[Federal Register Volume 67, Number 176 (Wednesday, September 11, 2002)]
[Rules and Regulations]
[Pages 57506-57509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-23091]


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NUCLEAR REGULATORY COMMISSION

10 CFR Part 16

RIN 3150-AG96


Salary Offset Procedures for Collecting Debts Owed by Federal 
Employees to the Federal Government

AGENCY: Nuclear Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is amending its 
regulations concerning the procedures used to collect debts that are 
owed to NRC by Federal employees. These amendments will conform NRC 
regulations to the legislative changes enacted in the Debt Collection 
Improvement Act of 1996 (DCIA) and the amended procedures presented in 
the Federal Claims Collection Standards (FCCS) issued by the Department 
of the Treasury (Treasury) and the Department of Justice (DOJ). The 
final action will allow the NRC to improve its collection of debts due 
the United States from Federal employees.

EFFECTIVE DATE: October 11, 2002.

FOR FURTHER INFORMATION CONTACT: Leah Tremper, Office of the Chief 
Financial Officer, U.S. Nuclear Regulatory Commission, 11545 Rockville 
Pike, Rockville, MD 20852-2738, Telephone 301-415-7347.

SUPPLEMENTARY INFORMATION: 

I. Background
II. Comments on Proposed Rule
III. Section by Section Analysis
IV. Voluntary Consensus Standards
V. Finding of No Significant Environmental Impact
VI. Paperwork Reduction Act
VII. Regulatory Analysis
VIII. Regulatory Flexibility Certification
IX. Backfit Analysis

I. Background

    On October 16, 1991 (56 FR 51829), the Nuclear Regulatory 
Commission (NRC) published a final rule concerning procedures for the 
collection of debts from Federal employees. Since then, the DCIA of 
1996 (Pub. L. 104-134), was enacted on April 26, 1996. A major purpose 
of the DCIA of 1996 is to increase the collection of delinquent nontax 
debts owed to the Federal Government. Among other things, the DCIA of 
1996 established a centralized process for withholding or reducing 
eligible Federal payments, including Federal salary payments, to pay 
the payee's delinquent debt owed to the United States. This process is 
known as ``centralized administrative offset.'' The DCIA of 1996 
requires Federal agencies to annually match their delinquent debtor 
records with records of Federal employees to identify Federal employees 
who owe delinquent debt to the Federal Government. The Treasury and 
other disbursing officials will match payments from the Federal 
Government, including Federal salary payments, for the purpose of 
offsetting the payments of those debtors who owe debt to the United 
States. When a match occurs and all the requirements for offset have 
been met, the payment will be offset to satisfy the debt in whole or 
part. To meet this responsibility, Treasury has established the 
Treasury Offset Program. Under the DCIA of 1996, Federal agencies are 
required to notify the Financial Management Service (FMS) of all past-
due, legally enforceable nontax debts owed to the United States that 
are over 180 days delinquent. The debts are included in the delinquent 
debtor database, and include debts owed by Federal employees that the 
NRC seeks to collect from the employee's pay account at another agency. 
Compliance with the administrative offset provisions of the DCIA of 
1996 will accomplish salary offset. This rule establishes NRC's 
procedures for notifying Treasury of delinquent debtors for the purpose 
of matching NRC's debtors against the delinquent debtor database.
    The FCCS (31 CFR Chapter IX and Parts 900, 901, 902, 903, and 904) 
were revised on November 22, 2000 (65 FR 70390). The revised FCCS 
clarify and simplify Federal debt collection procedures and reflect 
changes under the DCIA of 1996 and the General Accounting Office Act of 
1996. The revised FCCS reflect legislative changes to Federal debt 
collection procedures enacted under the DCIA of 1996, Pub. L. 104-134, 
110 Stat. 1321-358, as part of the Omnibus Consolidated Rescissions and 
Appropriations Act of 1996. The revised FCCS provide agencies with 
greater latitude to adopt agency-specific regulations, tailored to the 
legal and policy requirements applicable to the various types of 
Federal debt, to maximize the effectiveness of Federal debt collection 
procedures. The Secretary of the Treasury has been added as a co-
promulgator of the FCCS in accordance with section 31001(g)(1)(C) of 
the DCIA of 1996. The Comptroller General has been removed as a co-
promulgator in accordance with section 115(g) of the General Accounting 
Office Act of 1996, Pub. L. 104-316, 110 Stat. 3826 (October 19, 1996), 
(65 FR 70390 (November 22, 2000)). The Department of the Treasury and 
DOJ have published the revised FCCS as a joint final rule under new 
Chapter IX, 31 Code of Federal Regulations. The revised FCCS supersede 
the current FCCS codified at 4 CFR Parts 101-105.
    The revised FCCS prescribe standards for Federal agency use in the 
administrative collection, offset, compromise, and the suspension or 
termination of collection activity for civil claims for money, funds, 
or property, as defined by 31 U.S.C. 3701(b), unless specific Federal 
agency statutes or regulations apply to such activities, or as provided 
for by Title 11 of the United States Code when the claims involve 
bankruptcy. The revised FCCS also prescribe standards for referring 
debts to the Department of Justice for litigation.

