[Federal Register Volume 71, Number 62 (Friday, March 31, 2006)]
[Rules and Regulations]
[Pages 16228-16231]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-3136]


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DEPARTMENT OF STATE

22 CFR Part 17

[Public Notice 5311]


Overpayments From the Foreign Service Retirement and Disability 
Fund

AGENCY: Department of State.

ACTION: Final rule.

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SUMMARY: The Department of State is revising its regulations regarding 
overpayments from the Foreign Service Retirement and Disability Fund 
under the Foreign Service Retirement and Disability System (FSRDS) to 
reflect internal Department restructuring and realignment of 
responsibilities and the

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creation of the Foreign Service Pension System (FSPS).

DATES: This rule is effective May 1, 2006.

ADDRESSES: You may submit comments by any of the following methods:
     E-mail: [email protected]
     Mail paper submissions to the Deputy Assistant Secretary 
for Global Financial Services, Charleston Financial Service Center, 
P.O. Box 150008, Charleston, S.C. 29415-5008.
    Persons with access to the internet may also view this notice by 
going to the regulations.gov Web site at: http://www.regulations.gov/index.cfm.

FOR FURTHER INFORMATION CONTACT: Kathryn Nutt Skipper, Office of the 
Legal Adviser, telephone 202-647-4278.

SUPPLEMENTARY INFORMATION: This rule revises the Department of State's 
regulations regarding overpayments from the Foreign Service Retirement 
and Disability Fund under the Foreign Service Retirement and Disability 
System (FSRDS) to reflect internal Department restructuring and 
realignment of responsibilities and the creation of the Foreign Service 
Pension System (FSPS).
    This regulation establishes procedures for notifying individuals of 
their rights if they have received an overpayment from the Foreign 
Service Retirement and Disability Fund under Chapter 8 of the Foreign 
Service Act of 1980, as amended, including their right to contest the 
determination that there has been an overpayment and the right to 
request a waiver of recovery of the overpayment. This part also 
provides the procedures for administrative determination of these 
rights and for appeals of negative determinations.

Regulatory Analysis

Administrative Procedures Act

    No notice of proposed rulemaking is required under the 
Administrative Procedure Act (APA) because these rules relate solely to 
agency procedure and practice (5 U.S.C. 553(b)(3)(A)).

Regulatory Flexibility Act

    The Department, in accordance with the Regulatory Flexibility Act 
(5 U.S.C. 605(b)), has reviewed this regulation and, by approving it, 
certifies that this final rule will not have a significant economic 
impact on a substantial number of small entities.

Unfunded Mandated Reform Act of 1995

    This rule will not result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any one year and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Small Business Regulatory Enforcement Act of 1996

    This rule is not a major rule as defined by section 251 of the 
Small Business Regulatory Enforcement Act of 1996 (5 U.S.C. 804). This 
rule will not result in an annual effect on the economy of $100 million 
or more; a major increase in costs or prices for consumers, individual 
industries, Federal, State, or local government agencies, or geographic 
regions; or 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 and export markets.

Executive Order 12866

    The Department does not consider this rule to be a ``significant 
regulatory action'' under Executive Order 12866, section 3(f), 
Regulatory Planning and Review. In addition, the Department is exempt 
from Executive Order 12866 except to the extent that it is promulgating 
regulations in conjunction with a domestic agency that are significant 
regulatory actions. The Department has nevertheless reviewed the 
regulation to ensure its consistency with the regulatory philosophy and 
principles set forth in the Executive Order.

Executive Order 12988

    The Department has reviewed this regulation in light of sections 
3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to 
eliminate ambiguity, minimize litigation, establish clear legal 
standards, and reduce burden.

Executive Order 13132

    This regulation will not have substantial direct effects on the 
States, the relationship between the National Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, the Department determines that 
this rule does not have sufficient federalism implications to require 
consultations or warrant the preparation of a federalism summary impact 
statement.

Executive Order 12372

    This regulation does not require review under Executive Order 
12372, Intergovernmental Review of Federal Programs.

Paperwork Reduction Act

    This rule does not impose any new reporting or recordkeeping 
requirements subject to the Paperwork Reduction Act, 44 U.S.C. chapter 
35.

