45 CFR Parts 160 & 164 (CFR Annual Edition) f the record after the other party has an opportunity to comment. Board members and staff shall not consider any information outside the record (see § 16.21 for what the record consists of) about matters involved in an appeal. (b) The above does not apply to the among following: Communications Board members and staff; communica- tions concerning the Board’s adminis- trative functions or procedures; re- quests from the Board to a party for a document (although the material sub- mitted in response also must be given to the other party); and material which the Board includes in the record after notice and an opportunity to comment. § 16.18 Mediation. (a) In cases pending before the Board. If the Board decides that mediation would be useful to resolve a dispute, the Board, in consultation with the parties, may suggest use of mediation techniques and will provide or assist in selecting a mediator. The mediator may take any steps agreed upon by the parties to resolve the dispute or clarify issues. The results of mediation are not binding on the parties unless the par- ties so agree in writing. The Board will internally insulate the mediator from any Board or staff members assigned to han ssues. The results of mediation are not binding on the parties unless the par- ties so agree in writing. The Board will internally insulate the mediator from any Board or staff members assigned to handle the appeal. (b) In other cases. In any other grants dispute, the Board may, within the limitations of its resources, offer per- sons trained in mediation skills to aid in resolving the dispute. Mediation services will only be offered at the re- quest, or with the concurrence, of a re- sponsible federal program official in the program under which the dispute arises. The Board will insulate the me- diator if any appeal subsequently arises from the dispute. § 16.19 How to calculate deadlines. In counting days, include Saturdays, Sundays, and holidays; but if a due date would fall on a Saturday, Sunday or Federal holiday, then the due date is the next Federal working day. § 16.20 How to submit material to the Board. (a) Submissions should be addressed to the Board’s current mailing address: Department of Health and Human Services, Departmental Appeals Board, Appellate Division—MS 6127, 330 Inde- pendence Ave. SW., Cohen Building— Rm. G–644, Washington, DC 20201; how- ever, submissions : Department of Health and Human Services, Departmental Appeals Board, Appellate Division—MS 6127, 330 Inde- pendence Ave. SW., Cohen Building— Rm. G–644, Washington, DC 20201; how- ever, submissions to the Board in cer- tain types of cases may be made by electronic filing using DAB E-File at https://dab.efile.hhs.gov. Changes to the 82 Dept. of Health and Human Services § 16.23 mailing address will be made available on at site the Board’s Web www.hhs.gov/dab/divisions/appellate. (2) Defer or disallow other claims questioned for reasons also disputed in the pending appeal; (b) All submissions after the notice of appeal should identify the Board’s docket number (the Board’s acknowl- edgement under § 16.7 will specify the docket number). (c) Unless the Board otherwise speci- fies, parties shall submit to the Board an original and two copies of all mate- rials. Each submission other than the notice of appeal, must include a state- ment that one copy of the materials has been sent to the other party, iden- tifying when and to whom the copy was sent. (d) Unless hand delivered, all mate- rials should be sent to the Board and the other party by certified or reg- istered mail, return recei ther party, iden- tifying when and to whom the copy was sent. (d) Unless hand delivered, all mate- rials should be sent to the Board and the other party by certified or reg- istered mail, return receipt requested. (e) The Board considers material to be submitted on the date when it is postmarked or hand delivered to the Board. [46 FR 43817, Aug. 31, 1981, as amended at 81 FR 3012, Jan. 20, 2016] § 16.21 Record and decisions. (a) Each decision is issued by three Board members (see § 16.5(b)), who base their decision on a record consisting of the appeal file; other submissions of the parties; transcripts or other records of any meetings, conferences or hearings conducted by the Board; writ- ten statements resulting from con- ferences; evidence submitted at hear- ings; and orders and other documents issued by the Board. In addition, the Board may include other materials (such as evidence submitted in another appeal) after the parties are given no- tice and an opportunity to comment. (b) The Board will promptly notify the parties in writing of any disposi- tion of a case and the basis for the dis- position. § 16.22 The effect of an appeal. (a) General. Until the Board disposes of an ap he Board will promptly notify the parties in writing of any disposi- tion of a case and the basis for the dis- position. § 16.22 The effect of an appeal. (a) General. Until the Board disposes of an appeal, the respondent shall take no action to implement the final deci- sion appealed. (b) Exceptions. The respondent may— (1) Suspend funding (see § 75.371 of this title); (3) In programs listed in appendix A, B.(a)(1), to this part implement a deci- sion to disallow Federal financial par- ticipation claimed in expenditures re- ported on a statement of expenditures, by recovering, withholding or offset- ting payments, if the decision is issued before the reported expenditures are in- cluded in the calculation of a subse- quent grant; (4) Take other action to recover, withhold, or offset funds if specifically authorized by statute or regulation; or (5) Take action to require a State to suspend procedural disenrollments, as defined at 42 CFR 430.5, or continue the accrual of the civil money penalties a State owes under 42 CFR 430.49(c). [46 FR 43817, Aug. 31, 1981, as amended at 81 FR 3012, Jan. 20, 2016; 88 FR 84737, Dec. 6, 2023] § 16.23 How long an appeal takes. The Board has establis penalties a State owes under 42 CFR 430.49(c). [46 FR 43817, Aug. 31, 1981, as amended at 81 FR 3012, Jan. 20, 2016; 88 FR 84737, Dec. 6, 2023] § 16.23 How long an appeal takes. The Board has established general goals for its consideration of cases, as follows (measured from the point when the Board receives the first submission after the notice of appeal): —For regular review based on a written record under § 16.8, 6 months. When a con- ference under § 16.10 is held, the goal re- mains at 6 months, unless a requirement for post-conference briefing in a particular case renders the goal unrealistic. —For cases involving a hearing under § 16.11, 9 months. —For the expedited process under § 16.12, 3 months. These are goals, not rigid require- ments. The paramount concern of the Board is to take the time needed to re- view a record fairly and adequately in order to produce a sound decision. Fur- thermore, many factors are beyond the Board’s direct control, such as unfore- seen delays due to the parties’ negotia- tions or requests for extensions, how many cases are filed, and Board re- sources. On the other hand, the parties may agree to steps which may shorten review by the Board; for o the parties’ negotia- tions or requests for extensions, how many cases are filed, and Board re- sources. On the other hand, the parties may agree to steps which may shorten review by the Board; for example, by waiving the right to submit a brief, by agreeing to shorten submission sched- ules, or by electing the expedited proc- ess. 83 Pt. 16, App. A 45 CFR Subtitle A (10–1–24 Edition) APPENDIX A TO PART 16—WHAT DISPUTES THE BOARD REVIEWS A. What this appendix covers. This appendix describes programs which use the Board for dispute resolution, the types of disputes covered, and any conditions for Board review of final written decisions resulting from those disputes. Disputes under programs not specified in this appen- dix may be covered in a program regulation or in a memorandum of understanding be- tween the Board and the head of the appro- priate HHS operating component or other agency responsible for administering the program. If in doubt, call the Board. Even though a dispute may be covered here, the Board still may not be able to review it if the limits in paragraph F apply. B. Mandatory grant programs. (a) The Board reviews the following types of final written decisions in d be covered here, the Board still may not be able to review it if the limits in paragraph F apply. B. Mandatory grant programs. (a) The Board reviews the following types of final written decisions in disputes arising in HHS programs authorizing the award of mandatory grants: (1) Disallowances under Titles I, IV, VI, X, XIV, XVI(AABD), XIX, and XX of the Social Security Act, including penalty disallow- ances such as those under sections 403(g) and 1903(g) of the Act and fiscal disallowances based on quality control samples. (2) Disallowances in mandatory grant pro- grams administered by the Public Health Service, including Title V of the Social Secu- rity Act. (3) Disallowances in the programs under sections 113 and 132 of the Developmental Disabilities Act. (4) Disallowances under Title III of the Older American Act. (5) Decisions relating to repayment and withholding under block grant programs as provided in 45 CFR 96.52. (6) Decisions relating to repayment and withholding under State Legalization Im- pact Assistance Grants as provided in 45 CFR 402.24 and 402.25. (7) Decisions relating to suspensions of pro- cedural disenrollments and civil money pen- alties under 42 CFR 430.49(c) Legalization Im- pact Assistance Grants as provided in 45 CFR 402.24 and 402.25. (7) Decisions relating to suspensions of pro- cedural disenrollments and civil money pen- alties under 42 CFR 430.49(c). (b) In some of these disputes, there is an option for review by the head of the granting agency prior to appeal to the Board. Where an appellant has requested review by the agency head first, the ‘‘final written deci- sion’’ required by § 16.3 for purposes of Board review will generally be the agency head’s decision affirming the disallowance. If the agency head declines to review the disallow- ance or if the appellant withdraws its re- quest for review by the agency head, the original disallowance decision is the ‘‘final written decision.’’ In the latter cases, the 30- day period for submitting a notice of appeal begins with the date of receipt of the notice declining review or with the date of the withdrawal letter. C. Direct, discretionary project programs. (a) The Board reviews the following types of final written decisions in disputes arising in any HHS program authorizing the award of direct, discretionary project grants or co- operative agreements: (1) A disallowance or other ollowing types of final written decisions in disputes arising in any HHS program authorizing the award of direct, discretionary project grants or co- operative agreements: (1) A disallowance or other determination denying payment of an amount claimed under an award, or requiring return or set- off of funds already received. This does not apply to determinations of award amount or disposition of unobligated balances, or selec- tion in the award document of an option for disposition of program-related income. (2) A termination for failure to comply with the terms of an award. (3) A denial of a noncompeting continu- ation award under the project period system of funding where the denial is for failure to comply with the terms of a previous award. (4) A voiding (a decision that an award is invalid because it was not authorized by statute or regulation or because it was fraudulently obtained). (b) Where an HHS component uses a pre- liminary appeal process (for example, the Public Health Service), the ‘‘final written decision’’ for purposes of Board review is the decision issued as a result of that process. D. Cost allocation and rate disputes. The Board reviews final written decisions i vice), the ‘‘final written decision’’ for purposes of Board review is the decision issued as a result of that process. D. Cost allocation and rate disputes. The Board reviews final written decisions in disputes which may affect a number of HHS programs because they involve cost al- location plans or rate determinations. These include decisions related to cost allocation plans negotiated with State or local govern- ments and negotiated rates such as indirect cost rates, fringe benefit rates, computer rates, research patient care rates, and other special rates. E. SSI agreement disputes. The Board reviews disputes in the Supple- mental Security Income (SSI) program aris- ing under agreements for Federal adminis- tration of State supplementary payments under section 1616 of the Social Security Act or mandatory minimum supplements under section 212 of Pub. L. 93–66. In these cases, the Board provides an opportunity to be heard and offer evidence at the Secretarial level of review as set out in the applicable agreements. Thus, the ‘‘final written deci- sion’’ for purposes of Board review is that de- termination appealable to the Secretary under the agreement. F. Where Board review is no t in the applicable agreements. Thus, the ‘‘final written deci- sion’’ for purposes of Board review is that de- termination appealable to the Secretary under the agreement. F. Where Board review is not available. The Board will not review a decision if a hearing under 5 U.S.C. 554 is required by statute, if the basis of the decision is a viola- tion of applicable civil rights or non- discrimination laws or regulations (for ex- ample, Title VI of the Civil Rights Act), or if some other hearing process is established pursuant to statute. G. How the Board determines whether it will re- view a case. 84 Dept. of Health and Human Services § 17.5 Under § 16.7, the Board Chair determines whether an appeal meets the requirements of this appendix. If the Chair finds that there is some question about this, the Board will re- quest the written opinion of the HHS compo- nent which issued the decision. Unless the Chair determines that the opinion is clearly erroneous, the Board will be bound by the opinion. If the HHS component does not re- spond within a time set by the Chair, or can- not determine whether the Board clearly does or does not have jurisdiction, the Board will take the appeal. [46 opinion. If the HHS component does not re- spond within a time set by the Chair, or can- not determine whether the Board clearly does or does not have jurisdiction, the Board will take the appeal. [46 FR 43817, Aug. 31, 1981, as amended at 47 FR 29492, July 6, 1982; 53 FR 7864, Mar. 10, 1988; 62 FR 38218, July 17, 1997; 88 FR 84737, Dec. 6, 2023] PART 17—RELEASE OF ADVERSE INFORMATION TO NEWS MEDIA Sec. 17.1 Definition. 17.2 Basic policy. 17.3 Precautions to be taken. 17.4 Regulatory investigations and trial- type proceedings. 17.5 Context to be reflected. 17.6 Advance notice. 17.7 Retractions or corrections. AUTHORITY: 5 U.S.C. 301. SOURCE: 41 FR 3, Jan. 2, 1976, unless other- wise noted. § 17.1 Definition. Adverse information released by an agency means any statement or release by the Department or any principal op- erating component made to the news media inviting public attention to an action or a finding by the Department or principal operating component of the Department which may adversely affect persons or organizations identi- fied therein. This part does not apply to nor is it affected by any disclosure of records to the public in response to requests made under the Freed y adversely affect persons or organizations identi- fied therein. This part does not apply to nor is it affected by any disclosure of records to the public in response to requests made under the Freedom of Information Act (Pub. L. 90–23). The criteria for such disclosures are set forth in the Department’s Public Infor- mation Regulation (45 CFR part 5). § 17.2 Basic policy. All adverse information release to news media shall be factual in content and accurate in description. Dispar- aging terminology not essential to the content and purpose of the publicity shall be avoided. § 17.3 Precautions to be taken. The issuing organization shall take reasonable precautions to assure that information released is accurate and that its release fulfills an authorized purpose. § 17.4 Regulatory investigations and trial-type proceedings. Adverse information relating to regu- latory investigations of specifically identified persons or organizations or to pending agency trial-type pro- ceedings shall be released only in lim- ited circumstances in accordance with the criteria outlined below: (a) Where the Department or a prin- cipal operating component determines that there is a significant risk tha e released only in lim- ited circumstances in accordance with the criteria outlined below: (a) Where the Department or a prin- cipal operating component determines that there is a significant risk that the public health or safety may be im- paired or substantial economic harm may occur unless the public is notified immediately, it may release informa- tion to news media as one of the means of notifying the affected public speed- ily and accurately. However, where the Department or principal operating component determines that public harm can be avoided by immediate dis- continuance of an offending practice, a respondent shall be allowed an oppor- tunity, where feasible, to cease the practice (pending a legal test) in lieu of release of adverse information by the agency. (b) Where it is required in order to bring notice of pending agency adju- dication to persons likely to desire to participate therein or likely to be af- fected by that or a related adjudica- tion, the Department or principal oper- ating component shall rely on the news media to the extent necessary to pro- vide such notice even though it may be adverse to a respondent. § 17.5 Context to be reflected. The authority ncipal oper- ating component shall rely on the news media to the extent necessary to pro- vide such notice even though it may be adverse to a respondent. § 17.5 Context to be reflected. The authority for and the character of the information shall be made clear, where appropriate, the release shall ex- plain the nature of any studies per- formed, the sources of relevant data, the areas in which administrative find- ings of fact were made, and whether the information is based on allegations subject to subsequent adjudication. 85 § 17.6 45 CFR Subtitle A (10–1–24 Edition) § 17.6 Advance notice. Any respondent or prospective re- spondent in an agency proceeding shall, if practicable and consistent with the nature of the proceeding, be given advance notice of information to be released about the proceeding and a reasonable opportunity to prepare in advance a response to the information released. § 17.7 Retractions or corrections. Where the Assistant Secretary for Public Affairs finds that information released by the Department was mis- leading or a misstatement of fact and any person named therein requests a retraction or correction, the Depart- ment shall issue a retraction or correc- nformation released by the Department was mis- leading or a misstatement of fact and any person named therein requests a retraction or correction, the Depart- ment shall issue a retraction or correc- tion in the same manner to all of the media outlets that received the origi- nal information (or as many of them as is feasible). Where information shown to be misleading or misstatement of fact has been released by a principal operating component of the Depart- ment and any person named therein re- quests a retraction or correction, the agency head shall issue a retraction or correction in the same manner to all of the media outlets that received the original information (or as many of them as is feasible). PART 18—OFFICIAL SYMBOL, LOGO, AND SEAL AUTHORITY: 42 U.S.C. 3505 and 5 U.S.C. 301. § 18.1 Description of the Symbol, Logo, and Seal. (a) The Departmental Symbol (Sym- bol) of the Department of Health and Human Services (HHS) is the key ele- ment in Department identification. It represents the American People shel- tered in the wing of the American Eagle, suggesting the Department’s concern and responsibility for the wel- fare of the people. This Symbol is the visual link which con ents the American People shel- tered in the wing of the American Eagle, suggesting the Department’s concern and responsibility for the wel- fare of the people. This Symbol is the visual link which connects the graphic communications of all components and programs of the Department. It is the major design component for the De- partment Identifiers — the Department Logo, Seal, and Signatures. (b) The Symbol is described as fol- lows: The outline of an American Eagle, facing left, with one of its wings stretched upward and the other wing pointed downward, is flanked on its right side by two outlines of the profile of a human head, both of which are lo- cated in between the eagle’s wings. One of the profile outlines is smaller than the other and is nestled in the larger outline. (c) The HHS Departmental Logo (Logo) incorporates the Symbol and is described as follows: From the tip of the outstretched wing of the American Eagle in symbol to the tip of the other, downward-facing wing, the words, ‘‘DEPARTMENT OF HEALTH & HUMAN SERVICES • USA’’ form a cir- cular arc. The official colors of the Logo are either Black or Reflex Blue. Reflex Blue RGB Numbers: 0/0/153 (R0, G0, B153) 86 Dept. of ds, ‘‘DEPARTMENT OF HEALTH & HUMAN SERVICES • USA’’ form a cir- cular arc. The official colors of the Logo are either Black or Reflex Blue. Reflex Blue RGB Numbers: 0/0/153 (R0, G0, B153) 86 Dept. of Health and Human Services Pt. 30 (d) The HHS Departmental Seal (Seal) incorporates the Symbol and is described as follows: Starting from the tip of the downward-facing wing of the American Eagle in the HHS symbol and forming a complete circle clockwise around the HHS symbol, the words, ‘‘DEPARTMENT OF HEALTH & HUMAN SERVICES • USA •’’ are printed, surrounded by a border com- posed of a solid inner ring at the base of the text and a triangular, scalloped edge at the top of the text. The official colors of the Seal are Reflex Blue and Gold [Reflex Blue RGB Numbers: 0/0/153 (R0, G0, B153); Reflex Gold RGB Num- bers: 254/252/1 (R254, G252, B1)]. The Seal may also appear in Reflex Blue or Black. (e) The HHS Departmental symbol, logo, and seal shall each be referred to as an HHS emblem and shall collec- tively be referred to as HHS emblems. [80 FR 13252, Mar. 13, 2015] 30.5 Other administrative remedies. 30.6 Form of payment. 30.7 Subdivision of claims. 30.8 Required administrative proceedin collec- tively be referred to as HHS emblems. [80 FR 13252, Mar. 13, 2015] 30.5 Other administrative remedies. 30.6 Form of payment. 30.7 Subdivision of claims. 30.8 Required administrative proceedings. 30.9 No private rights created. PART 30—CLAIMS COLLECTION Subpart B—Standards for the Administrative Collection of Debts Subpart A—General Provisions Sec. 30.1 Purpose, authority, and scope. 30.2 Definitions. 30.3 Antitrust, fraud, exception in the ac- count of an accountable official, and interagency claims excluded. 30.4 Compromise, waiver, or disposition under other statutes not precluded. 30.10 Collection activities. 30.11 Demand for payment. 30.12 Administrative offset. 30.13 Debt reporting and the use of credit reporting agencies. 30.14 Contracting with private collection contractors and with entities that locate and recover unclaimed assets. 87 § 30.1 45 CFR Subtitle A (10–1–24 Edition) 30.15 Suspension or revocation of eligibility for loans and loan guarantees, licenses, permits or privileges. 30.16 Liquidation of collateral. 30.17 Collection in installments. 30.18 Interest, penalties, and administrative costs. 30.19 Review of cost effectiveness of collec- tion. 30.20 Taxpa s or privileges. 30.16 Liquidation of collateral. 30.17 Collection in installments. 30.18 Interest, penalties, and administrative costs. 30.19 Review of cost effectiveness of collec- tion. 30.20 Taxpayer information. Subpart C—Debt Compromise 30.21 Scope and application. 30.22 Basis for compromise. 30.23 Enforcement policy. 30.24 Joint and several liability. 30.25 Further review of compromise offers. 30.26 Consideration of tax consequences to the Government. 30.27 Mutual release of the debtor and the Government. Subpart D—Suspending and Terminating Collection Activities 30.28 Scope and application. 