II. Comments on Proposed Rule

    On April 24, 2002 (67 FR 20059), the NRC published a proposed rule 
to amend its salary offset procedures to conform NRC regulations to the 
legislative changes enacted in the DCIA of 1996 and the revised FCCS. 
The comment period expired on July 8, 2002. No comments were received 
on the proposed rule.

III. Section by Section Analysis

Section 16.1 Purpose and Scope

    This section is amended to (1) state the NRC is not limited to 
collection remedies contained in the revised FCCS, (2) delete the 
statement that these procedures do not apply to the Social Security 
Act, 42 U.S.C. 301 et. seq., and (3) delete the reference to 4 CFR 
parts 101-105 and substitute the reference to 31 CFR Chapter IX, Parts 
900-904.

Section 16.3 Definitions

    This section is amended to revise the definitions of ``agency,'' 
``creditor agency,'' ``debt and claim,'' ``disposable pay,'' 
``employee,'' and ``FCCS'' to conform with the DCIA of 1996. Other 
definitions such as ``centralized salary offset computer matching,'' 
``debt collection center,'' ``delinquent debt record,'' ``disbursing 
official,'' and ``Treasury'' have been added to conform to the 
definitions in the DCIA of 1996.

[[Page 57507]]

Section 16.7 Notice Requirements

    This section is amended to state the amount of the intended 
deduction may be stated as a fixed dollar or a percentage of pay and 
delete the reference to 4 CFR 102.2(e) and substitute the reference to 
31 CFR Chapter IX, 901.2(d).

Section 16.8 Information Collection Requirements: OMB Approval

    This section is added to state that this part contains no 
information collection requirements and is not subject to the 
requirements of the Paperwork Reduction Act.

Section 16.9 Hearing

    This section is amended to delete the reference to 4 CFR 102.3(c) 
and substitute the reference to 31 CFR Chapter IX, 901.3(e).

Section 16.13 Coordinating Offset With Another Federal Agency

    This section is amended to change the section heading from 
``Coordinating offset with another Federal agency'' to ``Procedures for 
centralized administrative offset'' and to include NRC's procedures for 
offset.

Section 16.15 Procedures for Salary Offset

    This section is amended to change the section heading from 
``Procedures for Salary Offset'' to ``Procedures for Internal Salary 
Offset.''

Section 16.23 Interest, Penalties, and Administrative Charges

    This section is amended to delete the reference to 4 CFR 102.13 and 
substitute the reference to 31 CFR Chapter IX, 901.9.

IV. Voluntary Consensus Standards

    The National Technology Transfer and Advancement Act of 1995, Pub. 
L. 104-113, requires that Federal agencies use technical standards that 
are developed or adopted by voluntary consensus standards bodies unless 
using such a standard is inconsistent with applicable law or is 
otherwise impractical. In this final rule, the NRC is amending part 16 
to reflect the current requirements of the DCIA of 1996 and the revised 
FCCS. This action does not constitute the establishment of a standard 
that contains generally applicable requirements.

V. Finding of No Significant Environmental Impact

    The Commission has determined, under the National Environmental 
Policy Act of 1969, as amended, and the Commission's regulations in 
Subpart A of 10 CFR part 51, that this rule, if adopted, would not be a 
major Federal action significantly affecting the quality of the human 
environment and, therefore, an environmental impact statement is not 
required. This final rule is necessary to conform the NRC regulations 
to the amended procedures presented in the FCCS. Amending the 
procedures that the NRC uses to collect debts which are owed to it will 
not have any radiological environmental impact offsite and no impact on 
occupational radiation exposure onsite. The rule does not affect 
nonradiological plant effluents and has no other environmental impact. 
The environmental assessment and finding of no significant impact, on 
which this determination is based, are available for inspection at the 
NRC Public Document Room, 11555 Rockville Pike, Rockville, Maryland, 
between 7:30 am and 4:15 pm except on Federal holidays.

