give a debtor that salary offset will occur?
513.32   What are the hearing procedures when the Commission is the 
creditor agency?
513.33   Will the Commission issue a certification when the 
Commission is the creditor agency?
513.34   What opportunity is there for a voluntary repayment 
agreement when the Commission is the creditor agency?
513.35   What special review is available when the Commission is the 
creditor agency?
513.36   Under what conditions will the Commission refund amounts 
collected by salary offset?
513.37   What will the Commission do as the paying agency?

Subpart D--Administrative Wage Garnishment

513.40   How will the Commission handle debt collection through 
administrative wage garnishment?

    Authority: 31 U.S.C. 3711, 3716-3718, 3720A, 3720D; 5 U.S.C. 
5514; 25 U.S.C. 2713(a)(1).

[[Page 58058]]

Subpart A--General Provisions


513.1  What definitions apply to the regulations in this part?

    As used in this part:
    (a) Administrative offset means the withholding of funds payable by 
the United States (including funds payable by the United States on 
behalf of a State government) to any person, or the withholding of 
funds held by the United States for any person, in order to satisfy a 
debt owed to the United States.
    (b) Agency means a department, agency, court, court administrative 
office, or instrumentality in the executive, judicial, or legislative 
branch of government, including a government corporation.
    (c) Chairman means the Chairman of the Commission, or his or her 
designee.
    (d) Commission means the National Indian Gaming Commission.
    (e) Creditor agency means a Federal agency that is owed a debt.
    (f) Day means calendar day. To count days, include the last day of 
the period unless it is a Saturday, Sunday, or Federal legal holiday.
    (g) Debt and claim are synonymous and interchangeable. They refer 
to, among other things, fines, fees, and penalties that a Federal 
agency has determined are due the United States from any person, 
organization, or entity, except another Federal agency. For the 
purposes of administrative offset under 31 U.S.C. 3716 and subpart B of 
this part, the terms ``debt'' and ``claims'' include money, funds, or 
property owed to a State, the District of Columbia, American Samoa, 
Guam, the U.S. Virgin Islands, the Commonwealth of the Northern Mariana 
Islands, or the Commonwealth of Puerto Rico.
    (h) Debtor means a person, contractor, Tribe, or other entity that 
owes a debt to the Commission.
    (i) Delinquent debt means a debt that has not been paid within the 
time limit prescribed by the applicable Act, law, or contract.
    (j) Disposable pay means the part of an employee's pay that remains 
after deductions that must be withheld by law have been made (other 
than deductions to execute garnishment orders for child support and/or 
alimony, in accordance with 5 CFR part 581, and for commercial 
garnishment of federal employees' pay, in accordance with 5 CFR part 
582). ``Pay'' includes current basic pay, special pay, incentive pay, 
retired pay, and retainer pay.
    (k) Employee means a current employee of an agency, including a 
current member of the Armed Forces or Reserve of the Armed Forces of 
the United States.
    (l) DOJ means the U.S. Department of Justice.
    (m) FCCS means the Federal Claims Collection Standards, which are 
published at 31 CFR parts 900-904.
    (n) FMS means the Federal Management Service, a bureau of the U.S. 
Department of the Treasury.
    (o) Paying agency means the agency that makes payment to an 
individual who owes a debt to the United States.
    (p) Payroll office means the office in an agency that is primarily 
responsible for payroll records and the coordination of pay matters 
with the appropriate personnel office.
    (q) Person includes a natural person or persons, profit or non-
profit corporation, partnership, association, trust, estate, 
consortium, tribe, or other entity that owes a debt to the United 
States, excluding the United States.
    (r) Salary offset means a payroll procedure to collect debt under 5 
U.S.C. 5514 and 31 U.S.C. 3716 by deduction(s) at one or more 
officially established pay intervals from the current pay account of an 
employee, without the employee's consent.
    (s) Tax refund offset means the reduction of a tax refund by the 
amount of a past-due legally enforceable debt.


Sec. 513.2  What is the Commission's authority to issue these 
regulations?

    (a) The Commission has authority to issue these regulations under 
25 U.S.C. 2713(a)(1) of the Indian Gaming Regulatory Act. The 
Commission is issuing the regulations in this part under the authority 
of: The FCCS, the Debt Collection Act of 1982 and the Debt Collection 
Improvement Act of 1996, 31 U.S.C. 3711, 3716-3718, and 3720A. In 
addition, the salary offset provisions are issued in conformity with 5 
U.S.C. 5514 and its implementing regulations published at 5 CFR part 
550, subpart K.
    (b) The Commission hereby adopts the provisions of the FCCS (31 CFR 
parts 900-904). The Commission's regulations supplement the FCCS as 
necessary.


