[Federal Register Volume 69, Number 168 (Tuesday, August 31, 2004)]
[Rules and Regulations]
[Pages 52995-52997]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-19755]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 143

RIN 3038-AC03


Collection of Claims Owed the United States Arising From 
Activities Under the Commission's Jurisdiction

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of final rulemaking.

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SUMMARY: The Commodity Futures Trading Commission (Commission) is 
amending its regulations which govern the collection of claims owed to 
the United States arising from activities under the Commission's 
jurisdiction. The amendment implements provisions of the Debt 
Collection Improvement Act of 1996 (DCIA) that allow Federal agencies 
to collect past-due debts through administrative wage garnishment. As 
required by the DCIA, the wage garnishment procedures the Commission is 
adopting are based on, and are consistent with, implementing 
regulations that have been issued by the Department of Treasury.

DATES: The Commission's amendment of its part 143 regulations shall be 
effective on August 31, 2004.

FOR FURTHER INFORMATION CONTACT: Stephen Mihans, Esq., Office of 
General Counsel, Commodity Futures Trading Commission, at (202) 418-
5399 or [email protected]. This document also is available at http://www.regulations.gov.

SUPPLEMENTARY INFORMATION: On December 15, 2003, the Commission 
published for public comment a proposed revision of part 143 of its 
regulations, 17 CFR part 143, which would add administrative wage 
garnishment to the available procedures for collecting debts owed to 
the United States arising from activities subject to the Commission's 
jurisdiction.\1\ At present, the part 143 rules, which apply to debts 
owed by persons not employed by the Federal government, authorize

[[Page 52996]]

collection by (1) administrative offset against obligations owed to the 
debtor by the United States; (2) compromise (if the debt owed is not 
more than $100,000); or (3) referral to the Department of Justice for 
litigation.\2\
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    \1\ See 68 FR 69634 (Dec. 15, 2003).
    \2\ The collection of debts owed to the Commission by its 
current employees or by the employees of other Federal agencies, and 
of debts owed to other Federal agencies by current Commission 
employees, is separately governed by part 141 of the Commission's 
regulations, 17 CFR part 141.
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    Under the Commission's proposal, Department of the Treasury 
regulations implementing the administrative wage garnishment provisions 
of the DCIA would govern wage garnishment proceedings initiated by the 
Commission. Those regulations, promulgated by the Treasury Department's 
Financial Management Service (FMS), have been codified at 31 CFR 
285.11. As proposed by the Commission, when an individual owes the 
United States a delinquent non-tax debt arising from activities under 
the Commission's jurisdiction, the Commission, or another Federal 
agency collecting the debt on the Commission's behalf,\3\ would be 
authorized to initiate administrative proceedings to garnish the 
debtor's disposable income in accordance with the requirements of 31 
CFR 285.11.\4\ The debtor would have an opportunity to request a 
hearing regarding the existence or amount of the debt or the terms of 
repayment. If such a hearing were requested, the Commission's Executive 
Director would designate a qualified and impartial employee of the 
Commission to act as the hearing official.\5\
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    \3\ On August 27, 19994, the Commission entered into a cross-
servicing agreement with the FMS, which allows the FMS to undertake 
debt-collection activities on behalf of the Commission. The 
Commission's routine uses of information for purposes of the Privacy 
Act, 5 U.S.C. 552a, permit the disclosure of information necessary 
for the FMS to assist the Commission in collecting delinquent debts 
through administrative wage garnishment. See 62 FR 44442 (Aug. 21, 
1997).
    \4\ See Proposed Rule 143.9, which can be found at 68 FR 69637. 
Under this proposed rule, the Commission's use of the other debt-
collection measures set forth in part 143 would not preclude it from 
initiating an administrative wage garnishment proceeding against a 
delinquent debtor.
    \5\ See Proposed Rule 143.10, which can be found at 68 FR 69637.
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    In addition to adding administrative wage garnishment to the 
existing debt-collection measures in the part 143 rules, the 
Commission's proposal included several technical corrections and 
editorial changes of a non-substantive nature in the part 143 rules. 
Finally, the Commission proposed that the current part 143 rules, as 
revised, be grouped together in a new subpart A, while the new 
administrative wage garnishment rules be placed in a new subpart B.
    The public comment period for the proposed revision of the 
Commission's part 143 rules closed on January 14, 2004. No comments 
were received. As a result, with the exception of certain non-
substantive changes to Proposed Rule 143.10, the Commission is revising 
its part 143 rules as proposed.\6\
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    \6\ As adopted, Rule 143.10 clarifies that administrative wage 
garnishment hearings held by the Commission will be governed by 31 
CFR 285.11(f). It provides, however, that in addition to the 
mandates of 31 CFR 285.11(f), several further requirements will 
apply to the Commission's wage garnishment hearings, including 
marking and retaining as exhibits all documents presented for 
consideration by the hearing official, and taking all testimony 
adduced at an oral hearing under oath or affirmation and on the 
record. These additional requirements will ensure that an adequate 
record is available for review in the event that an administrative 
wage garnishment order issued by, or on behalf of, the Commission is 
appealed to a Federal court with appropriate jurisdiction.
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Related Matters

