**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | *  | MD Docket No. 02-339         |
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| Amendment of Parts 0 and 1 of    | ** |                              |
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| Implementation of the Debt       |    |                              |
| Collection                       | *  |                              |
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| Improvement Act of 1996 and      | ** |                              |
| Adoption of Rules Governing      |    |                              |
| Applications or Requests for     | *  |                              |
| Benefits by Delinquent Debtors   | *) |                              |
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**REPORT AND ORDER**

**Adopted: March 25, 2004 Released: April 13, 2004**

By the Commission:

1.  By this order, we amend our rules governing the collection of
    claims[^1] owed the United States, 47 C.F.R. Part 1 Subpart O, to
    implement the Debt Collection Improvement Act of 1996, Pub. L. No.
    104-134, 110 Stat. 1321, 1358 (1996) (DCIA). We also adopt a rule
    providing that we will withhold action on applications and other
    requests for benefits upon discovery that the entity applying for or
    seeking benefits is delinquent in its non-tax debts[^2] owed to the
    Commission, and dismiss such applications or requests if the
    delinquent debt is not resolved.

    **I. DCIA RULES**

2.  In the Notice in this proceeding, we proposed many revisions to our
    rules based on the statutory changes adopted in the DCIA, as
    implemented in rules adopted by the Departments of Treasury and
    Justice.[^3] No comments relevant to the proposed rule changes were
    received.[^4] We therefore adopt the DCIA rule changes as generally
    proposed in the notice. As we noted in the Notice, the major changes
    to the Commission's debt collection rules include an increase in the
    principal claim amount from \$20,000 to \$100,000 or such amount as
    the Attorney General deems appropriate, that agencies are authorized
    to compromise or to suspend or terminate collection activity thereon
    without the concurrence of the Department of Justice[^5], and an
    increase in the minimum amount of a claim that may be referred to
    the Department of Justice from \$600 to \$2,500.[^6] The rules also
    reflect several new debt collection procedures under the DCIA,
    including but not limited to (a) transfer or referral of delinquent
    debt to the Department of the Treasury or Treasury-designated debt
    collection centers for collection (known as cross-servicing); (b)
    mandatory, centralized administrative offset by disbursing
    officials; (c) mandatory credit bureau reporting; and (d) mandatory
    prohibition against extending Federal assistance in the form of loan
    or loan guarantees to delinquent debtors. The rules adopted conform
    the Commission's definitions[^7] to those used by the Departments of
    Justice and Treasury in their regulations on the DCIA. Finally, we
    have added a new section 1.1935 adopting the new Treasury
    regulations adopting the DCIA administrative wage garnishment
    requirements.[^8] We also incorporate the Federal salary offset
    procedures, governed by 5 U.S.C. § 5514 and Office of Personnel
    Management (OPM) regulations.[^9] Many other adjustments have been
    made to take into account debts arising under our auction rules.
    Other provisions have been redrafted for clarity but do not
    substantively change debt collection procedures.

    **II. DELINQUENT DEBTORS**

3.  As noted, we received no comments concerning our proposed rules
    changes, including the proposed "red light rule." In the Notice, we
    explained that our regulatory and application fee rules already
    permit us as a matter of discretion to dismiss applications for
    failure to pay appropriate fees.[^10] Our auctions rules provide
    that an applicant must certify that it "is not in default on any
    Commission licenses and that it is not delinquent on any non-tax
    debt owed to any Federal agency"[^11] or its application will be
    dismissed.[^12] We proposed that as a next step in the improvement
    of the management of the Commission's accounts, we would adopt a
    rule that anyone delinquent in any non-tax debts owed to the
    Commission will be ineligible for or barred from receiving a license
    or other benefit until the delinquency has been resolved by payment
    in full or by the completion of satisfactory arrangements for
    payment.

4.  We adopt the rule changes as indicated in the Appendix to this
    Order. Our regulatory and application fee rules are amended (with
    some minor modifications from the rules proposed in the Notice) to
    make it clear that we will withhold action on applications or other
    requests for benefits by delinquent debtors and ultimately dismiss
    those applications or other requests if payment of the delinquent
    debt is not made or other satisfactory arrangement for payment is
    not made. In addition, we are adding a generally applicable rule
    (with some necessary exceptions, as discussed below) to be added as
    section 1.1910 of our rules as set forth in the appendix to withhold
    action on applications or other requests for benefits by debtors
    delinquent in debts other than application or regulatory fees, and
    to dismiss those applications or other requests if the delinquent
    debt is not paid or satisfactory arrangement for payment is not
    made.

5.  Under the rules adopted here, the Commission will not approve any
    applications[^13] or other authorizations[^14] until we determine
    that all delinquent debt to the Commission by entities using the
    same taxpayer identifying number (TIN) is paid or satisfactory
    arrangements are made for payment. An applicant's FCC Register
    Number (FRN) will be used to determine all delinquent debt owed
    attributable to all entities using the same TIN.[^15] By delinquent
    debt we mean a claim or debt[^16] that has not been paid by the date
    specified in the initial written demand for payment, applicable
    agreement, instrument, or Commission rule or rules, unless other
    satisfactory payment arrangements have been made by that date, or,
    at any time thereafter, the debtor has failed to satisfy an
    obligation under a payment agreement or instrument with the agency,
    or pursuant to a Commission rule.[^17] All Commission electronic
    systems are linked with Revenue And Management Information System
    (RAMIS), which after the rules take effect, will check the FRN
    provided on the filing for eligibility-based fee sufficiency and the
    existence of any non-tax delinquent debt. The delinquency of any
    entity covered by the same TIN as that used by the entity making the
    filing will trigger this new rule. The delinquent debtor will be
    notified that a fee and delinquent debt check revealed either a fee
    insufficiency or delinquent debt that must be resolved within 30
    days of the notification. Resolution includes payment of the debt,
    or other satisfactory resolution such as adequate arrangement that
    the debt will be paid. This resolution period is not intended to
    restrict our exercise of any right to recover or collect amounts due
    to the Commission.[^18] An application or other request for benefit
    will not be granted until the delinquent debt issue has been
    resolved. If the delinquency has not been resolved within 30 days of
    the date of the notification letter, the application or request for
    authorization will be dismissed.

6.  We asked in the Notice how to handle those situations where a timely
    challenge has been filed either to the existence of or the amount of
    a debt, and whether such debts should be considered delinquent for
    purposes of the red light rule.[^19] No comments were received. We
    believe that a timely written challenge to a debt should preclude
    consideration of the debt for purposes of the red light rule.
    Accordingly, where an applicant has filed a timely administrative
    appeal, or a contested judicial proceeding, challenging either the
    existence of, or the amount of, a debt, such debt shall not be
    considered delinquent for purpose of the red light rule.[^20]
    Similarly, if an applicant has submitted a written request for
    compromise of debt in conformance with applicable rules, such a debt
    shall not be considered delinquent for purposes of the red light
    rule.[^21] As we noted in the Notice, for purposes of Part 1,
    Subpart O only, an installment payment under 47 C.F.R. § 1.2110(g)
    will not be considered delinquent until the expiration of all
    applicable grace periods and any other applicable periods under
    Commission rules to make the payment due. The rules adopted here in
    no way affect the Commission's rules regarding payment for licenses
    (including installment, down, or final payments) or automatic
    cancellation of Commission licenses.[^22]

7.  We invited comment on the exceptions to the red light rule, but
    received no comments. However, we raised several issues in this
    regard that we now resolve.

8.  In the Notice, we proposed that emergency authorizations, special
    temporary authority (STA) applications involving safety of life or
    property, including national security emergencies, requests to
    waive, defer, or reduce applications fees or regulatory fees under
    47 C.F.R. §§ 1.1117 and 1.1166, and petitions or applications for
    review under 47 C.F.R. §§ 1.1117, 1.1159, and 1.1167 related to
    other requests will not be subject to the red light rule.[^23] We
    proposed that such applications should include the FRN, as we noted
    in the [FRN Order]{.underline}.[^24] We also proposed that we would
    examine any subsequent applications for regular authority in place
    of the emergency authorization or STA to determine if the applicant
    is a delinquent debtor, and would not grant such applications until
    such delinquencies are resolved. We adopt this proposal as set forth
    in the Notice. Further, we expand these exceptions to include
    situations where an entity's license is cancelled or expired, and
    where the entity seeks STA in order to continue providing service to
    a substantial number of customers or end-users for a brief period
    until those customers or end-users can be transitioned to other
    methods of communication. This approach minimizes service disruption
    to the public, including those who use radio systems for E911 and
    emergency communications.

9.  We also sought comment on how to handle certain sections of the
    Communications Act that contain congressionally mandated
    deadlines,[^25] or provide that if the Commission fails to act by a
    set date, the Commission is deemed to have approved the action
    sought.[^26] In addition, we noted that certain sections of the
    Commission's rules provide that uncontested applications are granted
    automatically once a given period of time has passed.[^27] We
    proposed that in these circumstances, if the applicant is found to
    be a delinquent debtor at the statutory or Commission imposed
    deadline, the application will be dismissed, consistent with the
    general rule. We received no comments on this proposal. We therefore
    adopt the rule as proposed. We continue to believe that this result
    is unlikely. Debtors will receive sufficient notice in advance of a
    debt being classified as delinquent. We expect that most applicants
    will diligently check to determine whether they are delinquent in
    any debts owed to the Commission and resolve any such delinquencies
    in a timely manner. Nonetheless, dismissal of such applications for
    delinquencies is possible.

10. The red light rule permits delinquent debtors to resolve the
    delinquency within 30 days to avoid dismissal of an application. We
    proposed that the 30-day resolution period would not apply to
    applications or requests for benefits where more restrictive rules
    govern treatment of delinquent debtors. For example, under existing
    rules auction applicants must already certify that they are not
    delinquent in non-tax debt or their short form application will be
    dismissed and they will be ineligible to participate in an
    auction.[^28] We noted, however, that the red light rule would apply
    to subsequent applications filed by winning bidders, *e.g.*, the
    long-form application. We adopt this proposal without modification.

11. In the Notice, we asked whether the Bankruptcy Code requires an
    exception to the red light rule. No comments were received
    concerning this question. We have concluded that we must adopt an
    exception to the red light rule to comply with Section 525(a) of the
    Bankruptcy Code as interpreted by the Supreme Court in [FCC v.
    Nextwave Personal Communications, Inc.,]{.underline} 537 U.S. 293
    (2003). Therefore, the rules provide that applications or requests
    for benefits to which 11 U.S.C. § 525(a) applies will not be
    dismissed by virtue of the applicant's delinquent status. We are not
    always aware that a delinquent debtor has filed for bankruptcy.
    Therefore, if an applicant receives a letter pursuant to section
    1.1910 and that applicant has filed for bankruptcy, it should notify
    the Managing Director in writing of its status so that it can be
    determined whether section 525(a) applies.

12. In some instances, such as tariffs, filings with the Commission go
    into effect immediately (or within one day), thus precluding a check
    to determine if the filer is a delinquent debtor before the request
    goes into effect.[^29] In the tariff situation, we have the ability
    to take appropriate action against a tariff after its effective date
    for noncompliance with any of our rules.[^30] We adopt this proposal
    for tariffs that go into effect immediately on filing and where it
    is later discovered that the filer is a delinquent debtor. We will
    not apply this rule to multi-party tariffs where one party is
    discovered to be a delinquent debtor, as we do not wish to penalize
    the other parties to the tariff.

13. We did not propose to pre-screen FOIA requestors for delinquent debt
    under the proposed procedures, as our FOIA rules already address
    situations where FOIA requesters previously failed to pay FOIA
    fees.[^31] We adopt this proposal as previously stated. We note,
    however, that if an applicant is delinquent in paying its FOIA fees
    that delinquency will trigger the red light rule for other
    applications.

14. We proposed that if we adopted the red light rule, it would apply to
    any applications or requests for benefits pending at the time the
    rule goes into effect. Pending applications or requests for benefits
    are subject to a check for debt delinquency at any time before the
    request is granted. No comments were received on this proposal, and
    we adopt it as stated. Any submissions on or after the effective
    date of the red light rule will be subject to screening for
    delinquent debt.

15. The FRN became mandatory on December 3, 2001.[^32] Prior to that
    date, we encouraged entities doing business with the Commission to
    obtain and include the FRN in their filings with the
    Commission.[^33] While many applicants included the FRN prior to
    December 3, 2001, many did not. We proposed that applications still
    pending if we ultimately adopt the red light rule that were filed
    prior to December 3, 2001 without an FRN will not be subject to the
    rule due to the administrative difficulties in checking for
    delinquent debt on those applications. Absent any comments on this
    issue, we adopt the proposal as stated.

    **III. DELEGATION OF AUTHORITY**

16. Pursuant to the DCIA and the FCCS, the head of the agency is
    empowered to collect claims of the United States for money or
    property arising out of activities of the agency,[^34] compromise
    debts that do not exceed \$100,000 without the approval of the
    Department of Justice,[^35] and to suspend or terminate collection
    activity on a debt.[^36] The DCIA rules we adopt here (and the
    predecessor rules) define the Chairman as the head of the agency for
    DCIA purposes,[^37] but neither the DCIA implementing rules nor our
    existing delegations of authority expressly address various
    administrative determinations specifically assigned to the head of
    the agency under the DCIA.[^38] Additionally, the head of the agency
    is authorized

    to waive the ban on the issuance of Federal financial assistance to
    persons or entities delinquent in non-tax debt owed to the Federal
    Government, and to delegate this authority to the Chief Financial
    Officer or the Deputy Chief Financial Officer[^39]. Our existing
    regulations did not specifically address this authority.[^40] We
    amend the delegations of authority to make clear that the Chairman
    may make all administrative determinations under the DCIA. We also
    amend the rules to delegate to the Managing Director and the General
    Counsel authority to make administrative determinations (except
    waiver determinations under section 3720B) under the DCIA. Finally,
    we add a delegation to the Chief Financial Officer and the Deputy
    Chief Financial Officer to make the waiver determination under 31
    U.S.C.§ 3720B. We adopt these rules of agency organization,
    procedure and practice without notice and comment.[^41]

    **IV. PROCEDURAL MATTERS AND ORDERING CLAUSES**

17. [Regulatory Flexibility Certification.]{.underline} We hereby
    certify that the rules adopted in this Order will not have a
    significant economic impact on a substantial number of small
    entities.[^42] The amendment of our Part 1 Subpart O rules to
    conform to the DCIA streamline our debt collection rules reflecting
    the statutory language contained in the DCIA, and therefore a
    regulatory flexibility analysis is not required.[^43] The rule
    amendments requiring payment of delinquent debts before final action
    is taken on an application or other request for a federal benefit
    will not affect a substantial number of small entities. We estimate
    that there are approximately 1,225 debtors currently delinquent in
    their debt to the Commission out of approximately 750,000 entities
    that hold an FRN. This means that potentially less than ¼ percent of
    entities doing business with the Commission could be affected by
    this rule. Of the 1,225 delinquent debtors, we do not know how many
    are small entities, but we can reasonably posit that less than all
    1,225 are small entities. Consequently, fewer than one percent of
    entities subject to this rule are small entities. We have no reason
    to expect that this percentage will change over time. Therefore, we
    certify pursuant to 5 U.S.C. § 605(b) that the "red light rule" does
    not require a regulatory flexibility analysis.