30.29 Suspension of collection activity. 30.30 Termination of collection activity. 30.31 Exception to termination. 30.32 Discharge of indebtedness; reporting requirements. Subpart E—Referrals to the Department of Justice 30.33 Prompt referral. 30.34 Claims Collection Litigation Report. 30.35 Preservation of evidence. 30.36 Minimum amount of referrals. AUTHORITY: 31 U.S.C. 3711(d). SOURCE: 72 FR 10409, Mar. 8, 2007, unless otherwise noted. Subpart A—General Provisions § 30.1 Purpose, authority, and scope. (a) Purpose. This part prescribes the standards and procedures for the De- partment’ FR 10409, Mar. 8, 2007, unless otherwise noted. Subpart A—General Provisions § 30.1 Purpose, authority, and scope. (a) Purpose. This part prescribes the standards and procedures for the De- partment’s use in the administrative collection, offset, compromise, and sus- pension or termination of collection activity for claims for funds or prop- erty, as defined by 31 U.S.C. 3701(b) and this part. Covered activities include the collection of debts in any amount; the compromise and suspension or ter- mination of collection activity of debts that do not exceed $100,000, or such higher amount as the Attorney General may prescribe, exclusive of interest, penalties, and administrative costs; and the referral of debts to the Depart- ment of the Treasury (Treasury), the Treasury-designated debt collection centers, or the Department of Justice (Justice) for collection by further ad- ministrative action or litigation, as ap- plicable. (b) Authority. The Secretary is issuing the regulations in this part under the authority contained in 31 U.S.C. 3711(d). The standards and proce- dures prescribed in this part are au- thorized under the Federal Claims Col- lection Act, as amended, Public Law No. part under the authority contained in 31 U.S.C. 3711(d). The standards and proce- dures prescribed in this part are au- thorized under the Federal Claims Col- lection Act, as amended, Public Law No. 89–508, 80 Stat. 308 (July 19, 1966), the Debt Collection Act of 1982, Public Law No. 97–365, 96 Stat. 1749 (October 25, 1982), the Debt Collection Improve- ment Act of 1996, Public Law No. 104– 134, 110 Stat. 1321, 1358 (April 26, 1996) and the Federal Claims Collection Standards at 31 CFR parts 900 through 904. (c) Scope. (1) The standards and pro- cedures prescribed in this part apply to all officers and employees of the De- partment, including officers and em- ployees of the various Operating Divi- sions and Regional Offices of the De- partment, charged with the collection and disposition of debts owed to the United States. (2) The standards and procedures set forth in this part will be applied except where specifically excluded herein or where a statute, regulation or contract prescribes different standards or proce- dures. (3) Regulations governing the use of certain debt collection procedures cre- ated under the Debt Collection Im- provement Act of 1996, including tax refund off bes different standards or proce- dures. (3) Regulations governing the use of certain debt collection procedures cre- ated under the Debt Collection Im- provement Act of 1996, including tax refund offset, administrative wage gar- nishment, and Federal salary offset, are contained in parts 31 through 33 of this chapter. § 30.2 Definitions. In this part— Administrative offset means with- holding funds payable by the United States to, or held by the United States for, a person to satisfy a debt. Agency means a department, agency, court, court administrative office, or instrumentality in the executive, judi- cial, or legislative branch of the Gov- ernment, including Government cor- porations. 88 Dept. of Health and Human Services § 30.2 Appropriate official means the Depart- ment official who, by statute or delega- tion of authority, determines the exist- ence and amount of debt. Business day means Monday through Friday. For purposes of computation, the last day of the period will be in- cluded unless it is a Federal holiday, in which case the next business day fol- lowing the holiday will be considered the last day of the period. Claim see the definition for the term ‘‘debt.’’ The ter luded unless it is a Federal holiday, in which case the next business day fol- lowing the holiday will be considered the last day of the period. Claim see the definition for the term ‘‘debt.’’ The terms ‘‘claim’’ and ‘‘debt’’ are synonymous and interchangeable. Creditor agency means an agency to which a debt is owed, including a debt collection center acting on behalf of a creditor agency. Day means calendar day. For pur- poses of computation, the last day of the period will be included unless it is a Saturday, Sunday, or a Federal holi- day, in which case the next business day will be considered the last day of the period. Debt or claim means an amount of funds or other property determined by an appropriate official of the Federal Government to be owed to the United States from any person, organization, or entity, except another Federal agen- cy. For the purpose of administrative offset, the term includes an amount owed by an individual to a State, the District of Columbia, American Samoa, Guam, the United States Virgin Is- lands, the Commonwealth of the North- ern Mariana Islands, or the Common- wealth of Puerto Rico. Debts include, but are not limited to, amounts owed pursuant t amoa, Guam, the United States Virgin Is- lands, the Commonwealth of the North- ern Mariana Islands, or the Common- wealth of Puerto Rico. Debts include, but are not limited to, amounts owed pursuant to: Loans insured or guaran- teed by the United States; fees; leases; rents; royalties; services; sales of real or personal property; Federal salary overpayments; overpayments to pro- gram beneficiaries, contractors, pro- viders, suppliers, and grantees; audit disallowance determinations; civil pen- alties and assessments; theft or loss; interest; fines and forfeitures (except those arising under the Uniform Code of Military Justice); and all other simi- lar sources. Debt collection center means the De- partment of the Treasury, or other Federal agency, subagency, unit, or di- vision designated by the Secretary of the Treasury to collect debts owed to the United States. Debtor means an individual, organiza- tion, association, partnership, corpora- tion, or State or local government or subdivision indebted to the Govern- ment, or the person or entity with legal responsibility for assuming the debtor’s obligation. Debts arising under the Social Security Act are overpayments to, or contrib vision indebted to the Govern- ment, or the person or entity with legal responsibility for assuming the debtor’s obligation. Debts arising under the Social Security Act are overpayments to, or contribu- tions, reimbursements, penalties or as- sessments owed by, any entity, indi- vidual, or State under the Social Secu- rity Act. Such amounts include amounts owed to the Medicare program under section 1862(b) of the Social Se- curity Act. Salary overpayments and other debts that result from the admin- istration of the provisions of the Social Security Act are not deemed to ‘‘arise under’’ the Social Security Act for pur- poses of this part. Delinquent debt means a debt which the debtor does not pay or otherwise resolve by the date specified in the ini- tial demand for payment, or in an ap- plicable written repayment agreement or other instrument, including a post- delinquency repayment agreement. Department means the Department of Health and Human Services, and its Operating Divisions and Regional Of- fices. Disbursing official means an officer or employee who has authority to dis- burse public money pursuant to 31 U.S.C. 3321 or another law. Disposable pay means that part of the debt Regional Of- fices. Disbursing official means an officer or employee who has authority to dis- burse public money pursuant to 31 U.S.C. 3321 or another law. Disposable pay means that part of the debtor’s current basic, special, incen- tive, retired, and retainer pay, or other authorized pay, remaining after deduc- tion of amounts required by law to be withheld. For purposes of calculating disposable pay, legally required deduc- tions that must be applied first in- clude: Tax levies pursuant to the Inter- nal Revenue Code (title 26, United States Code); properly withheld taxes, FICA, Medicare; health and life insur- ance premiums; and retirement con- tributions. Amounts deducted under garnishment orders, including child support garnishment orders, are not le- gally required deductions for calcu- lating disposable pay. Evidence of service means information retained by the Department indicating the nature of the document to which it pertains, the date of mailing of the document, and the address and name of 89 § 30.2 45 CFR Subtitle A (10–1–24 Edition) the debtor to whom it is being sent. A copy of the dated and signed written notice provided to the debtor pursuant to this part may be address and name of 89 § 30.2 45 CFR Subtitle A (10–1–24 Edition) the debtor to whom it is being sent. A copy of the dated and signed written notice provided to the debtor pursuant to this part may be considered evidence of service for purposes of this part. Evi- dence of service may be retained elec- tronically so long as the manner of re- tention is sufficient for evidentiary purposes. FMS means the Financial Manage- ment Service, a bureau of the Depart- ment of the Treasury. Hearing means a review of the docu- mentary evidence to confirm the exist- ence or amount of a debt or the terms of a repayment schedule. If the Sec- retary determines that the issues in dispute cannot be resolved by such a review, such as when the validity of the claim turns on the issue of credi- bility or veracity, the Secretary may provide an oral hearing. (See 45 CFR 33.6(c)(2) for oral hearing procedures that may be provided by the Sec- retary). IRS means the Internal Revenue Service, a bureau of the Department of the Treasury. Late charges means interest, pen- alties, and administrative costs re- quired or permitted to be assessed on delinquent debts. Legally enforceable means that there has been a fi tment of the Treasury. Late charges means interest, pen- alties, and administrative costs re- quired or permitted to be assessed on delinquent debts. Legally enforceable means that there has been a final agency determination that the debt, in the amount stated, is due and there are no legal bars to col- lection action. Local government means a political subdivision, instrumentality, or au- thority of any State, the District of Columbia, American Samoa, Guam, the United States Virgin Islands, the Com- monwealth of the Northern Mariana Is- lands, or the Commonwealth of Puerto Rico, or an Indian tribe, band or na- tion. Operating Division means each sepa- rate component, agency, subagency, and unit within the Department of Health and Human Services, including, but not limited to, the Administration for Children and Families, the Admin- istration on Aging, the Centers for Dis- ease Control and Prevention, the Cen- ters for Medicare & Medicaid Services, the Food and Drug Administration, the National Institutes of Health, Sub- stance Abuse and Mental Health Serv- ices Administration, Indian Health Service, Health Resources and Services Administration, Agency for Toxic Sub- stances and Di National Institutes of Health, Sub- stance Abuse and Mental Health Serv- ices Administration, Indian Health Service, Health Resources and Services Administration, Agency for Toxic Sub- stances and Disease Registry, Agency for Healthcare Research and Quality, and the Office of the Secretary. OPM means the Office of Personnel Management. Payment authorizing agency means an agency that transmits a voucher to a disbursing official for the disbursement of public money. Payments made under the Social Secu- rity Act means payments by this De- partment or other agencies to bene- ficiaries, providers, intermediaries, physicians, suppliers, carriers, States, or other contractors or grantees under a Social Security Act program, includ- ing: Title I (Grants to States for Old- Age Assistance for the Aged); Title II (Federal Old-Age, Survivors, and Dis- ability Insurance Benefits); Title III (Grants to States for Unemployment Compensation Administration); Title IV (Grants to States for Aid and Serv- ices to Needy Families with Children and for Child-Welfare Services); Title V (Maternal and Child Health Services Block Grant); Title IX (Miscellaneous Provisions Relating to Employment Security); T - ices to Needy Families with Children and for Child-Welfare Services); Title V (Maternal and Child Health Services Block Grant); Title IX (Miscellaneous Provisions Relating to Employment Security); Title X (Grants to States for Aid to the Blind); Title XI, part B (Peer Review of the Utilization and Quality of Health Care Services); Title XII (Ad- vances to State Unemployment Funds); Title XIV (Grants to States for Aid to Permanently and Totally Disabled); Title XVI (Grants to States for Aid to the Aged, Blind, and Disabled); Title XVII (Grants for Planning Comprehen- sive Action to Combat Mental Retarda- tion); Title XVIII (Health Insurance for the Aged and Disabled); Title XIX (Grants to States for Medical Assist- (Block ance Programs); Title XX Grants to States for Social Services); and Title XXI (State Children’s Health Insurance Program). Federal employee salaries and other payments made by the Department or other agencies in the course of administering the provi- sions of the Social Security Act are not deemed to be ‘‘payable under’’ the So- cial Security Act for purposes of this part. Private collection contractors means private debt collection under contract with the Depart ial Security Act are not deemed to be ‘‘payable under’’ the So- cial Security Act for purposes of this part. Private collection contractors means private debt collection under contract with the Department to collect a 90 Dept. of Health and Human Services § 30.7 nontax debt or claim owed to the De- partment. The term includes private debt collectors, collection agencies, and commercial attorneys. Salary offset means an administrative offset to collect a debt owed by a Fed- eral employee through deductions at one or more officially established pay intervals from the current pay account of the employee without his or her con- sent. Secretary means the Secretary of Health and Human Services, or the Secretary’s designee. Taxpayer identification number means the identifying number described under section 6109 of the Internal Revenue Code of 1986 (26 U.S.C. 6109). For an in- dividual, identifying number is the individual’s Social Secu- rity Number. taxpayer the Tax refund offset means withholding or reducing a tax refund payment by an amount necessary to satisfy a debt. § 30.3 Antitrust, fraud, exception in the account of an accountable offi- cial, and interagency claims ex- cluded. (a) lding or reducing a tax refund payment by an amount necessary to satisfy a debt. § 30.3 Antitrust, fraud, exception in the account of an accountable offi- cial, and interagency claims ex- cluded. (a) Claims involving antitrust violations or fraud. (1) The standards in this part relating to compromise, suspension, and termination of collection activity do not apply to any debt based in whole or in part on conduct in violation of antitrust laws, or to any debt involving fraud, presentation of a false claim, or misrepresentation on the part of the debtor or any party having an interest in the claim, unless the Department of Justice returns a referred claim to the Department for further handling in ac- cordance with parts 31 CFR 900 through 904 and this part. (2) Upon identification of a debt sus- pected of involving an antitrust viola- tion or fraud, a false claim, misrepre- sentation, or other criminal activity or misconduct, the Secretary shall refer the debt to the Office of the Inspector General for review. (3) Upon the determination of the Of- fice of the Inspector General that a claim is based in whole or in part on conduct in violation of the antitrust laws, or involves fraud, tor General for review. (3) Upon the determination of the Of- fice of the Inspector General that a claim is based in whole or in part on conduct in violation of the antitrust laws, or involves fraud, the presen- tation of a false claim, or misrepresen- tation on the part of the debtor or any party having an interest in the claim, the Secretary shall promptly refer the case to the Department of Justice for action. (b) Exception in the account of an ac- countable official. The standards in this part do not apply to compromise of an exception in the account of an account- able official. (c) Interagency claims. This part does not apply to claims between Federal agencies. The Department will attempt to resolve interagency claims by nego- tiation in accordance with EO 12146. § 30.4 Compromise, waiver, or disposi- tion under other statutes not pre- cluded. Nothing in this part precludes the Department from disposing of any claim under statutes and implementing regulations other than subchapter II of chapter 37 of Title 31 of the United States Code and the Federal Claims Collection Standards, 31 CFR parts 900 through 904. Any statute and imple- menting regulation specifically appli- cable r II of chapter 37 of Title 31 of the United States Code and the Federal Claims Collection Standards, 31 CFR parts 900 through 904. Any statute and imple- menting regulation specifically appli- cable to the claims collection activi- ties of the Department will take prece- dence over this part. § 30.5 Other administrative remedies. The remedies and sanctions available under this part for collecting debts are not intended to be exclusive. Nothing contained in this part precludes using any other administrative remedy which may be available for collecting debts owed to the Department, such as converting the method of payment under a grant from an advancement to a reimbursement method or revoking a grantee’s letter-of-credit. § 30.6 Form of payment. Claims may be paid in the form of money or, when a contractual basis ex- ists, the Department may demand the return of specific property or the per- formance of specific services. § 30.7 Subdivision of claims. Debts may not be subdivided to avoid the monetary ceiling established by 31 U.S.C. 3711(a)(2). A debtor’s liability arising from a particular transaction or contract shall be considered a single debt in determining whether the debt, ex d the monetary ceiling established by 31 U.S.C. 3711(a)(2). A debtor’s liability arising from a particular transaction or contract shall be considered a single debt in determining whether the debt, exclusive of interest, penalties and ad- ministrative costs, does not exceed 91 § 30.8 45 CFR Subtitle A (10–1–24 Edition) $100,000, or such higher amount as pre- scribed by the Attorney General for purposes of compromise, or suspension or termination of collection activity. § 30.8 Required administrative pro- ceedings. This part does not supersede, or re- quire omission or duplication of admin- istrative proceedings required by con- tract, or other laws or regulations. See for example, 42 CFR part 50 (Public Health Service), 45 CFR part 16 (De- partmental Grant Appeals Board), and 48 CFR part 33 (Federal Acquisition Regulation) and part 333 (HHS Acquisi- tion Regulation). § 30.9 No private rights created. The standards in this part do not cre- ate any right or benefit, substantive or procedural, enforceable at law or in eq- uity by a party against the United States, the Department, its officers, or any other person, nor shall the failure of the Department to comply with any of the provi ural, enforceable at law or in eq- uity by a party against the United States, the Department, its officers, or any other person, nor shall the failure of the Department to comply with any of the provisions of this part be avail- able to any debtor as a defense. Subpart B—Standards for the Administrative Collection of Debts § 30.10 Collection activities. (a) General rule. The Secretary shall aggressively and timely collect all debts arising out of activities of, or re- ferred or transferred for collection ac- tions to, the Department. Normally, an initial written demand for payment shall be made no later than 30 days after a determination by an appro- priate official that a debt exists. (b) Cooperation with other agencies. The Department shall cooperate with other agencies in their debt collection activities. (c) Transfer of delinquent debts—(1) Mandatory transfer. The Department shall transfer legally enforceable debts 180 days or more delinquent to Treas- ury in accordance with the require- ments of 31 CFR 285.12. This require- ment does not apply to any debt that: (i) Is in litigation or foreclosure; (ii) Will be disposed of under an ap- proved asset sale program within one year quire- ments of 31 CFR 285.12. This require- ment does not apply to any debt that: (i) Is in litigation or foreclosure; (ii) Will be disposed of under an ap- proved asset sale program within one year of becoming eligible for sale; (iii) Has been referred to a private collection contractor for a period of time acceptable to the Secretary of the Treasury; (iv) Is at a debt collection center for a period of time acceptable to the Sec- retary of the Treasury (see paragraph (c)(2) of this section); (v) Will be collected under internal offset procedures within three years after the debt first became delinquent; or (vi) Is exempt from this requirement based on a determination by the Sec- retary of the Treasury that exemption for a certain class of debt is in the best interest of the United States. (2) Permissive transfer. The Secretary may refer debts less than 180 days de- linquent, including debts referred to the Department by another agency, to the Treasury in accordance with the requirements of 31 CFR 285.12, or with the consent of the Treasury, to a Treasury-designated debt collection center to accomplish efficient, cost ef- fective debt collection. Referrals to debt collection cente nts of 31 CFR 285.12, or with the consent of the Treasury, to a Treasury-designated debt collection center to accomplish efficient, cost ef- fective debt collection. Referrals to debt collection centers shall be at the discretion of, and for a time period ac- ceptable to, the Secretary of the Treas- ury. Referrals may be for servicing, collection, compromise, suspension, or termination of collection action. § 30.11 Demand for payment. (a) Written demand for payment. (1) Written demand, as described in para- graph (b) of this section, shall be made promptly upon a debtor in terms that inform the debtor of the consequences of failing to cooperate with the Depart- ment to resolve the debt. (2) Normally, the demand letter will be sent no later than 30 days after the appropriate official determines that the debt exists. The demand letter shall be sent by first class mail to the debtor’s last known address. (3) When necessary to protect the Government’s interest, for example to prevent the running of a statute of lim- itations, the written demand for pay- ment may be preceded by other appro- priate action under this part, including immediate referral to Justice for liti- gation. (b) Dema unning of a statute of lim- itations, the written demand for pay- ment may be preceded by other appro- priate action under this part, including immediate referral to Justice for liti- gation. (b) Demand letters. The specific con- tent, timing, and number of demand letters shall depend upon the type and 92 Dept. of Health and Human Services § 30.11 amount of the debt and the debtor’s re- sponse, if any, to the Department’s let- ters or telephone calls. Generally, one demand letter should suffice; however, more may be used. (1) The written demand for payment shall include the following informa- tion: (i) The nature and amount of the debt, including the basis for the indebt- edness; (ii) The date by which payment should be made to avoid late charges and enforced collection, which gen- erally shall be no later than 30 days from the date the demand letter is mailed; (iii) The applicable standards for im- posing any interest, penalties, or ad- ministrative costs (see § 30.18); (iv) The rights, if any, the debtor may have to: (A) Seek review of the Department’s determination of the debt, and for pur- poses of administrative wage garnish- ment or salary