[Federal Register Volume 79, Number 3 (Monday, January 6, 2014)]
[Rules and Regulations]
[Pages 529-530]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-31508]



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 Rules and Regulations
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  Federal Register / Vol. 79, No. 3 / Monday, January 6, 2014 / Rules 
and Regulations  

[[Page 529]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 550

RIN 3206-AM14


Collection by Offset From Indebted Government Employees

AGENCY: U.S. Office of Personnel Management.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The U.S. Office of Personnel Management (OPM) is issuing final 
regulations to eliminate the 10-year statute of limitations on 
collection of debt by administrative offset, which includes centralized 
salary offset. The final regulations conform with an amendment made by 
the Food, Conservation, and Energy Act of 2008. This change would 
authorize the offset of nontax payments (via salary offset) to collect 
delinquent Federal debt without regard to the amount of time the debt 
has been delinquent. OPM is also making several technical changes to be 
consistent with the Department of the Treasury and the Department of 
Justice Federal Claims Collection Standards and the Department of the 
Treasury salary offset regulations.

DATES: Effective date: These regulations are effective on February 5, 
2014.

FOR FURTHER INFORMATION CONTACT: Tameka Gillis by telephone at (202) 
606-2858; by fax at (202) 606-0824; or by email at [email protected].

SUPPLEMENTARY INFORMATION: On May 2, 2011, the U.S. Office of Personnel 
Management (OPM) issued proposed regulations (76 FR 24406) to eliminate 
the 10-year statute of limitations on collection of debt by 
administrative offset, which includes centralized salary offset. The 
proposed regulations conformed with an amendment to 31 U.S.C. 3716(e) 
made by section 14219 of the Food, Conservation, and Energy Act of 2008 
(Pub. L. 110-246 (122 Stat. 1651)) that became effective on June 18, 
2008, to authorize the offset of nontax payments (via salary offset) to 
collect delinquent Federal debt without regard to the amount of time 
the debt has been delinquent.
    The 60-day comment period for the proposed regulations ended July 
1, 2011. OPM received comments from one agency that concurred with 
changes in the proposed regulations. We also received comments from two 
labor organizations and two individuals. This supplementary information 
addresses these comments.
    One labor organization appreciated that the proposed regulations 
were designed to conform to the statutory change authorizing the offset 
of nontax payments to collect Federal debt without time limitations. 
However, the labor organization believed the proposed regulations do 
not give sufficient clarification on the requirement for the creditor 
agency to notify employees about such a longstanding overdue debt. We 
agree. We have revised 5 CFR 550.1104(d) to specify the requirements 
for notification of employees for debts outstanding more than 10 years 
on or before June 11, 2009; see also the Department of the Treasury's 
salary offset regulations at 31 CFR 285.7(d)(7) for additional 
notification requirements.
    The labor organization also questioned whether OPM should amend its 
own internal agency salary offset regulations at 5 CFR part 179, 
subpart B, which contains the obsolete 10-year limitation provision. 
This final regulation does not amend OPM's internal salary offset 
regulations at 5 CFR part 179, subpart B. Under 5 U.S.C. 5514 and 5 CFR 
550.1104, each covered agency must issue regulations, subject to OPM 
approval, governing its internal procedures for collecting a debt by 
salary offset. OPM's internal salary offset regulations, as well as the 
internal salary offset regulations issued by other agencies, must be 
amended to reflect the changes made by these final regulations on or 
after the effective date of these regulations. OPM considers amendments 
to agency internal salary offset regulations in this case to be 
conforming changes. Agencies need not submit these conforming changes 
to OPM for approval prior to publication.
    A different labor organization and an individual opposed the 
removal of the 10-year limit from the salary offset regulations. The 
labor organization stated the proposed regulations would allow agencies 
to be less accountable for clearing up mistakes in a timely fashion and 
expressed concerns that in some cases they could allow agencies to 
retaliate against employees and their exclusive representatives. The 
labor organization believed that the statute of limitations governing 
debt collection should be based upon the nature of actions of the 
agencies and the employees involved, and that, where an employee in 
good faith earned compensation that is later judged to be erroneously 
paid, there should be no more than a 6-year statute of limitations, 
consistent with the time limit under the Back Pay Act. The individual 
stated that there must be boundaries on salary offset rules and the 
Government should move swiftly to collect debt within a reasonable 
period of time.
    OPM is not changing the regulations in response to these comments. 
Elimination of the 10-year limitation in OPM's regulations to authorize 
the offset of nontax payments (via salary offset) to collect delinquent 
Federal debt without regard to the amount of time the debt has been 
delinquent is required by changes made to 31 U.S.C. 3716(e) by the 
Food, Conservation, and Energy Act of 2008. OPM has no authority to 
establish a time limitation under regulations for collecting a debt via 
salary offset that is inconsistent with the law.
    Another individual questioned the legality of the changes to Sec.  
550.1104 regarding deductions of greater than 15 percent of the 
employee's disposable pay, as it related to employee due process 
rights. We are not revising the regulations in response to this 
comment. Employees will continue to have notice and due process rights 
as provided in 5 U.S.C. 5514 and 5 CFR 550.1104 if a court orders 
deductions greater than 15 percent of pay.