18. For further information concerning this Order, contact Regina W.
    Dorsey, Special Assistant to the Chief Financial Officer, at
    1-202-418-1993, or by e-mail at \<Regina.Dorsey@fcc.gov\>, or
    Laurence H. Schecker, Office of General Counsel, Administrative Law
    Division, at 1-202-418-1720, or by e-mail at
    \<Laurence.Schecker@fcc.gov\>.

19. Accordingly, IT IS ORDERED THAT, pursuant to Sections 4(i), 8(c)(2),
    9(c)(2), and 303(r) of the Communications Act of 1934, as amended,
    47 U.S.C. §§ 154(i), 158(c)(2), 159(c)(2), and 303(r), and 5 U.S.C.
    § 5514, the rules set forth in Appendix A are hereby ADOPTED,
    effective 30 days from publication in the Federal Register, except
    that changes to rules 1.1112, 1.1116, 1.1161 and 1.1164 and newly
    adopted rule 1.1910 are effective October 1, 2004.

20. IT IS FURTHER ORDERED that the Commission's Consumer & Governmental
    Affairs Bureau, Reference Information Center, SHALL SEND a copy of
    this Report and Order including the Regulatory Flexibility
    Certification, to the Chief Counsel for Advocacy of the Small
    Business Administration.

    FEDERAL COMMUNICATIONS COMMISSION

    Marlene H. Dortch

    Secretary

    **APPENDIX**

    **Part 0 of Title 47 of the Code of Federal Regulations is amended
    as follows:**

    Part 0 \-- COMMISSION ORGANIZATION

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1.  The Authority citations for Part 0 continue to read as follows:

    Authority: Sec. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155, 225,
    unless otherwise noted.

2.  Section 0.211 is amended by adding a new paragraph (f) to read as
    follows:

    [§ 0.211 Chairman]{.underline}.

    \* \* \* \* \*

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(f) Authority to act as "Head of the Agency" or "Agency Head" for all
    administrative determinations pursuant to the Debt Collection
    Improvement Act of 1996, Pub. L. No. 104-134, 110 Stat. 1321,
    1358 (1996) (DCIA).

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3.  Section 0.231 is amended by adding a new paragraph (f) to read as
    follows:

    [§ 0.231 Authority Delegated]{.underline}

    \* \* \* \* \*

    f.  \(1\) The Managing Director, or his designee, is delegated
        authority to perform all administrative determinations provided
        for by the Debt Collection Improvement Act of 1996, Pub. L. No.
        104-134, 110 Stat. 1321, 1358 (1996) (DCIA), including, but not
        limited to the provisions of Title 31, United States Code
        section 3711 to:

        \(i\) collect claims of the United States Government for money
        or property arising out of the activities of, or referred to,
        the Federal Communications Commission,

        \(ii\) compromise a claim of the Government of not more than
        \$100,000 (excluding interest) or such higher amount as the
        Attorney General of the United States may from time to time
        prescribe, and

        \(iii\) suspend or end collection action on a claim of the
        Government of not more than \$100,000 (excluding interest) when
        it appears that no person liable on the claim has the present or
        prospective ability to pay a significant amount of the claim or
        the cost of collections the claim is likely to be more than the
        amount recovered.

        This delegation does not include waiver authority provided by 31
        U.S.C. 3720B.

        \(2\) the Chief Financial Officer, or the Deputy Chief Financial
        Officer, is delegated authority to perform all administrative
        determinations provided for by 31 U.S.C. 3720B.

4.  Section 0.251 is amended by adding a new paragraph (i) to read as
    follows:

    [§ 0.251 Authority Delegated]{.underline}

    \* \* \* \* \*

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(i) The General Counsel is delegated authority to perform all
    administrative determinations provided for by the Debt Collection
    Improvement Act of 1996, Pub. L. No. 104-134, 110 Stat. 1321,
    1358 (1996) (DCIA), including, but not limited to the provisions of
    Title 31, United States Code section 3711 to:

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(1) collect claims of the United States Government of money or property
    arising out of the activities of, or referred to, the Federal
    Communications Commission,

(2) compromise a claim of the Government of not more than \$100,000
    (excluding interest) or such higher amount as the Attorney General
    of the United States may from time to time prescribe, and

(3) suspend or end collection action on a claim of the Government of not
    more than \$100,000 (excluding interest) when it appears that no
    person liable on the claim has the present or prospective ability to
    pay a significant amount of the claim or the cost of collecting the
    claim is likely to be more than the amount recovered.

    This delegation does not include waiver authority provided by 31
    U.S.C. 3720B.

    **Part 1 of Title 47 of the Code of Federal Regulations is amended
    as follows:**

    Part 1 -- PRACTICE AND PROCEDURE

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5.  The Authority citations for Part 1 continue to read as follows:

    Authority: 47 U.S.C. 151, 154(i), 154(j), 155, 225, 303(r), 309, and
    325(e).

6.  Section 1.1112 is amended by revising paragraph (a) introductory
    text and paragraph (c) to read as follows:

> [§ 1.1112 Conditionality of Commission or staff
> authorizations.]{.underline}

\(a\) Any instrument of authorization granted by the Commission, or by
its staff under delegated authority, will be conditioned upon final
payment of the applicable fee or delinquent fees and timely payment of
bills issued by the Commission. As applied to checks, bank drafts and
money orders, final payment shall mean receipt by the Treasury of funds
cleared by the financial institution on which the check, bank draft or
money order is drawn.

\* \* \* \* \*

> \(c\) (1) Where an applicant is found to be delinquent in the payment
> of application fees, the Commission will make a written request for
> the delinquent fee, together with any penalties that may be due under
> this subpart. Such request shall inform the applicant/filer that
> failure to pay or make satisfactory payment arrangements will result
> in the Commission\'s withholding action on, and/or as appropriate,
> dismissal of, any applications or requests filed by the applicant. The
> staff shall also inform the applicant of the procedures for seeking
> Commission review of the staff\'s fee determination.
>
> \(2\) If, after final determination that the fee is due or that the
> applicant is delinquent in the payment of fees, and payment is not
> made in a timely manner, the staff will withhold action on the
> application or filing until payment or other satisfactory arrangement
> is made. If payment or satisfactory arrangement is not made within 30
> days of the date of the original notification, the application will be
> dismissed.

7.  Section 1.1116 is amended by revising paragraph (a) introductory
    text, paragraph (b) and by adding paragraph (d) to read as follows:

[§ 1.1116 Penalty for late or insufficient payments.]{.underline}

(a) Filings subject to fees and accompanied by defective fee submissions
    will be dismissed under § 1.1109 (b) of this subpart where the
    defect is discovered by the Commission's staff within 30 calendar
    days from the receipt of the application or filing by the
    Commission. Filings by delinquent debtors will also be dismissed if
    the delinquent debt is not paid or satisfactory arrangements are not
    made within 30 days of the date of the original notification. See 47
    CFR 1.1910.

\* \* \* \* \*

(b) Applications or filings accompanied by insufficient fees or no fees,
    or where such applications or filings are made by persons or
    organizations that are delinquent in fees owed to the Commission,
    that are inadvertently forwarded to Commission staff for substantive
    review will be billed for the amount due if the discrepancy is not
    discovered until after 30 calendar days from the receipt of the
    application or filing by the Commission. Applications or filings
    that are accompanied by insufficient fees or no fees will have a
    penalty charge equaling 25 percent of the amount due added to each
    bill. Any Commission action taken prior to timely payment of these
    charges is contingent and subject to rescission.

\* \* \* \* \*

(d) Failure to submit fees, following notice to the applicant of failure
    to submit the required fee, is subject to collection of the fee,
    including interest thereon, any associated penalties, and the full
    cost of collection to the Federal government pursuant to the
    provisions of the Debt Collection Improvement Act, 31 U.S.C. 3717
    and 3720A. *See* 47 CFR 1.1901 through 1.1952. The debt collection
    processes described above may proceed concurrently with any other
    sanction in this paragraph.

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8.  Section 1.1118 is amended by revising paragraph (a) to read as
    follows:

[§ 1.1118 Error claims.]{.underline}

\(a\) Applicants who wish to challenge a staff determination of an
insufficient fee or delinquent debt may do so in writing. A challenge to
a determination that a party is delinquent in paying the full
application fee must be accompanied by suitable proof that the fee had
been paid or waived (or deferred from payment during the period in
question), or by the required application payment and any assessment
penalty payment (see § 1.1116) of this subpart). Failure to comply with
these procedures will result in dismissal of the challenge. These claims
should be addressed to the Federal Communications Commission, Attention:
Financial Operations, 445 12th St. S.W., Washington, DC 20554 or emailed
to ARINQUIRIES@fcc.gov.

\* \* \* \* \*

9.  Section 1.1161 is amended by revising introductory text of
    paragraph (a) and revising paragraph (c) to read as follows:

[§1.1161 Conditional license grants and delegated
authorizations.]{.underline}

\(a\) Grant of any application or an instrument of authorization or
other filing for which a regulatory fee is required to accompany the
application or filing, will be conditioned upon final payment of the
current or delinquent regulatory fees. Final payment shall mean receipt
by the U.S. Treasury of funds cleared by the financial institution on
which the check, bank draft, money order, credit card (Visa, MasterCard,
American Express, or Discover), wire or electronic payment is drawn.

\* \* \* \* \*

> \(c\) (1) Where an applicant is found to be delinquent in the payment
> of regulatory fees, the Commission will make a written request for the
> fee, together with any penalties that may be rendered under this
> subpart. Such request shall inform the regulatee that failure to pay
> may result in the Commission withholding action on any application or
> request filed by the applicant. The staff shall also inform the
> regulatee of the procedures for seeking Commission review of the
> staff\'s determination.
>
> \(2\) If, after final determination that the fee is due or that the
> applicant is delinquent in the payment of fees and payment is not made
> in a timely manner, the staff will withhold action on the application
> or filing until payment or other satisfactory arrangement is made. If
> payment or satisfactory arrangement is not made within 30 days, the
> application will be dismissed.

10. Section 1.1164 is amended by adding paragraph (f)(5) as follows:

> [§ 1.1164 Penalties for late or insufficient regulatory fee
> payments.]{.underline}
>
> \* \* \* \* \*
>
> \(f\) \* \* \*
>
> \(5\) An application or filing by a regulatee that is delinquent in
> its debt to the Commission is also subject to dismissal under 47 CFR
> 1.1910.

11. Section 1.1167 is amended by revising paragraph (a) to read as
    follows:

> [§1.1167 Error claims related to regulatory fees.]{.underline}
>
> \(a\) Challenges to determinations or an insufficient regulatory fee
> payment or delinquent fees should be made in writing. A challenge to a
> determination that a party is delinquent in paying a standard
> regulatory fee must be accompanied by suitable proof that the fee had
> been paid or waived (deferred from payment during the period in
> question), or by the required regulatory payment and any assessed
> penalty payment (see § 1.1164(c) of this subpart). Challenges
> submitted with a fee payment must be submitted to address stated on
> the invoice or billing statement. Challenges not accompanied by a fee
> payment should be filed with the Commission's Secretary and clearly
> marked to the attention of the Managing Director or emailed to
> ARINQUIRIES@fcc.gov.
>
> \* \* \* \* \*

12\. Subpart O of Part 1 is revised to read as follows:

Subpart O -- Collection of Claims Owed the United States

[General Provisions]{.underline}

1.1901 Definitions and construction.

1.1902 Exceptions.

1.1903 Use of procedures.

1.1904 Conformance to law and regulations.

1.1905 Other procedures; collection of forfeiture penalties.

1.1906 Informal action.

1.1907 Return of property or collateral.

1.1908 Omissions not a defense.

1.1909 \[Reserved\]

1.1910 Effect of insufficient fee payments, delinquent debts, or
debarment.

[Administrative Offset \-- Consumer Reporting Agencies \-- Contracting
for Collection]{.underline}

1.1911 Demand for payment.

1.1912 Collection by administrative offset.

1.1913 Administrative offset against amounts payable from Civil Service
Retirement and Disability Fund.

1.1914 Collection in installments.

1.1915 Exploration of compromise.

1.1916 Suspending or terminating collection action.

1.1917 Referrals to the Department of Justice and transfers of
delinquent debt to the Secretary of Treasury.

1.1918 Use of consumer reporting agencies.

1.1919 Contracting for collection services.

1.1920 -- 1.1924 \[Reserved\]

[Salary Offset -- Individual Debt]{.underline}

1.1925 Purpose.

1.1926 Scope.

1.1927 Notification.

1.1928 Hearing.

1.1929 Deduction from employee's pay.

1.1930 Liquidation from final check or recovery from other payment.

1.1931 Non‑waiver of rights by payments.

1.1932 Refunds.

1.1933 Interest, penalties and administrative costs.

1.1934 Recovery when the Commission is not creditor agency.

1.1935 Obtaining the services of a hearing official.

1.1936 Administrative Wage Garnishment.

1.1937 -- 1.1939 \[Reserved\]

[Interest, Penalties, Administrative Costs and Other
Sanctions]{.underline}

1.1940 Assessment.

1.1941 Exemptions.

1.1942 Other sanctions.

1.1943 -- 1.1949 \[Reserved\]

[Cooperation with the Internal Revenue Service]{.underline}

1.1950 Reporting discharged debts to the Internal Revenue Service.

1.1951 Offset against tax refunds.

1.1952 Use and disclosure of mailing addresses.

[General Provisions Concerning Interagency Requests]{.underline}

1.1953 Interagency requests.

The authority citation for Subpart O continues to read:

Authority: 31 U.S.C. 3701; 31 U.S.C. 3711 et seq.; 5 U.S.C. 5514; sec.
8(1) of E.O. 11609; redesignated in sec. 2-1 of E.O. 12107; 31 CFR Parts
901-904; 5 CFR Part 550.