offset, to request a hearing (see 45 s, if any, the debtor may have to: (A) Seek review of the Department’s determination of the debt, and for pur- poses of administrative wage garnish- ment or salary offset, to request a hearing (see 45 CFR parts 32 and 33); and (B) Enter into a reasonable repay- ment agreement. (v) An explanation of how the debtor may exercise any of the rights de- scribed in paragraph (b)(1)(iv) of this section; (vi) The name, address, and phone number of a contact person or office within the Department to address any debt-related matters; and (vii) The Department’s remedies to enforce payment of the debt, which may include: (A) Garnishing the debtor’s wages through administrative wage garnish- ment; (B) Offsetting any Federal payments due the debtor, including income tax refunds, salary, certain benefit pay- ments such as Social Security, retire- ment, and travel reimbursements and advances; (C) Referring the debt to a private collection contractor; (D) Reporting the debt to a credit bu- reau or other automated database; (E) Referring the debt to Justice for litigation; and (F) Referring the debt to Treasury for any of the collection actions de- (b)(1)(vii)(A) scribed in paragraphs through (E) of automated database; (E) Referring the debt to Justice for litigation; and (F) Referring the debt to Treasury for any of the collection actions de- (b)(1)(vii)(A) scribed in paragraphs through (E) of this section, advising the debtor that such referral is manda- tory if the debt is 180 or more days de- linquent. (2) The written demand for payment should also include the following infor- mation: (i) The debtor’s right to inspect and copy all records of the Department per- taining to the debt, or if the debtor or the debtor’s representative cannot per- sonally inspect the records, to request and receive copies of such records; (ii) The Department’s willingness to discuss with the debtor alternative methods of payment; (iii) A debtor delinquent on a debt is ineligible for Government loans, loan guarantees, or loan insurance until the debtor resolves the debt; (iv) When seeking to collect statu- tory penalties, forfeiture or other simi- lar types of claim, the debtor’s li- censes, permits, or other privileges may be suspended or revoked if failure to pay the debt is inexcusable or will- ful. Such suspension or revocation shall extend to programs or activities administered by the States or other privileges may be suspended or revoked if failure to pay the debt is inexcusable or will- ful. Such suspension or revocation shall extend to programs or activities administered by the States on behalf of the Federal Government, to the extent that they affect the Federal Govern- ment’s ability to collect money or funds owed by debtors; (v) Knowingly making false state- ments or bringing frivolous actions may subject the debtor to civil or criminal penalties under 31 U.S.C. 3729– 3731, 18 U.S.C. 286, 287, 1001, and 1002, or any other applicable statutory author- ity, and, if the debtor is a Federal em- ployee, to disciplinary action under 5 CFR part 752 or other applicable au- thority; (vi) Any amounts collected and ulti- mately found not to have been owed by the debtor will be refunded; (vii) For salary offset, up to 15% of the debtor’s current disposable pay may be deducted every pay period until the debt is paid in full; and (viii) Dependent upon applicable stat- utory authority, the debtor may be en- titled to consideration for a waiver. (c) The Secretary will retain evi- dence of service indicating the date of mailing of the demand letter. The evi- dence of service, wh rity, the debtor may be en- titled to consideration for a waiver. (c) The Secretary will retain evi- dence of service indicating the date of mailing of the demand letter. The evi- dence of service, which may include a certificate of service, may be retained electronically so long as the manner of 93 § 30.12 45 CFR Subtitle A (10–1–24 Edition) retention is sufficient for evidentiary purposes. (d) Prior to, during, or after the com- pletion of the demand process, if the Secretary determines to pursue, or is required to pursue offset, the proce- dures applicable to offset should be fol- lowed (see § 30.12). The availability of funds for debt satisfaction by offset and the Secretary’s determination to pursue collection by offset shall release the Secretary from the necessity of further compliance with paragraphs (a), (b), and (c) of this section. (e) Finding debtors. The Secretary will use every reasonable effort to lo- cate debtors, using such sources as telephone directories, city directories, postmasters, drivers license records, automobile title and license records in State and local government agencies, the IRS, credit reporting agencies and skip locator services. Referral of a co ories, postmasters, drivers license records, automobile title and license records in State and local government agencies, the IRS, credit reporting agencies and skip locator services. Referral of a con- fess-judgment note to the appropriate United States Attorney’s Office for entry of judgment will not be delayed because the debtor cannot be located. (f) Communications from debtors. The Secretary should respond promptly to communications from debtor, within 30 days where feasible, and should advise debtors who dispute debts to furnish available evidence to support their contentions. (g) Exception. This section does not require duplication of any notice al- ready contained in a written agree- ment, letter or other document signed by, or provided to, the debtor. § 30.12 Administrative offset. (a) Scope. (1) Administrative offset is the withholding of funds payable by the United States to, or held by the United States for, a person to satisfy a debt. (2) This section does not apply to: (i) Debts arising under the Social Se- curity 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), and implementing re ) Debts arising under the Social Se- curity 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), and implementing reg- ulation at 31 CFR 285.4; (iii) Debts arising under, or payments made under, the Internal Revenue Code or the tariff laws of the United States; (iv) Offsets against Federal salaries to the extent these standards are in- consistent 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; 31 CFR 285.7; and part 33 of this chapter); (v) Offsets under 31 U.S.C. 3728 against a judgment obtained by a debt- or against the United States; (vi) Offsets or recoupments under common law, State law, or Federal statutes specifically prohibiting offsets or recoupments for 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 col- lected by administrative offset under the common law or other applicable statutory authority. (4) Unless otherwi payments that are not subject to administrative offset under 31 U.S.C. 3716 may be col- lected by administrative offset under the common law or other applicable statutory authority. (4) Unless otherwise provided by law, collection by administrative offset under the authority of 31 U.S.C. 3716 may not be conducted more than 10 years after the Department’s right to collect the debt first accrued, unless facts material to the Department’s right to collect the debt were not known and could not reasonably have been known by the Secretary. This lim- itation does not apply to debts reduced to judgment. (5) Where there is reason to believe that a bankruptcy petition has been filed with respect to a debtor, the Of- fice of the General Counsel should be contacted for legal advice concerning the impact of the Bankruptcy Code, particularly 11 U.S.C. 106, 362 and 553, on pending or contemplated collections by offset. (b) Centralized administrative offset. (1) Except as provided in the exceptions listed in § 30.10(c)(1), legally enforceable debts which are 180 days delinquent shall be referred to the Secretary of the Treasury for collection by central- ized administrative offset pursuant to and sted in § 30.10(c)(1), legally enforceable debts which are 180 days delinquent shall be referred to the Secretary of the Treasury for collection by central- ized administrative offset pursuant to and in accordance with 31 CFR 901.3(b). Debts which are less than 180 days de- linquent, including debts referred to the Department by another agency, also may be referred to the Secretary of the Treasury for collection by cen- tralized administrative offset. (2) When referring delinquent debts to the Secretary of the Treasury for 94 Dept. of Health and Human Services § 30.12 centralized administrative offset, the Department must certify, in a form ac- ceptable to the Secretary of the Treas- ury, that: (i) The debt is past due and legally enforceable; and (ii) The Department has complied with all due process requirements under 31 U.S.C. 3716(a) and paragraph (c)(2) of this section. (3) Payments that are prohibited by law from being offset are exempt from centralized administrative offset. The Secretary of the Treasury shall exempt payments under means-tested pro- grams from centralized administrative offset when requested in writing by the head of the payment certifying or au- thorizing ag Secretary of the Treasury shall exempt payments under means-tested pro- grams from centralized administrative offset when requested in writing by the head of the payment certifying or au- thorizing agency. Also, the Secretary of the Treasury may exempt other classes of payments from centralized offset upon the written request of the head of the payment certifying or au- thorizing agency. (c) Non-centralized administrative off- set. (1) Unless otherwise prohibited by law, when centralized administrative offset under paragraph (b) of this sec- tion is not available or appropriate, the Secretary may collect a delinquent debt by conducting non-centralized ad- ministrative offset internally or in co- operation with the agency certifying or authorizing payments to the debtor. (2) Except as provided in paragraph (c)(3) of this section, administrative offset may be initiated only after: (i) The debtor has been sent written notice of the type and amount of the debt, the intention of the Department to initiate administrative offset to col- lect the debt, and an explanation of the debtor’s rights under 31 U.S.C. 3716; and (ii) The debtor has been given: (A) The opportunity to inspect and copy ent to initiate administrative offset to col- lect the debt, and an explanation of the debtor’s rights under 31 U.S.C. 3716; and (ii) The debtor has been given: (A) The opportunity to inspect and copy Department records related to the debt; (B) The opportunity for a review within the Department of the deter- mination of indebtedness; and (C) The opportunity to make a writ- ten agreement to repay the debt. (3) The due process requirements under paragraph (c)(2) of this section may be omitted when: (i) Offset is in the nature of a recoupment, i.e., the debt and the pay- ment to be offset arise out of the same transaction or occurrence; (ii) The debt arises under a contract as set forth in Cecile Industries, Inc. v. Cheney, 995 F.2d 1052 (Fed. Cir. 1993) (notice and other procedural protec- tions set forth in 31 U.S.C. 3716(a) do not supplant or restrict established procedures for contractual offsets cov- ered by the Contracts Disputes Act); or (iii) In the case of non-centralized ad- ministrative offset conducted under paragraph (c)(1) of this section, the De- partment first learns of the existence of the amount owed by the debtor when there is insufficient time before pay- ment woul istrative offset conducted under paragraph (c)(1) of this section, the De- partment first learns of the existence of the amount owed by the debtor when there is insufficient time before pay- ment would be made to the debtor/ payee to allow for prior notice and an opportunity for review. When prior no- tice and an opportunity for review are omitted, the Secretary shall give the debtor such notice and an opportunity for review as soon as practical and shall promptly refund any money ulti- mately found not to have been owed to the Government. (4) When the debtor previously has been given any of the required notice and review opportunities with respect to a particular debt, such as under § 30.11 of this part, the Department need not duplicate such notice and re- view opportunities before administra- tive offset may be initiated. (5) Before requesting that a payment authorizing agency to conduct non-cen- tralized administrative offset, the De- partment shall: (i) Provide the debtor with due proc- ess as set forth in paragraph (c)(2) of this section; and (ii) Provide the payment authorizing agency written certification that the debtor owes the past due, legally en- forceable delinquent d proc- ess as set forth in paragraph (c)(2) of this section; and (ii) Provide the payment authorizing agency written certification that the debtor owes the past due, legally en- forceable delinquent debt the amount stated, and that the Depart- ment has fully complied with this sec- tion. in (6) When a creditor agency requests that the Department, as the payment authorizing agency, conduct non-cen- tralized administrative offset, the Sec- retary shall comply with the request, unless the offset would not be in the best interest of the United States with respect to the program of the Depart- ment, or would otherwise be contrary to law. Appropriate use should be made of the cooperative efforts of other 95 § 30.13 45 CFR Subtitle A (10–1–24 Edition) agencies in effecting collection by ad- ministrative offset, including salary offset. (7) When collecting multiple debts by non-centralized administrative offset, the Department will apply the recov- ered amounts to those debts in accord- ance with the best interests of the United States, as determined by the facts and circumstances of the par- ticular case, particularly the applica- ble statute of limitations. (d) Requests to OPM to offset ith the best interests of the United States, as determined by the facts and circumstances of the par- ticular case, particularly the applica- ble statute of limitations. (d) Requests to OPM to offset a debtor’s anticipated or future benefit payments under the Civil Service Retirement and Disability Fund and the Federal Em- ployee Retirement System. Upon pro- viding OPM written certification that a debtor has been afforded the proce- dures provided in paragraph (c)(2) of this section, the Department may re- quest OPM to offset a debtor’s antici- pated or future benefit payments under the Civil Service Retirement and Dis- ability Fund (Fund) in accordance with 5 CFR part 831, subpart R, or under the Federal Employee Retirement System (FERS) in accordance with 5 CFR part 845, subpart D. 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 be- comes eligible to receive, payments from the Fund or under FERS. This will satisfy any requirement that offset be initiated prior to the expiration of the time limitations referenced in 31 CFR 901.3(b)(4). (e) Review requirements. (1) For pur- poses of this sect S. This will satisfy any requirement that offset be initiated prior to the expiration of the time limitations referenced in 31 CFR 901.3(b)(4). (e) Review requirements. (1) For pur- poses of this section, whenever the Sec- retary is required to afford a debtor a review within the Department, the debtor shall be provided with a reason- able opportunity for an oral hearing when the debtor requests reconsider- ation of the debt and the Secretary de- termines that the question of the in- debtedness cannot be resolved by re- view of the documentary evidence, for example, when the validity of the debt turns on an issue of credibility or ve- racity. (2) Unless otherwise required by law, an oral hearing under this section is not required to be a formal evidentiary hearing, although the Department will carefully document all significant mat- ters discussed at the hearing. (3) An oral hearing is not required with respect to debt collection systems where determinations of indebtedness rarely involve issues of credibility or veracity, and the Secretary has deter- mined that a review of the written record is adequate to correct prior mis- takes. (4) In those cases when an oral hear- ing is not lve issues of credibility or veracity, and the Secretary has deter- mined that a review of the written record is adequate to correct prior mis- takes. (4) In those cases when an oral hear- ing is not required by this section, the Secretary shall accord the debtor a ‘‘paper hearing,’’ that is, a determina- tion of the request for reconsideration based upon a review of the written record. § 30.13 Debt reporting and use of cred- it reporting agencies. (a) Reporting delinquent debts. (1) The Secretary will report delinquent debts over $100 to credit bureaus or other automated databases. Debts arising under the Social Security Act are ex- cluded from paragraph (a). (2) Debts owed by individuals will be reported to consumer reporting agen- cies pursuant to 5 U.S.C. 552a(b)(12). (3) Once a debt has been referred to Treasury for collection, any subse- quent reporting to or updating of a credit bureau or other automated data- base may be handled by the Treasury. (4) Where there is reason to believe that a bankruptcy petition has been filed with respect to a debtor, the Of- fice of the General Counsel should be contacted for legal advice concerning the impact of the Bankruptcy Code, particul ieve that a bankruptcy petition has been filed with respect to a debtor, the Of- fice of the General Counsel should be contacted for legal advice concerning the impact of the Bankruptcy Code, particularly with respect to the appli- cability of the automatic stay, 11 U.S.C. 362, and the procedures for ob- taining relief from such stay prior to proceeding under paragraph (a) of this section. (5) If the debtor has not received prior written notice under § 30.11(b), be- fore reporting a delinquent debt under this section, the Secretary shall pro- vide the debtor at least 60 days written notice of the amount and nature of the debt; that the debt is delinquent and the Department intends to report the debt to a credit bureau (including the specific information that will be dis- closed); that the debtor has the right to dispute the accuracy and validity of the information being disclosed; and, if 96 Dept. of Health and Human Services § 30.15 a previous opportunity was not pro- vided, that the debtor may request re- view within the Department of the debt or rescheduling of payment. The Sec- retary may disclose only the individ- ual’s name, address, and social security number and the nature, debtor may request re- view within the Department of the debt or rescheduling of payment. The Sec- retary may disclose only the individ- ual’s name, address, and social security number and the nature, amount, status and history of the debt. (b) Use of credit reporting agencies. The Secretary may also use credit report- ing agencies to obtain credit reports to evaluate the financial status of loan applicants, potential contractors and grantees; to determine a debtor’s abil- ity to repay a debt; and to locate debt- ors. In the case of an individual, the Secretary may disclose, as a routine use under 5 U.S.C 552a(b)(3), only the individual’s name, address, and Social Security number and the purpose for which the information will be used. § 30.14 Contracting with private collec- tion contractors and with entities that locate and recover unclaimed assets. (a) Subject to the provisions of para- graph (b) of this section, the Secretary may contract with private collection contractors recover delinquent debts, provided that: to (1) The Secretary retains the author- ity to resolve disputes, compromise debts, suspend or terminate collection action, and refer debts to Justice for litigation; delinquent debts, provided that: to (1) The Secretary retains the author- ity to resolve disputes, compromise debts, suspend or terminate collection action, and refer debts to Justice for litigation; (2) The private collection contractor is not allowed to offer the debtor, as an incentive for payment, the opportunity to pay the debt less the private collec- tion contractor’s fee unless the Sec- retary has granted such authority prior to the offer; (3) The contract provides 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 ap- plicable Federal and State laws and regulations pertaining to debt collec- tion practices, including but not lim- ited to the Fair Debt Collection Prac- tices Act, 15 U.S.C. 1692; and (4) The private collection contractor is required to account for all amounts collected. (b) The Secretary shall use govern- ment-wide debt collection contracts to obtain debt collection services pro- vided by private collection contractors. However, the Secretary may refer debts to private collection contractors pursuant to a contract between the De- partment and the private collection contractor only by private collection contractors. However, the Secretary may refer debts to private collection contractors pursuant to a contract between the De- partment and the private collection contractor only if such debts are not subject to the requirement to transfer debts to the Department of the Treas- ury for debt collection under 31 U.S.C. 3711(g) and 31 CFR 285.12(e). (c) Debts arising under the Social Se- curity Act (which can be collected by private collection contractors only by Treasury after the debt has been re- ferred to Treasury for collection) are excluded from this section. (d) The Secretary may fund private collection contractor contracts in ac- cordance with 31 U.S.C. 3718(d), or as otherwise permitted by law. A contract under paragraph (a) of this section may provide that the fee a private collec- tion contractor charges the Depart- ment for collecting the debt is payable from the amounts collected. (e) The Department may enter into contracts for locating and recovering assets of the United States including unclaimed assets. However, before en- tering into a contract to recover assets of the United States that may be held by a State government or financial in- stitution, ts of the United States including unclaimed assets. However, before en- tering into a contract to recover assets of the United States that may be held by a State government or financial in- stitution, the Department must estab- lish procedures that are acceptable to the Secretary of Treasury. (f) The Secretary may enter into con- tracts for debtor asset and income search reports. In accordance with 31 U.S.C. 3718(d), such contracts may pro- vide that the fee a contractor charges the Department for such services may be payable from the amounts recov- ered, unless otherwise prohibited by statute. § 30.15 Suspension or revocation of eli- gibility for loans and loan guaran- tees, licenses, permits, or privileges. (a)(1) Unless waived by the Secretary, financial assistance in the form of loans, loan guarantees, or loan insur- ance shall not be extended to any per- son delinquent on a non-tax debt owed to the United States. This prohibition does not apply to disaster loans. Grants, cooperative agreements, and contracts are not considered to be loans. (2) The authority to waive the appli- cation of this section may be delegated 97 § 30.16 45 CFR Subtitle A (10–1–24 Edition) to the Chief F ve agreements, and contracts are not considered to be loans. (2) The authority to waive the appli- cation of this section may be delegated 97 § 30.16 45 CFR Subtitle A (10–1–24 Edition) to the Chief Financial Officer and re- delegated only to the Deputy Chief Fi- nancial Officer. (3) States that manage Federal ac- tivities, pursuant to approval from the Secretary, should ensure that appro- priate steps are taken to safeguard against issuing licenses, permits, or other privileges to debtors who fail to pay their debts to the Federal Govern- ment. (b) The Secretary will report to Treasury any surety that fails to honor its obligations under 31 U.S.C. 9305. (c) In non-bankruptcy cases, when seeking to collect statutory penalties, forfeitures, or other types of claims, the Secretary may suspend or revoke licenses, permits, or other privileges of a delinquent debtor if the failure to pay the debt is found to be inexcusable or willful. Such suspension or revoca- tion will extend to programs or activi- ties administered by the States on be- half of the Federal Government, to the extent that they affect the Federal Government’s ability to