Sec. 513.3  What happens to delinquent debts owed to the Commission?

    (a) The Commission will collect debts in accordance with these 
regulations in this part.
    (b) The Commission will transfer to the Department of the Treasury 
any past due, legally enforceable nontax debt that has been delinquent 
for 180 days or more so that Treasury may take appropriate action to 
collect the debt or terminate collection action in accordance with 5 
U.S.C. 5514, 26 U.S.C. 6402, 31 U.S.C. 3711 and 3716, the FCCS, 5 CFR 
550.1108, and 31 CFR part 285.
    (c) The Commission may transfer any past due, legally enforceable 
nontax debt that has been delinquent for fewer than 180 days to the 
Department of Treasury for collection in accordance with 5 U.S.C. 5514, 
26 U.S.C. 6402, 31 U.S.C. 3711 and 3716, the FFCS, 5 CFR 550.1108, and 
31 CFR part 285.


Sec. 513.4  What notice will the Commission give to a debtor of the 
Commission's intent to collect debts?

    (a) When the Chairman determines that a debt is owed to the 
Commission, the Chairman will send a written notice (Notice), also 
known as a demand letter. The Notice will be sent by facsimile or mail 
to the most current address known to the Commission. The Notice will 
inform the debtor of the following:
    (1) The amount, nature, and basis of the debt;
    (2) The methods of offset that may be employed;
    (3) The debtor's opportunity to inspect and copy agency records 
related to the debt;
    (4) The debtor's opportunity to enter into a written agreement with 
the Commission to repay the debt;
    (5) The Commission's policy concerning interest, penalty charges, 
and administrative costs, as set out in Sec. 513.5, including a 
statement that such assessments must be made against the debtor unless 
excused in accordance with the FCCS and this part;
    (6) The date by which payment should be made to avoid late charges 
and enforced collection;
    (7) The name, address, and telephone number of a contact person or 
office at the Commission that is available to discuss the debt; and
    (8) The debtor's opportunity for review.
    (b) A debtor whose debt arises from a notice of violation and/or 
civil fine assessment that has become a final order and that was 
subject to the Commission's appeal procedures at 25 CFR part 577 may 
not re-litigate matters that were the subject of the final order.


Sec. 513.5  What is the Commission's policy on interest, penalty 
charges, and administrative costs?

    (a) Interest.
    (1) The Commission will assess interest on all delinquent debts 
unless prohibited by statute, regulation, or contract.
    (2) Interest begins to accrue on all debts from the date that the 
debt becomes delinquent. The Commission will assess interest at the 
rate established annually by the Secretary of the Treasury under 31 
U.S.C. 3717.

[[Page 58059]]

    (b) Penalties. The Commission will assess a penalty charge of 6 
percent a year on any portion of a delinquent debt.
    (c) Administrative costs. The Commission will assess charges to 
cover administrative costs incurred as a result of the debtor's failure 
to pay a debt before it becomes delinquent. Administrative costs 
include the cost of providing a copy of the file to the debtor and 
costs incurred in processing and handling the debt because it became 
delinquent, such as costs incurred in obtaining a credit report or in 
using a private collection contractor, or service fees charged by a 
Federal agency for collection activities undertaken on behalf of the 
Commission.
    (d) Interest, penalties, and administrative costs will continue to 
accrue throughout any appeal process.
    (e) Allocation of payments. A partial or installment payment by a 
debtor will be applied first to outstanding penalty assessments, second 
to administrative costs, third to accrued interest, and fourth to the 
outstanding debt principal.
    (f) Additional authority. The Commission may assess interest, 
penalty charges, and administrative costs on debts that are not subject 
to 31 U.S.C. 3717 to the extent authorized under common law or other 
applicable statutory authority.
    (g) Waiver. (1) Regardless of the amount of the debt, the Chairman 
may decide to waive collection of all or part of the accrued interest, 
penalty charges, or administrative costs if collection of these charges 
would be against equity and good conscience or not in the Commission's 
best interest.
    (2) A decision to waive interest, penalty charges, or 
administrative costs may be made at any time before a debt is paid. 
However, when charges have been collected before the waiver decision, 
they will not be refunded. The Chairman's decision whether to waive 
collection of these charges is final and not subject to further review.


Sec. 513.6  What are the requirements for offset review?

