[Federal Register Volume 77, Number 171 (Tuesday, September 4, 2012)]
[Proposed Rules]
[Pages 53830-53834]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-21617]


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POSTAL SERVICE

39 CFR Part 966


Rules of Practice in Proceedings Relative to Administrative 
Offsets Initiated Against Former Employees of the Postal Service

AGENCY: Postal Service.

ACTION: Proposed rule.

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SUMMARY: This document proposes revisions to the rules of practice of 
the Judicial Officer in proceedings relative to administrative offsets 
initiated against former employees of the Postal Service. These 
revisions would update the rules to reflect changes in the Postal

[[Page 53831]]

Service's debt collection regulations and procedures. This document 
also proposes minor revisions to eliminate outdated provisions and 
conform the rules to the Judicial Officer's existing practice.

DATES: Comments must be received on or before October 4, 2012.

ADDRESSES: Mail or deliver written comments to the Office of the 
Judicial Officer, United States Postal Service, 2101 Wilson Boulevard, 
Suite 600, Arlington, VA 22201-3078. Copies of all written comments 
will be available for inspection and photocopying between 9 a.m. and 4 
p.m., Monday through Friday, at the above address.

FOR FURTHER INFORMATION CONTACT: Administrative Judge Gary E. Shapiro, 
2101 Wilson Boulevard, Suite 600, Arlington, VA 22201-3078; Telephone: 
(703) 812-1900.

SUPPLEMENTARY INFORMATION:

A. Executive Summary

    The rules of practice in proceedings relative to administrative 
offsets initiated against former employees of the Postal Service are 
set forth in 39 CFR part 966. The Postal Service is concurrently 
revising its regulations pertaining to collecting debts from former 
employees contained in the Postal Service Employment and Labor 
Relations Manual (ELM). These ELM revisions conform existing Postal 
Service regulations to the requirements of the Debt Collection Act. The 
revisions proposed in this document would revise 39 CFR part 966 to 
bring its provisions into accord with the Postal Service's revised 
regulations for collecting debts from former employees by 
administrative offset. In addition, minor changes would be made to 
eliminate outdated provisions and conform these rules to the existing 
practice of the Judicial Officer.