collect money or funds owed by debtors. (d) Where t or activi- ties administered by the States on be- half of the Federal Government, to the extent that they affect the Federal Government’s ability to collect money or funds owed by debtors. (d) Where there is reason to believe that a bankruptcy petition has been filed with respect to a debtor, before taking any action to suspend or revoke under paragraph (c) of this section, the Office of the General Counsel should be contacted for legal advice concerning the impact of the Bankruptcy Code, particularly 11 U.S.C. 362 and 525, which may restrict such action. § 30.16 Liquidation of collateral. (a)(1) The Secretary will liquidate se- curity or collateral through the exer- cise of a power of sale in the security instrument or a non-judicial fore- closure, and apply the proceeds to the applicable debt(s), if the debtor fails to pay the debt(s) within a reasonable time after demand and if such action is in the best interests of the United States. (2) Collection from other sources, in- cluding liquidation of security or col- lateral, is not a prerequisite to requir- ing payment by a surety, insurer, or guarantor unless such action is ex- pressly required by statute or contract. (3) The Secr liquidation of security or col- lateral, is not a prerequisite to requir- ing payment by a surety, insurer, or guarantor unless such action is ex- pressly required by statute or contract. (3) The Secretary will give the debtor reasonable notice of the sale and an ac- counting of any surplus proceeds and will comply with other requirements under law or contract. (b) Where there is reason to believe that a bankruptcy petition has been filed with respect to a debtor, the Of- fice of the General Counsel should be contacted for legal advice concerning the impact of the Bankruptcy Code, particularly with respect to the appli- cability of the automatic stay, 11 U.S.C. 362, and the procedures for ob- taining relief from such stay prior to proceeding under paragraph (a) of this section. § 30.17 Collection in installments. (a) Whenever feasible, the total amount of a debt shall be collected in one lump sum payment. If a debtor is financially unable to pay a debt in one lump sum, either by funds or adminis- trative offset, the Secretary may ac- cept payment in regular installments. The Secretary will obtain financial statements from debtors who represent that they are unable to pay in one lum or adminis- trative offset, the Secretary may ac- cept payment in regular installments. The Secretary will obtain financial statements from debtors who represent that they are unable to pay in one lump sum and independently verify such representations as described in § 30.22(a)(1). (b)(1) When the Secretary agrees to accept payments in regular install- ments, a legally enforceable written agreement should be obtained from the debtor that specifies all the terms and conditions of the agreement, and that includes a provision accelerating the debt in the event of a default. (2) The size and frequency of the pay- ments should reasonably relate to the size of the debt and the debtor’s ability to pay. Whenever feasible, the install- ment agreement will provide for full payment of the debt, including interest and charges, in three years or less. (3) In appropriate cases, the agree- ment should include a provision identi- fying security obtained from the debtor for the deferred payments. § 30.18 Interest, penalties, and admin- istrative costs. (a) Generally. Except as provided in paragraphs (g), (h), and (i) of this sec- tion, the Department shall charge in- terest, penalties, and administ 18 Interest, penalties, and admin- istrative costs. (a) Generally. Except as provided in paragraphs (g), (h), and (i) of this sec- tion, the Department shall charge in- terest, penalties, and administrative costs on delinquent debts owed to the United States. These charges shall con- tinue to accrue until the debt is paid in 98 Dept. of Health and Human Services § 30.18 full or otherwise resolved through com- promise, termination, or waiver of the charges. (b) Interest. The Department shall charge interest on delinquent debts owed the United States as follows: (1) Interest shall accrue from the date of delinquency, or as otherwise provided by law. For debts not paid by the date specified in the written de- mand for payment made under § 30.11, the date of delinquency is the date of mailing of the notice. The date of de- linquency for an installment payment is the due date specified in the pay- ment agreement. (2) Unless a different rate is pre- scribed by statute, contract, or a re- payment agreement, the rate of inter- est charged shall be the rate estab- lished annually by the Secretary of the Treasury pursuant to 31 U.S.C. 3717. The Department may charge a higher rate if necessar ment agreement, the rate of inter- est charged shall be the rate estab- lished annually by the Secretary of the Treasury pursuant to 31 U.S.C. 3717. The Department may charge a higher rate if necessary to protect the rights of the United States and the Secretary has determined and documented a higher rate for delinquent debt is re- quired to protect the Government’s in- terests. Any such higher rate of inter- est charged will be based on Treasury’s quarterly rate certification to the U.S. Public Health Service for delinquencies in the National Research Services Awards and the National Health Serv- ices Corps Scholarship Program. The Department publishes this rate in the FEDERAL REGISTER quarterly. (3) Unless prescribed by statute or contract, the rate of interest, as ini- tially 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 Department may require payment of interest at a new rate that reflects the Treasury rate in effect at the time the new agreement is executed. Interest shall not be com- pounded, that is, interest shall not be charged on interest, penalties, or ad- min rate that reflects the Treasury rate in effect at the time the new agreement is executed. Interest shall not be com- pounded, that is, interest shall not be charged on interest, penalties, or ad- ministrative costs required by this sec- tion, unless prescribed by statute or contract. If, however, the debtor de- faults on a previous repayment agree- ment, charges that accrued but were not collected under the defaulted agreement shall be added to the prin- cipal under the new repayment agree- ment. (c) Administrative costs. The Depart- ment shall assess administrative costs incurred for processing and handling delinquent debts. The calculation of administrative costs should be based on actual costs incurred or a valid esti- mate of the actual costs. Calculation of administrative costs shall include all direct (personnel, supplies, etc.) and in- direct collection costs, including the cost of providing a hearing or any other form of administrative review re- quested by a debtor, and any costs charged by a collection agency under § 30.14. These charges will be assessed monthly, or per payment period, throughout the period that the debt is overdue. Such costs may also be in ad- dition t osts charged by a collection agency under § 30.14. These charges will be assessed monthly, or per payment period, throughout the period that the debt is overdue. Such costs may also be in ad- dition to other administrative costs if collection is being made for another Federal agency or unit. (d) Penalty. Unless otherwise estab- lished by contract, repayment agree- ment, or statute, the Secretary will charge a penalty of six percent a year on the amount due on a debt that is de- linquent for more than 90 days. This charge shall accrue from the date of de- linquency. (e) Cost of living adjustment. 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, an administrative debt may be in- creased by the cost of living adjust- ment in lieu of charging interest and penalties under this section. Adminis- trative debt 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 Govern- ment credit, such as those arising from loans and loan guaranties. The cost of living adjustment is the percentage by which t verpayments, but does not include a debt based on the extension of Govern- ment 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. Such increases to administrative debts shall be computed annually. (f) Priority. When a debt is paid in partial or installment payments, amounts received shall be applied first to outstanding penalties, second to ad- ministrative charges, third to interest, and last to principal. 99 § 30.19 45 CFR Subtitle A (10–1–24 Edition) (g) Waiver. (1) The Secretary shall waive the collection of interest and ad- ministrative 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 ac- crue. The Secretary may extend this 30-day period on a case-by-case basis if the Secretary determines that such ac- tion is in the best interest of the Gov- ernment, or otherwise warranted by eq- uity and good conscience. ay extend this 30-day period on a case-by-case basis if the Secretary determines that such ac- tion is in the best interest of the Gov- ernment, or otherwise warranted by eq- uity and good conscience. (2) The Secretary also may waive in- terest, penalties, and administrative charges charged under this section, in whole or in part, without regard to the amount of the debt, based on: (i) The forth at § 30.22(a)(1) through (4) for the com- promise of debts; or criteria set (ii) A determination by the Secretary that collection of these charges is: (A) Against equity and good con- science; or (B) Not in the best interest of the United States. (h) Review. (1) Except as provided in paragraph (h)(2) of this section, admin- istrative review of a debt will not sus- pend the assessment of interest, pen- alties, and administrative costs. While agency review of a debt is pending, the debtor either may pay the debt or be liable for interest and related charges on the uncollected debt. When agency review results in a final determination that any amount was properly a debt and the debtor chose to retain the amount in dispute, the Secretary shall collect from the debtor the amount de- termined to b view results in a final determination that any amount was properly a debt and the debtor chose to retain the amount in dispute, the Secretary shall collect from the debtor the amount de- termined to be due, plus interest, pen- alties and administrative costs on such debt amount, as calculated under this section, starting from the date the debtor was first made aware of the debt and ending when the debt is repaid. (2) Exception. Interest, penalties, and administrative cost charges will not be imposed on a debt for periods during which collection activity has been sus- pended under § 30.29(c)(1) pending agen- cy review or consideration of waiver if statute prohibits collection of the debt during this period. (i) Common law or other statutory au- thority. The Department may impose and waive interest and related charges on debts not subject to 31 U.S.C. 3717 in accordance with the common law or other statutory authority. § 30.19 Review of cost effectiveness of collection. Periodically, the Secretary will com- pare costs incurred and amounts col- lected. Data on costs and cor- responding recovery rates for debts of different types and in various dollar ranges will be used to compare the Secretary will com- pare costs incurred and amounts col- lected. Data on costs and cor- responding recovery rates for debts of different types and in various dollar ranges will be used to compare the cost effectiveness of alternative collection techniques, establish guidelines with respect to points at which costs of fur- ther collection efforts are likely to ex- ceed recoveries, assist in evaluating of- fers in compromise, and establish min- imum debt amounts below which col- lection efforts need not be taken. § 30.20 Taxpayer information. (a) When attempting to locate a debt- or in order to collect or compromise a debt under this part or any other au- thority, the Secretary may send a re- quest to Treasury in accordance with 31 CFR 901.11 to obtain a debtor’s mail- ing address from the records of the IRS. (b) Mailing addresses obtained under paragraph (a) of this section may be used to enforce collection of a delin- quent debt and may be disclosed to other agencies and to collection agen- cies for collection purposes. Subpart C—Debt Compromise § 30.21 Scope and application. (a) Scope. The standards set forth in this subpart apply to the compromise of debts pursuant to 31 U.S.C. agen- cies for collection purposes. Subpart C—Debt Compromise § 30.21 Scope and application. (a) Scope. The standards set forth in this subpart apply to the compromise of debts pursuant to 31 U.S.C. 3711. The Secretary may exercise such com- promise authority for debts arising out of activities of, or referred or trans- ferred for collection services to, the Department when the amount of the debt then due, exclusive of interest, penalties, and administrative costs, does not exceed $100,000, or any higher amount authorized by the Attorney General. (b) Application. Unless otherwise pro- vided by law, when the principal bal- ance of a debt, exclusive of interest, penalties, and administrative costs, ex- ceeds $100,000 or any higher amount au- thorized by the Attorney General, the authority to accept a compromise rests 100 Dept. of Health and Human Services § 30.22 with Justice. The Secretary shall evaluate the compromise offer, using the factors set forth in this subpart. If an offer to compromise any debt in ex- cess of $100,000 is acceptable to the De- partment, the Secretary shall refer the debt to the Civil Division or other ap- propriate litigating division in Justice using a Cl compromise any debt in ex- cess of $100,000 is acceptable to the De- partment, the Secretary shall refer the debt to the Civil Division or other ap- propriate litigating division in Justice using a Claims Collection Litigation Report (CCLR), which may be obtained from Justice’s National Central Intake Facility. The referral shall include ap- propriate financial information and a recommendation for the acceptance of the compromise offer. Justice approval is not required if the Secretary rejects a compromise offer. § 30.22 Bases for compromise. (a) Compromise. The Secretary may compromise a debt if the full amount cannot be collected based upon inabil- ity to pay, inability to collect the full debt, cost of collection, or doubt debt can be proven in court. (1) Inability to pay. The debtor is un- able to pay the full amount in a rea- sonable time, as verified through credit reports or other financial information. In determining a debtor’s inability to pay the full amount of the debt within a reasonable time, the Secretary will obtain and verify the debtor’s claim of inability to pay by using credit reports or a current financial Statement from the debtor, executed under penalty of per n a reasonable time, the Secretary will obtain and verify the debtor’s claim of inability to pay by using credit reports or a current financial Statement from the debtor, executed under penalty of perjury, showing the debtor’s assets, li- abilities, income, and expenses. The Secretary may use a Departmental fi- nancial information form or may re- quest suitable forms from Justice or the local United States Attorney’s Of- fice. The Secretary also may consider other relevant factors such as: (i) Age and health of the debtor; (ii) Present and potential income; (iii) Inheritance prospects; (iv) The possibility that assets have been concealed or improperly trans- ferred by the debtor; and (v) The availability of assets or in- come that may be realized by enforced collection proceedings. (2) Inability to collect full debt. The Government is unable to collect the debt in full within a reasonable time by enforced collection proceedings. (i) In determining the Government’s ability to enforce collection, the Sec- retary will consider the applicable ex- emptions available to the debtor under State and Federal law, and may also consider uncertainty as to the price the collateral or other prope llection, the Sec- retary will consider the applicable ex- emptions available to the debtor under State and Federal law, and may also consider uncertainty as to the price the collateral or other property will bring at a forced sale. (ii) A compromise effected under this section should be for an amount that bears a reasonable relation to the amount that can be recovered by en- forced collection procedures, with re- gard to the exemptions available to the debtor and the time that collection will take. (3) Cost of collection. The cost of col- lecting the debt does not justify the en- forced collection of the full amount. (i) The Secretary may compromise a debt if the cost of collecting the debt does not justify the enforced collection of the full amount. The amount accept- ed in compromise of such cases may re- flect an appropriate discount for the administrative and litigation costs of collection, with consideration given to the time it will take to effect collec- tion. Collection costs may be a sub- stantial factor in the settlement of small debts. (ii) In determining whether the costs of collection justify enforced collection of the full amount, the Secretary will consider whether may be a sub- stantial factor in the settlement of small debts. (ii) In determining whether the costs of collection justify enforced collection of the full amount, the Secretary will consider whether continued collection of the debt, regardless of cost, is nec- essary to further an enforcement prin- cipal, such as the Government’s will- ingness to pursue aggressively default- ing and uncooperative debtors. (4) Doubt debt can be proven in court. There is significant doubt concerning the Government’s ability to prove its case in court. (i) If there is significant doubt con- cerning the Government’s ability to prove its case in court for the full amount claimed, either because of the legal issues involved or because of a bona fide dispute as to the facts, then the amount accepted in compromise of such cases should fairly reflect the probabilities of successful prosecution to judgment, with due regard to the availability of witnesses and other evi- dentiary support for the Government’s claim. (ii) In determining the litigation risks involved, the Secretary will con- sider the probable amount of court costs and attorney fees pursuant to the 101 § 30.23 45 CFR Subtitle A (10–1–24 Edition im. (ii) In determining the litigation risks involved, the Secretary will con- sider the probable amount of court costs and attorney fees pursuant to the 101 § 30.23 45 CFR Subtitle A (10–1–24 Edition) Equal Access to Justice Act, 28 U.S.C. 2412, that may be imposed against the Government if it is unsuccessful in liti- gation. (b) Installments. The Secretary gen- erally will not accept compromises payable in installments. This is not an advantageous form of compromise in terms of time and administrative ex- pense. If, however, payment of a com- promise in installments is necessary, the Secretary shall, except in the case of compromises based on paragraph (a)(4) of this section, obtain a legally enforceable written agreement pro- viding that, in the event of default, the full original principal balance of the debt prior to compromise, less sums paid thereon, is reinstated. The Office of the General Counsel should be con- sulted concerning the appropriateness of including such a requirement in the case of compromises based on para- graph (a)(4) of this section. Whenever possible, the Secretary will obtain se- curity for repayment in the manner set forth in subpart B of this part. § 3 ent in the case of compromises based on para- graph (a)(4) of this section. Whenever possible, the Secretary will obtain se- curity for repayment in the manner set forth in subpart B of this part. § 30.23 Enforcement policy. The Secretary may compromise stat- utory penalties, forfeitures, or claims established as an aid to enforcement and to compel compliance if the De- in partment’s enforcement policy, terms of deterrence and securing com- pliance, present and future, will be ade- quately served by the Secretary’s ac- ceptance of the sum to be agreed upon. § 30.24 Joint and several liability. (a) When two or more debtors are jointly and severally liable, the Sec- retary will pursue collection against all debtors, as appropriate. The Sec- retary will not attempt to allocate the burden of payment between the debtors but will proceed to liquidate the in- debtedness as quickly as possible. (b) The Secretary will ensure that a compromise agreement with one debtor does not automatically release the De- partment’s claim against the remain- ing debtor(s). The amount of a com- promise with one debtor shall not be considered a precedent or binding in determining the amount that will be requ ease the De- partment’s claim against the remain- ing debtor(s). The amount of a com- promise with one debtor shall not be considered a precedent or binding in determining the amount that will be required from other debtors jointly and severally liable on the claim. § 30.25 Further review of compromise offers. If the Secretary is uncertain whether to accept a firm, written, substantive compromise offer on a debt that is within the Secretary’s delegated com- promise authority, the Secretary may refer the offer to the Civil Division or other appropriate litigating division in Justice, using a CCLR accompanied by supporting data and particulars con- cerning the debt. Justice may act upon such an offer or return it to the Sec- retary with instructions or advice. § 30.26 Consideration tax sequences to the Government. of con- In negotiating a compromise, the Secretary will consider the tax con- sequences to the Government. In par- ticular, the Secretary will consider re- quiring a waiver of tax-loss-carry-for- ward and tax-loss-carry-back rights of the debtor. For information on dis- charge of indebtedness reporting re- quirements see § 30.32. § 30.27 Mutual release of the debtor and the tax-loss-carry-for- ward and tax-loss-carry-back rights of the debtor. For information on dis- charge of indebtedness reporting re- quirements see § 30.32. § 30.27 Mutual release of the debtor and the Government. In all appropriate instances, a com- promise that is accepted by the Sec- retary will be implemented by means of a mutual release. The terms of such mutual release shall provide that the debtor is released from further non-tax liability on the compromised debt in consideration of payment in full of the compromise amount and the Govern- ment and its officials, past and present, are released and discharged from any and all claims and causes of action arising from the same transaction that the debtor may have. In the event a mutual release is not executed when a debt is compromised, unless prohibited by law, the debtor is still deemed to have waived any and all claims and causes of action against the Govern- ment and its officials related to the transaction giving rise to the com- promised debt. Subpart D—Suspending and Terminating Collection Activities § 30.28 Scope and application. (a) Scope. The standards set forth in this subpart apply to the suspension or 102 Dept. of He - promised debt. Subpart D—Suspending and Terminating Collection Activities § 30.28 Scope and application. (a) Scope. The standards set forth in this subpart apply to the suspension or 102 Dept. of Health and Human Services § 30.29 termination of collection activity pur- suant to 31 U.S.C. 3711 on debts that do not exceed $100,000, or such other amount as the Attorney General may direct, exclusive of interest, penalties, and administrative costs, after deduct- ing the amount of partial payments or collections, if any. Prior to referring a debt to Justice for litigation, the Sec- retary may suspend or terminate col- lection under this subpart with respect to debts arising out of activities of, or referred or transferred for collection services to, the Department. (b) Application. (1) If, after deducting the amount of partial payments or col- lections, the principal amount of the debt exceeds $100,000, or such other amount as the Attorney General may direct, exclusive of interest, penalties, and administrative costs, the authority to suspend or terminate rests solely with Justice. (2) If the Secretary believes that sus- pension or termination of any debt in excess of $100,000 may be ies, and administrative