    (a) The Commission will provide the debtor with a reasonable 
opportunity for an oral hearing when the debtor requests 
reconsideration of the debt and the Commission determines that the 
question of indebtedness cannot be resolved by review of the 
documentary evidence.
    (b) Unless otherwise required by law, an oral hearing is not 
required to be a formal evidentiary hearing, although the Commission 
will carefully document all significant matters discussed at the 
hearing.
    (c) When an oral hearing is not required, the Commission will 
review the request for reconsideration based on the written record.


Sec. 513.7  What is the Commission's policy on revoking a debtor's 
ability to engage in Indian gaming for failure to pay a debt?

    The Chairman of the Commission may revoke a debtor's ability to 
operate, manage, or otherwise participate in the operation of an Indian 
gaming facility if the debtor inexcusably or willfully fails to pay a 
debt. The revocation of ability to engage in gaming may last only as 
long as the debtor's indebtedness.

Subpart B--Administrative and Tax Refund Offset


Sec. 513.20  What debts can the Commission refer to Treasury for 
collection by administrative and tax refund offset?

    (a) The Commission may refer any past due, legally enforceable 
nonjudgment debt of a person to the Treasury for administrative and tax 
refund offset if the debt:
    (1) Has been delinquent for at least three months and will not have 
been delinquent more than 10 years at the time the offset is made;
    (2) Is at least $25.00 or another amount established by Treasury.
    (b) Debts reduced to judgment may be referred to Treasury for tax 
refund offset at any time.


Sec. 513.21  What notice will a debtor be given of the Commission's 
intent to collect a debt through administrative and tax refund offset?

    (a) The Commission will give the debtor written notice of its 
intent to offset before initiating the offset. Notice will be mailed to 
the debtor at the debtor's last known address as determined by the 
Commission.
    (b) The notice will state the amount of the debt and notify the 
debtor that:
    (1) The debt is past due and, unless repaid within 60 days after 
the date of the notice, the Commission will refer the debt to Treasury 
for administrative and tax refund offset;
    (2) The debtor has 60 calendar days to present evidence that all or 
part of the debt is not past-due or legally enforceable; and
    (3) The debtor has an opportunity to make a written agreement to 
repay the debt.

Subpart C--Salary Offset


Sec. 513.30  When may the Commission use salary offset to collect 
debts?

    (a) The Commission collects debts owed by employees to the Federal 
Government by means of salary offset under the authority of: 5 U.S.C. 
5514; 31 U.S.C. 3716; 5 CFR part 550, subpart K; 31 CFR 285.7; and this 
subpart. Salary offset is applicable when the Commission is attempting 
to collect a debt owed by an individual employed by the Commission or 
another agency.
    (b) Nothing in the regulations in this subpart precludes the 
compromise, suspension, or termination of collection actions under the 
Federal Claims Collection Act of 1966, as amended, or the Federal 
Claims Collection Standards.
    (c) A levy pursuant to the Internal Revenue Code takes precedence 
over a salary offset under this subpart, as provided in 5 U.S.C. 
5514(d) and 31 U.S.C. 3716.
    (d) The regulations in this subpart do not apply to any case where 
collection of a debt by salary offset is explicitly prohibited by 
another statute.
    (e) This subpart's regulations covering notice, hearing, written 
responses, and final decisions do not apply to:
    (1) Any routine intra-agency adjustment in 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 adjustment, or as soon thereafter as 
possible, the Commission's payroll agency will provide the employee 
with a written notice of the nature and amount of the adjustment and a 
contact point for appealing the adjustment.
    (2) Any negative adjustment to pay that arises from the debtor's 
election of coverage or a change in coverage under a Federal benefits 
program requiring periodic deductions from pay, if the amount to be 
recovered was accumulated over four or fewer pay periods. However, at 
the time of the adjustment, the Commission's payroll agent will provide 
in the debtor's earnings statement a clear statement informing the 
debtor of the previous overpayment.
    (f) An employee's involuntary payment of all or any of the debt 
through salary offset will not be construed as a waiver of any rights 
that the employee may have under the law, unless there are statutory or 
contractual provisions to the contrary.


Sec. 513.31  What notice will the Commission, as the creditor agency, 
give a debtor that salary offset will occur?

    (a) Deductions from a debtor's salary will not be made unless the 
Commission sends the debtor a written Notice of Intent at least 30 
calendar days before the salary offset is initiated.