B. Summary of Proposed Changes

    Changes to Sec.  966.2(a) cross reference the Postal Service's new 
ELM provisions pertaining to administrative offsets and also clarify 
that such offsets are taken pursuant to the statutory authority of 31 
U.S.C. 3716. Changes to Sec.  966.2(b) clarify that the regulations 
contained in 39 CFR part 966 are intended to be consistent with the 
Federal Claims Collection Standards promulgated jointly by the 
Department of Justice and the Treasury, found at 31 CFR parts 900-904.
    Changes to Sec.  966.3 update the definitions of part 966 to refer 
to the Postal Service Accounting Service Center (ASC) or successor 
installation instead of the area Postmaster/Installation head. The 
definition of ``reconsideration'' in paragraph (i) is thus revised to 
refer to action taken by the ASC. These changes accurately reflect the 
Postal Service's current practices for collecting debts from former 
employees, as collections from former employees are normally handled 
through the ASC. Definitions are also updated to include the Federal 
Claims Collection Standards, referenced elsewhere in the revised 
regulations. Changes to paragraph (j) are non-substantive and provide 
the parties with useful contact information.
    Changes to Sec.  966.4 revise the procedures for filing a petition 
for a hearing under part 966. These revisions align these regulations 
with the Postal Service's revised ELM regulations pertaining to 
collecting debts from former employees by administrative offset, the 
Postal Service's current debt collection procedures, and current 
practice before the Judicial Officer. Paragraphs (a)(2) and (3) are 
revised to cross reference and incorporate the Postal Service's ELM 
provisions, as well as the relevant section of the Debt Collection Act, 
that detail the notice and due process rights former Postal Service 
employees are afforded prior to the collection of a debt by 
administrative offset. Changes to these paragraphs clarify that a 
former employee may petition for review under part 966 either after 
receiving the required notice and requesting and receiving a 
reconsideration determination from the ASC, or after requesting 
reconsideration but not receiving a determination within 60 days from 
the request. Changes to paragraph (b) detail those situations whereby 
the Postal Service may take an administrative offset without affording 
an opportunity for pre-deprivation review to the former employee. In 
accordance with the Judicial Officer's current practice and applicable 
law, these changes further clarify that where prior notice and an 
opportunity for review are omitted and the circumstances outlined in 
revised paragraphs (b)(2), (3) and/or (4) do not apply, the former 
employee may submit a petition for review under part 966 following the 
offset. Changes to paragraph (c) clarify the procedural time limits for 
filing a petition for review under revised part 966. In conformance 
with revisions made elsewhere to part 966, ``Accounting Service 
Center'' is substituted for ``Postmaster/Installation Head'' in 
paragraph (d)(4). The remaining revisions to paragraph (d) are intended 
to modernize requirements for the content of hearing petitions.
    In Sec.  966.6, paragraph (a) is revised to reflect the Recorder's 
correct hours, delete the requirement that parties submit documents in 
triplicate, and clarify that parties should serve papers directly with 
each other unless otherwise directed by the Hearing Official. Paragraph 
(c) explicitly requires that parties discuss extensions of time with 
the opposing party, as is the current practice. Paragraph (d) clarifies 
that the General Counsel may delegate cases to a designee and 
establishes a notice of appearance requirement in order to reduce the 
possibility of misdirected orders. In addition, paragraph (d) is 
revised to allow for non-attorney representatives. In current practice, 
former employees are often represented by non-attorneys.
    Section 966.7 is revised to simplify the answer's content, 
eliminate the need for the Postal Service's representative to provide 
certain information prematurely, and require that the answer clearly 
explain the basis and calculation of the debt at issue.
    Changes to Sec.  966.8(a)(3), (6), and (7) conform the regulations 
to the existing practice of the Judicial Officer. Changes to Sec.  
966.8(a)(9) similarly reflect the Judicial Officer's existing practice 
and provide notice to parties that time extensions will not be 
automatically granted.
    Changes to Sec.  966.9 update the regulation to reflect the 
existing practice of the Judicial Officer pertaining to hearing 
transcripts, as well as the Hearing Official's ability, in case of a 
party's unexcused absence, to continue with a hearing at the Hearing 
Official's discretion.
    Section 966.11 is revised to provide that the Initial Decision of 
the presiding Administrative Judge may become the final determination 
of the Postal Service without any further order by the Judicial 
Officer, so long as no appeal has been filed and the Judicial Officer 
has not decided to review the decision on his or her own motion.
    Formerly, Sec.  966.12 detailed only circumstances under which the 
Petitioner could be found in default and administrative offset could 
thus be initiated. As revised, Sec.  966.12 provides for circumstances 
under which either party may be found in default. This change is in 
accordance with existing practice and decisions of the Judicial 
Officer.
    Section 966.13 is revised to reflect more accurately the definition 
of ``ex parte'' discussions in the context of proceedings brought under 
part 966.
    Sections 966.5 and 966.10, dealing respectively with the effect of 
filing a petition, and the initial decision of the Hearing Official, 
are retained without change.

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C. Effective Dates and Applicability

    These revised rules would begin to govern proceedings under part 
966 docketed on or after 30 days from their publication in final form.

List of Subjects in 39 CFR Part 966

    Administrative practice and procedure, claims, Government 
employees, wages.

    For the reasons stated in the preamble, the Postal Service proposes 
to amend 39 CFR part 966 as set forth below:

PART 966--RULES OF PRACTICE IN PROCEEDINGS RELATIVE TO 
ADMINISTRATIVE OFFSETS INITIATED AGAINST FORMER EMPLOYEES OF THE 
POSTAL SERVICE

    1. The authority citation for 39 CFR part 966 is revised to read as 
follows:

    Authority:  31 U.S.C. 3716; 39 U.S.C. 204, 401, 2601.

    2. Section 966.2 is revised to read as follows:


Sec.  966.2  Scope of Rules.

    (a) The rules in this part apply to any petition filed by a former 
postal employee:
    (1) To challenge the Postal Service's determination that he or she 
is liable to the Postal Service for a debt incurred in connection with 
his or her Postal Service employment, that the Postal Service intends 
to collect by administrative offset pursuant to the authority of 31 
U.S.C. 3716 and in accordance with the regulations contained in the 
Employee and Labor Relations Manual, sections 470 and 480; and/or
    (2) To challenge the administrative offset schedule proposed by the 
Postal Service for collecting any such debt.
    (b) The regulations in this part are consistent with the provisions 
of the Federal Claims Collection Standards pertaining to administrative 
offset.
    3. Section 966.3 is revised to read as follows:


Sec.  966.3  Definitions.