costs, the authority to suspend or terminate rests solely with Justice. (2) If the Secretary believes that sus- pension or termination of any debt in excess of $100,000 may be appropriate, the Secretary shall refer the debt to the Civil Division or other appropriate litigating division in Justice, using the CCLR. The referral will specify the rea- sons for the Secretary’s recommenda- tion. If, prior to referral to Justice, the Secretary determines that a debt is plainly erroneous or clearly without merit, the Secretary may terminate collection activity regardless of the amount involved without obtaining Justice concurrence. § 30.29 Suspension of collection activ- ity. (a) Generally. The Secretary may sus- pend collection activity on a debt when: (1) The Department cannot locate the debtor; (2) The debtor’s financial condition is expected to improve; or (3) The debtor has requested a waiver or review of the debt. (b) Financial condition. Based on the current financial condition of a debtor, the Secretary may suspend collection activity on a debt when the debtor’s fu- ture prospects justify retention of the debt for periodic review and collection activity, and ncial condition of a debtor, the Secretary may suspend collection activity on a debt when the debtor’s fu- ture prospects justify retention of the debt for periodic review and collection activity, and: (1) The applicable statute of limita- tions has not expired; (2) Future collection can be effected by administrative offset, notwith- standing the expiration of the applica- ble statute of limitations for litigation of claims, with due regard to the 10- year limitation for administrative off- set prescribed by 31 U.S.C. 3716(e)(1); or (3) The debtor agrees to pay interest on the amount of the debt on which collection will be suspended, and such suspension is likely to enhance the debtor’s ability to pay the full amount of the principal of the debt with inter- est at a later date. (c) Waiver or review. (1) The Secretary shall suspend collection activity during the time required for consideration of the debtor’s request for waiver or ad- ministrative review of the debt if the statute under which the request is sought prohibits the Secretary from collecting the debt during that time. (2) If the statute under which the waiver or administrative review re- quest is sought does not prohibit which the request is sought prohibits the Secretary from collecting the debt during that time. (2) If the statute under which the waiver or administrative review re- quest is sought does not prohibit col- lection activity pending consideration of the request, the Secretary may use discretion, on a case-by-case basis, to suspend collection. Collection action ordinarily will be suspended upon a re- quest for waiver or review if the Sec- retary is prohibited by statute or regu- issuing a refund of lation amounts collected prior to agency con- sideration of the debtor’s request. How- ever, collection will not be suspended when the Secretary determines that the request for waiver or review is friv- olous or was made primarily to delay collection. from (d) Bankruptcy. Upon learning that a bankruptcy petition has been filed with respect to a debtor, in most cases the Secretary must suspend collection ac- tivity on the debt, pursuant to the pro- visions of 11 U.S.C. 362, 1201, and 1301, unless the Secretary can clearly estab- lish that the automatic stay has been lifted or is no longer in effect. The Of- fice of the General Counsel should be contacted immediately for legal ad- vice, and t s the Secretary can clearly estab- lish that the automatic stay has been lifted or is no longer in effect. The Of- fice of the General Counsel should be contacted immediately for legal ad- vice, and the Secretary will take the necessary legal steps to ensure that no funds or money are paid by the Depart- ment to the debtor until relief from the automatic stay is obtained. 103 § 30.30 45 CFR Subtitle A (10–1–24 Edition) § 30.30 Termination of collection activ- ity. (a) The Secretary may terminate col- lection activity when: (1) The Department is unable to col- lect any substantial amount through its own efforts or through the efforts of others; (2) The Department is unable to lo- cate the debtor; (3) Costs of collection are anticipated to exceed the amount recoverable; (4) The debt is legally without merit or enforcement of the debt is barred by any applicable statute of limitations; (5) The debt cannot be substantiated; or (6) The debt against the debtor has been discharged in bankruptcy. (b)(1) Collection activity will not be terminated before the Secretary has pursued all appropriate means of col- lection and determined, based upon the results of the collection activity, that the cy. (b)(1) Collection activity will not be terminated before the Secretary has pursued all appropriate means of col- lection and determined, based upon the results of the collection activity, that the debt is uncollectible. (2) Termination of collection activity ceases active collection of the debt. The termination of collection activity does not preclude the Secretary from retaining a record of the account for purposes of: (i) Selling the debt, if the Secretary of the Treasury determines that such sale is in the best interest of the United States; (ii) Pursuing collection at a subse- quent date in the event there is a change in the debtor’s status or a new collection tool becomes available; (iii) Offsetting against future income or assets not available at the time of termination of collection activity; or (iv) Screening future applicants for prior indebtedness. (c) Generally, the Secretary shall ter- minate collection activity on a debt that has been discharged in bank- ruptcy, regardless of the amount. The Secretary may continue collection ac- tivity, however, subject to the provi- sions of the Bankruptcy Code, for any payments provided under a plan of re- organization. Offset an less of the amount. The Secretary may continue collection ac- tivity, however, subject to the provi- sions of the Bankruptcy Code, for any payments provided under a plan of re- organization. Offset and recoupment rights may survive the discharge of the debtor in bankruptcy and, under some circumstances, claims also may sur- vive the discharge. For example, when the Department is a known creditor of a debtor the claims of the Department may survive a discharge if the Depart- ment did not receive formal notice of the bankruptcy proceedings. When the Department believes that it has claims or offsets that may have survived the discharge of the debtor, the Office of the General Counsel should be con- tacted for legal advice. § 30.31 Exception to termination. When a significant enforcement pol- icy is involved, or recovery of a judg- ment is a prerequisite to the imposi- tion of administrative sanctions, the Secretary may refer debts to Justice for litigation even though termination of collection activity may otherwise be appropriate. § 30.32 Discharge of indebtedness; re- porting requirements. (a)(1) Before discharging a delinquent debt, also referred to as close out of the debt, the Se ction activity may otherwise be appropriate. § 30.32 Discharge of indebtedness; re- porting requirements. (a)(1) Before discharging a delinquent debt, also referred to as close out of the debt, the Secretary shall take all ap- propriate steps to collect the debt in accordance with 31 U.S.C. 3711(g)(9), and parts 30 through 33 of this chapter, including, as applicable, administra- tive offset; tax refund offset; Federal salary offset; credit bureau reporting; administrative wage garnishment; liti- gation; foreclosure; and referral to Treasury, Treasury-designated debt collection centers, or private collection contractors. (2) Discharge of indebtedness is dis- tinct from termination or suspension of collection activity under this sub- part, and is governed by the Internal Revenue Code. When collection action on a debt is suspended or terminated, the debt remains delinquent and fur- ther collection action may be pursued at a later date in accordance with the standards set forth in this part and 31 CFR parts 900 through 904. (3) When the Department discharges a debt in full or in part, further collec- tion action is prohibited. Therefore, be- fore discharging a debt, the Secretary must rt and 31 CFR parts 900 through 904. (3) When the Department discharges a debt in full or in part, further collec- tion action is prohibited. Therefore, be- fore discharging a debt, the Secretary must: (i) Make the determination that col- lection action is no longer warranted; and (ii) Terminate debt collection action. (b) In accordance with 31 U.S.C. 3711(i), the Secretary shall use com- petitive procedures to sell a delinquent 104 Dept. of Health and Human Services § 30.34 debt upon termination of collection ac- tion if the Secretary of the Treasury determines such a sale is in the best in- terests of the United States. Since the discharge of a debt precludes any fur- ther collection action, including the sale of a delinquent debt, the Secretary may not discharge a debt until the re- quirements of 31 U.S.C. 3711(i) have been meet. (c) Upon discharge of an indebted- ness, the Secretary must report the discharge to the IRS in accordance with the requirements of 26 U.S.C. 6050P and 26 CFR 1.6050P–1. The Sec- retary may request that Treasury or Treasury-designated debt collection centers file such a discharge report to the IRS on the Department’s behalf. (d) When discharging a debt, FR 1.6050P–1. The Sec- retary may request that Treasury or Treasury-designated debt collection centers file such a discharge report to the IRS on the Department’s behalf. (d) When discharging a debt, the Sec- retary must request that litigation counsel release any liens of record se- curing the debt. Subpart E—Referrals to the Department of Justice § 30.33 Prompt referral. (a)(1) The Secretary promptly shall refer to Justice for litigation debts on which aggressive collection activity has been taken in accordance with sub- part B of this part, and that cannot be compromised, or on which collection activity cannot be suspended or termi- nated, in accordance with subpart D of this part. (2) The Secretary may refer to Jus- tice for litigation those debts arising out of activities of, or referred or transferred for collection services to, the Department. (b)(1) Debts for which the principal amount is over $1,000,000, or such other amount as the Attorney General may direct, exclusive of interest, penalties, and administrative costs shall be re- ferred to the Civil Division or other di- vision responsible for litigating such debts at the Department of Justice, Washington DC. (2) Debts fo erest, penalties, and administrative costs shall be re- ferred to the Civil Division or other di- vision responsible for litigating such debts at the Department of Justice, Washington DC. (2) Debts for which the principal amount is $1,000,000 or less, or such other amount as the Attorney General may direct, exclusive of interest, pen- alties, and administrative costs shall be referred to the Nationwide Central Intake Facility at Justice as required by the CCLR instructions. (c)(1) Consistent with aggressive agency collection activity and the standards contained in this part and 31 CFR parts 900 through 904, debts shall be referred to Justice as early as pos- sible, and, in any event, well within the period for initiating timely lawsuits against the debtors. (2) The Secretary shall make every effort to refer delinquent debts to Jus- tice for litigation within one year of the date such debts last became delin- quent. In the case of guaranteed or in- sured loans, the Secretary will make every effort to refer these delinquent debts to Justice for litigation within one year from the date the loan was presented to the Department for pay- ment or re-insurance. (d) Justice has exclusive ju very effort to refer these delinquent debts to Justice for litigation within one year from the date the loan was presented to the Department for pay- ment or re-insurance. (d) Justice has exclusive jurisdiction over debts referred to it pursuant to this subpart. Upon referral of a debt to Justice, the Secretary shall: (1) Immediately terminate the use of any administrative collection activi- ties to collect the debt; (2) Advise Justice of the collection activities utilized to date, and their re- sult; and (3) Refrain from having any contact with the debtor and direct all debtor inquiries concerning the debt to Jus- tice. (e) After referral of a debt under this subpart, the Secretary shall imme- diately notify the Department of Jus- tice of any payments credited by the Department to the debtor’s account. Pursuant to 31 CFR 904.1(b), after refer- ral of the debt under this subpart, Jus- tice shall notify the Secretary of any payment received from the debtor. § 30.34 Claims Collection Litigation Report. (a)(1) Unless excepted by Justice, the Secretary will complete the CCLR, ac- companied by a signed Certificate of Indebtedness, to refer all administra- tively uncollectible claims to igation Report. (a)(1) Unless excepted by Justice, the Secretary will complete the CCLR, ac- companied by a signed Certificate of Indebtedness, to refer all administra- tively uncollectible claims to the De- partment of Justice for litigation. (2) The Secretary shall complete all of the sections of the CCLR appropriate to each debt as required by the CCLR instructions, and furnish such other in- formation as may be required in spe- cific cases. (b) The Secretary shall indicate clearly on the CCLR the actions that 105 § 30.35 45 CFR Subtitle A (10–1–24 Edition) the Department wishes Justice to take with respect to the referred debt. The Secretary may indicate specifically any of a number of litigation activities which Justice may pursue, including enforced collection, judgement lien only, renew judgement lien only, renew judgement lien and enforced collection, program enforcement, foreclosure only, and foreclosure and deficiency judg- ment. (c) The Secretary also shall use the CCLR to refer a debt to Justice for the purpose of obtaining approval of a pro- posal to compromise the debt, or to suspend or terminate administrative collection activity of the debt. § 30.35 Preservation of efer a debt to Justice for the purpose of obtaining approval of a pro- posal to compromise the debt, or to suspend or terminate administrative collection activity of the debt. § 30.35 Preservation of evidence. The Secretary will maintain and pre- serve all files and records that may be needed by Justice to prove the Depart- ment’s claim in court. When referring debts to Justice for litigation, certified copies of the documents that form the basis for the claim should be provided along with the CCLR. Upon its request, the original documents will be pro- vided to Justice. § 30.36 Minimum amount of referrals. (a) Except as in paragraph (b) of this section, claims of less than $2,500 ex- clusive of interest, penalties, and ad- ministrative costs, or such other amount as the Attorney General may prescribe, shall not be referred for liti- gation. (b) The Secretary shall not refer claims of less than the minimum amount unless: (1) Litigation to collect such smaller amount is important to ensure compli- ance with the policies and programs of the Department; (2) The claim is being referred solely for the purpose of securing a judgment against the debtor, which will be filed as a lien agains re compli- ance with the policies and programs of the Department; (2) The claim is being referred solely for the purpose of securing a judgment against the debtor, which will be filed as a lien against the debtor’s property pursuant to 28 U.S.C. 3201 and returned to the Department for enforcement; or (3) The debtor has the clear ability to pay the claim and the Government ef- fectively can enforce payment, with due regard for the exemptions avail- able to the debtor under State and Fed- eral law and the judicial remedies available to the Government. (c) The Secretary should consult with the Financial Litigation Staff of the Executive Office for United States At- torneys in Justice prior to referring claims valued at less than the min- imum amount. PART 31—TAX REFUND OFFSET Sec. 31.1 Purpose and scope. 31.2 Definitions. 31.3 General rule. 31.4 Certification and referral of debt. 31.5 Notice. 31.6 Review of Departmental records. 31.7 Review of a determination that a debt is past-due and legally enforceable. AUTHORITY: 31 U.S.C. 3720A, 31 CFR 285.2, E.O. 12866, E.O. 13258. SOURCE: 68 FR 70445, Dec. 18, 2003, unless otherwise noted. § 31.1 Purpose and scope. (a) Purpose. This part pres legally enforceable. AUTHORITY: 31 U.S.C. 3720A, 31 CFR 285.2, E.O. 12866, E.O. 13258. SOURCE: 68 FR 70445, Dec. 18, 2003, unless otherwise noted. § 31.1 Purpose and scope. (a) Purpose. This part prescribes the Department’s standards and procedures for submitting past-due, legally en- forceable debts to the Department of the Treasury for collection by tax re- fund offset. (b) Authority. These standards and procedures are authorized under the tax refund offset provision of the Def- icit Reduction Act of 1984, as amended by the Debt Collection Improvement Act of 1996, codified at 31 U.S.C. 3720A, and the implementing regulations issued by the Department of the Treas- ury at 31 CFR 285.2. (c) Scope. (1) This part applies to all Departmental Operating Divisions and Regional Offices that administer a pro- gram that gives rise to a past-due non- tax debt owed to the United States, and to all officers or employees of the Department authorized to collect such debt. This part does not apply to any debt or claim owed to the Department of Health and Human Services by an- other Federal agency. (2) Nothing in this part precludes the Department from pursuing other debt collection procedures, inc any debt or claim owed to the Department of Health and Human Services by an- other Federal agency. (2) Nothing in this part precludes the Department from pursuing other debt collection procedures, including admin- istrative wage garnishment under part 32 of this title, to collect a debt that has been submitted to the Department of the Treasury under this part. The 106 Dept. of Health and Human Services § 31.3 Department may use such debt collec- tion procedures separately or in con- junction with the offset collection pro- cedures of this part. § 31.2 Definitions. In this part, unless the context oth- erwise requires: Administrative offset means with- holding funds payable by the United States (including funds payable by the United States on behalf of a State gov- ernment) to, or held by the United States for, a person to satisfy a claim. Day means calendar day. For pur- poses of computation, the last day of the period will be included unless it is a Saturday, Sunday, or a Federal legal holiday, in which case the next busi- ness day will be considered the last day of the period. Debt or claim means an amount of money, funds, or other property deter- mined by an appropriate official l holiday, in which case the next busi- ness day will be considered the last day of the period. Debt or claim means an amount of money, funds, or other property deter- mined by an appropriate official to be owed to the United States from any in- dividual, entity, organization, associa- tion, partnership, corporation, or State or local government or subdivision, ex- cept another Federal agency. Debtor means an individual, organiza- tion, association, partnership, corpora- tion, or State or local government or subdivision indebted to the Govern- ment, or the person or entity with legal responsibility for assuming the debtor’s obligation. Department means the Department of Health and Human Services, and each of its Operating Divisions and regional offices. Evidence of service means information retained by the Department indicating the nature of the document to which it pertains, the date of mailing of the document, and the address and name of the debtor to whom it is being sent. A copy of the dated and signed written notice of intent to offset provided to the debtor pursuant to this part may be considered evidence of service for purposes of this regulation. Evidence of service may be the dated and signed written notice of intent to offset provided to the debtor pursuant to this part may be considered evidence of service for purposes of this regulation. Evidence of service may be retained electronically so long as the manner of retention is sufficient for evidentiary purposes. IRS means the Internal Revenue Service, a bureau of the Department of the Treasury. Legally enforceable means that there has been a final agency determination that the debt, in the amount stated, is due and there are no legal bars to col- lection action. Operating division means each sepa- rate component, within the Depart- ment of Health and Human Services, including, but not limited to, the Ad- ministration for Children and Fami- lies, Administration on Aging, the Cen- ters for Disease Control and Preven- tion, the Centers for Medicare & Med- icaid Services, the Food and Drug Ad- ministration, the National Institutes of Health, and the Office of the Sec- retary. Past-due debt means a debt which the debtor does not pay or otherwise re- solve by the date specified in the ini- tial demand for payment, or in an ap- plicable written repayment agreement or other instrument, including a post- hich the debtor does not pay or otherwise re- solve by the date specified in the ini- tial demand for payment, or in an ap- plicable written repayment agreement or other instrument, including a post- delinquency repayment agreement. Secretary means the Secretary of the Department of Health and Human Services, or the Secretary’s designee within any Operating Division or Re- gional Office. Taxpayer identifying number means the identifying number described under section 6109 of the Internal Revenue Code of 1986 (26 U.S.C. 6109). For an in- dividual, identifying number is the individual’s social secu- rity number. taxpayer the Tax refund offset means withholding or reducing a tax refund payment by an amount necessary to satisfy a debt owed to the United States by the payee(s) of a tax refund payment. Tax refund payment means any over- payment of Federal taxes to be re- funded to the person making the over- payment after the IRS makes the ap- propriate credits as provided in 26 U.S.C. 6402 for any liabilities for any tax on the part of the person who made the overpayment. § 31.3 General rule. FMS means the Financial Manage- ment Service, a bureau within the De- partment of the Treasury. for any liabilities for any tax on the part of the person who made the overpayment. § 31.3 General rule. FMS means the Financial Manage- ment Service, a bureau within the De- partment of the Treasury. (a) Any past-due, legally enforceable debt of at least $25, or such other min- imum amount as determined by the 107 § 31.4 45 CFR Subtitle A (10–1–24 Edition) Secretary of the Treasury, shall be sub- mitted to FMS for collection by tax re- fund offset. (b) FMS will compare tax refund pay- ment records, as certified by the IRS, with records of debts submitted by the Department under this part. A match will occur when the taxpayer identi- fication number and name of a pay- ment certification record are the same as the taxpayer identifying number and name control of a debtor record. When a match occurs and all other require- ments for tax refund offset have been met, FMS will reduce the amount of any tax refund payment payable to a debtor by the amount of any past-due legally enforceable debt. Any amounts not offset will be paid to the payee(s) listed in the payment certification record. § 31.4 Certification and referral of debt. (a) Certification. The Secretary shall certify to FMS that t. Any amounts not offset will be paid to the payee(s) listed in the payment certification record. § 31.4 Certification and referral of debt. (a) Certification. The Secretary shall certify to FMS that: (1) The debt is past-due and legally enforceable in the amount submitted and that the Department will ensure that collections are properly credited to the debt; (2) Except in the case of a judgment debt or as otherwise allowed by law, the debt is referred within ten (10) years after the Department’s right of action accrues; (3) The Department has made reason- able efforts to obtain payment of the debt, and has: (i) Submitted the debt to FMS for collection by offset and complied with the administrative offset provision of 31 U.S.C. 3716(a) and related regula- tions, to the extent that collection by administrative offset is not prohibited by statute; (ii) Notified, or made a reasonable at- tempt to notify, the debtor that the debt is past-due, and unless paid within 60 days of the date of the notice, the debt may be referred to Treasury for tax refund offset. For purposes of this regulation, the Department has made a reasonable attempt to notify the debt- or if the agency uses the curr the notice, the debt may be referred to Treasury for tax refund offset. For purposes of this regulation, the Department has made a reasonable attempt to notify the debt- or if the agency uses the current ad- dress information contained in the De- partment’s records related to the debt. If address validation is desired or nec- essary, the Department may obtain in- formation from the IRS pursuant to 26 U.S.C. 6103(m)(2)(4) or (5). (iii) Given the debtor at least 60 days to present evidence that all or part of the debt is not past-due or not legally enforceable, considered any evidence presented by the debtor, and deter- mined that the debt is past-due and le- gally enforceable; and (iv) Provided the debtor with an op- portunity to make a written agreement to repay the debt; and (4) The debt is at least $25. (b) Referral. (1) The Secretary shall submit past-due, legally enforceable debt information for tax refund offset in the time and manner prescribed by the Department of the Treasury. (2) For each debt referred under this part, the Secretary will include the fol- lowing information: (i) The name and taxpayer identi- fying number, as defined in 26 U.S.C. 6109, of the debtor responsi (2) For each debt referred under this part, the Secretary will include the fol- lowing information: (i) The name and taxpayer identi- fying number, as defined in 26 U.S.C. 6109, of the debtor responsible for the debt; (ii) The amount of such past-due and legally enforceable debt; (iii) The date on which the debt be- came past-due; and (iv) The designation of the Depart- ment referring the debt. (c) Correcting and updating referral. (1) After referring a debt under this part, the Secretary shall promptly notify the Department of the Treasury if: (i) An error was made with respect to information transmitted to the Depart- ment of the Treasury; (ii) The Department receives a pay- ment or credits a payment to the ac- count of a debtor referred for tax re- fund offset; or (iii) The debt amount is otherwise in- correct. (2) The Department shall provide the certification required under paragraph (a) of this section for any increases to amounts owed. (d) Rejection of certification. If the De- partment of Treasury rejects a certifi- cation because it does not comply with the requirements of paragraph (a) of this section, upon notification of the rejection and the reason(s) for rejec- tion, partment of Treasury rejects a certifi- cation because it does not comply with the requirements of paragraph (a) of this section, upon notification of the rejection and the reason(s) for rejec- tion, the Secretary will resubmit the debt with a corrected certification. 