[§ 1.1901 Definitions and construction.]{.underline}

For purposes of this subpart:

(a) The term "[administrative offset]{.underline}" means withholding
    money payable by the United States Government to, or held by the
    Government for, a person, organization, or entity to satisfy a debt
    the person, organization, or entity owes the Government.

(b) The term "[agency or Commission]{.underline}" means the Federal
    Communications Commission (including the Universal Service Fund, the
    Telecommunications Relay Service Fund, and any other reporting
    components of the Commission) or any other agency of the U.S.
    Government as defined by section 105 of title 5 U.S.C., the U.S.
    Postal Service, the U.S. Postal Rate Commission, a military
    department as defined by section 102 of title 5 U.S.C., an agency or
    court of the judicial branch, or an agency of the legislative
    branch, including the U.S. Senate and the U.S. House of
    Representatives.

(c) The term "[agency head]{.underline}" means the Chairman of the
    Federal Communications Commission.

(d) The term "[application]{.underline}" includes in addition to
    petitions and applications elsewhere defined in the Commission's
    rules, any request, as for assistance, relief, declaratory ruling,
    or decision, by the Commission or on delegated authority.

(e) The terms "[claim]{.underline}" and "[debt]{.underline}" are deemed
    synonymous and interchangeable. They refer to an amount of money,
    funds, or property that has been determined by an agency official to
    be due to the United States from any person, organization, or
    entity, except another federal agency. For purposes of
    administrative offset under 31 U.S.C. 3716, the terms "claim" and
    "debt" include an amount of money, funds, or property owed by a
    person to 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. "Claim" and
    "debt" include amounts owed to the United States on account of
    extension of credit or loans made by, insured or guaranteed by the
    United States and all other amounts due the United States from fees,
    leases, rents, royalties, services, sales of real or personal
    property, overpayments, penalties, damages, interest, taxes, and
    forfeitures issued after a notice of apparent liability that have
    been partially paid or for which a court of competent jurisdiction
    has order payment and such order is final (except those arising
    under the Uniform Code of Military Justice), and other similar
    sources.

(f) The term "[creditor agency]{.underline}" means the agency to which
    the debt is owed.

(g) The term "[debt collection center]{.underline}" means an agency of a
    unit or subagency within an agency that has been designated by the
    Secretary of the Treasury to collect debt owed to the United States.
    The Financial Management Service (FMS), Fiscal Service, United
    States Treasury, is a debt collection center.

(h) The term "[demand letter]{.underline}" includes written letters,
    orders, judgments, and memoranda from the Commission or on delegated
    authority.

(i) The term "[delinquent]{.underline}" means a claim or debt which has
    not been paid by the date specified by the agency unless other
    satisfactory payment arrangements have been made by that date, or,
    at any time thereafter, the debtor has failed to satisfy an
    obligation under a payment agreement or instrument with the agency,
    or pursuant to a Commission rule. For purposes of this subpart only,
    an installment payment under 47 CFR 1.2110(g) will not be considered
    deliquent until the expiration of all applicable grace periods and
    any other applicable periods under Commission rules to make the
    payment due. The rules set forth in this subpart in no way affect
    the Commission's rules, as may be amended, regarding payment for
    licenses (including installment, down, or final payments) or
    automatic cancellation of Commission licenses (see 47 CFR
    1.1902(f)).

(j) The term "[disposable pay]{.underline}" 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 any amount required
    by law to be withheld. Agencies must exclude deductions described in
    5 CFR 581.105(b) through (f) to determine disposable pay subject to
    salary offset.

(k) The term "[employee]{.underline}" means a current employee of the
    Commission or of another agency, including a current member of the
    Armed Forces or a Reserve of the Armed Forces (Reserve).

(l) The term "[entity]{.underline}" includes natural persons, legal
    associations, applicants, licensees, and regulatees.

(m) The term "[FCCS]{.underline}" means the Federal Claims Collection
    Standards jointly issued by the Secretary of the Treasury and the
    Attorney General of the United States at 31 CFR Parts 900-904.

(n) The term "[paying agency]{.underline}" means the agency employing
    the individual and authorizing the payment of his or her current
    pay.

(o) The term "[referral for litigation]{.underline}" means referral to
    the Department of Justice for appropriate legal proceedings except
    where the Commission has the statutory authority to handle the
    litigation itself.

(p) The term "reporting component" means any program, account, or entity
    required to be included in the Agency's Financial Statements by
    generally accepted accounting principles for Federal Agencies.

(q) The term "[salary offset]{.underline}" means an administrative
    offset to collect a debt under 5 U.S.C. 5514 by deduction(s) at one
    or more officially established pay intervals from the current pay
    account of an employee without his or her consent.

(r) The term "[waiver]{.underline}" means the cancellation, remission,
    forgiveness, or non‑recovery of a debt or fee, including, but not
    limited to, a debt due to the United States, by an entity or an
    employee to an agency and as the waiver is permitted or required by
    5 U.S.C. 5584, 10 U.S.C. 2774, 31 U.S.C. 3711, or any other law.

(s) Words in the plural form shall include the singular, and vice-versa,
    and words signifying the masculine gender shall include the
    feminine, and vice-versa. The terms "[includes]{.underline}" and
    "[including]{.underline}" do not exclude matters not listed but do
    include matters of the same general class.

[§ 1.1902 Exceptions]{.underline}.

(a) Claims arising from the audit of transportation accounts pursuant to
    31 U.S.C. 3726 shall be determined, collected, compromised,
    terminated or settled in accordance with regulations published under
    the authority of 31 U.S.C. 3726 ([see]{.underline} 41 CFR Part
    101‑41).

(b) Claims arising out of acquisition contracts subject to the Federal
    Acquisition Regulations (FAR) shall be determined, collected,
    compromised, terminated, or settled in accordance with those
    regulations. ([See]{.underline} 48 CFR Part 32). If not otherwise
    provided for in the FAR, contract claims that have been the subject
    of a contracting officer's final decision in accordance with section
    6(a) of the Contract Disputes Act of 1978 (41 U.S.C. 605(a)), may be
    determined, collected, compromised, terminated or settled under the
    provisions of this regulation, except that no additional review of
    the debt shall be granted beyond that provided by the contracting
    officer in accordance with the provisions of section 6 of the
    Contract Disputes Act of 1978 (41 U.S.C. 605), and the amount of any
    interest, administrative charge, or penalty charge shall be subject
    to the limitations, if any, contained in the contract out of which
    the claim arose.

(c) Claims based in whole or in part on conduct in violation of the
    antitrust laws, or in regard to which there is an indication of
    fraud, the presentation of a false claim, or a misrepresentation on
    the part of the debtor or any other party having an interest in the
    claim, shall be referred to the Department of Justice (DOJ) as only
    the DOJ has authority to compromise, suspend, or terminate
    collection action on such claims. The standards in the FCCS relating
    to the administrative collection of claims do apply, but only to the
    extent authorized by the DOJ in a particular case. Upon
    identification of a claim based in whole or in part on conduct in
    violation of the antitrust laws or any claim involving fraud, the
    presentation of a false claim, or misrepresentation on the part of
    the debtor or any party having an interest in the claim, the
    Commission shall promptly refer the case to the Department of
    Justice for action. At its discretion, the DOJ may return the claim
    to the forwarding agency for further handling in accordance with the
    standards in the FCCS.

(d) Tax claims are excluded from the coverage of this regulation.

(e) The Commission will attempt to resolve interagency claims by
    negotiation in accordance with Executive Order 12146 (3 CFR, 1980
    Comp., pp. 409-412).

(f) Nothing in this subpart shall supercede or invalidate other
    Commission rules, such as the Part 1 general competitive bidding
    rules (47 CFR Part 1, Subpart Q) or the service specific competitive
    bidding rules, as may be amended, regarding the Commission's rights,
    including but not limited to the Commission's right to cancel a
    license or authorization, obtain judgment, or collect interest,
    penalties, and administrative costs.

[§ 1.1903 Use of procedures.]{.underline}

Procedures authorized by this regulation (including, but not limited to,
disclosure to a consumer reporting agency, contracting for collection
services, administrative offset and salary offset) may be used singly or
in combination, so long as the requirements of applicable law and
regulation are satisfied.

[§ 1.1904 Conformance to law and regulations]{.underline}.

> The requirements of applicable law (31 U.S.C. 3701‑3719, as amended by
> Pub. L. 97‑365, 96 Stat. 1749 and Pub. L. 104-134, 110 Stat. 1321,
> 1358) have been implemented in government-wide standards which include
> the Regulations of the Office of Personnel Management (5 CFR Part 550)
> and the Federal Claims Collection Standards issued jointly by the
> Secretary of the Treasury and the Attorney General of the United
> States (31 CFR Parts 900-904). Not every item in the above-described
> standards has been incorporated or referenced in this regulation. To
> the extent, however, that circumstances arise which are not covered by
> the terms stated in these regulations, the Commission will proceed in
> any actions taken in accordance with applicable requirements found in
> the standards referred to in this section.

[§ 1.1905 Other procedures; collection of forfeiture
penalties.]{.underline}

Nothing contained in these regulations is intended to require the
Commission to duplicate administrative or other proceedings required by
contract or other laws or regulations, nor do these regulations
supercede procedures permitted or required by other statutes or
regulations. In particular, the assessment and collection of monetary
forfeitures imposed by the Commission will be governed initially by the
procedures prescribed by 47 U.S.C. 503, 504 and 47 CFR 1.80. After
compliance with those procedures, the Commission may determine that the
collection of a monetary forfeiture under the collection alternatives
prescribed by this subpart is appropriate but need not duplicate
administrative or other proceedings. Fees and penalties prescribed by
law, [e.g.]{.underline}, 47 U.S.C. 158 and 159, and promulgated under
the authority of 47 U.S.C. 309(j) ([e.g.]{.underline}, 47 CFR Part 1,
Subpart Q) may be collected as permitted by applicable law. Nothing
contained herein is intended to restrict the Commission from exercising
any other right to recover or collect amounts owed to it.

[§ 1.1906 Informal action.]{.underline}

Nothing contained in these regulations is intended to preclude
utilization of informal administrative actions or remedies which may be
available (including, [e.g.]{.underline}, Alternative Dispute
Resolution), and/or for the Commission to exercise rights as agreed to
among the parties in written agreements, including notes and security
agreements.

[§ 1.1907 Return of property or collateral.]{.underline}

Nothing contained in this regulation is intended to deter the Commission
from exercising any other right under law or regulation or by agreement
it may have or possess, or to exercise its authority and right as a
regulator under the Communications Act of 1934, as amended, and the
Commission's rules, and demanding the return of specific property or
from demanding, as a non-exclusive alternative, either the return of
property or the payment of its value or the amount due the United States
under any agreement or Commission rule.

[§ 1.1908 Omissions not a defense.]{.underline}

The failure or omission of the Commission to comply with any provision
in this regulation shall not serve as a defense to any debtor.

[§ 1.1909 \[Reserved\]]{.underline}

[§ 1.1910 Effect of insufficient fee payments, delinquent debts, or
debarment.]{.underline}

(a) \(1\) An application (including a petition for reconsideration or
    any application for review of a fee determination) or request for
    authorization subject to the FCC Registration Number (FRN)
    requirement set forth in subpart W of this chapter will be examined
    to determine if the applicant has paid the appropriate application
    fee, appropriate regulatory fees, is delinquent in its debts owed
    the Commission, or is debarred from receiving Federal benefits
    ([see, e.g.]{.underline}, 31 CFR 285.13; 47 CFR Part 1, Subpart P).

.

(2) Fee payments, delinquent debt, and debarment will be examined based
    on the entity's taxpayer identifying number (TIN), supplied when the
    entity acquired or was assigned an FRN. [See]{.underline} 47 CFR
    1.8002(b)(1).

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(b) \(1\) Applications by any entity found not to have paid the proper
    application or regulatory fee will be handled pursuant to the rules
    set forth in 47 CFR Part 1, Subpart G.

> \(2\) Action will be withheld on applications, including on a petition
> for reconsideration or any application for review of a fee
> determination, or requests for authorization by any entity found to be
> delinquent in its debt to the Commission (see paragraph 1.1901(j)),
> unless otherwise provided for in this regulation, [e.g.]{.underline},
> 47 CFR 1.1928 (employee petition for a hearing). The entity will be
> informed that action will be withheld on the application until full
> payment or arrangement to pay any non-tax delinquent debt owed to the
> Commission is made and/or that the application may be dismissed. See
> the provisisons of paragraphs 1.1108, 1.1109, 1.1116 and l.1118. Any
> Commission action taken prior to the payment of delinquent non-tax
> debt owed to the Commission is contingent and subject to recission.
> Failure to make payment on any delinquent debt is subject to
> collection of the debt, including interest thereon, any associated
> penalties, and the full cost of collection to the Federal government
> pursuant to the provisions of the Debt Collection Improvement Act, 31
> U.S.C. 3717.

(3) If a delinquency has not been paid or the debtor has not made other
    satisfactory arrangements within 30 days of the date of the notice
    provided pursuant to paragraph (b)(2) of this section, the
    application or request for authorization will be dismissed.

(4) The provisions of paragraphs (b)(2) and (b)(3) of this section will
    not apply if the applicant has timely filed a challenge through an
    administrative appeal or a contested judicial proceeding either to
    the existence or amount of the non-tax delinquent debt owed the
    Commission.