List of Subjects in 22 CFR Part 17

    Administrative practice and procedure, Annuities, Claims, Debts, 
Foreign service, Government employee, Hearing and appeal procedures, 
Pensions, Retirement.


0
In consideration of the foregoing, the State Department amends Title 22 
of the Code of Federal Regulations, by revising part 17 to read:

PART 17--OVERPAYMENTS FROM THE FOREIGN SERVICE RETIREMENT AND 
DISABILITY FUND UNDER THE FOREIGN SERVICE RETIREMENT AND DISABILITY 
SYSTEM (FSRDS) AND THE FOREIGN SERVICE PENSION SYSTEM (FSPS)

Sec.
17.1 General.
17.2 Conditions for waiver of recovery of an overpayment.
17.3 Fault.
17.4 Equity and good conscience.
17.5 Financial hardship.
17.6 Ordinary and necessary living expenses.
17.7 Waiver precluded.
17.8 Burdens of proof.
17.9 Procedures.

    Authority: 22 U.S.C. 4047(d); 22 U.S.C. 4071(b); 5 U.S.C. 
8470(b); 5 CFR 845.301-07.


Sec.  17.1  General.

    This part establishes procedures for notifying individuals of their 
rights if they have received an overpayment from the Foreign Service 
Retirement and Disability Fund under Chapter 8 of the Foreign Service 
Act of 1980, as amended, including their right to contest the 
determination that there has been an overpayment and the right to 
request a waiver of recovery of the overpayment. This part also 
provides the procedures for administrative determination of these 
rights and for appeals of negative determinations.


Sec.  17.2  Conditions for waiver of Recovery of an Overpayment.

    (a) Foreign Service Retirement and Disability System. Recovery of 
an overpayment from the Foreign Service Retirement and Disability Fund 
under the Foreign Service Retirement and Disability System may be 
waived

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pursuant to section 4047(d), of title 22, United States Code when the 
individual is without fault and recovery would be against equity and 
good conscience or administratively infeasible.
    (b) Foreign Service Pension System. Recovery of an overpayment from 
the Foreign Service Retirement and Disability Fund under the Foreign 
Service Pension System may be waived pursuant to section 4071(b) of 
title 22, United States Code and section 8470(b) of title 5, United 
States Code when the individual is without fault and recovery would be 
against equity and good conscience.
    (c) When it has been determined that the recipient of an 
overpayment is ineligible for waiver, the individual is nevertheless 
entitled to an adjustment in the recovery schedule if he or she shows 
that it would cause him or her financial hardship to make payment at 
the rate scheduled.


Sec.  17.3  Fault.

    A recipient of an overpayment is without fault if he or she 
performed no act of commission or omission that resulted in the 
overpayment. The fact that the Department of State or other agency may 
have been at fault in initiating an overpayment will not necessarily 
relieve the individual from liability.
    (a) Considerations. Pertinent considerations in finding fault are--
    (1) Whether payment resulted from the individual's incorrect but 
not necessarily fraudulent statement, which he/she should have known to 
be incorrect;
    (2) Whether payment resulted from the individual's failure to 
disclose material facts in his/her possession which he/she should have 
known to be material; or
    (3) Whether he/she accepted a payment which he/she knew or should 
have known to be erroneous.
    (b) Mitigation factors. The individual's age, physical and mental 
condition or the nature of the information supplied to him or her by 
the Department of State or a Federal agency may mitigate against 
finding fault if one or more contributed to his or her submission of an 
incorrect statement, a statement which did not disclose material facts 
in his or her possession, or his or her acceptance of an erroneous 
overpayment.


Sec.  17.4  Equity and good conscience.

    (a) Defined. Recovery is against equity and good conscience when--
    (1) It would cause financial hardship to the person from whom it is 
sought;
    (2) The recipient of the overpayment can show (regardless of his or 
her financial circumstances) that due to the notice that such payment 
would be made or because of the incorrect payment either he/she has 
relinquished a valuable right or changed positions for the worse; or
    (3) Recovery could be unconscionable under the circumstances.
    (b) [Reserved]


Sec.  17.5  Financial hardship.