    (a) Accounting Service Center refers to the United States Postal 
Service Eagan Accounting Service Center or its successor installation.
    (b) Administrative offset refers to the withholding of money 
payable by the Postal Service or the United States to, or held by the 
Postal Service or the United States for, a former employee in order to 
satisfy a debt determined to be owed by the former employee to the 
Postal Service.
    (c) Debt refers to any amount determined by the Postal Service to 
be owed to the Postal Service by a former employee.
    (d) Federal Claims Collection Standards or FCCS refers to 
regulations promulgated by the Department of Justice and the Department 
of the Treasury and codified at 31 CFR parts 900-904.
    (e) Former employee refers to an individual whose employment with 
the Postal Service has ceased. An employee is considered formally 
separated from the Postal Service rolls as of close of business on the 
effective date of his or her separation.
    (f) General Counsel refers to the General Counsel of the Postal 
Service, and includes a designated representative.
    (g) Hearing Official refers to an Administrative Law Judge 
qualified to hear cases under the Administrative Procedure Act, an 
Administrative Judge appointed under the Contract Disputes Act of 1978, 
or any other qualified person licensed to practice law designated by 
the Judicial Officer to preside over a hearing conducted pursuant to 
this part.
    (h) Judicial Officer refers to the Judicial Officer, Associate 
Judicial Officer, or Acting Judicial Officer of the Postal Service.
    (i) Reconsideration refers to the review of an alleged debt and/or 
the proposed offset schedule conducted by the Accounting Service Center 
at the request of a former employee alleged to be indebted to the 
Postal Service.
    (j) Recorder refers to the Recorder, Judicial Officer Department, 
United States Postal Service, 2101 Wilson Boulevard, Suite 600, 
Arlington, VA 22201-3078. The recorder's telephone number is (703) 812-
1900, and the Judicial Officer's Web site is http://about.usps.com/who-we-are/judicial/welcome.htm. The fax number is (703) 812-1901.
    4. Section 966.4 is revised to read as follows:


Sec.  966.4  Petition for a hearing and supplement to petition.

    (a) A former employee who is alleged to be responsible for a debt 
to the Postal Service may petition for a hearing under this part, 
provided:
    (1) Liability for the debt and/or the proposed offset schedule has 
not been established under part 452.3 or part 462.3 of the Employee & 
Labor Relations Manual (ELM);
    (2) The former employee has received a Notice from the Accounting 
Service Center in compliance with section 472.1 of the ELM and the 
administrative offset provisions of the FCCS, informing the former 
employee of the debt and an offset schedule to satisfy the debt, the 
former employee's rights under 31 U.S.C. 3716(a), the right to request 
reconsideration of the debt and/or offset schedule from the Accounting 
Service Center, and the right to request review under this part; and
    (3) The former employee has requested reconsideration of the Postal 
Service's determination of the existence or amount of the alleged debt 
and/or the offset schedule proposed by the Postal Service within thirty 
(30) calendar days of receiving the notice referenced in paragraph 
(a)(2), and either has received a reconsideration determination, or 
within sixty (60) calendar days from the reconsideration request has 
not received a reconsideration determination.
    (b) Notwithstanding the provisions of this part, the Postal Service 
may omit the procedures for notice and reconsideration in this part 
under certain circumstances as set forth below:
    (1) If the Postal Service first learns of the existence of the 
amount owed by the former employee when there is insufficient time 
before payment would be made to the former employee to allow for prior 
notice and an opportunity for review under this part. When prior notice 
and an opportunity for review are omitted, the Postal Service will give 
the former employee notice and an opportunity for review as soon as 
practicable and will promptly refund any money ultimately found not to 
have been owed. In such circumstances whereby prior notice and an 
opportunity for pre-deprivation review are omitted, the former employee 
may submit a petition for review under this part.
    (2) If an agency (including the Postal Service) has already given 
the former employee any of the required notice and review opportunities 
set forth in the FCCS with respect to a particular debt. In such a 
situation, the Postal Service need not duplicate such notice and review 
opportunities before taking an administrative offset.
    (3) If a former bargaining unit employee of the Postal Service 
pursues, in accordance with the applicable provisions of his or her 
CBA, a grievance concerning the Postal Service's claim, including, but 
not limited to, the existence of a debt owed to the Postal Service, the 
amount of such debt, and/or the proposed repayment schedule, and none 
of the circumstances set forth in ELM section 483.1 apply;
    (4) If otherwise allowed by law, including, but not limited to, the 
administrative offset provisions of the FCCS.