(5) The provisions of paragraphs (b)(2) and (b)(3) of this section will
    not apply where more restrictive rules govern treatment of
    delinquent debtors, such as 47 CFR 1.2105(a)(2)(x) and (xi).

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(c) \(1\) Applications for emergency or special temporary authority
    involving safety of life or property (including national security
    emergencies) or involving a brief transition period facilitating
    continuity of service to a substantial number of customers or end
    users, will not be subject to the provisions of paragraphs (a)
    and (b) of this section. However, paragraphs (a) and (b) will be
    applied to permanent authorizations for these services.

\(2\) Provisions of paragraph (a) and (b) of this section will not apply
to application or requst for authorization to which 11 U.S.C. 525(a) is
applicable.

[§ 1.1911 Demand for payment.]{.underline}

(a) Written demand as described in paragraph (b) of this section, and
    which may be in the form of a letter, order, memorandum, or other
    form of written communication, will be made promptly upon a debtor
    of the United States in terms that inform the debtor of the
    consequences of failing to cooperate to resolve the debt. The
    specific content, timing, and number of demand letters depend upon
    the type and amount of the debt, including, [e.g.]{.underline}, any
    notes and the terms of agreements of the parties, and the debtor\'s
    response, if any, to the Commission\'s letters or telephone calls.
    One demand letter will be deemed sufficient. In determining the
    timing of the demand letter(s), the Commission will give due regard
    to the need to refer debts promptly to the Department of Justice for
    litigation, in accordance with the FCCS. When necessary to protect
    the Government\'s interest (for example, to prevent the expiration
    of a statute of limitations), written demand may be preceded by
    other appropriate actions under the FCCS, including immediate
    referral for litigation. The demand letter does not provide an
    additional period within to challenge the existence of, or amount of
    the non-tax debt if such time period has expired under Commission
    rules or other applicable limitation periods. Nothing contained
    herein is intended to limit the Commission's authority or discretion
    as may otherwise be permitted to collect debts owed.

(b) The demand letter will inform the debtor of:

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(1) The basis for the indebtedness and the opportunities, if any, of the
    debtor to request review within the Commission;

(2) The applicable standards for assessing any interest, penalties, and
    administrative costs (sections 1.1940 and 1.1941);

(3) The date by which payment is to be made to avoid late charges and
    enforced collection, which normally will not be more than 30 days
    from the date that the initial demand letter was mailed or
    hand‑delivered; and

(4) The name, address, and phone number of a contact person or office
    within the Commission.

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(c) The Commission will expend all reasonable effort to ensure that
    demand letters are mailed or hand-delivered on the same day that
    they are dated. As provided for in any agreement among parties, or
    as may be required by exigent circumstances, the Commission may use
    other forms of delivery, including, [e.g.]{.underline}, facsimile
    telecopier or electronic mail. There is no prescribed format for
    demand letters. The Commission utilizes demand letters and
    procedures that will lead to the earliest practicable determination
    of whether the debt can be resolved administratively or must be
    referred for litigation.

(d) The Commission may, as circumstances and the nature of the debt
    permit, include in demand letters such items as the Commission\'s
    willingness to discuss alternative methods of payment; its policies
    with respect to the use of credit bureaus, debt collection centers,
    and collection agencies; the Commission's remedies to enforce
    payment of the debt (including assessment of interest,
    administrative costs and penalties, administrative garnishment, the
    use of collection agencies, Federal salary offset, tax refund
    offset, administrative offset, and litigation); the requirement that
    any debt delinquent for more than 180 days be transferred to the
    Department of the Treasury for collection; and, depending on
    applicable statutory authority, the debtor\'s entitlement to
    consideration of a waiver. Where applicable, the debtor will be
    provided with a period of time (normally not more than 15 calendar
    days) from the date of the demand in which to exercise the
    opportunity to request a review.

(e) The Commission will respond promptly to communications from the
    debtor, within 30 days whenever feasible, and will advise debtors
    who dispute the debt that they must furnish available evidence to
    support their contentions.

(f) Prior to the initiation of the demand process or at any time during
    or after completion of the demand process, if the Commission
    determines to pursue, or is required to pursue, offset, the
    procedures applicable to offset in sections 1.1912 and 1.1913, as
    applicable, will be followed. The availability of funds or money for
    debt satisfaction by offset and the Commission's determination to
    pursue collection by offset shall release the Commission from the
    necessity of further compliance with paragraphs (a), (b), (c),
    and (d) of this section.

(g) Prior to referring a debt for litigation, the Commission will advise
    each person determined to be liable for the debt that, unless the
    debt can be collected administratively, litigation may be initiated.
    This notification will follow the requirements of Executive Order
    12988 (3 CFR, 1996 Comp., pp. 157-163) and may be given as part of a
    demand letter under paragraph (b) of this section or in a separate
    document. Litigation counsel for the Government will be advised that
    this notice has been given.

(h) When the Commission learns that a bankruptcy petition has been filed
    with respect to a debtor, before proceeding with further collection
    action, the Commission may immediately seek legal advice from its
    counsel concerning the impact of the Bankruptcy Code on any pending
    or contemplated collection activities. Unless the Commission
    determines that the automatic stay imposed at the time of filing
    pursuant to 11 U.S.C. 362 has been lifted or is no longer in effect,
    in most cases collection activity against the debtor should stop
    immediately.

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(1) After seeking legal advice, a proof of claim will be filed in most
    cases with the bankruptcy court or the Trustee. The Commission will
    refer to the provisions of 11 U.S.C. 106 relating to the
    consequences on sovereign immunity of filing a proof of claim.

(2) If the Commission is a secured creditor, it may seek relief from the
    automatic stay regarding its security, subject to the provisions and
    requirements of 11 U.S.C. 362.

(3) Offset is stayed in most cases by the automatic stay. However, the
    Commission will determine from its counsel whether its payments to
    the debtor and payments of other agencies available for offset may
    be frozen by the Commission until relief from the automatic stay can
    be obtained from the bankruptcy court. The Commission will also
    determine from its counsel whether recoupment is available.

[§ 1.1912 Collection by administrative offset.]{.underline}

> \(a\) [Scope]{.underline}. (1) The term "[administrative
> offset]{.underline}" has the meaning provided in § 1.1901.
>
> \(2\) This section does not apply to:

(i) Debts arising under the Social Security Act, except as provided in
    42 U.S.C. 404;

(ii) Payments made under the Social Security Act, except as provided for
     in 31 U.S.C. 3716(c) (see 31 CFR 285.4, Federal Benefit Offset);

(iii) Debts arising under, or payments made under, the Internal Revenue
      Code (see 31 CFR 285.2, Tax Refund Offset) or the tariff laws of
      the United States;

(iv) Offsets against Federal salaries to the extent these standards are
     inconsistent with regulations published to implement such offsets
     under 5 U.S.C. 5514 and 31 U.S.C. 3716 (see 5 CFR part 550, subpart
     K, and 31 CFR 285.7, Federal Salary Offset);

(v) Offsets under 31 U.S.C. 3728 against a judgment obtained by a debtor
    against the United States;

(vi) Offsets or recoupments under common law, State law, or Federal
     statutes specifically prohibiting offsets or recoupments of
     particular types of debts; or

(vii) Offsets in the course of judicial proceedings, including
      bankruptcy.

> \(3\) Unless otherwise provided for by contract or law, debts or
> payments that are not subject to administrative offset under 31 U.S.C.
> 3716 may be collected by administrative offset under the common law or
> other applicable statutory authority.
>
> \(4\) Unless otherwise provided by law, administrative offset of
> payments under the authority of 31 U.S.C. 3716 to collect a debt may
> not be conducted more than 10 years after the Government\'s right to
> collect the debt first accrued, unless facts material to the
> Government\'s right to collect the debt were not known and could not
> reasonably have been known by the official or officials of the
> Government who were charged with the responsibility to discover and
> collect such debts. This limitation does not apply to debts reduced to
> a judgment.
>
> \(5\) In bankruptcy cases, the Commission will seek legal advice from
> its counsel concerning the impact of the Bankruptcy Code, particularly
> 11 U.S.C. 106, 362, and 553, on pending or contemplated collections by
> offset.
>
> \(b\) [Mandatory centralized administrative offset]{.underline}. (1)
> The Commission is required to refer past due, legally enforceable
> nontax debts which are over 180 days delinquent to the Treasury for
> collection by centralized administrative offset. Debts which are less
> than 180 days delinquent also may be referred to the Treasury for this
> purpose. [See]{.underline} FCCS for debt certification requirements.
>
> \(2\) The names and taxpayer identifying numbers (TINs) of debtors who
> owe debts referred to the Treasury as described in paragraph (b)(1) of
> this section shall be compared to the names and TINs on payments to be
> made by Federal disbursing officials. Federal disbursing officials
> include disbursing officials of Treasury, the Department of Defense,
> the United States Postal Service, other Government corporations, and
> disbursing officials of the United States designated by the Treasury.
> When the name and TIN of a debtor match the name and TIN of a payee
> and all other requirements for offset have been met, the payment will
> be offset to satisfy the debt.
>
> \(3\) Federal disbursing officials will notify the debtor/payee in
> writing that an offset has occurred to satisfy, in part or in full, a
> past due, legally enforceable delinquent debt. The notice shall
> include a description of the type and amount of the payment from which
> the offset was taken, the amount of offset that was taken, the
> identity of the creditor agency requesting the offset, and a contact
> point within the creditor agency who will respond to questions
> regarding the offset.
>
> (4)(i) Before referring a delinquent debt to the Treasury for
> administrative offset, and subject to any agreement and/or waiver to
> the contrary by the debtor, the Commission shall ensure that offsets
> are initiated only after the debtor:

(A) Has been sent written notice of the type and amount of the debt, the
    intention of the Commission to use administrative offset to collect
    the debt, and an explanation of the debtor\'s rights under 31 U.S.C.
    3716; and

(B) The debtor has been given:

> \(1\) The opportunity to request within 15 days of the date of the
> written notice, after which opportunity is deemed waived, by the
> debtor, to inspect and copy Commission records related to the debt;
>
> \(2\) The opportunity, unless otherwise waived by the debtor, for a
> review within the Commission of the determination of indebtedness; and
>
> \(3\) The opportunity to request within 15 days of the date of the
> written notice, after which the opportunity is deemed waived by the
> debtor, for the debtor to make a written agreement to repay the debt.
>
> \(ii\) The Commission may omit the procedures set forth in paragraph
> (a)(4)(i) of this section when:

(A) The offset is in the nature of a recoupment;

(B) The debt arises under a contract as set forth in [Cecile Industries,
    Inc. v. Cheney]{.underline}, 995 F.2d 1052 (Fed. Cir. 1993) (notice
    and other procedural protections set forth in 31 U.S.C. 3716(a) do
    not supplant or restrict established procedures for contractual
    offsets accommodated by the Contracts Disputes Act); or

(C) In the case of non-centralized administrative offsets conducted
    under paragraph (c) of this section, the Commission first learns of
    the existence of the amount owed by the debtor when there is
    insufficient time before payment would be made to the debtor/payee
    to allow for prior notice and an opportunity for review. When prior
    notice and an opportunity for review are omitted, the Commission
    shall give the debtor such notice and an opportunity for review as
    soon as practicable and shall promptly refund any money ultimately
    found not to have been owed to the Government.

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(iii) When the Commission previously has given a debtor any of the
      required notice and review opportunities with respect to a
      particular debt ([see]{.underline} 31 CFR 901.2), the Commission
      need not duplicate such notice and review opportunities before
      administrative offset may be initiated.

\(5\) Before the Commission refers delinquent debts to the Treasury, the
Office of Managing Director must certify, in a form acceptable to the
Treasury, that:

> \(i\) The debt(s) is (are) past due and legally enforceable; and
>
> \(ii\) The Commission has complied with all due process requirements
> under 31 U.S.C. 3716(a) and its regulations.

(6) Payments that are prohibited by law from being offset are exempt
    from centralized administrative offset. The Treasury shall exempt
    payments under means-tested programs from centralized administrative
    offset when requested in writing by the head of the payment
    certifying or authorizing agency. Also, the Treasury may exempt
    other classes of payments from centralized offset upon the written
    request of the head of the payment certifying or authorizing agency.

(7) Benefit payments made under the Social Security Act (42 U.S.C. 301
    [et seq]{.underline}.), part B of the Black Lung Benefits Act (30
    U.S.C. 921 [et seq]{.underline}.), and any law administered by the
    Railroad Retirement Board (other than tier 2 benefits), may be
    offset only in accordance with Treasury regulations, issued in
    consultation with the Social Security Administration, the Railroad
    Retirement Board, and the Office of Management and Budget.
    [See]{.underline} 31 CFR 285.4.

(8) In accordance with 31 U.S.C. 3716(f), the Treasury may waive the
    provisions of the Computer Matching and Privacy Protection Act of
    1988 concerning matching agreements and post-match notification and
    verification (5 U.S.C. 552a(o) and (p)) for centralized
    administrative offset upon receipt of a certification from a
    creditor agency that the due process requirements enumerated in 31
    U.S.C. 3716(a) have been met. The certification of a debt in
    accordance with paragraph (b)(5) of this section will satisfy this
    requirement. If such a waiver is granted, only the Data Integrity
    Board of the Department of the Treasury is required to oversee any
    matching activities, in accordance with 31 U.S.C. 3716(g). This
    waiver authority does not apply to offsets conducted under
    paragraphs (c) and (d) of this section.

\(c\) [Non-centralized administrative offset]{.underline}. (1)
Generally, non-centralized administrative offsets are ad hoc
case-by-case offsets that the Commission conducts, at the Commission's
discretion, internally or in cooperation with the agency certifying or
authorizing payments to the debtor. Unless otherwise prohibited by law,
when centralized administrative offset is not available or appropriate,
past due, legally enforceable nontax delinquent debts may be collected
through non-centralized administrative offset. In these cases, a
creditor agency may make a request directly to a payment-authorizing
agency to offset a payment due a debtor to collect a delinquent debt.
For example, it may be appropriate for a creditor agency to request that
the Office of Personnel Management (OPM) offset a Federal employee\'s
lump-sum payment upon leaving Government service to satisfy an unpaid
advance.

