Federal Register / Vol. 65, No. 116 / Thursday, June 15, 2000 / Rules and Regulations 37485

NATIONAL FOUNDATION ON THE

ARTS AND THE HUMANITIES

45 CFR Part 1150

RIN 3135–AA01

Collection of Claims

AGENCY: National Endowment for the

Arts.

ACTION: Interim rule with request for

comments.

SUMMARY: The National Endowment for

the Arts (Endowment) is issuing interim

regulations governing the collection of

debts owed to it and other Federal

agencies. These regulations describe

actions that the Endowment may take to

collect such debts. These regulations

also provide that the Endowment will

enter into a cross-servicing agreement

with the U.S. Department of the

Treasury (Treasury) under which the

Treasury will take authorized action to

collect amounts owed to the

Endowment. The Endowment requests

comments on these regulations.

DATES: These regulations are effective

on June 15, 2000. Written comments on

these regulations must be received by

July 17, 2000.

ADDRESSES: Interested persons should

submit written comments concerning

these regulations to Hope O’Keeffe;

Acting General Counsel; National

Endowment for the Arts; 1100

Pennsylvania Avenue, N.W.;

Washington, DC 20506. Written

comments may also be sent to Ms.

O’Keeffe by telefax at (202) 682–5572 or

by electronic mail at

okeeffeh@arts.endow.gov.

FOR FURTHER INFORMATION CONTACT:

Hope O’Keeffe, (202) 682–5418.

SUPPLEMENTARY INFORMATION: Under

these regulations, the Endowment may

collect debts owed to it through a

number of actions, including the

following: making offsets against

amounts, including salary payments,

owed to the debtor by the Endowment

or other Federal agencies; making offsets

against tax refunds owed to the debtor

by the Internal Revenue Service (IRS);

referring the debt to a private collection

contractor; and referring the matter to

the U.S. Department of Justice (DOJ) for

initiation of a judicial proceeding

against the debtor. In addition, these

regulations describe the actions

necessary for the Endowment to take

collection actions on behalf of another

Federal agency. These actions could

include making offsets against the salary

of an Endowment employee or any other

amounts owed by the Endowment to the

debtor. These regulations also provide

that the Endowment will enter into a

cross-servicing agreement with the

Treasury to take all of the above-listed

actions to collect debts for the

Endowment.

These regulations implement the

requirements of the Federal Claims

Collection Act of 1966 (Public Law 89–

508, 80 Stat. 308) as amended by the

Debt Collection Act of 1982 (Public Law

97–365, 96 Stat. 1749) and the Debt

Collection Improvement Act of 1996

(Public Law 104–134, 110 Stat. 1321).

These regulations are issued in

conformity with the Federal Claims

Collection Standards (4 CFR Chapter II).

Revised Federal Claims Collection

Standards have been proposed jointly

by the DOJ and the Treasury. The

Endowment will amend these

regulations, as necessary, after the

revised Federal Claims Collection

Standards have been issued as final

regulations. The regulations in this part

are also issued in conformity with the

guidelines of the Office of Personnel

Management (OPM) on offsets against

Federal employee salaries (5 CFR part

550, subpart K).

Effective Date and Request for

Comments

The Endowment has determined that

these interim regulations pertain to

agency practice and procedure and are

interpretative in nature. The procedures

contained in these regulations for salary

offset, tax refund offset, and

administrative offset are mandated by

law and by regulations promulgated by

OPM, the IRS, and jointly by the DOJ

and the Treasury. Therefore, under 5

U.S.C. 553 (b)–(d), these regulations are

not subject to the Administrative

Procedure Act (APA) and the

requirements of the APA for a notice

and comment period and a delayed

effective date. Nonetheless, the

Endowment requests comments on

these regulations from the public and

will take all comments into

consideration before promulgating the

final regulations.

Regulatory Impact

Executive Order 12866, Regulatory

Planning and Review

These interim regulations are not

classified as a significant rule under

Executive Order 12866 because they

will not result in (1) An annual effect on

the economy of $100 million or more;

(2) a major increase in costs or prices for

consumers, individual industries,

geographic regions, or Federal, State, or

local government agencies; or (3)

significant adverse effects on

competition, employment, investment,

productivity, innovation, or the ability

of United States-based enterprises to

compete with foreign-based enterprises

in domestic or foreign markets.

Accordingly, no regulatory impact

assessment is required, and these

regulations have not been submitted to

the Office of Management and Budget

(OMB) for review.