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    (c) Within thirty (30) calendar days after the date of receipt of 
the Accounting Service Center's decision upon reconsideration, after 
the expiration of sixty (60) calendar days after a request for 
reconsideration where a reconsideration determination is not made, or 
following an administrative offset taken without prior notice and 
opportunity for reconsideration pursuant to paragraph (b)(1) of this 
section, the former employee must file a written, signed petition, 
requesting a written or oral hearing, with the Recorder, Judicial 
Officer Department, United States Postal Service, 2101 Wilson 
Boulevard, Suite 600, Arlington, VA 22201-3078.
    (d) The petition must include the following:
    (1) The words, ``Petition for Review Under 39 CFR Part 966'';
    (2) The former employee's name;
    (3) The former employee's home address, email address (if 
available), and telephone number, and any other address and telephone 
number at which the former employee may be contacted about these 
proceedings;
    (4) A statement of the date the former employee received the 
Accounting Service Center's decision upon reconsideration of the 
alleged debt and a copy of the decision;
    (5) A statement of the grounds upon which the former employee 
objects to the Postal Service's determination of the debt or to the 
administrative offset schedule proposed by the Postal Service for 
collecting any such debt. This statement should identify with 
reasonable specificity and brevity the facts, evidence, and legal 
arguments, if any, which support the former employee's position; and
    (6) Copies of all records in the former employee's possession which 
relate to the debt and which the former employee may enter into the 
record of the hearing.
    (e) The former employee may, if necessary, file with the Recorder 
additional information as a supplement to the petition at any time 
prior to the filing of the answer to the petition under Sec.  966.7, or 
at such later time as permitted by the Hearing Official upon a showing 
of good cause.
    5. Section 966.6 is revised to read as follows:


Sec.  966.6  Filing, docketing and serving documents; computation of 
time; representation of parties.

    (a) Filing. All documents required under this part must be filed by 
the former employee or the General Counsel with the Recorder. (The 
Recorder's normal business hours are between 8:45 a.m. and 4:45 p.m., 
eastern standard or daylight saving time as appropriate during the 
year.) Unless otherwise directed by the Hearing Official, the party 
filing any document shall send a copy thereof to the opposing party.
    (b) Docketing. The Recorder will maintain a docket record of 
proceedings under this part and will assign each petition a docket 
number. After notification of the docket number, the former employee 
and General Counsel should refer to it on any further filings regarding 
the petition.
    (c) Time computation. A filing period under the rules in this part 
excludes the day the period begins, and includes the last day of the 
period unless the last day is a Saturday, Sunday, or legal holiday, in 
which event the period runs until the close of business on the next 
business day. Requests for extensions of time shall be made in writing 
stating good cause therefor, shall represent that the moving party has 
contacted the opposing party about the request, or made reasonable 
efforts to do so, and shall indicate whether the opposing party 
consents to the extension.
    (d) Representation of parties. After the filing of the petition, 
further document transmittals for, or communications with, the Postal 
Service shall be through its representative, the General Counsel, or 
designee. The representative of the Postal Service, as designated by 
the General Counsel, shall file a notice of appearance as soon as 
practicable, and no later than the date for filing the answer. If a 
former employee has a representative, further transmissions of 
documents and other communications by and with the former employee 
shall be made through his or her representative rather than directly 
with the former employee.
    6. Section 966.7 is revised to read as follows:


Sec.  966.7  Answer to petition.

    Within thirty (30) days after the date of receipt of the petition, 
the General Counsel shall file an answer to the petition, and attach 
all available relevant records and documents in support of the Postal 
Service's claim, or the administrative offset schedule proposed by the 
Postal Service for collecting any such claim. The answer shall provide 
a clear and detailed description of the basis for the Postal Service's 
determination of the alleged debt and its calculation of the amount of 
the alleged debt and/or its proposed offset schedule, as appropriate.
    7. Section 966.8 is revised to read as follows:


Sec.  966.8  Authority and responsibilities of Hearing Official or 
Judicial Officer.