(2) The Commission will make reasonable effort to ensure that such
    offsets may occur only after:

> \(i\) The debtor has been provided due process as set forth in
> paragraph (b)(4) of this section (subject to any waiver by the
> debtor); and
>
> \(ii\) The payment authorizing agency has received written
> certification from the Commission that the debtor owes the past due,
> legally enforceable delinquent debt in the amount stated, and that the
> creditor agency has fully complied with its regulations concerning
> administrative offset.

(3) Payment authorizing agencies shall comply with offset requests by
    creditor agencies to collect debts owed to the United States, unless
    the offset would not be in the best interests of the United States
    with respect to the program of the payment authorizing agency, or
    would otherwise be contrary to law. Appropriate use should be made
    of the cooperative efforts of other agencies in effecting collection
    by administrative offset.

(4) When collecting multiple debts by non-centralized administrative
    offset, agencies should apply the recovered amounts to those debts
    in accordance with the best interests of the United States, as
    determined by the facts and circumstances of the particular case,
    particularly the applicable statute of limitations.

[§ 1.1913 Administrative offset against amounts payable from Civil
Service Retirement and Disability Fund.]{.underline}

> Upon providing the Office of Personnel Management (OPM) with written
> certification that a debtor has been afforded the procedures provided
> in paragraph 1.1912(b)(4), the Commission may request OPM to offset a
> debtor\'s anticipated or future benefit payments under the Civil
> Service Retirement and Disability Fund (Fund) in accordance with
> regulations codified at 5 CFR 831.1801-831.1808. Upon receipt of such
> a request, OPM will identify and "flag" a debtor's account in
> anticipation of the time when the debtor requests, or becomes eligible
> to receive, payments from the Fund. This will satisfy any requirement
> that offset be initiated prior to the expiration of the time
> limitations referenced in paragraph 1.1914(a)(4).

[§ 1.1914 Collection in installments.]{.underline}

> \(a\) Subject to the Commission's rules pertaining to the installment
> loan program (*see* e.g., 47 CFR Subpart Q, paragraph 1.2110(g)) or
> other agreements among the parties, the terms of which will control,
> whenever feasible, the Commission shall collect the total amount of a
> debt in one lump sum. If a debtor is financially unable to pay a debt
> in one lump sum, the Commission, in its sole discretion, may accept
> payment in regular installments. The Commission will obtain financial
> statements from debtors who represent that they are unable to pay in
> one lump sum and which are able to verify independently such
> representations ([see]{.underline} 31 CFR 902.2(g)). The Commission
> will require and obtain a legally enforceable written agreement from
> the debtor that specifies all of the terms of the arrangement,
> including, as appropriate, sureties and other indicia of
> creditworthiness ([see]{.underline} Federal Credit Reform Act of 1990,
> 2 USC 661, [et seq]{.underline}., OMB Circular A-129), and that
> contains a provision accelerating the debt in the event of default.
>
> \(b\) The size and frequency of installment payments should bear a
> reasonable relation to the size of the debt and the debtor's ability
> to pay. If possible, the installment payments will be sufficient in
> size and frequency to liquidate the debt in three years or less.
>
> \(c\) Security for deferred payments will be obtained in appropriate
> cases. The Commission may accept installment payments notwithstanding
> the refusal of the debtor to execute a written agreement or to give
> security, at the Commission's option.
>
> \(d\) The Commission may deny the extension of credit to any debtor
> who fails to provide the records requested or fails to show an ability
> to pay the debt.

[§ 1.1915 Exploration of compromise.]{.underline}

> The Commission may attempt to effect compromise, preferably during the
> course of personal interviews, in accordance with the standards set
> forth in Part 902 of the Federal Claims Collection Standards (31 CFR
> Part 902). The Commission will also consider a request submitted by
> the debtor to compromise the debt. Such requests should be submitted
> in writing with full justification of the offer and addressing the
> bases for compromise at 31 CFR 902.2. Debtors will provide full
> financial information to support any request for compromise based on
> the debtor's inability to pay the debt. Unless otherwise provided by
> law, when the principal balance of a debt, exclusive of interest,
> penalties, and administrative costs, exceeds \$100,000 or any higher
> amount authorized by the Attorney General, the authority to accept the
> compromise rests with the Department of Justice. The Commission will
> evaluate an offer, using the factors set forth in 31 CFR 902.2 and, as
> appropriate, refer the offer with the appropriate financial
> information to the Department of Justice. Department of Justice
> approval is not required if the Commission rejects a compromise offer.

[§ 1.1916 Suspending or terminating collection action.]{.underline}

> The suspension or termination of collection action shall be made in
> accordance with the standards set forth in Part 903 of the Federal
> Claims Collection Standards (31 CFR Part 903).

[§ 1.1917 Referrals to the Department of Justice and transfer of
delinquent debt to the Secretary of Treasury.]{.underline}

(a) Referrals to the Department of Justice shall be made in accordance
    with the standards set forth in Part 904 of the Federal Claims
    Collection Standards (31 CFR Part 904).

> \(b\) The DCIA includes separate provisions governing the requirements
> that the Commission transfer delinquent debts to Treasury for general
> collection purposes (cross-servicing) in accordance with 31 U.S.C.
> 3711(g)(1) and (2), and notify Treasury of delinquent debts for the
> purpose of administrative offset in accordance with 31 U.S.C.
> 3716(c)(6). Title 31, United States Code Section 3711(g)(1) requires
> the Commission to transfer to Treasury all collection activity for a
> given debt. Under section 3711(g), Treasury will use all appropriate
> debt collection tools to collect the debt, including referral to a
> designated debt collection center or private collection agency, and
> administrative offset. Once a debt has been transferred to Treasury
> pursuant to the procedures at 31 CFR 285.12, the Commission will cease
> all collection activity related to that debt.
>
> \(c\) All non-tax debts of claims owed to the Commission that have
> been delinquent for a period of 180 days shall be transferred to the
> Secretary of the Treasury. Debts which are less than 180 days
> delinquent may also be referred to the Treasury. Upon such transfer
> the Secretary of the Treasury shall take appropriate action to collect
> or terminate collection actions on the debt or claim. A debt is
> past-due if it has not been paid by the date specified in the
> Commission's initial written demand for payment or applicable
> agreement or instrument (including a post-delinquency payment
> agreement) unless other satisfactory payment arrangements have been
> made.

[§ 1.1918 Use of consumer reporting agencies.]{.underline}

(a) The term "[individual]{.underline}" means a natural person, and the
    term "consumer reporting agency" has the meaning provided in the
    Federal Claims Collection Act, as amended, 31 U.S.C. 3701(a)(3) or
    the Fair Credit Reporting Act, 15 U.S.C. 168a(f).

(b) The Commission may disclose to a consumer reporting agency, or
    provide information to the Treasury who may disclose to a consumer
    reporting agency from a system of records, information that an
    individual is responsible for a claim. System information includes,
    for example, name, taxpayer identification number, business and home
    address, business and home telephone numbers, the amount of the
    debt, the amount of unpaid principle, the late period, and the
    payment history. Before the Commission reports the information, it
    will;

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(1) Provide notice required by section 5 U.S.C. 552a(e)(4) that
    information in the system may be disclosed to a consumer reporting
    agency;

(2) Review the claim to determine that it is valid and overdue;

(3) Make reasonable efforts using information provided by the debtor in
    Commission files to notify the debtor, unless otherwise specified
    under the terms of a contract or agreement‑‑

> \(i\) That payment of the claim is overdue;
>
> \(ii\) That, within not less than 60 days from the date of the notice,
> the Commission intends to disclose to a consumer reporting agency that
> the individual is responsible for that claim;
>
> \(iii\) That information in the system of records may be disclosed to
> the consumer reporting agency; and
>
> \(iv\) That unless otherwise specified and agreed to in an agreement,
> contract, or by the terms of a note and/or security agreement, or that
> the debt arises from the nonpayment of a Commission fee, penalty, or
> other statutory or regulatory obligations, the individual will be
> provided with an explanation of the claim, and, as appropriate,
> procedures to dispute information in the records of the agency about
> the claim, and to administrative appeal or review of the claim; and

\(4\) Review Commission records to determine that the individual has
not‑‑

> \(i\) Repaid or agreed to repay the claim under a written repayment
> plan agreed to and signed by both the individual and the Commission's
> representative; or, if eligible,
>
> \(ii\) Filed for review of the claim under paragraph (g) of this
> section;
>
> \(c\) The Commission shall (1) disclose to each consumer reporting
> agency to which the original disclosure was made a substantial change
> in the condition or amount of the claim;

\(2\) Verify or correct promptly information about the claim, on request
of a consumer reporting agency for verification of any or all
information so disclosed; and

\(3\) Obtain assurances from each consumer reporting agency that they
are complying with all laws of the United States relating to providing
consumer credit information.

\(d\) The Commission shall ensure that information disclosed to the
consumer reporting agency is limited to‑‑

\(1\) Information necessary to establish the identity of the individual,
including name, address, and taxpayer identification number;

\(2\) The amount, status, and history of the claim; and

\(3\) The agency or program under which the claim arose.

\(e\) All accounts in excess of \$100 that have been delinquent more
than 31 days will normally be referred to a consumer reporting agency.

\(f\) Under the same provisions as described above, the Commission may
disclose to a credit reporting agency, information relating to a debtor
other than a natural person. Such commercial debt accounts are not
covered by the Privacy Act. Moreover, commercial debt accounts are
subject to the Commission's rules concerning debt obligation, including
Part 1 rules related to auction debt, and the agreements of the parties.

[§ 1.1919 Contracting for collection services]{.underline}.

(a) Subject to the provisions of paragraph (b) of this section, the
    Commission may contract with private collection contractors, as
    defined in 31 U.S.C. 3701(f), to recover delinquent debts. In that
    regard, the Commission:

> \(1\) Retains the authority to resolve disputes, compromise debts,
> suspend or terminate collection activity, and refer debts for
> litigation;

\(2\) Restricts the private collection contractor from offering, as an
incentive for payment, the opportunity to pay the debt less the private
collection contractor\'s fee unless the Commission has granted such
authority prior to the offer;

\(3\) Specifically requires, as a term of its contract with the private
collection contractor, that the private collection contractor is subject
to the Privacy Act of 1974 to the extent specified in 5 U.S.C. 552a(m),
and to applicable Federal and state laws and regulations pertaining to
debt collection practices, including but not limited to the Fair Debt
Collection Practices Act, 15 U.S.C. 1692; and

\(4\) The private collection contractor is required to account for all
amounts collected.

\(b\) Although the Commission will use government-wide debt collection
contracts to obtain debt collection services provided by private
collection contractors, the Commission may refer debts to private
collection contractors pursuant to a contract between the Commission and
the private collection contractor in those situations where the
Commission is not required to transfer debt to the Secretary of the
Treasury for debt collection.

\(c\) Agencies may fund private collection contractor in accordance with
31 U.S.C. 3718(d), or as otherwise permitted by law.

\(d\) The Commission may enter into contracts for locating and
recovering assets of the United States, such as unclaimed assets, but it
will first establish procedures that are acceptable to Treasury before
entering into contracts to recover assets of the United States held by a
state government or a financial institution.

\(e\) The Commission may enter into contracts for debtor asset and
income search reports. In accordance with 31 U.S.C. 3718(d), such
contracts may provide that the fee a contractor charges the Commission
for such services may be payable from the amounts recovered, unless
otherwise prohibited by statute. In that regard, fees for those services
will be added to the amount collected and are part of the administrative
collection costs passed on to the debtor. [See]{.underline} section
1.1940.

[§§ 1.1920 through 1.1924]{.underline} \[Reserved\]

[§ 1.1925 Purpose]{.underline}.

Sections 1925 through 1939 of this subchapter apply to individuals who
are employees of the Commission and provides the standards to be
followed by the Commission in implementing 5 U.S.C. 5514; sec. 8(1) of
E.O. 11609; redesignated in sec. 2-1 of E.O. 12107 to recover a debt
from the pay account of a Commission employee. It also establishes
procedural guidelines to recover debts when the employee's creditor and
paying agencies are not the same.

[§ 1.1926 Scope.]{.underline}

\(a\) [Coverage]{.underline}. This section applies to the Commission and
employees as defined by section 1.1901.

\(b\) [Applicability]{.underline}. This section and 5 U.S.C. 5514 apply
in recovering certain debts by offset, except where the employee
consents to the recovery, from the current pay account of that employee.
Because it is an administrative offset, debt collection procedures for
salary offset which are not specified in 5 U.S.C. 5514 and these
regulations should be consistent with the provisions of the Federal
Claims Collection Standards (31 CFR Parts 900-904).

\(1\) [Excluded debts or claims]{.underline}. The procedures contained
in this section do not apply to debts or claims arising under the
Internal Revenue Code of 1954, as amended (26 U.S.C. 1 [et
seq]{.underline}.), the Social Security Act (42 U.S.C. 301 [et
seq]{.underline}.) or the tariff laws of the United States, or to any
case where collection of a debt by salary offset is explicitly provided
for or prohibited by another statute ([e.g.]{.underline} travel advances
in 5 U.S.C. 5705 and employee training expenses in 5 U.S.C. 4108).

\(2\) This section does not preclude an employee from requesting waiver
of an erroneous payment under 5 U.S.C. 5584, 10 U.S.C. 2774, or 32
U.S.C. 716, or in any way questioning the amount or validity of a debt,
in the manner prescribed by the Commissioner. Similarly, this subpart
does not preclude an employee from requesting waiver of the collection
of a debt under any other applicable statutory authority.

\(c\) [Time limit]{.underline}. Under 31 CFR 901.3(a)(4) offset may not
be initiated more than 10 years after the Government\'s right to collect
the debt first accrued, unless an exception applies as stated in section
901.3(a)(4).

[§ 1.1927 Notification]{.underline}.

\(a\) Salary offset deductions will not be made unless the Managing
Director of the Commission, or the Managing Director's designee,
provides to the employee at least 30 days before any deduction, written
notice stating at a minimum:

\(1\) The Commission's determination that a debt is owed, including the
origin, nature, and amount of the debt;

\(2\) The Commission's intention to collect the debt by means of
deduction from the employee\'s current disposable pay account;

\(3\) 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) and the intention to continue the deductions until
the debt is paid in full or otherwise resolved;

\(4\) An explanation of the Commission's policy concerning interest,
penalties, and administrative costs (sections 1.1940 and 1.1941 of this
subchapter), a statement that such assessments must be made unless
excused in accordance with the FCCS;

\(5\) The employee's right to inspect and copy Government records
relating to the debt or, if the employee or his or her representative
cannot personally inspect the records, to request and receive a copy of
such records.