108 Dept. of Health and Human Services Pt. 32 § 31.5 Notice. (a) Requirements. If not previously in- cluded in the initial demand letter pro- vided under section 30.11, at least 60 days before referring a debt for tax re- fund offset, the Secretary shall mail, by first class mail to the debtor’s last known address, written notice inform- ing the debtor of: (1) The nature and amount of the debt; (2) The determination that the debt is past-due and legally enforceable, and unless paid within 60 days after the date of the notice, the Secretary in- tends to enforce collection by referring the debt the Department of the Treas- ury for tax refund offset; and (3) The debtor’s rights to: (i) Inspect and copy Department records relating to the debt; (ii) Enter into written agreement to repay the amount of the debt; (iii) Request review and present evi- dence that all or part of the debt is not past-due or not legally enforceabl ating to the debt; (ii) Enter into written agreement to repay the amount of the debt; (iii) Request review and present evi- dence that all or part of the debt is not past-due or not legally enforceable. (b) The Secretary will retain evi- dence of service indicating the date of mailing of the notice. The notice may be retained electronically so long as the manner of retention is sufficient for evidentiary purposes § 31.6 Review of Departmental records. (a) To inspect or copy Departmental records relating to the debt, the debtor must send a written request to the ad- dress designated in the notice described in section 31.5. The request must be re- ceived by the Department within 60 days from the date of the notice. (b) In response to a timely request as described in paragraph (a) of this sec- tion, the designated Department offi- cial shall notify the debtor of the loca- tion and time when the debtor may in- spect and copy such records. If the debtor is unable to personally inspect such records as the result of geo- graphical or other constraints, the De- partment will arrange to send copies of the records to the debtor. § 31.7 Review of a determination that a debt is past-due and le records as the result of geo- graphical or other constraints, the De- partment will arrange to send copies of the records to the debtor. § 31.7 Review of a determination that a debt is past-due and legally enforce- able. (a) Requesting a review. (1) If the debt- or believes that all or part of the debt is not past-due or not legally enforce- able, the debtor may request a review by the Department by sending a writ- ten request to the address provided in the notice. The written request must be received by the Department within 60 days from the date of the notice or, if the debtor has requested to inspect the records, within 30 days from the debtor’s inspection of the records or the Department’s mailing of the records under section 31.6(b), whichever is later. (2) The request for review must be signed by the debtor, state the amount disputed, and fully identify and explain the evidence that the debtor believes supports the debtor’s position. The debtor must submit with the request any documents that the debtor wishes to be considered, or the debtor must state in the request that additional in- formation will be submitted within the above specified time period. (3) Failure to timely r cuments that the debtor wishes to be considered, or the debtor must state in the request that additional in- formation will be submitted within the above specified time period. (3) Failure to timely request a review will be deemed an admission by the debtor that the debt is past-due and le- gally enforceable, and will result in a referral of the debt to the Department of the Treasury without further action. (b) Review. Upon the timely submis- sion of evidence by the debtor, the De- partment shall review the dispute and shall consider its records and any docu- mentation and evidence submitted by the debtor. The Department shall make a determination based on the review of the written record, and shall send a written notice of its decision to the debtor. There is no administrative ap- peal of this decision. (c) A debt that previously has been reviewed pursuant to this part, or that has been reduced to a judgment, will not be reconsidered under this part un- less the evidence presented by the debt- or disputes payments made or events occurring subsequent to the previous review or judgment. PART 32—ADMINISTRATIVE WAGE GARNISHMENT Sec. 32.1 Purpose and scope. 32.2 Definitions. 32.3 Gener the debt- or disputes payments made or events occurring subsequent to the previous review or judgment. PART 32—ADMINISTRATIVE WAGE GARNISHMENT Sec. 32.1 Purpose and scope. 32.2 Definitions. 32.3 General rule. 32.4 Notice. 32.5 Hearing. 32.6 Withholding order. 32.7 Certification by employer. 109 § 32.1 45 CFR Subtitle A (10–1–24 Edition) 32.8 Amounts withheld. 32.9 Financial hardship. 32.10 Refunds. 32.11 Ending garnishment. 32.12 Right of action. (6) Nothing in this part requires the Department to duplicate notices or ad- ministrative proceedings required by contract or other laws or regulations. AUTHORITY: 31 U.S.C. 3720D, 5 U.S.C. 552, § 32.2 Definitions. 553, E.O. 12866, 12988, 13808. In this part, unless the context oth- SOURCE: 68 FR 15093, Mar. 28, 2003, unless erwise requires: otherwise noted. § 32.1 Purpose and scope. (a) Purpose. This part prescribes the standards and procedures for the De- partment to collect money from a debtor’s disposable pay by means of ad- ministrative wage garnishment to sat- isfy delinquent non-tax debts owed to the United States. (b) Authority. These standards and procedures are authorized under the wage garnishment provisions of the Debt Collecti age garnishment to sat- isfy delinquent non-tax debts owed to the United States. (b) Authority. These standards and procedures are authorized under the wage garnishment provisions of the Debt Collection Improvement Act of 1996, codified at 31 U.S.C. 3720D, and the Department of the Treasury Adminis- trative Wage Garnishment Regulations at 31 CFR 285.11. (c) Scope. (1) This part applies to all Departmental Operating Divisions and Regional Offices that administer a pro- gram that gives rise to a delinquent non-tax debt owed to the United States and to all officers or employees of the Department authorized to collect such debt. (2) This part shall apply notwith- standing any provision of State law. (3) Nothing in this part precludes the compromise of a debt or the suspension or termination of collection action in accordance with part 30 of this title, or other applicable law or regulation. (4) The receipt of payments pursuant to this part does not preclude the De- partment from pursuing other debt col- lection remedies, including the offset of Federal payments to satisfy delin- quent non-tax debt owed to the United States. The Department may pursue such debt collection remedies sepa- ther debt col- lection remedies, including the offset of Federal payments to satisfy delin- quent non-tax debt owed to the United States. The Department may pursue such debt collection remedies sepa- rately or in conjunction with adminis- trative wage garnishment. (5) This part does not apply to the collection of delinquent non-tax debts owed to the United States 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 and other applicable laws. Business day means Monday through Friday. For purposes of computation, the last day of the period will be in- cluded unless it is a Federal legal holi- day, in which case the next business day following the holiday will be con- sidered the last day of the period. Certificate of service means a certifi- cate signed by an employee of the De- partment indicating the nature of the document to which it pertains, the date of mailing of the document, and to whom it is being sent. Day means calendar day. For pur- poses of computation, the last day of the period will be included unless it is a Saturday, Sunday, or a Federal legal holiday, in which cas d to whom it is being sent. Day means calendar day. For pur- poses of computation, the last day of the period will be included unless it is a Saturday, Sunday, or a Federal legal holiday, in which case the next busi- ness day will be considered the last day of the period. Debt or claim means an amount of money, funds, or property that has been determined by the Secretary to be owed to the United States by an indi- vidual, including debt administered by a third party as an agent of the Federal Government. A debt or claim includes, but is not limited to: amounts owed on account of loans made, insured or guar- anteed by the Federal Government, in- cluding any deficiency or difference be- tween the price obtained by the Fed- eral Government upon selling the prop- erty and the amount owed to the Fed- eral Government; overpayments to pro- gram beneficiaries; any amount the Federal Government is authorized by statute to collect for the benefit of any person; the unpaid share of any non- Federal partner in a program involving a Federal payment, including a match- ing or cost-sharing payment of the non-Federal partner; any fine, civil penalty or assessment; and other amounts or money or pro al partner in a program involving a Federal payment, including a match- ing or cost-sharing payment of the non-Federal partner; any fine, civil penalty or assessment; and other amounts or money or property owed to the Federal Government. Debtor means an individual who owes a delinquent non-tax debt to the United States. Delinquent debt means any non-tax debt that has not been paid by the date 110 Dept. of Health and Human Services § 32.4 specified in the Department’s initial written demand for payment, or appli- cable payment agreement or instru- ment, unless other satisfactory pay- ment arrangements have been made. For purposes of this part, ‘‘delinquent’’ and ‘‘overdue’’ have the same meaning. Department means the United States Department of I-Iealth and 1—luman Services, including each of its Oper- ating Divisions and Regional Offices. Disposable pay means that part of the debtor’s compensation (including, but not limited to, salary, bonuses, com- missions, and vacation pay) from an employer remaining after the deduc- tion of health insurance premiums and any amounts required by law to be withheld. For purposes of this part, ‘‘amounts required by law to be with- held’’ include a employer remaining after the deduc- tion of health insurance premiums and any amounts required by law to be withheld. For purposes of this part, ‘‘amounts required by law to be with- held’’ include amounts for deductions such as social security taxes and with- holding taxes, but do not include any amount withheld pursuant to a court order. Employer 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 lim- ited to, State and local Governments, but does not include an agency of the Federal Government as defined by 31 CFR 285.11(c). Garnishment means the process of withholding amounts from an employ- ee’s disposable pay and paying those amounts to a creditor in satisfaction of a withholding order. Hearing means a review of the docu- mentary evidence concerning the exist- ence or amount of a debt, or the terms of a repayment schedule, provided such repayment schedule is established other than by a written agreement en- tered into pursuant to this part. If the hearing official determines that the issues in dispute cannot be resolved solely by review of the written record, such as when the validity of n agreement en- tered into pursuant to this part. If the hearing official determines that the issues in dispute cannot be resolved solely by review of the written record, such as when the validity of the debt turns on the issue of credibility or ve- racity, an oral hearing may be pro- vided. Hearing official means any qualified individual, as determined by the Sec- retary, including a Departmental Ap- peals Board administrative law judge. Secretary means the Secretary of Health and Human Services, or the Secretary’s designee within the De- partment. Withholding order for purposes of this part means ‘‘Wage Garnishment Order (SF329B).’’ Also for purposes of this part, the terms ‘‘wage garnishment order’’ and ‘‘garnishment order’’ have the same meaning as ‘‘withholding order.’’ § 32.3 General rule. (a) Except as provided in paragraph (b) of this section, whenever a delin- quent debt is owed by an individual, the Secretary, or another federal agen- cy collecting a debt on the Depart- ment’s behalf (See 45 CFR part 30), may initiate proceedings administratively to garnish the wages of the delinquent debtor. (b) The Secretary may not garnish the wages of a debtor who the Sec- retary know s behalf (See 45 CFR part 30), may initiate proceedings administratively to garnish the wages of the delinquent debtor. (b) The Secretary may not garnish the wages of a debtor who the Sec- retary knows has been involuntarily separated from employment until the debtor has been re-employed continu- ously for at least 12 months. The debt- or has the burden of informing the Sec- retary of the circumstances sur- rounding an involuntary separation from employment. § 32.4 Notice. (a) Notice requirements. At least 30 days before the initiation of garnish- ment proceedings, the Secretary shall mail, by first class mail, to the debt- or’s last known address a written no- tice informing the debtor of: (1) The nature and amount of the debt; (2) The intention of the Secretary to initiate proceedings to collect the debt through deductions from pay until the debt and all accumulated interest, pen- alties, and administrative costs are paid in full; (3) The debtor’s right— (i) To inspect and copy Department records related to the debt; (ii) To enter into a written repay- ment agreement with the Department under terms agreeable to the Depart- ment; (iii) To a hearing, in accordance with § 32.5, conc tment records related to the debt; (ii) To enter into a written repay- ment agreement with the Department under terms agreeable to the Depart- ment; (iii) To a hearing, in accordance with § 32.5, concerning the existence or the amount of the debt or the terms of the proposed repayment schedule under the garnishment order, except that the 111 § 32.5 45 CFR Subtitle A (10–1–24 Edition) debtor is not entitled to a hearing con- cerning the proposed repayment sched- ule if the terms were established by written agreement pursuant to para- graph (a)(3)(ii) of this section; and (4) The time frames within which the debtor may exercise his or her rights. (b) The Secretary will keep a copy of the dated notice. The notice may be re- tained electronically so long as the manner of retention is sufficient for evidentiary purposes. § 32.5 Hearing. (a) In general. Upon timely written request of the debtor, the Secretary shall provide a hearing, which at the Department’s option may be oral or written, concerning the existence or amount of the debt, or the terms of a repayment schedule established other than by written agreement under § 32.4(a)(3)(ii). (b) Request for hearing. (1) The request for a h oncerning the existence or amount of the debt, or the terms of a repayment schedule established other than by written agreement under § 32.4(a)(3)(ii). (b) Request for hearing. (1) The request for a hearing must be signed by the debtor, state each issue being disputed, and identify and explain with reason- able specificity all facts and evidence that the debtor believes supports the debtor’s position. Supporting docu- mentation identified by the debtor should be attached to the request. (2) Effect of timely request. Subject to paragraph (j) of this section, if the debtor’s written request is received on or before the 15th business day fol- lowing the mailing of the written no- tice required under this part, a with- holding order shall not be issued under § 32.6 until the debtor has been provided the requested hearing and a decision in accordance with paragraphs (g) and (h) of this section has been rendered. (3) Failure to timely request a hear- ing. If the debtor’s written request is received after the 15th business day fol- lowing the mailing of the written no- tice required under this part, the Sec- retary shall provide a hearing to the debtor. However, the Secretary shall not de eceived after the 15th business day fol- lowing the mailing of the written no- tice required under this part, the Sec- retary shall provide a hearing to the debtor. However, the Secretary shall not delay the issuance of a withholding order unless the Secretary determines that the delay in submitting such re- quest was caused by factors beyond the control of the debtor, or the Secretary receives information that the Sec- retary determines justifies a delay or cancellation of the withholding order. (c) Oral hearing. (1) For purposes of this section, a debtor shall be provided a reasonable opportunity for an oral hearing when the hearing official de- termines that the issues in dispute can- not be resolved by review of the docu- mentary evidence, such as when the va- lidity of the claim turns on the issue of credibility or veracity. (2) If the hearing official determines an oral hearing is appropriate, the hearing official will establish the date, time and location of the hearing. At the debtor’s option, the oral hearing may be conducted in person or by tele- phone conference. The hearing official will notify the debtor of the date, time, and in the case of an in-person hearing, the l debtor’s option, the oral hearing may be conducted in person or by tele- phone conference. The hearing official will notify the debtor of the date, time, and in the case of an in-person hearing, the location of the hearing. All travel expenses incurred by the debtor in con- nection with an in-person hearing will be borne by the debtor. (d) Paper hearing. (1) If the hearing official determines an oral hearing is not required by this section, the hear- ing official shall afford the debtor a paper hearing, that is, the issues in dis- pute will be decided based upon a re- view of the written record. (2) The hearing official shall notify the debtor of the deadline for the sub- mission of additional evidence if nec- essary for a review of the record. (e) Burden of proof. (1) The Secretary has the initial burden of proving the existence or amount of the debt. (2) Thereafter, if the debtor disputes the existence or amount of the debt, the debtor must present by a prepon- derance of the evidence that no debt exists or that the amount is incorrect. When challenging the terms of a repay- ment schedule, the debtor must estab- lish by a preponderance of the evidence that the terms of the repaym e that no debt exists or that the amount is incorrect. When challenging the terms of a repay- ment schedule, the debtor must estab- lish by a preponderance of the evidence that the terms of the repayment sched- ule are unlawful, would cause financial hardship to the debtor, or that collec- tion of the debt may not be pursued due to operation of law. (f) Record. The hearing official shall maintain a summary record of any hearing provided under this part. A hearing is not required to be a formal evidentiary-type hearing, but witnesses who testify in an oral hearing must do so under oath or affirmation. (g) Date of decision. (1) The hearing official shall issue a written decision, as soon as practicable, but no later 112 Dept. of Health and Human Services § 32.8 than sixty (60) days after the date on which the request for the hearing was received by the Department. (2) If the hearing official is unable to provide the debtor with a hearing and render a decision within 60 days after the receipt of the request for such hearing: (i) A withholding order may not be issued until the hearing is held and a decision is rendered; or (ii) A withholding order previously issued to the debtor’s empl eipt of the request for such hearing: (i) A withholding order may not be issued until the hearing is held and a decision is rendered; or (ii) A withholding order previously issued to the debtor’s employer must be suspended beginning on the 61st day after the receipt of the hearing request and continuing until a hearing is held and a decision is rendered. (h) Content of decision. The written decision shall include: (1) A summary of the facts presented; (2) The hearing official’s findings, analysis, and conclusions; and (3) The terms of any repayment schedule, if applicable. (i) Final agency action. The hearing official’s decision will be the final agency action for the purposes of judi- cial review under the Administrative Procedure Act. 5 U.S.C. 701 et seq. (j) Failure to appear. In the absence of good cause shown, a debtor who fails to appear at a hearing will be deemed as not having timely filed a request for a hearing. § 32.6 Withholding order. (a) Unless the Secretary receives in- formation that the Secretary deter- mines justifies a delay or cancellation of a withholding order, the Secretary shall send, by first class mail, an SF– 329A ‘‘Letter to Employer & Important Notice t formation that the Secretary deter- mines justifies a delay or cancellation of a withholding order, the Secretary shall send, by first class mail, an SF– 329A ‘‘Letter to Employer & Important Notice to Employer,’’ an SF–329B ‘‘Wage Garnishment Order,’’ an SF– 329C ‘‘Wage Garnishment Worksheet,’’ and an SF–329D ‘‘Employer Certifi- cation,’’ to the debtor’s employer with- in 30 days after the debtor fails to make a timely request for a hearing, i.e., within 15 business days after mail- ing the notice required under this part, or, if the timely request for a hearing is made by the debtor, within 30 days after a final decision is made by the Secretary to proceed with garnish- ment. (b) The Secretary shall keep a copy of the dated letter to the employer and a copy of the wage garnishment order. The certificate of service may be re- tained electronically so long as the manner of retention is sufficient for evidentiary purposes. § 32.7 Certification by employer. The employer must complete and re- turn the SF–329D, ‘‘Employer Certifi- cation’’ to the Department within 20 days of receipt. § 32.8 Amounts withheld. (a) After receipt of a withholding order issued under this part, the em- ploye re- turn the SF–329D, ‘‘Employer Certifi- cation’’ to the Department within 20 days of receipt. § 32.8 Amounts withheld. (a) After receipt of a withholding order issued under this part, the em- ployer shall deduct from all disposable pay paid to the debtor during each pay period the amount of garnishment de- scribed in paragraph (b) of this section. The employer may use the SF–329C ‘‘Wage Garnishment Worksheet’’ to calculate the amount to be deducted from the debtor’s disposable pay. (b) Subject to paragraphs (c) and (d) of this section, the amount of garnish- ment shall be the lesser of: (1) The amount indicated on the gar- nishment order up to 15% of the debt- or’s disposable pay; or (2) The amount set forth in 15 U.S.C. 1673(a)(2) (Maximum allowable garnish- ment). 