Regulatory Flexibility Act

The Regulatory Flexibility Act (5

U.S.C. 601 et seq.) requires that a

regulation that has a significant

economic impact on a substantial

number of small entities, small

businesses, or small organizations

include an initial regulatory flexibility

analysis describing the regulation’s

impact on small entities. Such an

analysis need not be undertaken if the

agency certifies, under 5 U.S.C. 605(b),

that the regulation will not have a

significant economic impact on a

substantial number of small entities.

The Endowment has considered the

impact of these interim regulations

under the Regulatory Flexibility Act and

certifies that these interim regulations

are not likely to have a significant

economic impact on a substantial

number of small entities.

Paperwork Reduction Act

The Endowment certifies that these

regulations do not require additional

reporting under the criteria of the

Paperwork Reduction Act (44 U.S.C.

3501 et seq).

Unfunded Mandates Reform Act of 1995

Assessment statements in accordance

with the Unfunded Mandates Reform

Act of 1995 (2 U.S.C. 1531 et seq.) are

not required for regulations that

incorporate requirements specifically

set forth in law. As explained in the

preamble, these regulations implement

specific statutory requirements. In

addition, these regulations do not

include a Federal mandate that may

result in the expenditure by the private

sector or by State, local, and tribal

governments (in the aggregate) of $100

million or more in any one year.

Therefore, a statement under 2 U.S.C.

1532 is not required.

Submission to Congress and the General

Accounting Office

Under 5 U.S.C. 801(a)(1)(A), the

Endowment submitted a report

containing these interim regulations and

other required information to the U.S.

Senate, the U.S. House of

37486 Federal Register / Vol. 65, No. 116 / Thursday, June 15, 2000 / Rules and Regulations

Representatives, and the Comptroller

General of the United States before

publication of these regulations in

today’s Federal Register. These

regulations are not a ‘‘major rule’’ as

defined at 5 U.S.C. 804(2).

List of Subjects in 45 CFR part 1150

Administrative practice and

procedure, Claims, Debt collection,

Government employees, Grants

administration, Income taxes, Penalties,

Wages.

For the reasons set out in this

preamble, the Endowment amends Title

45, Code of Federal Regulations, chapter

X by revising part 1150 to read as

follows:

PART 1150—COLLECTION OF CLAIMS

Subpart A—General Provisions

Sec.

1150.1 What definitions apply to the

regulations in this part?

1150.2 What is the Endowment’s authority

to issue these regulations?

1150.3 What other regulations also apply to

the Endowment’s debt collection efforts?

1150.4 What types of claims are excluded

from these regulations?

1150.5 What notice will I be provided if I

owe a debt to the Endowment?

1150.6 What opportunity do I have to

obtain a review of my debt within the

Endowment?

1150.7 What interest, penalty charges, and

administrative costs will I have to pay on

a debt owed to the Endowment?

1150.8 Will failure to pay my debt affect my

eligibility for Endowment programs?

1150.9 How can I resolve the Endowment’s

claim through a voluntary repayment

agreement?

1150.10 What is the extent of the

Chairperson’s authority to compromise

debts owed to the Endowment, or to

suspend or terminate collection action

on such debts?

1150.11 How does subdividing or joining

debts owed to the Endowment affect the

Chairperson’s compromise, suspension,

or termination authority?

1150.12 How will the Endowment use

credit reporting agencies to collect its

claims?

1150.13 How will the Endowment contract

for collection services?

1150.14 When will the Endowment refer

claims to the DOJ?

1150.15 Will the Endowment use a crossservicing agreement with the Treasury to

collect its claims?

1150.16 May I use the Endowment’s failure

to comply with these regulations as a

defense?

Subpart B—Salary Offset

1150.20 What debts are included or

excluded from coverage of these

regulations on salary offset?

1150.21 May I ask the Endowment to waive

an overpayment that otherwise would be

collected by offsetting my salary as a

Federal employee?

1150.22 What are the Endowment’s

procedures for salary offset?

1150.23 How will the Endowment

coordinate salary offsets with other

agencies?

1150.24 Under what conditions will the

Endowment make a refund of amounts

collected by salary offset?

1150.25 Will the collection of a claim by

salary offset act as a waiver of my rights

to dispute the claimed debt?

Subpart C—Tax Refund Offset

1150.30 Which debts can the Endowment

refer to the Treasury for collection by

offsetting tax refunds?

1150.31 What are the Endowment’s

procedures for collecting debts by tax

refund offset?

Subpart D—Administrative Offset

1150.40 Under what circumstances will the

Endowment collect amounts that I owe

to the Endowment (or some other

Federal agency) by offsetting the debt

against payments that the Endowment

(or some other Federal agency) owes me?

1150.41 How will the Endowment request

that my debt to the Endowment be

collected by offset against some payment

that another Federal agency owes me?