VI. Paperwork Reduction Act

    This final rule does not contain information collection 
requirements and, therefore, is not subject to the requirements of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

VII. Regulatory Analysis

    The final rule conforms NRC procedures for collecting debts owed to 
it with the amended procedures presented in the FCCS, the DCIA of 1996, 
5 CFR Part 550 Pay Administration, and 31 CFR part 285 Salary Offset 
and, as such, will not have a significant impact on state and local 
Governments and geographical regions; health, safety, and the 
environment; nor will it represent substantial costs to licensees, the 
NRC, or other Federal agencies. This constitutes the regulatory 
analysis for this final rule.

VIII. Regulatory Flexibility Certification

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 
605(b)), the Commission certifies that this rule does not have a 
significant economic impact on a substantial number of small entities 
because this rule applies only to Federal agencies and employees.

IX. Backfit Analysis

    The NRC has determined that the backfit rule does not apply to this 
final rule; therefore, a backfit analysis is not required for this 
final rule because these amendments are mandated by the DCIA of 1996 
(Public Law 104-134, 110 Stat. 1321-358 (April 26, 1996)).

Small Business Regulatory Enforcement Fairness Act

    In accordance with the Small Business Regulatory Enforcement Act of 
1996, the NRC has determined that this action is not a major rule and 
has verified this determination with the Office of Information and 
Regulatory Affairs of OMB.

List of Subjects in 10 CFR Part 16

    Administrative practice and procedures, Debt collection, Government 
employees, Salary offset, Wages.


    For the reasons set out in the preamble and under the authority of 
the Atomic Energy Act of 1954, as amended; the Energy Reorganization 
Act of 1974, as amended; and 5 U.S.C. 552 and 553, the NRC is adopting 
the following amendments to 10 CFR part 16.

PART 16--SALARY OFFSET PROCEDURES FOR COLLECTING DEBTS OWED BY 
FEDERAL EMPLOYEES TO THE FEDERAL GOVERNMENT

    1. The authority citation for Part 16 is revised to read as 
follows:

    Authority: Secs. 161, 186, 68 Stat. 948, 955, as amended (42 
U.S.C. 2201, 2236); sec. 201, 88 Stat. 1242, as amended (42 U.S.C. 
5841); sec. 1, Pub. L. 97-258, 96 Stat. 972 (31 U.S.C. 3713); sec 5, 
Pub. L. 89-508, 80 Stat. 308, as amended (31 U.S.C. 3711, 3717, 
3718); Pub. L. 97-365, 96 Stat. 1749; Federal Claims Collection 
Standards, 31 CFR Chapter IX, Parts 900-904; 31 U.S.C. Secs. 3701, 
3716; 31 CFR Sec 285; 26 U.S.C. Sec 6402(d); 31 U.S.C. Sec. 3720A; 
26 U.S.C. Sec. 6402(c); 42 U.S.C. Sec. 664; Pub. L. 104-134, as 
amended (31 U.S.C. 3713); 5 U.S.C. 5514; Executive Order 12988 (3 
CFR, 1996 Comp., pp. 157-163); 5 CFR 550.

    2. In Sec.  16.1 paragraph (b)(2) is removed, paragraphs (b)(3) and 
(b)(4) are redesignated as (b)(2) and (b)(3), paragraph (d) is revised, 
and paragraph (f) is added to read as follows:


Sec.  16.1  Purpose and scope.

* * * * *
    (d) These procedures do not preclude the compromise, suspension, or 
termination of collection action where appropriate under the standards 
implementing the revised Federal Claims Collection Standards (FCCS), 31 
U.S.C. 3711 et seq., 31 CFR chapter IX, parts 900 through 904.
* * * * *
    (f) The NRC is not limited to collection remedies contained in the 
revised FCCS. The FCCS is not intended to impair common law remedies.

    3. In Sec.  16.3, the definition of agency, creditor agency, debt, 
disposable pay,

[[Page 57508]]

employee, and FCCS are revised, and the definitions of centralized 
salary offset computer matching, debt collection center, delinquent 
debt record, disbursing official, and Treasury are added in 
alphabetical order to read as follows:


Sec.  16.3  Definitions.