[[Page 58060]]

    (b) The Notice of Intent will include the following:
    (1) Notice that the Commission has reviewed the records relating to 
the debt and has determined that the employee owes the debt;
    (2) Notice that, after a 30-day period, the Commission will begin 
to collect the debt by deductions from the employee's current 
disposable pay account and the date on which deductions from salary 
will start;
    (3) The amount of the debt and the facts giving rise to it;
    (4) The frequency and the amount of the intended deduction stated 
as a fixed dollar amount or as a percentage of pay not to exceed 15 
percent of the disposable pay, and the intention to continue the 
deductions until the debt and all accumulated interest are paid in full 
or resolved;
    (5) The name, address, and telephone number of the person to whom 
the debtor may propose a written alternative schedule for voluntary 
repayment in lieu of salary offset. The debtor must include a 
justification for the alternative schedule in the proposal;
    (6) The Commission's policy concerning interest, penalties, and 
administrative costs, set out at Sec. 513.5, and a statement that 
assessments will be made unless excused in accordance with the FCCS;
    (7) Notice of the employee's right to inspect and copy all 
Commission records pertaining to the debt and the name, address, and 
telephone number of the Commission employee to whom requests for access 
must be made;
    (8) Notice of the employee's opportunity to a hearing conducted by 
an individual who does not work for the Commission on the Commission's 
determination of the existence or amount of the debt and the terms of 
the repayment schedule;
    (9) Notice that filing a request for a hearing on or before the 
15th calendar day following the debtor's receiving the Notice of Intent 
will stay collection proceedings and that a final decision will be 
issued at the earliest practical date, but not later than 60 days after 
the filing of the petition for hearing, unless the employee requests, 
and a hearing official grants, a delay in proceedings;
    (10) An explanation of the effect of submitting knowingly false or 
frivolous statements; and
    (11) Notice that amounts paid on or deducted from debts that are 
later waived or found not to be owed will be promptly refunded to the 
employee.


Sec. 513.32  What are the hearing procedures when the Commission is the 
creditor agency?

    (a) To request a hearing, the debtor must file, within 15 days of 
receiving the Commission's notice of intent to offset, a written 
petition signed by the debtor and addressed to the Commission stating 
why the debtor believes the Commission's determination of the existence 
or amount of the debt is in error. The Commission may waive the 15-day 
time limit for filing a request for hearing if the employee shows that 
the delay was due to circumstances beyond his or her control or because 
the employee did not receive notice of the 15-day time limit. A debtor 
who has previously obtained a hearing to contest a debt that arose from 
a notice of violation or proposed civil fine assessment matters under 
25 CFR part 577 may not re-litigate matters that were at issue in that 
hearing.
    (b) Regardless of whether the debtor is a Commission employee, the 
Commission will provide a prompt and appropriate hearing before a 
hearing official who is not from the Commission.
    (c) The hearing will be conducted according to the FCCS review 
requirements at 31 CFR 901.3(e).
    (d) Unless the employee requests, and a hearing official grants, a 
delay in proceedings, within 60 days after the petition for hearing the 
hearing official will issue a written decision on:
    (1) The determination of the creditor agency concerning the 
existence or amount of the debt; and
    (2) The repayment schedule, if a schedule was not established by 
written agreement between the employee and the creditor agency.
    (e) If the hearing official determines that a debt may not be 
collected by salary offset but the Commission has determined that the 
debt is valid, the Commission may seek collection of the debt through 
other means in accordance with applicable law and regulations.
    (f) The form of hearings, written responses, and final decisions 
will be according to the Commission's review requirements at 
Sec. 513.7. Written decisions regarding salary offset that are provided 
after a request for hearing must state: The facts purported to evidence 
the nature and origin of the alleged debt; the hearing official's 
analysis, findings, and conclusions as to the employee's or creditor 
agency's grounds; the amount and validity of the alleged debt; and, 
where applicable, the repayment schedule.


Sec. 513.33  Will the Commission issue a certification when the 
Commission is the creditor agency?

    Yes. Upon completion of the procedures established in this subpart 
and pursuant to 5 U.S.C. 5514, the Commission will submit a 
certification to Treasury or to a paying agency in the form prescribed 
by the paying agency.


Sec. 513.34  What opportunity is there for a voluntary repayment 
agreement when the Commission is the creditor agency?

    (a) 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 the Commission. A proposal must 
be received by the Commission within 15 calendar days after the 
employee is sent the Notice of Intent.
    (b) The Commission will notify the employee whether, within the 
Commission's discretion, the proposed repayment schedule is acceptable.
    (c) If the proposed repayment schedule is unacceptable, the 
employee will have 15 calendar days from the date the notice of the 
decision is received in which to file a request for a hearing.
    (d) If the proposed repayment schedule is acceptable or the 
employee agrees to a modification proposed by the Commission, the 
agreement will be put in writing and signed by the employee and the 
Commission.