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-611, requires 
that in adopting final rules, agencies consider the impact of those 
rules on small businesses. As noted in the preamble to the proposed 
rule amendments, the revisions to the part 143 rules are not subject to 
the provisions of the RFA because they relate solely to agency 
organization, procedure, and practice. Nevertheless, the Acting 
Chairman certifies, on behalf of the Commission, that these rules will 
not have a significant economic impact on a substantial number of small 
businesses. Although an employer of a delinquent debtor will have to 
certify certain information about the debtor, such as the debtor's 
employment status and current earnings, this information is already 
contained in the employer's payroll records. In addition, under 31 CFR 
281.55, an employer will not be required to vary its normal payroll 
cycle to accommodate an administrative wage garnishment order.

B. Paperwork Reduction Act

    The Commission's administrative wage garnishment rules will not 
require the collection of information from the general public, but only 
from specifically identified individuals or entities. For that reason, 
the rules do not impose a burden within the meaning and intent of the 
Paperwork Reduction Act of 1980, 5 U.S.C., et seq., and do not 
necessitate review by the Office of Management and Budget.

C. Cost-Benefit Analysis

    Section 15(a) of the Commodity Exchange Act, 7 U.S.C. 19(a), 
requires the Commission to consider the costs and benefits of its 
action before issuing a new regulation. The Commission understands 
that, by its terms, section 15(a) does not require the Commission to 
quantify the costs and benefits of a new regulation or to determine 
whether the benefits of the proposed regulation outweigh its costs. Nor 
does it require that each rule be analyzed in isolation when that rule 
is a component of a larger package of rules or rule revisions. Rather, 
section 15(a) simply requires the Commission to ``consider the costs 
and benefits'' of its action.
    Section 15(a) further specifies that costs and benefits shall be 
evaluated in light of five broad areas of market and public concern--
namely, protection of market participants and the public; efficiency, 
competitiveness, and financial integrity of futures markets; price 
discovery; sound risk management practices; and other public interest 
considerations. As a result, the Commission can, in its discretion, 
give greater weight to any one of the five enumerated areas of concern 
and can, in its discretion, determine that notwithstanding its costs, a 
particular rule is necessary or appropriate to protect the public 
interest or to effectuate any of the provisions, or accomplish any of 
the purposes, of the Commodity Exchange Act.
    The administrative wage garnishment rules being adopted by the 
Commission are not related to the marketplace and, therefore, should 
not affect the protection of market participants; the efficiency, 
competitiveness, and financial integrity of futures markets; price 
discovery; or sound risk management practices. These rules do address 
other public interest considerations, namely, the collection of debts 
owed to the United States arising from activities under the 
Commission's jurisdiction. The costs associated with implementing 
administrative wage garnishment, which are mandated by the DCIA and 31 
CFR 285.11, will be small. On the other hand, the benefits include 
providing an additional means to prevent persons who have been found 
liable for violating the Commodity Exchange Act or the Commission's 
regulations or orders from avoiding payment of monetary sanctions 
lawfully imposed on them.

List of Subjects in 17 CFR Part 143

    Civil monetary penalty, Claims.


0
In consideration of the foregoing, the Commission amends chapter 1 of 
title 17

[[Page 52997]]

of the Code of Federal Regulations as follows:

PART 143--COLLECTION OF CLAIMS OWED THE UNITED STATES ARISING FROM 
ACTIVITIES UNDER THE COMMISSION'S JURISDICTION

0
1. The authority citation for part 143 is revised to read as follows:

    Authority: 7 U.S.C. 9 and 15, 9a, 12a(5), 13a, 13a-1(d), and 
13(a); 31 U.S.C. 3701-3720E; 28 U.S.C. 2461 note.