\(6\) If not previously provided, the opportunity (under terms agreeable
to the Commission) 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. The agreement must be in
writing, signed by both the employee and the Managing Director (or
designee) of the Commission and documented in Commission files (see the
FCCS).

\(7\) The employee's right to a hearing conducted by an official
arranged by the Commission (an administrative law judge, or
alternatively, a hearing official not under the control of the head of
the Commission) if a petition is filed as prescribed by this subpart.

\(8\) The method and time period for petitioning for a hearing;

\(9\) That the timely filing of a petition for hearing will stay the
commencement of collection proceedings;

\(10\) That the final decision in the hearing (if one is requested) will
be issued at the earliest practical date, but not later than 60 days
after the filing of the petition requesting the hearing unless the
employee requests and the hearing official grants a delay in the
proceedings;

\(11\) That any knowingly false, misleading, or frivolous statements,
representations, or evidence may subject the employee to:

\(i\) Disciplinary procedures appropriate under Chapter 75 of Title 5,
United States Code, Part 752 of Title 5, Code of Federal Regulations, or
any other applicable statutes or regulations.

\(ii\) Penalties under the False Claims Act sections 3729‑3731 of Title
31, United States Code, or any other applicable statutory authority; or

\(iii\) Criminal penalties under sections 286, 287, 1001, and 1002 of
Title 18, United States Code, or any other applicable statutory
authority.

\(12\) Any other rights and remedies available to the employee under
statutes or regulations governing the program for which the collection
is being made; and

\(13\) Unless there are applicable contractual or statutory provisions
to the contrary, that amounts paid on or deducted for the debt which are
later waived or found not owed to the United States will be promptly
refunded to the employee.

\(b\) Notifications under this section shall be hand delivered with a
record made of the date of delivery, or shall be mailed by certified
mail, return receipt requested.

\(c\) No notification, hearing, written responses or final decisions
under this regulation are required by the Commission for:

(1) Any adjustment to pay arising out of an employee's election of
    coverage, or change in coverage, under a Federal benefit program
    requiring periodic deductions from pay, if the amount to be
    recovered was accumulated over four pay periods or less;

(2) A routine intra-Commission adjustment of pay that is made to correct
    an overpayment of pay attributable to clerical or administrative
    errors or delays in processing pay documents, if the overpayment
    occurred within the four pay periods preceding the adjustment, or as
    soon thereafter as practical, the individual is provided written
    notice of the nature and the amount of the adjustment and point of
    contact for contesting such adjustment; or

(3) Any adjustment to collect a debt amounting to \$50 or less, if, at
    the time of such adjustment, or as soon thereafter as practical, the
    individual is provided written notice of the nature and the amount
    of the adjustment and a point of contact for contesting such
    adjustment.

[§ 1.1928 Hearing]{.underline}.

\(a\) [Petition for hearing]{.underline}. (1) An employee may request a
hearing by filing a written petition with the Managing Director of the
Commission, or designated official stating why the employee believes the
determination of the Commission concerning the existence or the amount
of the debt is in error.

\(2\) The employee\'s petition must be executed under penalty of perjury
by the employee and fully identify and explain with reasonable
specificity all the facts, evidence and witnesses, if any, which the
employee believes support his or her position.

\(3\) The petition must be filed no later than fifteen (15) calendar
days from the date that the notification was hand delivered or the date
of delivery by certified mail, return receipt requested.

\(4\) If a petition is received after the fifteenth (15) calendar day
deadline referred to paragraph (a) (3) of this section, the Commission
will nevertheless accept the petition if the employee can show, in
writing, that the delay was due to circumstances beyond his or her
control, or because of failure to receive notice of the time limit
(unless otherwise aware of it).

\(5\) If a petition is not filed within the time limit specified in
paragraph (a) (3) of this section, and is not accepted pursuant to
paragraph (a)(4) of this section, the employee\'s right to hearing will
be considered waived, and salary offset will be implemented by the
Commission.

\(b\) [Type of hearing]{.underline}. (1) The form and content of the
hearing will be determined by the hearing official who shall be a person
outside the control or authority of the Commission except that nothing
herein shall be construed to prohibit the appointment of an
administrative law judge by the Commission. In determining the type of
hearing, the hearing officer will consider the nature and complexity of
the transaction giving rise to the debt. The hearing may be conducted as
an informal conference or interview, in which the Commission and
employee will be given a full opportunity to present their respective
positions, or as a more formal proceeding involving the presentation of
evidence, arguments and written submissions.

\(2\) The employee may represent him or herself, or may be represented
by an attorney.

\(3\) The hearing official shall maintain a summary record of the
hearing.

\(4\) The decision of the hearing officer shall be in writing, and shall
state:

\(i\) The facts purported to evidence the nature and origin of the
alleged debt;

\(ii\) The hearing official\'s analysis, findings, and conclusions, in
the light of the hearing, as to‑‑

\(A\) The employee's and/or agency's grounds,

\(B\) The amount and validity of the alleged debt, and,

\(C\) The repayment schedule, if applicable.

\(5\) The decision of the hearing official shall constitute the final
administrative decision of the Commission.

[§ 1.1929 Deduction from employee's pay]{.underline}.

\(a\) Deduction by salary offset, from an employee's current disposable
pay, shall be subject to the following conditions:

\(1\) Ordinarily, debts to the United States will be collected in full,
in one lump sum. This will be done when funds are available for payment
in one lump sum. 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 for an officially established pay interval, collection
must be made in installments.

\(2\) The size of the installment deductions will bear a reasonable
relationship to the size of the debt and the employee's ability to pay
([see]{.underline} the FCCS). However, the installments will 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.

\(3\) Deduction will generally commence with the next full pay interval
(ordinarily the next biweekly pay period) following the date: of the
employee\'s written consent to salary offset, the waiver of hearing, or
the decision issued by the hearing officer.

\(4\) Installment deductions will be pro-rated for a period not greater
than the anticipated period of employment except as provided in section
1.1930.

[§ 1.1930 Liquidation from final check or recovery from other
payment]{.underline}.

\(a\) If the employee retires or resigns or if his or her employment or
period of active duty ends before collection of the debt is completed,
offset of the entire remaining balance of the debt may be made from a
final payment of any nature, including, but not limited to a final
salary payment or lump‑sum leave due the employee as the date of
separation, to such extent as is necessary to liquidate the debt.

\(b\) If the debt cannot be liquidated by offset from a final payment,
offset may be made from later payments of any kind due from the United
States, including, but not limited to, the Civil Service Retirement and
Disability Fund, pursuant to section 1.1913.

[§ 1.1931 Non‑waiver of rights by payments]{.underline}.

An employee's involuntary payment of all or any portion of a debt being
collected under 5 U.S.C. 5514 shall not be construed as a waiver of any
rights which the employee may have under 5 U.S.C. 5514 or any other
provision of contract or law, unless statutory or contractual provisions
provide to the contrary.

[§ 1.1932 Refunds]{.underline}.

\(a\) Refunds shall promptly be made when‑‑ (1) A debt is waived or
otherwise found not owing to the United States (unless expressly
prohibited by statute or regulation); or

\(2\) The employee's paying agency is directed by an administrative or
judicial order to refund amounts deducted from his or her current pay.

\(b\) Refunds do not bear interest unless required or permitted by law
or contract.

[§ 1.1933 Interest, penalties and administrative costs]{.underline}.

The assessment of interest, penalties and administrative costs shall be
in accordance with sections 1.1940 and 1.1941.

[§ 1.1934 Recovery when the Commission is not creditor
agency]{.underline}.

\(a\) [Responsibilities of creditor agency]{.underline}. Upon completion
of the procedures established under 5 U.S.C. 5514, the creditor agency
must do the following:

\(1\) Must certify, in writing, that the employee owes the debt, the
amount and basis of the debt, the date on which payment(s) is due, the
date of the Government's right to collect the debt first accrued, and
that the creditor agency's regulations implementing 5 U.S.C. 5514 have
been approved by OPM.

\(2\) If the collection must be made in installments, the creditor
agency also must advise the Commission of the number of installments to
be collected, the amount of each installment, and the commencement date
of the first installment (if a date other than the next officially
established pay period is required).

\(3\) Unless the employee has consented to the salary offset in writing
or signed a statement acknowledging receipt of the required procedures,
and the written consent or statement is forwarded to the Commission, the
creditor agency also must advise the Commission of the action(s) taken
under 5 U.S.C. 5514(b) and give the date(s) the action(s) was taken.

\(4\) Except as otherwise provided in this paragraph, the creditor
agency must submit a debt claim containing the information specified in
paragraphs (a)(1) through (a)(3) of this section and an installment
agreement (or other instruction on the payment schedule), if applicable
to the Commission.

\(5\) If the employee is in the process of separating, the creditor
agency must submit its claim to the Commission for collection pursuant
to section 1.1930. The Commission will certify the total amount of its
collection and provide copies to the creditor agency and the employee as
stated in paragraph (c)(1) of this section. If the Commission is aware
that the employee is entitled to payments from the Civil Service
Retirement and Disability Fund, or other similar payments, it must
provide written notification to the agency responsible for making such
payments that the debtor owes a debt (including the amount) and that
there has been full compliance with the provisions of this section.
However, the creditor agency must submit a properly certified claim to
the agency responsible for making such payments before collection can be
made.

\(6\) If the employee is already separated and all payments from the
Commission have been paid, the creditor agency may request, unless
otherwise prohibited, that money due and payable to the employee from
the Civil Service Retirement and Disability Fund (5 CFR 831.1801 [et
seq]{.underline}.), or other similar funds, be administratively offset
to collect the debt. (31 U.S.C. 3716 and 4 CFR 102.4)

\(b\) [Responsibilities of the Commission]{.underline} (1) [Complete
claim]{.underline}. When the Commission receives a properly certified
debt claim from a creditor agency, deductions should be scheduled to
begin prospectively at the next official established pay interval. The
Commission will notify the employee that the Commission has received a
certified debt claim from the creditor agency (including the amount) and
written notice of the date deductions from salary will commence and of
the amount of such deductions.

\(2\) [Incomplete claim]{.underline}. When the Commission receives an
incomplete debt claim from a creditor agency, the Commission will return
the debt claim with a notice that procedures under 5 U.S.C. 5514 and
this subpart must be provided, and a properly certified debt claim
received, before action will be taken to collect from the employee\'s
current pay account.

\(3\) [Review]{.underline}. The Commission will not review the merits of
the creditor agency\'s determination with respect to the amount or
validity of the debt certified by the creditor agency.

\(c\) Employees who transfer from one paying agency to another.

\(1\) If, after the creditor agency has submitted the debt claim to the
Commission, the employee transfers to a position served by a different
paying agency before the debt is collected in full, the Commission must
certify the total amount of the collection made on the debt. One copy of
the certification must be furnished to the employee, another to the
creditor agency along with notice of employee\'s transfer. However, the
creditor agency must submit a properly certified claim to the new paying
agency before collection can be resumed.

\(2\) When an employee transfers to another paying agency, the creditor
agency need not repeat the due process procedures described by 5 U.S.C.
5514 and this subpart to resume the collection. However, the creditor
agency is responsible for reviewing the debt upon receiving the former
paying agency\'s notice of the employee\'s transfer to make sure the
collection is resumed by the new paying agency.

[§ 1.1935 Obtaining the services of a hearing official]{.underline}.

\(a\) When the debtor does not work for the creditor agency and the
creditor agency cannot provide a prompt and appropriate hearing before
an administrative law judge or before a hearing official furnished
pursuant to another lawful arrangement, the creditor agency may contact
an agent of the Commission designated in Appendix A of 5 CFR part 581
for a hearing official, and the Commission will then cooperate as
provided by the FCCS and provide a hearing official.

\(b\) When the debtor works for the creditor agency, the creditor agency
may contact any agent (of another agency) designated in Appendix A of 5
CFR part 581 to arrange for a hearing official. Agencies must then
cooperate as required by the FCCS and provide a hearing official.

\(c\) The determination of a hearing official designated under this
section is considered to be an official certification regarding the
existence and amount of the debt for purposes of executing salary offset
under 5 U.S.C. 5514. A creditor agency may make a certification to the
Secretary of the Treasury under 31 CFR 550.1108 or a paying agency under
31 CFR 550.1109 regarding the existence and amount of the debt based on
the certification of a hearing official. If a hearing official
determines that a debt may not be collected via salary offset, but the
creditor agency finds that the debt is still valid, the creditor agency
may still seek collection of the debt through other means, such as
offset of other Federal payments, litigation, etc.

[§ 1.1936 Administrative Wage Garnishment.]{.underline}

\(a\) [Purpose.]{.underline} This section provides procedures for the
Commission to collect money from a debtor's disposable pay by means of
administrative wage garnishment to satisfy delinquent non-tax debt owed
to the United States.

\(b\) [Scope]{.underline}. (1) This section applies to
Commission-administered programs that give rise to a delinquent nontax
debt owed to the United States and to the Commission's pursuit of
recovery of such debt.

> \(2\) This section shall apply notwithstanding any provision of State
> law.
>
> \(3\) Nothing in this section precludes the compromise of a debt or
> the suspension or termination of collection action in accordance with
> applicable law. See, for example, the Federal Claims Collection
> Standards (FCCS), 31 CFR parts 900 through 904.
>
> \(4\) The receipt of payments pursuant to this section does not
> preclude the Commission from pursuing other debt collection remedies,
> including the offset of Federal payments to satisfy delinquent nontax
> debt owed to the United States. The Commission may pursue such debt
> collection remedies separately or in conjunction with administrative
> wage garnishment.
>
> \(5\) This section does not apply to the collection of delinquent
> nontax debt owed to the Commission from the wages of Federal employees
> from their Federal employment. Federal pay is subject to the Federal
> salary offset procedures set forth in 5 U.S.C. 5514, sections 1.1925
> through 1.1935, and other applicable laws.
>
> \(6\) Nothing in this section requires the Commission to duplicate
> notices or administrative proceedings required by contract or other
> laws or regulations.