    (a) Waiver of overpayment will not be allowed in any case prior to 
receipt and evaluation of a completed Statement of Financial Status, 
duly sworn by the recipient of the overpayment.
    (b) Financial hardship may be deemed to exist in, but not limited 
to, those situations where the recipient from whom collection is sought 
needs substantially all of his or her current income and liquid assets 
to meet current ordinary and necessary living expenses and liabilities.
    (1) Considerations. Some pertinent considerations in determining 
whether recovery would cause financial hardship are as follows:
    (i) The individual's financial ability to pay at the time 
collection is scheduled to be made.
    (ii) Income to other family member(s), if such member's ordinary 
and necessary living expenses are included in expenses reported by the 
individual.
    (c) Exemptions. Assets exempt from execution under State law should 
not be considered in determining an individual's ability to repay the 
indebtedness, rather primary emphasis shall be placed upon the 
individual's liquid assets and current income in making such 
determinations.


Sec.  17.6  Ordinary and necessary living expenses.

    An individual's ordinary and necessary living expenses include 
rent, mortgage payments, utilities, maintenance, food, clothing, 
insurance (life, health and accident), taxes, installment payments, 
medical expenses, support expenses when the individual is legally 
responsible, and other miscellaneous expenses which the individual can 
establish as being ordinary and necessary.


Sec.  17.7  Waiver precluded.

    (a) Waiver of an overpayment cannot be granted when:
    (1) The overpayment was obtained by fraud; or
    (2) The overpayment was made to an estate.
    (b) [Reserved]


Sec.  17.8  Burdens of proof.

    (a) Burden of the Department of State. The Bureau of Resource 
Management, Department of State, must establish by the preponderance of 
the evidence that an overpayment occurred.
    (b) Burden of individual. The recipient of an overpayment must 
establish by substantial evidence that he or she is eligible for waiver 
or an adjustment in the recovery schedule.


Sec.  17.9  Procedures.

    (a) Notice. The Bureau of Resource Management, Department of State, 
shall give written notification to any individual who has received an 
overpayment promptly by first-class mail to the individual at the 
individual's most current address in the records of the Bureau of 
Resource Management. The written notice shall inform the individual of:
    (1) The amount of the overpayment;
    (2) The cause of the overpayment;
    (3) The intention of the Department to seek repayment of the 
overpayment,
    (4) The date by which payment should be made to avoid the 
imposition of interest, penalties, and administrative costs;
    (5) The applicable standards for the imposing of interest, 
penalties, and administrative costs;
    (6) The department's willingness to discuss alternative payment 
arrangements and how the individual may offer to enter into a written 
agreement to repay the amount of the overpayment under terms acceptable 
to the Department; and
    (7) The name, address and telephone number of a contact person 
within the Bureau of Resource Management. The written notice also shall 
inform the individual of their right to contest the overpayment, their 
right to request a waiver of recovery of the overpayment, and the 
procedures to follow in case of such contest or request for waiver of 
recovery. The notification shall allow at least 30 days from its date 
within which the individual may contest in writing the overpayment or 
request a waiver of recovery, including with their submission all 
evidence and arguments in support of their position.
    (b) Administrative File. The Bureau of Resource Management will 
prepare an administrative file as a basis for determination in each 
case where an individual contests a claim to recover overpayment or 
requests waiver of recovery of the overpayment. On the basis of the 
administrative file, the Chief Financial Officer or his or her 
delegate, shall make the final administrative determination.
    (c) Additional Information. At any time before the final 
administrative decision, the Department may request the individual to 
supplement his or her

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submission with additional factual information and may request that the 
individual authorize the Department of State to have access to bank and 
other financial records bearing on the application of these 
regulations. If the individual, without good cause shown, fails or 
refuses to produce the requested additional information or 
authorization, the Department of State is entitled to make adverse 
inferences with respect to the matters sought to be amplified, 
clarified, or verified.
    (d) Decision and right of appeal. The final administrative decision 
shall be reduced to writing and sent to the individual. If the decision 
is adverse to the individual, the notification of the decision shall 
include a written description of the individual's rights of appeal to 
the Foreign Service Grievance Board. The Foreign Service Grievance 
Board shall consider any appeal under this part in accordance with the 
regulations of the Board set forth in 22 CFR part 901.

    Dated: February 1, 2006.
Henrietta H. Fore,
Under Secretary for Management, Department of State.
[FR Doc. 06-3136 Filed 3-30-06; 8:45 am]
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