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because they 
will apply only to Federal agencies and employees.

[[Page 530]]

Executive Order 13563 and Executive Order 12866

    The Office of Management and Budget has reviewed this rule in 
accordance with E.O. 13563 and 12866.

List of Subjects in 5 CFR Part 550

    Administrative practice and procedure, Claims, Government 
employees, Wages.

    U.S. Office of Personnel Management.
Katherine Archuleta,
Director.
    Accordingly, OPM is amending 5 CFR part 550 as follows:

PART 550--PAY ADMINISTRATION (GENERAL)

Subpart K--Collection by Offset From Indebted Government Employees

0
1. The authority citation for subpart K of part 550 continues to read 
as follows:

    Authority:  5 U.S.C. 5514; sec. 8(1) of E.O. 11609; redesignated 
in sec. 2-1 of E.O. 12107.


0
2. In Sec.  550.1102, revise paragraph (b)(1) and add a new paragraph 
(b)(3) to read as follows:


Sec.  550.1102  Scope.

* * * * *
    (b) * * *
    (1) Excluded debts. The procedures contained in this subpart do not 
apply to--
    (i) Debts arising under the Internal Revenue Code (26 U.S.C. 1 et 
seq.);
    (ii) Debts arising under the tariff laws of the United States;
    (iii) Any case where collection of a debt by salary offset is 
explicitly provided for or prohibited by another statute (e.g., travel 
advances in 5 U.S.C. 5705 and employee training expenses in 5 U.S.C. 
4108); or
    (iv) Any other debt excluded by the FCCS or 31 CFR part 285.
* * * * *
    (3) Compromise, suspension, or termination of collection actions. 
This subpart does not preclude the compromise, suspension, or 
termination of collection actions, where appropriate, as provided in 
the FCCS (31 CFR 900.4) or the use of alternative dispute resolution 
methods if they are not inconsistent with agency-specific laws and 
regulations.


0
3. In Sec.  550.1103, revise the definition of ``FCCS'' to read as 
follows:


Sec.  550.1103  Definitions.

* * * * *
    FCCS means the Federal Claims Collections Standards published in 31 
CFR parts 900 through 904.
* * * * *

0
4. In Sec.  550.1104, revise paragraph (d) introductory text and 
paragraphs (d)(3), (i), and (j) to read as follows:


Sec.  550.1104  Agency regulations.

* * * * *
    (d) Notification before deductions begin. Provide for notification 
before deductions begin. Except as provided in paragraph (c) of this 
section, deductions under the authority of 5 U.S.C. 5514 must not be 
made unless the head of the creditor agency (or authorized designee) 
provides the employee a written notice at least 30 days before any 
deduction begins. (For debts outstanding more than 10 years on or 
before June 11, 2009, see also 31 CFR 285.7(d) for additional 
notification requirements.) The written notice must state at a minimum:
* * * * *
    (3) The frequency and amount of the intended deduction (stated as a 
fixed dollar amount or as a percentage of pay, not to exceed 15 percent 
of disposable pay except as provided in paragraph (i) of this section) 
and the intention to continue the deductions until the debt is paid in 
full or otherwise resolved;
* * * * *
    (i) Limitation on amount of deductions. Prescribe the limitations 
on the amount of the deduction. Ordinarily, the size of installment 
deductions must bear a reasonable relationship to the size of the debt 
and the employee's ability to pay (see the FCCS at 31 CFR 901.8). 
However, the amount deducted for any period under this subpart may not 
exceed 15 percent of the disposable pay from which the deduction is 
made, unless the employee has agreed in writing to the deduction of a 
greater amount or a higher deduction has been ordered by a court under 
section 124 of Public Law 97-276 (96 Stat.1195).
    (j) Duration of deductions. Prescribe the duration of deductions 
under this subpart. Ordinarily, debts must be collected in one lump sum 
where possible. However, if the employee is financially unable to pay 
in one lump sum or the amount of the debt exceeds 15 percent of 
disposable pay (or other applicable limitation as provided in paragraph 
(i) of this section) for an officially established pay interval, 
collection must be made in installments. Such installment deductions 
must be made over a period not greater than the anticipated period of 
active duty or employment, as the case may be, except as provided in 
paragraphs (1) and (m) of this section.
* * * * *

0
5. Revise Sec.  550.1106 to read as follows:


Sec.  550.1106  Time limit on collection of debts.

    Agencies may initiate salary offset to collect a debt without time 
limitations on any debt outstanding after the Government's right to 
collect the debt first accrued. (See Sec.  550.1108 for requirement 
when debts are delinquent over 180 days.)
[FR Doc. 2013-31508 Filed 1-3-14; 8:45 am]
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