0
2. Section 143.1 is revised to read as follows:


Sec.  143.1  Purpose.

    This part provides procedures that the Commission will use to 
collect debts owed the United States arising from activities under the 
Commission's jurisdiction. As applicable, these procedures are based 
upon, and conform to, the Federal Claims Collection Act, as amended, 31 
U.S.C. 3701-3720E; the Federal Claims Collection Standards, 31 CFR 
Parts 900-905, issued by the Department of the Treasury and the 
Department of Justice; administrative wage garnishment regulations 
issued by the Department of the Treasury, 31 CFR 285.11; and other laws 
applicable to the collection of non-tax debts owed to the United States 
arising from activities under the Commission's jurisdiction. Subpart A 
describes procedures for collection by offset against obligations of 
the United States to the debtor, by compromise, and by referral to the 
Department of Justice for litigation. It also sets forth the 
Commission's policy on collecting interest on unpaid claims, the method 
used in calculating such interest, and the maximum inflation-adjusted 
civil monetary penalties that may be assessed and enforced for each 
violation of the Commodity Exchange Act or regulations or orders of the 
Commission promulgated thereunder. Subpart B describes procedures for 
collection by administrative garnishment of the debtor's wages.

0
3. Sections 143.2 through 143.8 are designated as subpart A of part 
143, and a new heading, ``Subpart A--General Provisions,'' is added 
above Sec.  143.2 to read as follows:

Subpart A--General Provisions

0
4. Section 143.2 is amended by revising paragraph (c) to read as 
follows:


Sec.  143.2  Notice of claim.

* * * * *
    (c) If no response or an unsatisfactory response is received by the 
date indicated in the notice, the Commission may take further action as 
appropriate under the Commodity Exchange Act or regulations thereunder, 
or under 31 CFR parts 900-905 or the Federal Claims Collection Act as 
amended, 31 U.S.C. 3701-3720E.

0
5. Section 143.7 is amended by revising paragraph (a) to read as 
follows:


Sec.  143.7  Delegation of authority to the Executive Director.

    (a) The Commission hereby delegates, until such time as the 
Commission orders otherwise, to the Executive Director or to any 
Commission employee under the Executive Director's supervision as he or 
she may designate, authority to take action to carry out subpart A and 
subpart B of this part and the requirements of 31 CFR parts 900-905 and 
31 CFR 285.11.
* * * * *

0
6. A new subpart B is added to part 143, to read as follows:

Subpart B--Administrative Wage Garnishment


Sec.  143.9  Administrative wage garnishment orders.

    Whenever an individual owes the United States a delinquent non-tax 
debt arising from activities under the Commission's jurisdiction, the 
Commission, or another federal agency collecting the debt on behalf of 
the Commission, may initiate administrative proceedings to garnish the 
disposable income of the delinquent debtor in accordance with the 
requirements of, and the procedures set forth in, 31 CFR 285.11. The 
Commission's use of other debt-collection measures set forth in subpart 
A of this part does not preclude the initiation of an administrative 
wage garnishment proceeding against a delinquent debtor.


Sec.  143.10  Garnishment hearings.

    Any oral or written hearing required to establish the Commission's 
right to collect a delinquent debt through administrative wage 
garnishment shall be presided over by a hearing official designated by 
the Executive Director, with the concurrence of the General Counsel or 
the General Counsel's designee. Any qualified and impartial employee of 
the Commission designated by the Executive Director may serve as a 
hearing official. Except as otherwise provided in this section, the 
hearing shall be conducted in accordance with the requirements of, and 
the procedures set forth in, 31 CFR 285.11(f). All documents presented 
to the hearing official for his or her consideration shall be marked as 
exhibits and retained in the record. All testimony given at an oral 
hearing, either in person or by telephone, shall be under oath or 
affirmation; a transcript of the hearing shall be prepared and made 
part of the record. When a debtor requests a hearing, the designated 
hearing official shall hold the hearing and issue his or her written 
decision within 60 days of the Commission's receipt of the request, 
unless otherwise approved, in writing, by the Executive Director.

    Issued in Washington, DC, on August 24, 2004 by the Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 04-19755 Filed 8-30-04; 8:45 am]
BILLING CODE 6351-01-M