Sec. 513.35  What special review is available when the Commission is 
the creditor agency?

    (a) (1) An employee subject to salary offset or a voluntary 
repayment agreement may, at any time, request a special review by the 
Commission 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 
payment results in extreme financial hardship to the employee, spouse, 
or dependents. The 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) The Commission will evaluate the statement and documentation 
and determine whether the current offset or

[[Page 58061]]

repayment schedule imposes extreme financial hardship on the employee. 
The Commission will notify the employee in writing within 30 calendar 
days of its determination, including, if appropriate, a revised offset 
or payment schedule. If the special review results in a revised offset 
or repayment schedule, the Commission will provide a new certification 
to the paying agency.


Sec. 513.36  Under what conditions will the Commission refund amounts 
collected by salary offset?

    (a) As the creditor agency, the Commission will promptly refund any 
amount deducted under the authority of 5 U.S.C. 5514, when:
    (1) The Commission determines that the debt is not owed; or
    (2) An administrative or judicial order directs the Commission to 
make a refund.
    (b) Unless required or permitted by law or contract, refunds under 
this section will not bear interest.


Sec. 513.37  What will the Commission do as the paying agency?

    (a) When the Commission receives a certification from a creditor 
agency that has complied with the Office of Personnel Management's 
requirements set out at 5 CFR 550.1109, the Commission will send the 
employee a written notice of salary offset.
    (b) If the Commission receives an incomplete certification from a 
creditor agency, the Commission will return the certification with 
notice that the procedures under 5 U.S.C. 5514 and 5 CFR 550.1104 must 
be followed and a properly certified claim submitted before the 
Commission will take action to collect the debt from the employee's 
current pay account.
    (c) Notice to a debtor will include:
    (1) The Commission's receipt of a certification from a creditor 
agency;
    (2) The amount of the debt and the deductions to be made, which may 
be stated as a percentage of disposable pay; and
    (3) The date and pay period when the salary offset will begin.
    (d) The Commission will provide a copy of the notice of salary 
offset to a creditor agency.
    (e) The Commission will coordinate salary deductions under this 
subpart as appropriate.
    (f) The Commission's payroll officer will determine the amount of 
the debtor's disposable pay and will implement the salary offset.
    (g) The Commission may use the following types of salary debt 
collection:
    (1) Lump sum offset. If the amount of the debt is equal to or less 
than 15 percent of disposable pay, the debt generally will be collected 
through one lump sum offset.
    (2) Installment deductions. The amount deducted from any period 
will not exceed 15 percent of the disposable pay from which the 
deduction is made unless the debtor has agreed in writing to the 
deduction of a greater amount. If possible, installment payments will 
liquidate the debt in three years or less.
    (3) Deductions from final check. A deduction exceeding the 15 
percent of disposable pay limitation may be made from any final salary 
payment under 31 U.S.C. 3716 and the Federal Claims Collection 
Standards, in order to liquidate the debt, whether the employee is 
leaving voluntarily or involuntarily.
    (4) Deductions from other sources. If an employee subject to salary 
offset is leaving the Commission and the balance of the debt cannot be 
liquidated by offset of the final salary check, then the Commission may 
offset later payments of any kind against the balance of the debt, as 
allowed by 31 U.S.C. 3716 and the Federal Claims Collection Standards.
    (h) When two or more creditor agencies are seeking salary offsets, 
the Commission's payroll office may, in its discretion, determine 
whether one or more debts should be offset simultaneously within the 15 
percent limitation.
    (i) The Commission 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.

Subpart D--Administrative Wage Garnishment


Sec. 513.40  How will the Commission handle debt collection through 
administrative wage garnishment?

    This part adopts all the provisions of the administrative wage 
garnishment regulations contained in 31 CFR 285.11, promulgated by 
Treasury, which allow Federal agencies to collect debts from a debtor's 
non-Federal pay by means of administrative wage garnishment authorized 
by 31 U.S.C. 3720D, and in 5 CFR parts 581 and 582, promulgated by the 
Office of Personnel Management, which provides for garnishment orders 
for child support and/or alimony and commercial garnishment of federal 
employees' pay.

[FR Doc. 01-28693 Filed 11-19-01; 8:45 am]
BILLING CODE 7565-01-U