* * * * *
    Agency means any agency of the executive, legislative, and judicial 
branches of the Federal Government, including Government corporations.
    Centralized salary offset computer matching describes the 
computerized process used to match delinquent debt records with Federal 
salary payment records when the purpose of the match is to identify 
Federal employees who owe debt to the Federal Government.
    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.
    Debt and claim are used synonymously to refer to an amount of 
money, funds, or property that has been determined by an agency 
official to be owed to 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, the terms debt and claim 
include an amount of money, funds, or property owed by a person to a 
State (including past-due support being enforced by 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.
    Debt collection center means the Department of the Treasury or 
other Government agency or division designated by the Secretary of the 
Treasury with authority to collect debts on behalf of creditor 
agencies.
    Delinquent debt record refers to the information about a debt that 
an agency submits to Treasury when the agency refers the debt for 
collection by offset in accordance with the provision of 31 U.S.C. 
3716.
    Disbursing official means an official who has authority to disburse 
Federal salary payments pursuant to 31 U.S.C. 3321 or another law.
    Disposable pay means that part of current basic pay, special pay, 
incentive pay, retired pay, retainer pay, or in the case of an employee 
not entitled to basic pay, other authorized pay remaining after the 
deduction of:
    (1) Any amount required by law to be withheld;
    (2) Amounts properly withheld for Federal, state or local income 
tax purposes;
    (3) Amounts deducted as health insurance premiums;
    (4) Amounts deducted as normal retirement contributions, not 
including amounts deducted for supplementary coverage; and
    (5) Amounts deducted as normal life insurance premiums not 
including amounts deducted for supplementary coverage.
    Employee is any individual employed by any agency of the executive, 
legislative, and judicial branches of the Federal Government, including 
Government corporations.
    FCCS means the Federal Claims Collection Standards jointly 
published by the Department of the Treasury and the Department of 
Justice at 31 CFR Chapter IX, Parts 900 through 904.
* * * * *
    Treasury as used in 10 CFR part 16 means the Department of the 
Treasury.
* * * * *

    4. In Sec.  16.7, paragraphs (b)(3) and (b)(6) are revised to read 
as follows:


Sec.  16.7  Notice requirements.

* * * * *
    (b) * * *
* * * * *
    (3) The amount and frequency 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 deduction until 
the debt is paid in full or otherwise resolved.
* * * * *
    (6) If not previously provided, the opportunity (under terms 
agreeable to the NRC) to establish a schedule for the voluntary 
repayment of the debt or to enter into a written agreement to establish 
a schedule for repayment of the debt in lieu of offset (31 CFR Chapter 
IX, 901.2). The agreement must be in writing, signed by the employee 
and the NRC, and documented in the NRC's files.
* * * * *

    5. Section 16.8 is added to read as follows:


Sec.  16.8  Information collection requirements: OMB approval.

    This part contains no information collection requirements, and, 
therefore, is not subject to the requirements of the Paperwork 
Reduction Act (44 U.S.C. 3501 et. seq.).

    6. In Sec.  16.9, paragraph (b)(2) is revised to read as follows:


Sec.  16.9  Hearing.

* * * * *
    (b) * * *
    (2) The hearing must conform to procedures contained in the revised 
FCCS, 31 CFR Chapter IX, 901.3(e). The burden is on the employee to 
demonstrate either that the existence or the amount of the debt is in 
error or that the terms of the repayment schedule would result in undue 
financial hardship or would be against equity and good conscience.
* * * * *

    7. Section 16.13 is revised to read as follows:


Sec.  16.13  Procedures for centralized administrative offset.

    (a) The NRC must notify Treasury of all debts that are delinquent 
as defined in the FCCS (over 180 days old) so that recovery may be made 
by centralized administrative offset. This includes those debts the NRC 
seeks to recover from the pay account of an employee of another agency 
via salary offset. The Treasury and other Federal disbursing officials 
will match payments, including Federal salary payments, against such 
debts. When a match occurs, and all the requirements for offset have 
been met, the payments will be offset to collect the debt. Prior to 
offset of the pay account of an employee, the NRC must comply with the 
requirements of 5 U.S.C. 5514, 5 CFR part 550, and 10 CFR part 15. 
Procedures for notifying Treasury of a debt for purposes of collection 
by centralized administrative offset are contained in 31 CFR part 285 
and 10 CFR 15.33. Procedures for internal salary offset are contained 
in Sec.  16.15 of this chapter.
    (b) When the NRC determines that an employee of another Federal 
agency owes a delinquent debt to the NRC, the NRC will, as appropriate:
    (1) Arrange for a hearing upon the proper petitioning by the 
employee;
    (2) Provide the Federal employee with a notice and an opportunity 
to dispute the debt as contained in 5 U.S.C. 5514 and 10 CFR 15.26.
    (3) Submit the debt to Treasury for centralized administrative 
offset and certify in writing that the debtor has been afforded the 
legally required due process notification.
    (4) If collection must be made in installments, the NRC must advise 
the paying agency of the amount or percentage of disposable pay to be 
collected in each installment.
    (c) Offset amount. (1) The amount offset from a salary payment 
under this section shall be the lesser of:

[[Page 57509]]

    (i) The amount of the debt, including any interest, penalties, and 
administrative costs; or
    (ii) An amount up to 15 percent of the debtor's disposable pay.
    (2) Alternatively, the amount offset may be an amount agreed upon, 
in writing, by the debtor and the NRC.
    (3) Offsets will continue until the debt, including any interest, 
penalties, and administrative costs, is paid in full or otherwise 
resolved to the satisfaction of the NRC.
    (d) Priorities. (1) A levy pursuant to the Internal Revenue Code of 
1986 shall take precedence over other deductions under this section.
    (2) When a salary payment may be reduced to collect more than one 
debt, amounts offset under this section will be applied to a debt only 
after amounts offset have been applied to satisfy past due child 
support debt assigned to a State pursuant 26 U.S.C. 6402(c) and 31 CFR 
285.7(h)(2).
    (e) Notice. (1) Before offsetting a salary payment, the disbursing 
official, or the paying agency on behalf of the disbursing official, 
shall notify the Federal employee in writing of the date that 
deductions from salary will commence and of the amount of such 
deductions.
    (2)(i) When an offset occurs under this section, the disbursing 
official, or the paying agency on behalf of the disbursing official, 
shall notify the Federal employee in writing that an offset has 
occurred including:
    (A) A description of the payment and the amount of the offset 
taken;
    (B) Identification of NRC as the agency requesting the offset; and,
    (C) A contact point within the NRC that will handle concerns 
regarding the offset.
    (ii) The information described in paragraphs (e)(2)(i)(B) and 
(e)(2)(i)(C) of this section does not need to be provided to the 
Federal employee when the offset occurs if such information was 
included in a prior notice from the disbursing official or paying 
agency.
    (3) The disbursing official will advise the NRC of the names, 
mailing addresses, and taxpayer identifying numbers of the debtors from 
whom amounts of past-due, legally enforceable debt were collected and 
of the amounts collected from each debtor. The disbursing official will 
not advise the NRC of the source of payment from which such amounts 
were collected.
    (f) Fees. Agencies that perform centralized salary offset computer 
matching services may charge a fee sufficient to cover the full cost of 
such services. In addition, Treasury or a paying agency acting on 
behalf of Treasury, may charge a fee sufficient to cover the full cost 
of implementing the administrative offset program. Treasury may deduct 
the fees from amounts collected by offset or may bill the NRC. Fees 
charged for offset shall be based on actual administrative offsets 
completed.
    (g) Disposition of amounts collected. The disbursing official 
conducting the offset will transmit amounts collected for debts, less 
fees charged under paragraph (f) of this section, to NRC. If an 
erroneous offset payment is made to the NRC, the disbursing official 
will notify the NRC that an erroneous offset payment has been made. The 
disbursing official may deduct the amount of the erroneous offset 
payment from future amounts payable to the NRC. Alternatively, upon the 
disbursing official's request, the NRC shall return promptly to the 
disbursing official or the affected payee an amount equal to the amount 
of the erroneous payment (without regard to whether any other amounts 
payable to the agency have been paid). The disbursing official and the 
NRC shall adjust the debtor records appropriately.

    8. Section 16.15 is amended by revising the section heading to read 
as follows:


Sec.  16.15  Procedures for internal salary offset.

    9. Section 16.23 is revised to read as follows:


Sec.  16.23  Interest, penalties, and administrative charges.

    Charges may be assessed for interest, penalties, and administrative 
charges in accordance with the FCCS, 31 CFR Chapter IX, 901.9.

    Dated at Rockville, Maryland, this 29th day of August 2002.

    For the Nuclear Regulatory Commission.
Peter J. Rabideau,
Deputy Chief Financial Officer.
[FR Doc. 02-23091 Filed 9-10-02; 8:45 am]
BILLING CODE 7590-01-P