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 29 CFR 870.10. (c)(1) Except as provided in paragraph (c)(2) of this section, when a debtor’s pay is subject to multiple withholding orders, unless otherwise provided by Federal law, withholding orders issued pursuant to this part shall have pri- ority over o ) of this section, when a debtor’s pay is subject to multiple withholding orders, unless otherwise provided by Federal law, withholding orders issued pursuant to this part shall have pri- ority over other withholding orders that are served later in time. (2) Notwithstanding the foregoing, withholding orders for family support shall have priority over withholding orders issued under this part. (3) If amounts are being withheld from a debtor’s pay pursuant to a with- holding order served on an employer before a withholding order issued pur- suant to this part, or if a withholding order for family support is served on an employer at any time, the amounts withheld pursuant to a withholding order issued under this part shall be the lesser of: (i) The amount calculated under paragraph (b) of this section, or 113 § 32.9 45 CFR Subtitle A (10–1–24 Edition) (ii) An amount equal to 25% of the debtor’s disposable pay the amount(s) withheld under the with- holding order(s) with priority. less (d) If the debtor owes more than one debt to the Department, the Secretary may issue multiple withholding orders provided that the total amount gar- nished from the debtor’s pay for such orders does not e If the debtor owes more than one debt to the Department, the Secretary may issue multiple withholding orders provided that the total amount gar- nished from the debtor’s pay for such orders does not exceed the amount set forth in paragraph (b) of this section. (e) An amount greater than that set forth in paragraphs (b) or (c) of this section may be withheld upon the writ- ten consent of the debtor. (f) The employer shall promptly pay to the Department all amounts with- held in accordance with the with- holding order issued pursuant to this part. (g) The employer is not required to vary its normal pay and disbursement cycles in order to comply with the withholding order. (h) Any assignment or allotment by an employee shall be void to the extent it interferes with or prohibits execu- tion of the withholding order issued under this part, except for any assign- ment or allotment made pursuant to a family support judgment or order. (i) The employer shall withhold the appropriate amount from the debtor’s wages for each pay period until the em- ployer receives notification from the Secretary to discontinue wage with- holding. (j) The withholding order, SF–329B ‘‘Wage Garnishment Order,’’ the debtor’s wages for each pay period until the em- ployer receives notification from the Secretary to discontinue wage with- holding. (j) The withholding order, SF–329B ‘‘Wage Garnishment Order,’’ sent to the employer under § 32.6, requires the employer to commence wage with- holding on the first pay day after the employer receives the order. However, if the first pay day is within 10 days after receipt of the order, the employer may begin deductions on the second pay day. (k) An employer may not discharge, refuse to employ, or take disciplinary action against any debtor as a result of the issuance of a withholding order under this part. [68 FR 15093, Mar. 28, 2003; 68 FR 24052, May 6, 2003] § 32.9 Financial hardship. (a) A debtor whose wages are subject to a withholding order may, at any time, request a review by the Depart- ment of the amount garnished, based on materially changed circumstances such as disability, divorce, or cata- strophic illness which result in finan- cial hardship. (b) A debtor requesting such a review under paragraph (a) of this section shall submit the basis for claiming that the current amount of garnish- ment results in a financial hardship to the debt ship. (b) A debtor requesting such a review under paragraph (a) of this section shall submit the basis for claiming that the current amount of garnish- ment results in a financial hardship to the debtor, along with supporting docu- mentation. The Secretary shall con- sider any information submitted in ac- cordance with this part. (c) If a financial hardship is found, the Secretary shall downwardly adjust, by an amount and for a period of time established by the Secretary, the amount garnished to reflect the debt- or’s financial condition. The Secretary will notify the employer of any adjust- ments to the amount to be withheld. § 32.10 Refunds. (a) If the hearing official, pursuant to a hearing under this part, determines that a debt is not legally due and owing to the United States, the Sec- retary shall promptly refund any amount collected by means of adminis- trative wage garnishment. (b) Unless required by Federal law or contract, refunds under this part shall not bear interest. § 32.11 Ending garnishment. (a) Once the Department has fully re- covered the amounts owed by the debt- or, including interest, penalties, and administrative costs assessed pursuant to and in accordance 2.11 Ending garnishment. (a) Once the Department has fully re- covered the amounts owed by the debt- or, including interest, penalties, and administrative costs assessed pursuant to and in accordance with part 30 of this title, the Secretary shall send the debtor’s employer notification to dis- continue wage withholding. (b) At least annually, the Secretary shall review its debtors’ accounts to ensure that garnishment has been ter- minated for accounts that have been paid in full. § 32.12 Right of action. (a) The employer of a debtor subject to wage withholding pursuant to this part shall pay to the Department as di- rected in a withholding order issued under this part. (b) The Secretary may bring suit against an employer for any amount that the employer fails to withhold 114 Dept. of Health and Human Services § 33.2 from wages owed and payable to a debt- or in accordance with §§ 32.6 and 32.8, plus attorney’s fees, costs, and, if ap- plicable, punitive damages. (c) A suit under this section may not be filed before the termination of the collection action involving a particular debtor, unless earlier filing is nec- essary to avoid expiration of any appli- cable statute of limitatio ection may not be filed before the termination of the collection action involving a particular debtor, unless earlier filing is nec- essary to avoid expiration of any appli- cable statute of limitations period. For purposes of this section, ‘‘termination of collection action’’ occurs when the Secretary has terminated collection action in accordance with part 30 of this title, or other applicable law or regulation. (d) Notwithstanding deemed to occur if from a debtor whose paragraph (c) of this section, termination of the collec- tion action will be a period of one (1) year the Department does not receive any payments wages were subject to a garnishment order issued under this part. PART 33—SALARY OFFSET Sec. 33.1 Purpose, authority, and scope. 33.2 Definitions. 33.3 General rule. 33.4 Notice requirements before offset. 33.5 Review of department records relating to the debt. 33.6 Hearings. 33.7 Obtaining the services of a hearing offi- cial. 33.8 Voluntary repayment agreement in lieu of salary offset. 33.9 Special review. 33.10 Procedures for salary offset. 33.11 Salary offset when the Department is the creditor agency but not the paying agency. 33.12 Salary offset when the Departme salary offset. 33.9 Special review. 33.10 Procedures for salary offset. 33.11 Salary offset when the Department is the creditor agency but not the paying agency. 33.12 Salary offset when the Department is the paying agency but not the creditor agency. 33.13 Interest, penalties, and administrative costs. 33.14 Non-waiver of rights. 33.15 Refunds. 33.16 Additional administrative collection. AUTHORITY: 5 U.S.C. 5514; 5 CFR Part 550, Subpart K. SOURCE: 72 FR 10421, Mar. 8, 2007, unless otherwise noted. § 33.1 Purpose, authority, and scope. (a) Purpose. This part prescribes the Department’s standards and procedures for the collection of debts owed by Fed- eral employees to the United States through involuntary salary offset. (b) Authority. 5 U.S.C. 5514; 5 CFR part 550, subpart K. (c) Scope. (1) This part applies to in- ternal and Government-wide collec- tions of debts owed by Federal employ- ees by administrative offset from the current pay account of the debtor with- out his or her consent. to consents (2) The procedures contained in this part do not apply to any case where an employee collection through deduction(s) from the employ- ee’s pay account, or to debts arising under the In nt. to consents (2) The procedures contained in this part do not apply to any case where an employee collection through deduction(s) from the employ- ee’s pay account, or to debts arising under the Internal Revenue Code or the tariff laws of the United States, or where another statute explicitly pro- vides for, or prohibits, collection of a debt by salary offset (e.g., travel ad- vances in 5 U.S.C. 5705 and employee training expenses in 5 U.S.C. 4108). (3) This part does not preclude an em- ployee from requesting waiver of an er- roneous 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 valid- ity of a debt, in the manner prescribed by the Secretary. Similarly, this part does not preclude an employee from re- questing waiver of the collection of a debt under any other applicable statu- tory authority. (4) Nothing in this part precludes the compromise of the debt, or the suspen- sion or termination of collection ac- tions, in accordance with part 30 of this title. § 33.2 Definitions. In this part— Administrative offset means with- holding funds payable by the United States to, or held by the United States for, a person to satisfy ce with part 30 of this title. § 33.2 Definitions. In this part— Administrative offset means with- holding funds payable by the United States to, or held by the United States for, a person to satisfy a debt owed by the payee. Agency means an executive depart- ment or agency; a military depart- ment; the United States Postal Serv- ice; the Postal Rate Commission; the United States Senate; the United States House of Representatives; and court, court administrative office, or instrumentality in the judicial or leg- islative branches of the Government; or a Government Corporation. Creditor agency means the agency to which the debt is owed, including a debt collection center when acting on 115 § 33.2 45 CFR Subtitle A (10–1–24 Edition) behalf of a creditor agency in matters pertaining to the collection of a debt. Day means calendar day. For pur- poses of computation, the last day of the period will be included unless it is a Saturday, Sunday, or a Federal holi- day, in which case the next business day will be considered the last day of the period. Debt means an amount determined by an appropriate official to be owed to the United States from sources which include loans insured or guaran usiness day will be considered the last day of the period. Debt means an amount determined by an appropriate official to be owed to the United States from sources which include loans 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, over- payments, penalties, damages, interest, fines and forfeitures (except those aris- ing under the Uniform Code of Military Justice), and all other similar sources. Debt collection center means the De- partment of the Treasury or other Gov- ernment agency or division designated by the Secretary of the Treasury with authority to collect debts on behalf of creditor agencies in accordance with 31 U.S.C. 3711(g). Debtor means a Federal employee who owes a debt to the United States. Delinquent debt means a debt which the debtor does not pay or otherwise resolve by the date specified in the ini- tial demand for payment, or in an ap- plicable written repayment agreement or other instrument, including a post- delinquency repayment agreement. Department means the Department of Health and Human Services, its Staff Divisions, Operating Divisio written repayment agreement or other instrument, including a post- delinquency repayment agreement. Department means the Department of Health and Human Services, its Staff Divisions, Operating Divisions, and Re- gional Offices. Disposable pay means that part of the debtor’s current basic, special, incen- tive, retired, and retainer pay, or other authorized pay, remaining after deduc- tion of amounts required by law to be withheld. For purposes of calculating disposable pay, legally required deduc- tions that must be applied first in- clude: Tax levies pursuant to the Inter- nal Revenue Code (title 26, United States Code); properly withheld taxes, FICA, Medicare; health and life insur- ance premiums; and retirement con- tributions. Amounts deducted under garnishment orders, including child support garnishment orders, are not le- gally required deductions for calcu- lating disposable pay. Employee means any individual cur- rently employed by an agency, as de- fined in this section, including seasonal and temporary employees and current members of the Armed Forces or a Re- serve of the Armed Forces (Reserves). Evidence of service means information retained by the Department indicating ding seasonal and temporary employees and current members of the Armed Forces or a Re- serve of the Armed Forces (Reserves). Evidence of service means information retained by the Department indicating the nature of the document to which it pertains, the date of mailing the docu- ment, and the address and name of the debtor to whom it is being sent. A copy of the dated and signed written notice of intent to offset provided to the debt- or pursuant to this part may be consid- ered evidence of service for purposes of this part. Evidence of service may be retained electronically so long as the manner of retention is sufficient for evidentiary purposes. Hearing means a review of the docu- mentary evidence to confirm the exist- ence or amount of a debt or the terms of a repayment schedule. If the Sec- retary determines that the issues in dispute cannot be resolved by such a review, such as when the validity of the claim turns on the issue of credi- bility or veracity, the Secretary may provide an oral hearing. Hearing official means a Depart- mental Appeals Board administrative law judge or appropriate alternate as outlined in § 33.7(a)(2). Paying agency means the agency em- ploying the de an oral hearing. Hearing official means a Depart- mental Appeals Board administrative law judge or appropriate alternate as outlined in § 33.7(a)(2). Paying agency means the agency em- ploying the individual and authorizing the payment of his or her current pay. Salary offset means an administrative offset to collect a debt under 5 U.S.C. 5514 owed by a federal employee through deductions at one or more offi- cially established pay intervals from the current pay account of the em- ployee without his or her consent. Secretary means the Secretary of Health and Human Services, or the Secretary’s designee within any Staff Division, Operating Division or Re- gional Office. Waiver means the cancellation, re- mission, forgiveness, or non-recovery of a debt owed by an employee to this Department or another agency as re- quired or permitted by 5 U.S.C. 5584, 8346(b), 10 U.S.C. 2774, 32 U.S.C. 716, or any other law. 116 Dept. of Health and Human Services § 33.4 § 33.3 General rule. (a) Whenever a delinquent debt is owed to the Department by an em- ployee, the Secretary may, subject to paragraphs (b) through (d) of this sec- tion, involuntarily offset the amount of the debt from the employ er a delinquent debt is owed to the Department by an em- ployee, the Secretary may, subject to paragraphs (b) through (d) of this sec- tion, involuntarily offset the amount of the debt from the employee’s dispos- able pay. (b) Unless provided by another stat- ute pertaining to a particular type of debt (e.g., 42 U.S.C. 292r, Health profes- sionals education, 42 U.S.C. 297b, Nurse education), the Department may not initiate salary offset to collect a debt more than 10 years after the Govern- ment’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 reason- ably have been known by the official or officials of the Government who were charged with the responsibility to dis- cover and collect such debts. (c) Except as provided in paragraph (d) of this section, prior to initiating collection through salary offset under this part, the Secretary must first pro- vide the employee with the following: (1) Written notice of intent to offset as described in § 33.4; and (2) An opportunity to petition for a hearing, and, if a hearing is provided, to receive a written decision from the hearing official within 60 en notice of intent to offset as described in § 33.4; and (2) An opportunity to petition for a hearing, and, if a hearing is provided, to receive a written decision from the hearing official within 60 days on the following issues: (i) The determination of the Depart- ment concerning the existence or amount of the debt; and (ii) The repayment schedule, unless it was established by written agreement between the employee and Department. (d) The provisions of paragraph (c) of this section do not apply to: (1) Any adjustment to pay arising out of an employee’s election of coverage or a change in coverage under a federal benefits program requiring periodic de- duction from pay, if the amount to be recovered was accumulated over four pay periods or less; (2) A routine intra-agency adjust- ment 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 adjust- ment and, at the time of such adjust- ment, or as soon thereafter as prac- tical, the individual is provided written notice of the nature and the amount of the adjustment and point o eding the adjust- ment and, at the time of such adjust- ment, or as soon thereafter as prac- tical, 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 there- after as practical, the individual is pro- vided written notice of the nature and the amount of the adjustment and a point of contact for contesting such ad- justment. § 33.4 Notice requirements before off- set. (a) At least 30 days before the initi- ation of salary offset under this part, the Secretary shall mail, by first class mail, to the employee’s last known ad- dress, a written notice informing the debtor of the following: (1) The Secretary has reviewed the records relating to the debt and has de- termined that a debt is owed, the amount of the debt, and the facts giv- ing rise to the debt; (2) The Secretary’s intention to col- lect the debt by means of deduction from the employee’s current disposable pay account until the debt and all ac- cumulated interest, penalties, and ad- ministrative costs are paid in full; (3) T col- lect the debt by means of deduction from the employee’s current disposable pay account until the debt and all ac- cumulated interest, penalties, and ad- ministrative costs are paid in full; (3) The amount, stated either as a fixed dollar amount or as a percentage of pay not to exceed 15 percent of dis- posable pay, the frequency, the com- mencement date, and the duration of the intended deductions; (4) An explanation of the Depart- ment’s policies concerning the assess- ment of interest, penalties, and admin- istrative costs, stating that such as- sessments must be made unless waived in accordance with 31 CFR 901.9 and § 30.18 of this title; (5) The employee’s right to inspect and copy all records of the Department pertaining to the debt or, if the em- ployee or the employee’s representa- tive cannot personally inspect the records, to request and receive copies of such records; (6) If not previously provided, the op- portunity to establish a schedule for the voluntary repayment of the debt through offset, or to enter into an agreement to establish a schedule for repayment of the debt in lieu of offset, provided the agreement is in writing, 117 § 33.5 45 CFR Subtitle A (10–1–24 the debt through offset, or to enter into an agreement to establish a schedule for repayment of the debt in lieu of offset, provided the agreement is in writing, 117 § 33.5 45 CFR Subtitle A (10–1–24 Edition) signed by both the employee and the Department, and documented in the Department’s files; (7) The right to a hearing conducted by an impartial hearing official with respect to the existence and amount of the debt, or the repayment schedule, so long as a petition is filed by the em- ployee as prescribed in § 33.6; (8) Time limitations and other proce- dures or conditions for inspecting De- partment records pertaining to the debt, establishing an alternative repay- ment agreement, and requesting a hearing; (9) The name, address, and telephone number of the person or office within the Department who may be contacted concerning the procedures for inspect- ing Department records, establishing an alternative repayment agreement, and requesting a hearing; (10) The name and address of the of- fice within the Department to which the petition for a hearing should be sent, which generally will be the Oper- ating Division or Staff Division respon- sible for collecting the debt; (11) A ti e of- fice within the Department to which the petition for a hearing should be sent, which generally will be the Oper- ating Division or Staff Division respon- sible for collecting the debt; (11) A timely and properly filed peti- tion for a hearing will stay the com- mencement of the collection pro- ceeding; (12) The Department will initiate ac- tion to effect salary offset not less than 30 days from the date of mailing the notice of intent, unless the em- ployee properly files a timely petition for a hearing, (13) A final decision on a hearing, if one is requested, will be issued at the earliest practical date, but not later than 60 days after the filing of the peti- tion requesting the hearing unless the employee requests and the hearing offi- cial grants a delay in the proceeding; (14) Knowingly false or frivolous statements, representations or evi- dence may subject the employee to: (i) Disciplinary procedures appro- priate under chapter 75 of title 5, United States Code; part 752 of title 5, Code of Federal Regulations; or any other applicable statutes or regula- tions; (ii) Penalties under the False Claims Act, 31 U.S.C. 3729–3731, or under any other applicable statutory auth of title 5, Code of Federal Regulations; or any other applicable statutes or regula- tions; (ii) Penalties under the False Claims Act, 31 U.S.C. 3729–3731, or under any other applicable statutory authority; and (iii) Criminal penalties under 18 U.S.C. 286, 287, 1001, and 1002, or under any other applicable statutory