\(c\) [Definitions]{.underline}. In addition to the definitions set
forth in section 1.1901 as used in this section, the following
definitions shall apply:

(1) "[Business day means Monday through Friday]{.underline}". For
    purposes of computation, the last day of the period will be included
    unless it is a Federal legal holiday.

\(2\) "[Certificate of service]{.underline}" means a certificate signed
by a Commission official indicating the nature of the document to which
it pertains, the date of mailing of the document, and to whom the
document is being sent.

\(3\) "[Day means calendar day]{.underline}". For purposes of
computation, the last day of the period will be included unless it is a
Saturday, a Sunday, or a Federal legal holiday.

(4) "[Disposable pay]{.underline}" means that part of the debtor's
    compensation (including, but not limited to, salary, bonuses,
    commissions, and vacation pay) from an employer remaining after the
    deduction of health insurance premiums and any amounts required by
    law to be withheld.

(5) "[Amounts required by law to be withheld]{.underline}" include
    amounts for deductions such as social security taxes and withholding
    taxes, but do not include any amount withheld pursuant to a court
    order.

(6) "[Employer]{.underline}" means a person or entity that employs the
    services of others and that pays their wages or salaries. The term
    employer includes, but is not limited to, State and local
    Governments, but does not include an agency of the Federal
    Government.

(7) "[Garnishment]{.underline}" means the process of withholding amounts
    from an employee's disposable pay and the paying of those amounts to
    a creditor in satisfaction of a withholding order.

(8) "[Withholding order]{.underline}" means any order for withholding or
    garnishment of pay issued by an agency, or judicial or
    administrative body. For purposes of this section, the terms "wage
    garnishment order" and "garnishment order" have the same meaning as
    "withholding order."

\(d\) [General rule]{.underline}. Whenever the Commission determines
that a delinquent debt is owed by an individual, the Commission may
initiate proceedings administratively to garnish the wages of the
delinquent debtor as governed by procedures prescribed by 31 CFR 285.
Wage garnishment will usually be performed for the Commission by the
Treasury as part of the debt collection processes for Commission debts
referred to Treasury for further collection action.

\(e\) [Notice requirements]{.underline}. (1) At least 30 days before the
initiation of garnishment proceedings, the Commission shall mail, by
first class mail, to the debtor's last known address a written notice
informing the debtor of:

(i) The nature and amount of the debt;

(ii) The intention of the Commission to initiate proceedings to collect
     the debt through deductions from pay until the debt and all
     accumulated interest, penalties and administrative costs are paid
     in full; and

(iii) An explanation of the debtor's rights, including those set forth
      in paragraph (e)(2) of this section, and the time frame within
      which the debtor may exercise his or her rights.

\(2\) The debtor shall be afforded the opportunity:

(i) To inspect and copy agency records related to the debt;

(ii) To enter into a written repayment agreement with the Commission
     under terms agreeable to the Commission; and

> \(iii\) For a hearing in accordance with paragraph (f) of this section
> concerning the existence or the amount of the debt or the terms of the
> proposed repayment schedule under the garnishment order. However, the
> debtor is not entitled to a hearing concerning the terms of the
> proposed repayment schedule if these terms have been established by
> written agreement under paragraph (e)(2)(ii) of this section.

\(3\) The Commission will keep a copy of a certificate of service
indicating the date of mailing of the notice. The certificate of service
may be retained electronically so long as the manner of retention is
sufficient for evidentiary purposes.

\(f\) [Hearing]{.underline}. Pursuant to 31 CFR 285.11(f)(1), the
Commission hereby adopts by reference the hearing procedures of 31 CFR
285.11(f).

\(g\) [Wage garnishment order]{.underline}. (1) Unless the Commission
receives information that the Commission believes justifies a delay or
cancellation of the withholding order, the Commission will send, by
first class mail, a withholding order to the debtor's employer within 30
days after the debtor fails to make a timely request for a hearing
([i.e.]{.underline}, within 15 business days after the mailing of the
notice described in paragraph (e)(1) of this section), or, if a timely
request for a hearing is made by the debtor, within 30 days after a
final decision is made by the Commission to proceed with garnishment, or
as soon as reasonably possible thereafter.

\(2\) The withholding order sent to the employer under paragraph (g)(1)
of this section shall be in a form prescribed by the Secretary of the
Treasury on the Commission's letterhead and signed by the head of the
Commission or his/her delegate. The order shall contain only the
information necessary for the employer to comply with the withholding
order, including the debtor's name, address, and social security number,
as well as instructions for withholding and information as to where
payments should be sent.

(3)The Commission will keep a copy of a certificate of service
indicating the date of mailing of the order. The certificate of service
may be retained electronically so long as the manner of retention is
sufficient for evidentiary purposes.

\(h\) [Certification by employer]{.underline}. Along with the
withholding order, the Commission shall send to the employer a
certification in a form prescribed by the Secretary of the Treasury. The
employer shall complete and return the certification to the Commission
within the time frame prescribed in the instructions to the form
addressing matters such as information about the debtor\'s employment
status and disposable pay available for withholding.

\(i\) [Amounts withheld]{.underline}. (1) After receipt of the
garnishment order issued under this section, the employer shall deduct
from all disposable pay paid to the applicable debtor during each pay
period the amount of garnishment described in paragraph (i)(2) of this
section.

\(2\) Subject to the provisions of paragraphs (i)(3) and (i)(4) of this
section, the amount of garnishment shall be the lesser of:

> \(i\) The amount indicated on the garnishment order up to 15% of the
> debtor\'s disposable pay; or
>
> \(ii\) The amount set forth in 15 U.S.C. 1673(a)(2) (Restriction on
> Garnishment). The amount set forth at 15 U.S.C. 1673(a)(2) is the
> amount by which a debtor\'s disposable pay exceeds an amount
> equivalent to thirty times the minimum wage. [See]{.underline} 29 CFR
> 870.10.

\(3\) When a debtor\'s pay is subject to withholding orders with
priority the following shall apply:

\(i\) Unless otherwise provided by Federal law, withholding orders
issued under this section shall be paid in the amounts set forth under
paragraph (i)(2) of this section and shall have priority over other
withholding orders which are served later in time. Notwithstanding the
foregoing, withholding orders for family support shall have priority
over withholding orders issued under this section.

\(ii\) If amounts are being withheld from a debtor's pay pursuant to a
withholding order served on an employer before a withholding order
issued pursuant to this section, or if a withholding order for family
support is served on an employer at any time, the amounts withheld
pursuant to the withholding order issued under this section shall be the
lesser of:

(A) The amount calculated under paragraph (i)(2) of this section, or

(B) An amount equal to 25% of the debtor's disposable pay less the
    amount(s) withheld under the withholding order(s) with priority.

> \(iii\) If a debtor owes more than one debt to the Commission, the
> Commission may issue multiple withholding orders provided that the
> total amount garnished from the debtor\'s pay for such orders does not
> exceed the amount set forth in paragraph (i)(2) of this section. For
> purposes of this paragraph (i)(3)(iii), the term
> "[agency]{.underline}" refers to the Commission that is owed the debt.
>
> \(4\) An amount greater than that set forth in paragraphs (i)(2) and
> (i)(3) of this section may be withheld upon the written consent of
> debtor.

\(5\) The employer shall promptly pay to the Commission all amounts
withheld in accordance with the withholding order issued pursuant to
this section.

\(6\) An employer shall not be required to vary its normal pay and
disbursement cycles in order to comply with the withholding order.

\(7\) Any assignment or allotment by an employee of his earnings shall
be void to the extent it interferes with or prohibits execution of the
withholding order issued under this section, except for any assignment
or allotment made pursuant to a family support judgment or order.

\(8\) The employer shall withhold the appropriate amount from the
debtor\'s wages for each pay period until the employer receives
notification from the Commission to discontinue wage withholding. The
garnishment order shall indicate a reasonable period of time within
which the employer is required to commence wage withholding.

\(j\) [Exclusions from garnishment]{.underline}. The Commission may not
garnish the wages of a debtor who it knows has been involuntarily
separated from employment until the debtor has been reemployed
continuously for at least 12 months. The debtor has the burden of
informing the Commission of the circumstances surrounding an involuntary
separation from employment.

\(k\) [Financial hardship]{.underline}. (1) A debtor whose wages are
subject to a wage withholding order under this section, may, at any
time, request a review by the Commission of the amount garnished, based
on materially changed circumstances such as disability, divorce, or
catastrophic illness which result in demonstrated financial hardship.

\(2\) A debtor requesting a review under paragraph (k)(1) of this
section shall submit the basis for claiming that the current amount of
garnishment results in demonstrated financial hardship to the debtor,
along with supporting documentation. The Commission will consider any
information submitted; however, demonstrated financial hardship must be
based on financial records that include Federal and state tax returns,
affidavits executed under the pain and penalty of perjury, and, in the
case of business-related financial hardship ([e.g.]{.underline}, the
debtor is a partner or member of a business-agency relationship) full
financial statements (audited and/or submitted under oath) in accordance
with procedures and standards established by the Commission.

\(3\) If a financial hardship is found, the Commission will downwardly
adjust, by an amount and for a period of time agreeable to the
Commission, the amount garnished to reflect the debtor\'s financial
condition. The Commission will notify the employer of any adjustments to
the amounts to be withheld.

\(l\) [Ending garnishment]{.underline}. (1) Once the Commission has
fully recovered the amounts owed by the debtor, including interest,
penalties, and administrative costs consistent with the FCCS, the
Commission will send the debtor\'s employer notification to discontinue
wage withholding.

\(2\) At least annually, the Commission shall review its debtors'
accounts to ensure that garnishment has been terminated for accounts
that have been paid in full.

\(m\) [Actions prohibited by the employer]{.underline}. An employer may
not discharge, refuse to employ, or take disciplinary action against the
debtor due to the issuance of a withholding order under this section.

\(n\) [Refunds]{.underline}. (1) If a hearing official, at a hearing
held pursuant to paragraph (f)(3) of this section, determines that a
debt is not legally due and owing to the United States, the Commission
shall promptly refund any amount collected by means of administrative
wage garnishment.

\(2\) Unless required by Federal law or contract, refunds under this
section shall not bear interest.

\(o\) [Right of action]{.underline}. The Commission may sue any employer
for any amount that the employer fails to withhold from wages owed and
payable to an employee in accordance with paragraphs (g) and (i) of this
section. However, a suit may not be filed before the termination of the
collection action involving a particular debtor, unless earlier filing
is necessary to avoid expiration of any applicable statute of
limitations period. For purposes of this section, "termination of the
collection action" occurs when the Commission has terminated collection
action in accordance with the FCCS or other applicable standards. In any
event, termination of the collection action will have been deemed to
occur if the Commission has not received any payments to satisfy the
debt from the particular debtor whose wages were subject to garnishment,
in whole or in part, for a period of one (1) year.

§§ 1.1937 through 1.1939 \[Reserved\]

[§ 1.1940 Assessment]{.underline}.

(a) Except as provided in paragraphs (g), (h), and (i) of this section
    or section 1.1941, the Commission shall charge interest, penalties,
    and administrative costs on debts owed to the United States pursuant
    to 31 U.S.C. 3717. The Commission will mail, hand-deliver, or use
    other forms of transmission, including facsimile telecopier service,
    a written notice to the debtor, at the debtor\'s CORES contact
    address ([see]{.underline} section 1.8002(b)) explaining the
    Commission's requirements concerning these charges except where
    these requirements are included in a contractual or repayment
    agreement, or otherwise provided in the Commission's rules, as may
    be amended from time to time. These charges shall continue to accrue
    until the debt is paid in full or otherwise resolved through
    compromise, termination, or waiver of the charges. This provision is
    not intended to modify or limit the terms of any contract, note, or
    security agreement from the debtor, or to modify or limit the
    Commission's rights under its rules with regard to the notice or the
    parties' agreement to waive notice.

(b) The Commission shall charge interest on debts owed the United States
    as follows:

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(1) Interest shall accrue from the date of delinquency, or as otherwise
    provided by the terms of any contract, note, or security agreement,
    regulation, or law.

(2) Unless otherwise established in a contract, note, or security
    agreement, repayment agreement, or by statute, the rate of interest
    charged shall be the rate established annually by the Treasury in
    accordance with 31 U.S.C. 3717. Pursuant to 31 U.S.C. 3717, an
    agency may charge a higher rate of interest if it reasonably
    determines that a higher rate is necessary to protect the rights of
    the United States. The agency should document the reason(s) for its
    determination that the higher rate is necessary.

(3) The rate of interest, as initially charged, shall remain fixed for
    the duration of the indebtedness. When a debtor defaults on a
    repayment agreement and seeks to enter into a new agreement, the
    agency may require payment of interest at a new rate that reflects
    the current value of funds to the Treasury at the time the new
    agreement is executed. Interest shall not be compounded, that is,
    interest shall not be charged on interest, penalties, or
    administrative costs required by this section. If, however, a debtor
    defaults on a previous repayment agreement, charges that accrued but
    were not collected under the defaulted agreement shall be added to
    the principal under the new repayment agreement.

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(c) The Commission shall assess administrative costs incurred for
    processing and handling delinquent debts. The calculation of
    administrative costs may be based on actual costs incurred or upon
    estimated costs as determined by the Commission. Commission
    administrative costs include the personnel and service costs
    ([e.g.]{.underline}, telephone, copier, and overhead) to notify and
    collect the debt, without regard to the success of such efforts by
    the Commission.

(d) Unless otherwise established in a contract, repayment agreement, or
    by statute, the Commission will charge a penalty, pursuant to 31
    U.S.C. 3717(e)(2), currently not to exceed six percent (6%) a year
    on the amount due on a debt that is delinquent for more than 90
    days. This charge shall accrue from the date of delinquency. If the
    rate permitted under 31 U.S.C. 3717 is changed, the Commission will
    apply that rate.