    (a) In processing a case under this part, the Hearing Official's 
authority includes, but is not limited to, the following:
    (1) Ruling on all offers, motions, or requests by the parties;
    (2) Issuing any notices, orders, or memoranda to the parties 
concerning the hearing procedures;
    (3) Conducting telephone conferences with the parties to expedite 
the proceedings (a memorandum of a telephone conference will be 
transmitted to both parties). The Hearing Official's Memorandum of 
Telephone Conference serves as the official record of that conference;
    (4) Determining if an oral hearing is necessary, the type of oral 
hearing that would be appropriate, and setting the place, date, and 
time for such hearing;
    (5) Administering oaths or affirmations to witnesses;
    (6) Conducting the hearing in a manner to maintain discipline and 
decorum while assuring that relevant, reliable, and probative evidence 
is elicited on the disputed issues, and that irrelevant, immaterial, or 
repetitious evidence is excluded. The Hearing Official in his or her 
discretion may examine witnesses to ensure that a satisfactory record 
is developed;
    (7) Establishing the record in the case. Except as the Hearing 
Official may otherwise order in his or her discretion, no proof shall 
be received in evidence after completion of an oral hearing or, in 
cases submitted on the written record, after notification by the 
Hearing Official that the case is ready for decision. The weight to be 
attached to any evidence of record will rest within the sound 
discretion of the Hearing Official. The Hearing Official may require 
either party, with appropriate notice to the other party, to submit 
additional evidence on any relevant matter;
    (8) Issuing an initial decision or one on remand; and
    (9) Granting reasonable time extensions or other relief for good 
cause shown.
    (b) The Judicial Officer, in addition to possessing such authority 
as is described elsewhere in this part, shall possess all of the 
authority and responsibilities of a Hearing Official.
    8. Section 966.9 is revised to read as follows:


Sec.  966.9  Opportunity for oral hearing.

    An oral hearing generally will be held only in those cases which, 
in the opinion of the Hearing Official, cannot be resolved by a review 
of the

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documentary evidence, such as when the existence, or amount, of a debt 
turns on issues of credibility or veracity. An oral hearing includes an 
in-person hearing, a telephonic hearing, or a hearing by video 
conference. When the Hearing Official determines that an oral hearing 
is not necessary, the decision shall be based solely on written 
submissions. The Hearing Official shall arrange for the recording and 
transcription of an oral hearing, which shall serve as the official 
record of the hearing. The unexcused absence of a party at the time and 
place set for hearing may not be occasion for delay at the discretion 
of the Hearing Official. In the event of such absence, the hearing may 
proceed without the participation of the absent party.
    9. Section 966.11 is revised to read as follows:


Sec.  966.11  Appeal.

    The initial or tentative decision will become the final agency 
decision thirty (30) days after its issuance unless, before the 
expiration of that time, a party files an appeal with the Judicial 
Officer, or the Judicial Officer, in his or her sole discretion, elects 
to conduct a review of the decision on his or her own initiative. 
During such review or appeal consideration, the Judicial Officer will 
accept all findings of fact in the original decision unless clearly 
erroneous. If following appeal or review, the Judicial Officer affirms 
the original decision, that decision becomes the final agency decision 
with no further right of appeal within the agency.
    10. Section 966.12 is revised to read as follows:


Sec.  966.12  Waiver of rights.

    (a) The Hearing Official may determine that the former employee has 
waived the right to a hearing, and that administrative offset may be 
initiated if the former employee files a petition for hearing after the 
period prescribed in these Rules and fails to demonstrate to the 
satisfaction of the Hearing Official good cause for the delay; or has 
filed a withdrawal of the former employee's previous petition for a 
hearing.
    (b) The Hearing Official may determine that the Postal Service has 
waived the alleged debt at issue, and that the administrative offset 
may not be initiated if the Postal Service fails to file the answer 
within the period prescribed by the Rules and fails to demonstrate to 
the satisfaction of the Hearing Official good cause for the delay; or 
has filed a withdrawal of the debt determination at issue.
    (c) In addition, whenever a record discloses the failure of either 
party to file documents required by these rules, respond to notices or 
correspondence from the Hearing Official, comply with orders of the 
Hearing Official, participate in conferences, fail to treat the 
proceedings with the proper decorum, or otherwise indicate an intention 
not to continue the prosecution or defense of a petition, the Hearing 
Official may issue an order requiring the offending party to show cause 
why the petition should not be dismissed or granted, as appropriate. If 
the offending party shall fail to show cause, the Hearing Official may 
take such action as he or she deems reasonable and proper under the 
circumstances, including dismissal or granting of the petition as 
appropriate.
    11. Section 966.13 is revised to read as follows:


Sec.  966.13  Ex parte communications.

    Ex parte communications are not allowed between a party and the 
Hearing Official or the Official's staff. For these purposes, ex parte 
communication means an oral or written communication, not on the public 
record, with one party only with respect to which reasonable prior 
notice to all parties is not given, but it shall not include requests 
for status reports or procedural matters. A memorandum of any 
communication between the Hearing Official and a party will be 
transmitted to both parties.

Stanley F. Mires,
Attorney, Legal Policy & Legislative Advice.
[FR Doc. 2012-21617 Filed 8-31-12; 8:45 am]
BILLING CODE 7710-12-P