author- ity; (15) Any other rights and remedies available to the employee under stat- utes or regulations governing the pro- gram for which the collection is being made; (16) Unless there are applicable con- tractual or statutory provisions to the contrary, 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 em- ployee; and (17) Proceedings with respect to such debt are governed by 5 U.S.C. 5514. (b) The Secretary will retain evi- dence of service indicating the date of mailing of the notice. § 33.5 Review of department records relating to the debt. (a) To inspect or copy Department records relating to the debt, the em- ployee must send a written request to the Department official or office des- ignated in the notice of intent to offset stating his or her intention. The writ- ten reque s relating to the debt, the em- ployee must send a written request to the Department official or office des- ignated in the notice of intent to offset stating his or her intention. The writ- ten request must be received by the De- partment within 15 days from the em- ployee’s receipt of the notice. (b) In response to a timely request as described in paragraph (a) of this sec- tion, the designated Department offi- cial shall notify the employee of the lo- cation and time when the employee may inspect and copy such records. If the employee or employee’s representa- tive is unable to personally inspect such records as the result of geo- graphical or other constraints, the De- partment shall arrange to send copies of such records to the employee. § 33.6 Hearings. (a) Petitions for hearing. (1) To request a hearing concerning the existence or amount of the debt or the offset sched- ule established by the Department, the employee must send a written petition to the office designated in the notice of intent to offset, see § 33.4(a)(10), within 15 days of receipt of the notice. (2) The petition must: (i) Be signed by the employee; 118 Dept. of Health and Human Services § 33.6 (ii) Fully id otice of intent to offset, see § 33.4(a)(10), within 15 days of receipt of the notice. (2) The petition must: (i) Be signed by the employee; 118 Dept. of Health and Human Services § 33.6 (ii) Fully identify and explain with reasonable specificity all the facts, evi- dence, and witnesses, if any, that the employee believes support his or her position; and (iii) Specify whether an oral or paper hearing is requested. If an oral hearing is requested, the request should explain why the matter cannot be resolved by review of the documentary evidence alone. (3) The timely filing of a petition for hearing shall stay any further collec- tion proceedings. (b) Failure to timely request. (1) If the petition for hearing is filed after the 15-day period provided for in paragraph (a)(1) of this section, the Secretary may grant the request if the employee can establish that the delay was the re- sult of circumstances beyond the em- ployee’s control, or that the employee failed to receive actual notice of the filing deadline. (2) An employee waives the right to a hearing, and will have his or her dis- posable pay offset in accordance with the offset schedule established by the Department, if the em of the filing deadline. (2) An employee waives the right to a hearing, and will have his or her dis- posable pay offset in accordance with the offset schedule established by the Department, if the employee: (i) Fails to file a timely request for a hearing, unless such failure is excused; or (ii) Fails to appear at an oral hear- ing, of which the employee was noti- fied, unless the hearing official deter- mines that the failure to appear was due to circumstances beyond the em- ployee’s control. (c) Form of hearings—(1) General. After the employee requests a hearing, the hearing official shall notify the employee of the form of the hearing to be provided. If the hearing will be oral, the notice shall set forth the date, time, and location of the hearing. If the hearing will be a review of the written record, the employee shall be notified that he or she should submit evidence and arguments in writing to the hearing official by a specified date, after which the record shall be closed. The date specified shall give the em- ployee reasonable time to submit docu- mentation. (2) Oral hearing. An employee who re- quests an oral hearing shall be pro- vided an oral hearing if the hearing of e date specified shall give the em- ployee reasonable time to submit docu- mentation. (2) Oral hearing. An employee who re- quests an oral hearing shall be pro- vided an oral hearing if the hearing of- ficial determines that the matter can- not be resolved by review of documen- tary evidence alone because an issue of credibility or veracity is involved. Where an oral hearing is appropriate, the hearing is not an adversarial adju- dication and need not take the form of an evidentiary hearing, i.e., the rules of evidence need not apply. Oral hear- ings may take the form of, but are not lim- ited to: (i) Informal conferences with the hearing official in which the employee and agency representative will be given full opportunity to present evidence, witnesses, and arguments; (ii) Informal meetings in which the hearing official interviews the em- ployee; or (iii) Formal written submissions with an opportunity for oral presentations. (3) Paper hearing. If the hearing offi- cial determines that an oral hearing is not necessary, the hearing official will make the determination based upon a review of the available written record. (4) Record. The hearing official shall maintain a summary rec at an oral hearing is not necessary, the hearing official will make the determination based upon a review of the available written record. (4) Record. The hearing official shall maintain a summary record of any hearing conducted under this part. Wit- nesses who testify in oral hearings will do so under oath or affirmation. (d) Written decision. (1) Date of deci- sion. The hearing officer shall issue a written opinion stating his or her deci- sion, based upon documentary evidence and information developed at the hear- ing, as soon as practicable after the hearing, but not later than sixty (60) days after the date on which the hear- ing petition was received by the cred- itor agency, unless the employee re- quested a delay in the proceedings, in which case the 60-day decision period shall be extended by the number of days by which the hearing was post- poned. The recipient of an employee’s request for a hearing must forward the request expeditiously to the Depart- mental Appeals Board so as to not jeopardize the Boards’s ability to issue a decision within this 60-day period. (2) Content of decision. The written de- cision shall include: (i) A statement of the facts presented to suppo as to not jeopardize the Boards’s ability to issue a decision within this 60-day period. (2) Content of decision. The written de- cision shall include: (i) A statement of the facts presented to support the origin, nature, and amount of the debt; (ii) The hearing official’s findings, analysis, and conclusions, including a determination whether the employee’s petition for hearing was baseless and 119 § 33.7 45 CFR Subtitle A (10–1–24 Edition) resulted from an intent to delay cred- itor agency collection activity; and (iii) The terms of any repayment schedule, if applicable. (e) Failure to appear. In the absence of good cause shown, an employee who fails to appear at a hearing shall be deemed, for the purpose of this part, to admit the existence and amount of the debt as described in the notice of in- tent. If the representative of the cred- itor agency fails to appear, the hearing official shall proceed with the hearing as scheduled and make a determination based upon oral testimony presented and the documentary evidence sub- mitted by both parties. With the agree- ment of both parties, the hearing offi- cial shall schedule a new hearing date, and both parties shall be given reason- sented and the documentary evidence sub- mitted by both parties. With the agree- ment of both parties, the hearing offi- cial shall schedule a new hearing date, and both parties shall be given reason- able notice of the time and place of the new hearing. § 33.7 Obtaining the services of a hear- ing official. (a)(1) When the Department is the creditor agency, the office designated in § 33.4(a)(10) shall schedule a hearing, if one is requested by an employee, be- fore a hearing official. (2) When the Department cannot pro- vide a prompt and appropriate hearing before an administrative law judge or a hearing official furnished pursuant to another lawful arrangement, the office designated in § 33.4(a)(10) may: (i) When the debtor is not an em- ployee of the Department, contact an agent of the employee’s paying agency designated in 5 CFR part 581, appendix A, to arrange for a hearing official; or (ii) When the debtor is an employee of the Department, contact an agent of any agency designated in 5 CFR part 581, appendix A, to arrange for a hear- ing official. (b)(1) When another agency is the creditor agency, it is the responsibility of that agency to arrange for a hearing if one is requ d in 5 CFR part 581, appendix A, to arrange for a hear- ing official. (b)(1) When another agency is the creditor agency, it is the responsibility of that agency to arrange for a hearing if one is requested. The Department will provide a hearing official upon the request of a creditor agency when the debtor is employed by the Department and the creditor agency cannot provide a prompt and appropriate hearing be- fore a hearing official furnished pursu- ant to another lawful arrangement. (2) Services rendered to a creditor agency under paragraph (b)(1) of this section will be provided on a fully re- imbursable basis pursuant to the Econ- omy Act of 1932, as amended, 31 U.S.C. 1535. (c) The determination of a hearing official designated under this section is considered to be an official certifi- cation regarding the existence and amount of the debt for purposes of exe- cuting salary offset under 5 U.S.C. 5514 and this part. A creditor agency may make a certification to the Secretary of the Treasury under 5 CFR 550.1108 or a paying agency under 5 CFR 550.1109 regarding the existence and amount of the debt based on the certification of a hearing official. If a hearing official de- termin Treasury under 5 CFR 550.1108 or a paying agency under 5 CFR 550.1109 regarding the existence and amount of the debt based on the certification of a hearing official. If a hearing official de- termines that a debt may not be col- lected via salary offset, but the cred- itor 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 or litigation. § 33.8 Voluntary repayment agreement in lieu of salary offset. (a)(1) In response to the notice of in- tent to offset, the employee may pro- pose to establish an alternative sched- ule for the voluntary repayment of the debt by submitting a written request to the Department official designated in the notice of intent to offset. An em- ployee who wishes to repay the debt without salary offset shall also submit a proposed written repayment agree- ment. The proposal shall admit the ex- istence of the debt, and the agreement must be in such form that it is legally enforceable. The agreement must: (i) Be in writing; (ii) Be signed by both the employee and the Department; (iii) Specify all the terms of the ar- rangement for payment; and (iv) m that it is legally enforceable. The agreement must: (i) Be in writing; (ii) Be signed by both the employee and the Department; (iii) Specify all the terms of the ar- rangement for payment; and (iv) Contain a provision accelerating the debt in the event of default by the employee, but such an increase may not result in a deduction that exceeds 15 percent of the employee’s disposable pay unless the employee has agreed in writing to deduction of a greater amount. (2) Any proposal under paragraph (a)(1) of this section must be received by the Department within 30 days of the date of the notice of intent to off- set. 120 Dept. of Health and Human Services § 33.10 (b) In response to a timely request as described in paragraph (a) of this sec- tion, the designated Department offi- cial shall notify the employee whether the proposed repayment schedule is ac- ceptable. It is within the Secretary’s discretion to accept a proposed alter- native repayment schedule, and to set the necessary terms of a voluntary re- payment agreement. (c) No voluntary repayment agree- ment will be binding on the Secretary unless it is in writing and signed by both the Secretary and the employee. § 33.9 Special of a voluntary re- payment agreement. (c) No voluntary repayment agree- ment will be binding on the Secretary unless it is in writing and signed by both the Secretary and the employee. § 33.9 Special review. (a) A Department employee subject to salary offset or a voluntary repay- ment agreement may, at any time, re- quest a special review by the Secretary of the amount of the salary offset or voluntary installments, based on materially changed cir- cumstances, such as, but not limited to, catastrophic illness, divorce, death, or disability. repayment (b)(1) In determining whether an off- set would prevent the employee from meeting essential subsistence expenses, e.g., food, housing, clothing, transpor- tation, and medical care, the employee shall submit a detailed statement and supporting documents for the em- ployee, his or her spouse, and depend- ents indicating: (i) Income from all sources; (ii) Assets and liabilities; (iii) Number of dependents; (iv) Food, housing, clothing, trans- portation, and medical expenses; and (v) Exceptional and unusual ex- penses, if any. (2) When requesting a special review under this section, the employee shall file an alternative proposed offset or portation, and medical expenses; and (v) Exceptional and unusual ex- penses, if any. (2) When requesting a special review under this section, the employee shall file an alternative proposed offset or payment schedule and a statement, with supporting documents as de- scribed in paragraph (b)(1) of this sec- tion, stating why the current salary offset or payments result in an extreme financial hardship to the employee. (c)(1) The Secretary shall evaluate the statement and supporting docu- ments, and determine whether the original offset or repayment schedule imposes extreme financial hardship on the employee. (2) Within 30 calendar days of the re- ceipt of the request and supporting documents, the Secretary shall notify the employee in writing of such deter- mination, including, if appropriate, a revised offset or repayment schedule. (d) If the special review results in a revised offset or repayment schedule, the Secretary shall provide a new cer- tification to the paying agency. § 33.10 Procedures for salary offset. (a) Method and source of deductions. Unless the employee and the Secretary have agreed to an alternative repay- ment arrangement under § 33.8, a debt shall be collected 0 Procedures for salary offset. (a) Method and source of deductions. Unless the employee and the Secretary have agreed to an alternative repay- ment arrangement under § 33.8, a debt shall be collected in lump sum or by in- stallment deductions at officially es- tablished pay intervals from an em- ployee’s current pay account. (b) Limitation on amount of deduction. Ordinarily, the size of installment de- ductions must bear a reasonable rela- tionship to the size of the debt and the employee’s ability to pay. However, the amount deducted for any pay period must not exceed 15 percent of the dis- posable pay from which the deduction is made, unless the employee has agreed in writing to the deduction of a greater amount, as outlined in § 33.8. (c) Duration of deductions. (1) Lump sum. If the amount of the debt is equal to or less than 15 percent of the em- ployee’s disposable pay for an officially established pay interval, the debt gen- erally will be collected in one lump- sum deduction. (2) If the employee is deemed finan- cially unable to pay in one lump-sum or the amount of the debt exceeds 15 percent of the employee’s disposable pay for an officially established pay in- terval, the 2) If the employee is deemed finan- cially unable to pay in one lump-sum or the amount of the debt exceeds 15 percent of the employee’s disposable pay for an officially established pay in- terval, the debt shall be collected in in- stallments. Except as provided in para- graphs (e) and (f) of this section, in- stallment deductions must be made over a period not greater than the an- ticipated period of active duty or em- ployment. (d) When deductions may begin. (1) De- ductions will begin on the date stated in the notice of intent, unless an alter- native repayment agreement under § 33.8 has been accepted or the em- ployee has filed a timely request for a hearing. (2) If the employee files a timely pe- tition for hearing as provided in § 33.6, deductions will begin after the hearing official has provided the employee with 121 § 33.11 45 CFR Subtitle A (10–1–24 Edition) a hearing and a final written decision has been rendered in favor of the De- partment. (e) Liquidation from final check. If an employee retires, resigns, or the period of employment ends before collection of the debt is completed, the remainder of the debt will be offset under 31 U.S.C. 3716 from subsequent payments o . If an employee retires, resigns, or the period of employment ends before collection of the debt is completed, the remainder of the debt will be offset under 31 U.S.C. 3716 from subsequent payments of any nature (e.g., final salary pay- ment or lump-sum leave) due the em- ployee from the paying agency as of the date of separation. (f) Recovery from other payments due a separated employee. If the debt cannot be satisfied by offset from any final payment due the employee on the date of separation, the Secretary will liq- uidate the debt, where appropriate, by administrative offset under 31 U.S.C. 3716 from later payments of any kind due the former employee (e.g., lump sum leave payment). § 33.11 Salary offset when the Depart- ment is the creditor agency but not the paying agency. (a) Centralized administrative offset. (1) Under 31 U.S.C. 3716, the Department shall notify the Secretary of the Treas- ury of all past-due, legally enforceable debts which are 180 days delinquent for purposes of collection by centralized administrative offset. This includes debts which the Department seeks to recover from the pay account of an em- ployee of another agency via salary off- set. The Secretar of collection by centralized administrative offset. This includes debts which the Department seeks to recover from the pay account of an em- ployee of another agency via salary off- set. The Secretary of the Treasury and other Federal disbursing officials will match payments, including Federal salary payments, against these debts. Where a match occurs, and all the re- quirements for offset have been met, the payments will be offset to collect the debt. (2) Prior to offset of the pay account of an employee, the Department must comply with the requirements of 5 U.S.C. 5514; 5 CFR part 550, subpart K, and this part. Specific procedures for notifying the Secretary of the Treas- ury of a debt for purposes of collection by administrative offset, including sal- ary offset, are contained in 31 CFR parts 285 and 901 and part 30 of this title. (b) Non-centralized administrative off- set. When salary offset through central- ized administrative offset under para- graph (a) of this section is not possible, the Department may attempt to col- lect a debt through non-centralized ad- ministrative offset in accordance with part 30 of this title. (1) Format of the request. Upon com- pletion of the p possible, the Department may attempt to col- lect a debt through non-centralized ad- ministrative offset in accordance with part 30 of this title. (1) Format of the request. Upon com- pletion of the procedures established in this part and pursuant to 5 U.S.C. 5514, the Department shall: (i) Certify in writing to the paying agency that the employee owes the debt, the amount and basis of the debt, the date on which payment(s) is due, the date the Government’s right to col- lect the debt first accrued, and that the Departmental imple- menting 5 U.S.C. 5514 have been ap- proved by the Office of Personnel Man- agement. regulations (ii) If the collection is to be made in installments, advise the paying agency of the number of installments to be collected, the amount or percentage of disposable pay to be collected in each installment, and the commencement date of the installments, if a date other than the next officially established pay period is required. (iii) Unless the employee has con- sented in writing to the salary deduc- tions or signed a statement acknowl- edging receipt of the required proce- dures and this written consent or statement is forwarded to the paying agency, advise t ented in writing to the salary deduc- tions or signed a statement acknowl- edging receipt of the required proce- dures and this written consent or statement is forwarded to the paying agency, advise the paying agency of the action(s) taken under 5 U.S.C. 5514 and this part, and give the date(s) the action(s) was taken. (2) Requesting recovery from current paying agency. (i) Except as otherwise provided in this paragraph, the Depart- ment shall submit a certified debt claim containing the information spec- ified in paragraph (a) of this section, and an installment agreement, or other instruction on the payment schedule, if applicable, to the employee’s paying agency. (ii) If the employee is in the process of separating from the Federal Govern- ment, the Department shall submit the certified debt claim to the employee’s paying agency for collection as pro- vided in § 33.10(e). The paying agency must certify the total amount of its collection on the debt and send a copy of the certification to the employee and another copy to the Department. If the paying agency’s collection does not 122 Dept. of Health and Human Services § 33.12 fully satisfy the debt, and the paying agency is aware on to the employee and another copy to the Department. If the paying agency’s collection does not 122 Dept. of Health and Human Services § 33.12 fully satisfy the debt, and the paying agency is aware that the employee is entitled to payments from the Civil Service Retirement and Disability Fund, or other similar payments that may be due the employee from other Federal Government sources, the pay- ing agency will provide written notifi- cation of the outstanding debt to the agency responsible for making such payments to the employee, stating the employee owes a debt, the amount of the debt, and that the provisions of this section have been fully complied with. The Department must submit a properly certified claim to the agency responsible for making such payments before the collection can be made. (iii) If the employee is already sepa- rated and all payments due from the employee’s former paying agency have been paid, the Department may re- quest, unless otherwise prohibited, that money due and payable to the em- ployee from the Civil Service Retire- ment and Disability Fund (5 CFR 831.1801 or 5 CFR 845.401) or other simi- lar funds, be administratively offset to collect the debt. S due and payable to the em- ployee from the Civil Service Retire- ment and Disability Fund (5 CFR 831.1801 or 5 CFR 845.401) or other simi- lar funds, be administratively offset to collect the debt. See 31 U.S.C. 3716 and 31 CFR 901.3. (iv) If the employee transfers to an- other paying agency, the Department must submit a properly certified debt claim to the new paying agency before collection can be resumed; however, the Department need not repeat the due process procedures described in 5 U.S.C. 5514 and this part. The Depart- ment shall review the debt to ensure that collection is resumed by the new paying agency. § 33.12 Salary offset when the Depart- ment is the paying agency but not the creditor agency. (a) Format of the request. (1) When the Department is the paying agency and another agency is the creditor agency, the creditor agency must certify, in writing, to the Department that the employee owes the debt, the amount and basis of the debt, the date on which payment(s) is due, the date the Govern- ment’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 the Office of Personnel Management. (2