(e) The Commission may increase an "[administrative debt"]{.underline}
    by the cost of living adjustment in lieu of charging interest and
    penalties under this section. "[Administrative debt"]{.underline}
    includes, but is not limited to, a debt based on fines, penalties,
    and overpayments, but does not include a debt based on the extension
    of Government credit, such as those arising from loans and loan
    guaranties. The cost of living adjustment is the percentage by which
    the Consumer Price Index for the month of June of the calendar year
    preceding the adjustment exceeds the Consumer Price Index for the
    month of June of the calendar year in which the debt was determined
    or last adjusted. Increases to administrative debts shall be
    computed annually. Agencies should use this alternative only when
    there is a legitimate reason to do so, such as when calculating
    interest and penalties on a debt would be extremely difficult
    because of the age of the debt.

(f) When a debt is paid in partial or installment payments, amounts
    received by the agency shall be applied first to outstanding
    penalties and administrative cost charges, second to accrued
    interest, and third to the outstanding principal.

(g) The Commission will waive the collection of interest and
    administrative charges imposed pursuant to this section on the
    portion of the debt that is paid within 30 days after the date on
    which interest began to accrue. The Commission will not extend this
    30-day period except for good cause shown of extraordinary and
    compelling circumstances, completely documented and supported in
    writing, submitted and received before the expiration of the first
    30-day period. The Commission may, on good cause shown of
    extraordinary and compelling circumstances, completely documented
    and supported in writing, waive interest, penalties, and
    administrative costs charged under this section, in whole or in
    part, without regard to the amount of the debt, either under the
    criteria set forth in these standards for the compromise of debts,
    or if the agency determines that collection of these charges is
    against equity and good conscience or is not in the best interest of
    the United States.

(h) The Commission retains the common law right to impose interest and
    related charges on debts not subject to 31 U.S.C. 3717.

[§ 1.1941 Exemptions]{.underline}.

\(a\) The preceding sections of this part, to the extent they reflect
remedies or procedures prescribed by the Debt Collection Act of 1982 and
the Debt Collection Improvement Act of 1996, such as administrative
offset, use of credit bureaus, contracting for collection agencies, and
interest and related charges, do not apply to debts arising under, or
payments made under, the Internal Revenue Code of 1986, as amended (26
U.S.C. 1 [et seq.]{.underline}); the Social Security Act (42 U.S.C. 301
[et seq.]{.underline}), except to the extent provided under 42 U.S.C.
404 and 31 U.S.C. 3716(c); or the tariff laws of the United States.
These remedies and procedures, however, may be authorized with respect
to debts that are exempt from the Debt Collection Act of 1982 and the
Debt Collection Improvement Act of 1996, to the extent that they are
authorized under some other statute or the common law.

\(b\) This section should not be construed as prohibiting the use of
these authorities or requirements when collecting debts owed by persons
employed by agencies administering the laws cited in paragraph (a) of
this section unless the debt arose under those laws. However, the
Commission is authorized to assess interest and related charges on debts
which are not subject to 31 U.S.C. 3717 to the extent authorized under
the common law or other applicable statutory authority.

[§ 1.1942 Other sanctions]{.underline}.

The remedies and sanctions available to the Commission in this subpart
are not exclusive. The Commission may impose other sanctions, where
permitted by law, for any inexcusable, prolonged, or repeated failure of
a debtor to pay such a claim. In such cases, the Commission will provide
notice, as required by law, to the debtor prior to imposition of any
such sanction.

§§ 1.1943 through 1.1949 \[Reserved\]

[§ 1.1950 Reporting discharged debts to the Internal Revenue
Service]{.underline}.

(a) In accordance with applicable provisions of the Internal Revenue
    Code and implementing regulations (26 U.S.C. 6050P; 26 C.F.R.
    1.6050P-1), when the Commission discharges a debt for less than the
    full value of the indebtedness, it will report the outstanding
    balance discharged, not including interest, to the Internal Revenue
    Service, using IRS Form 1099‑C or any other form prescribed by the
    Service, when:

    1.  The principle amount of the debt not in dispute is \$600 or
        more; and

    2.  The obligation has not been discharged in a bankruptcy
        proceeding; and

    3.  The obligation is no longer collectible either because the time
        limit in the applicable statute for enforcing collection expired
        during the tax year, or because during the year a formal
        compromise agreement was reached in which the debtor was legally
        discharged of all or a portion of the obligation.

(b) The Treasury will prepare the Form 1099-C for those debts
    transferred to Treasury for collection and deemed uncollectible.

[§ 1.1951 Offset against tax refunds]{.underline}.

The Commission will take action to effect administrative offset against
tax refunds due to debtors under 26 U.S.C. 6402, in accordance with the
provisions of 31 U.S.C. 3720A and Treasury Department regulations.

[§ 1.1952 Use and disclosure of mailing addresses]{.underline}.

(a) When attempting to locate a debtor in order to collect or compromise
    a debt under this subpart or other authority, the Commission may
    send a request to the Secretary of the Treasury (or designee) to
    obtain a debtor\'s mailing address from the records of the Internal
    Revenue Service.

(b) The Commission is authorized to use mailing addresses obtained under
    paragraph (a) of this section to enforce collection of a delinquent
    debt and may disclose such mailing addresses to other agencies and
    to collection agencies for collection purposes.

[§ 1.1953 Interagency requests]{.underline}.

(a) Requests to the Commission by other Federal agencies for
    administrative or salary offset shall be in writing and forwarded to
    the Financial Operations Center, FCC, 445 12th Street, S.W.,
    Washington, DC 20554.

(b) Requests by the Commission to other Federal agencies holding funds
    payable to the debtor will be in writing and forwarded, certified
    return receipt, as specified by that agency in its regulations. If
    the agency\'s rules governing this matter are not readily available
    or identifiable, the request will be submitted to that agency's
    office of legal counsel with a request that it be processed in
    accordance with their internal procedures.

(c) Requests to and from the Commission shall be accompanied by a
    certification that the debtor owes the debt (including the amount)
    and that the procedures for administrative or salary offset
    contained in this subpart, or comparable procedures prescribed by
    the requesting agency, have been fully complied with. The Commission
    will cooperate with other agencies in effecting collection.

Requests to and from the Commission shall be processed within 30
calendar days of receipt. If such processing is impractical or not
feasible, notice to extend the time period for another 30 calendar days
will be forwarded 10 calendar days prior to the expiration of the first
30‑day period.

[^1]: The term "claim" or "debt" has the meaning used in 31 U.S.C. §
    3701(b), which is any amount of funds or property that has been
    determined by an appropriate official of the Federal Government to
    be owed to the United States by a person, organization, or entity
    other than a Federal Agency.

[^2]: 31 U.S.C. §§ 3701(a) (8); 3701(b).

[^3]: [Part 1 of the Commission's Rules -- Implementation of the Debt
    Collection Improvement Act of 1996 and Adoption of Rules Governing
    Applications or Requests for Benefits by Delinquent
    Debtors]{.underline}, 17 FCC Rcd 23096 (2002) (Notice).

[^4]: Verizon filed a comment generally supporting the proposed rules.

[^5]: 31 U.S.C. § 3711(a) (2).

[^6]: 31 C.F.R. § 904.4.

[^7]: [See]{.underline} [generally]{.underline} revisions to 47 C.F.R. §
    1.1901.

[^8]: [See]{.underline} [Administrative Wage Garnishment]{.underline},
    63 Fed. Reg. 25136 (1998) (permitting agencies to garnish up to 15
    percent of the disposable pay of a debtor to satisfy delinquent
    non-tax debt owed), [adopting]{.underline} 31 C.F.R. § 285.11.

[^9]: [See]{.underline} 5 C.F.R. § 550.1104.

[^10]: 47 U.S.C. §§ 158(c)(2), 159(c)(2). [See]{.underline} 47 C.F.R. §§
    1.1109(c), 1.1109(d)(1); 1.1112(a)(1)(i); 1.1112(a)(2)(ii);
    1.1157(a)(2); 1.1161(a)(1)(i); 1.1161(a)(2)(ii); 1.1164(e); and
    1.1166(c).

[^11]: 47 C.F.R. § 1.2105(a)(2)(x). [See also]{.underline} 47 C.F.R. §
    1.2105(a)(2)(xi). These rules are not affected by the red light
    rule.

[^12]: 47 C.F.R. § 1.2105(b).

[^13]: Applications subject to the red light rule do not include matters
    that are subject to more restrictive procedures, e.g. requests to
    waive, defer, or reduce application fees or regulatory fees under 47
    C.F.R. §§ 1.1117 and 1.1166, and petitions or applications for
    review under 47 C.F.R. §§ 1.1117, 1.1159, and 1.1167 related to
    applications or other requests requiring the filing of an FRN. See ¶
    10, [infra]{.underline}.

[^14]: [See Amendment of Parts 1, 21, 61, 73, 74, and 76 of the
    Commission's Rules: Adoption of a Mandatory FCC Registration Number,
    16 FCC Rcd 16138, 16141 (2001) (FRN Order]{.underline}),
    [citing]{.underline} 31 U.S.C. § 7701(c)(2) (DCIA definition of
    doing business with the federal government); 47 C.F.R. § 1.8002(a)
    (indicating anyone doing business with the Commission must obtain an
    FRN).

[^15]: As noted in the [FRN Order]{.underline}, 16 FCC Rcd at 16141,
    entities may acquire multiple FRNs. However, only delinquent debt
    attributable to the same TIN will trigger our red light rule.

[^16]: We note that, pursuant to section 504(c) of the Communications
    Act, as amended, 47 U.S.C. § 504(c), we do not treat monetary
    forfeitures imposed after issuance of a notice of apparent liability
    as debts owed to the United States until the forfeiture had been
    partially paid or a court of competent jurisdiction has ordered
    payment of the forfeiture and such order is final.

[^17]: [See]{.underline} 47 C.F.R. § 1.1901(j). [See also]{.underline}
    31 C.F.R. § 900.2(b) ("a debt is 'delinquent' if it has not been
    paid by the date specified in the agency's initial written demand
    for payment or applicable agreement or instrument (including
    post-delinquency payment agreement), unless other satisfactory
    payment arrangements have been made.").

[^18]: [See]{.underline} 47 C.F.R. §§ 1.1902 and 1.1905.

[^19]: [Cf.]{.underline} 31 C.F.R. § 285.13(d)(2)(iii) (a debt is not
    delinquent for purposes of the denial of financial assistance to
    delinquent debtors under 31 U.S.C. § 3720B if it is subject to
    time-filed administrative or judicial challenge).

[^20]: For the purpose of the red light rule, we will consider appeals
    made to the Administrators of the Universal Service Fund and the
    Telecommunications Relay Services Fund and to the Billing and
    Collections Agent for the North American Numbering Plan as
    administrative appeals.

[^21]: 31 U.S.C. § 3711.

[^22]: [See]{.underline} 47 C.F.R. § 1.1915.

[^23]: [See]{.underline} [FRN Order]{.underline}, 16 FCC Rcd at 16146
    n.63 (citing regulations for emergency authorizations and STAs).

[^24]: [Id.]{.underline} at 46.

[^25]: [See]{.underline} 47 U.S.C. § 271(d)(3) (Bell operating company
    interLATA applications must be decided within 90 days); 47 U.S.C. §
    252(e)(5) (if a state commission fails to act on an interconnection
    agreement, the Commission shall issue an order preempting the state
    commission's jurisdiction within 90 days of notice of failure of the
    state to act); 47 U.S.C. § 405(b)(1) (Commission must act on
    petition for reconsideration of an order concluding a hearing under
    section 204(a) or 208(b)); 47 U.S.C. § 208(b)(1) (Commission must
    issue an order concluding an investigation of lawfulness of a
    charge, classification, regulation, or practice within 5 months
    after filing of complaint); 47 U.S.C. § 614(h)(C)(iv) (Commission
    must decide cable must carry complaints within 120 days).

[^26]: [See]{.underline} 47 U.S.C. § 160(c) (Commission must act on
    petition for forbearance within one year, extendable by an
    additional 90 days, or petition deemed granted).

[^27]: [See, e.g.]{.underline}, 47 C.F.R. § 63.03 (a), which allows an
    applicant to transfer control of the domestic lines or authorization
    to operate on the 31^st^ day after the date of public notice listing
    a domestic section 214 transfer of control application as accepted
    for filing as a streamline application.

[^28]: [See]{.underline} 47 C.F.R. § 1.2105(a)(2)(x) and (xi).

[^29]: [See]{.underline} 47 U.S.C. §§ 203, 206.

[^30]: [See]{.underline} 47 C.F.R. § 205.

[^31]: [See]{.underline} 47 C.F.R. § 0.469(a)(2).

[^32]: [See]{.underline} [FRN Order]{.underline}, 16 FCC Rcd at 16148.

[^33]: [See]{.underline} [New Commission Registration System (CORES) to
    be Implemented July 19]{.underline}, 15 FCC Rcd 18754 (2001).

[^34]: [See]{.underline} 31 U.S.C. § 3711 (a) (1); 31 C.F.R. Part 901.

[^35]: [See]{.underline} 31 U.S.C. § 3711(a) (2); 31 C.F.R. Part 902.

[^36]: [See]{.underline} 31 U.S.C. § 3711(a) (3); 31 C.F.R. Part 903.

[^37]: [See]{.underline} 47 C.F.R. § 1.1901(c)

[^38]: [See]{.underline} 47 C.F.R. § 0.211 and Part 1, Subpart O (2002).

[^39]: [See]{.underline} 31 U.S.C. §§ 3720B(a) (waiver of ban on
    issuance of Federal financial assistance to delinquent debtors by
    agency head); 3720B(b) (delegation of waiver authority to Chief or
    Deputy Chief Financial Officer).

[^40]: [See]{.underline} 47 C.F.R. §§ 0.211, 0.231, and Part 1, Subpart
    O (2002).

[^41]: [See]{.underline} 5 U.S.C. § 553(b)(A).

[^42]: 5 U.S.C. § 605(b). The amendment of the delegations of authority
    is adopted without notice and comment and therefore does not require
    regulatory flexibility analysis. [See]{.underline} 5 U.S.C. §
    604(a).

[^43]: [See Federal Claims Collection Standards]{.underline}, 65 FR
    70390, 70395 (2000) (certifying under section 605(b) that the FCCS
    rules did not require a regulatory flexibility analysis).