1150.42 What procedures will the

Endowment use to collect amounts I owe

to a Federal agency by offsetting a

payment that the Endowment would

otherwise make to me?

1150.43 When may the Endowment make

an offset in an expedited manner?

1150.44 Can a judgment I have obtained

against the United States be used to

satisfy a debt that I owe to the

Endowment?

Authority: 31 U.S.C. 3711, 3716–3718,

3720A; 5 U.S.C. 5514

Subpart A—General Provisions

§ 1150.1 What definitions apply to the

regulations in this part?

As used in this part:

(a) Administrative offset means the

withholding of funds payable by the

United States (including funds payable

by the United States on behalf of a State

government) to any person, or the

withholding of funds held by the United

States for any person, in order to satisfy

a debt owed to the United States.

(b) Agency means a department,

agency, court, court administrative

office, or instrumentality in the

executive, judicial, or legislative branch

of government, including a government

corporation.

(c) Chairperson means the

Chairperson of the Endowment, or his

or her designee.

(d) Creditor agency means the agency

to which the debt is owed.

(e) Day means calendar day. To count

days, include the last day of the period

unless it is a Saturday, a Sunday, or a

Federal legal holiday.

(f) Debt and claim are deemed

synonymous and interchangeable. These

terms mean money owed by a person to

the United States for any reason,

including loans made or guaranteed by

the United States, fees, leases, rents,

royalties, services, sales of real or

personal property, overpayments,

damages, interests, penalties, fines,

forfeitures, and all other similar sources.

For the purpose of administrative offset

under 31 U.S.C. 3716 and subpart D of

these regulations, the terms debt and

claim also include money or property

owed by a person to a State, the District

of Columbia, American Samoa, Guam,

the United States Virgin Islands, the

Commonwealth of the Northern Marina

Islands, or the Commonwealth of Puerto

Rico.

(g) Debtor means a person who owes

a debt. Uses of the terms ‘‘I,’’ ‘‘you,’’

‘‘me,’’ and similar references to the

reader of the regulations in this part are

meant to apply to debtors as defined in

this paragraph (g).

(h) Delinquent debt means a debt that

has not been paid within the time limit

prescribed by the Endowment.

(i) Disposable pay means the part of

an employee’s pay that remains after

deductions that are required to be

withheld by law have been made.

(j) Employee means a current

employee of an agency, including a

current member of the Armed Forces or

Reserve of the Armed Forces of the

United States.

(k) Endowment means the National

Endowment for the Arts.

(l) Federal Claims Collection

Standards means the standards

currently published at 4 CFR Chapter II.

The DOJ and the Treasury have

proposed a revision that would move

the Federal Claims Collection Standards

to 31 CFR parts 900–904. The

Endowment will amend these

regulations, as necessary, after the

revised Federal Claims Collection

Standards have been issued as final

regulations.

(m) Paying agency means the agency

that employs the individual who owes

a debt to the United States. In some

cases, the Endowment may be both the

creditor agency and the paying agency.

(n) Payroll office means the office in

the paying agency that is primarily

responsible for payroll records and the

coordination of pay matters with the

appropriate personnel office.

(o) Person includes a natural person

or persons, profit or non-profit

corporation, partnership, association,

trust, estate, consortium, state or local

government, or other entity that is

capable of owing a debt to the United

Federal Register / Vol. 65, No. 116 / Thursday, June 15, 2000 / Rules and Regulations 37487

States; however, agencies of the United

States are excluded.

(p) Private collection contractor

means a private debt collector under

contract with an agency to collect a nontax debt owed to the United States.

(q) Salary offset means a payroll

procedure to collect a debt under 5

U.S.C. 5514 by deduction(s) at one or

more officially established pay intervals

from the current pay account of an

employee, without his or her consent.

(r) Tax refund offset means the

reduction of a tax refund by the amount

of a past-due legally enforceable debt

owed to the Endowment or any other

Federal agency.

§ 1150.2 What is the Endowment’s

authority to issue these regulations?

The Endowment is issuing the

regulations in this part under 31 U.S.C.

3711, 3716–3718, and 3720A. These

sections reflect the Federal Claims

Collection Act of 1966, as amended by

the Debt Collection Act of 1982 and the

Debt Collection Improvement Act of

1996. The Endowment is also issuing

the regulations in this part in

conformity with the Federal Claims

Collection Standards, which prescribe

standards for the handling of the

Federal government’s claims for money

or property. The Endowment is further

issuing the regulations in this part in

conformity with 5 U.S.C. 5514 and the

salary offset regulations published by

the OPM at 5 CFR part 550, subpart K.

§ 1150.3 What other regulations also apply

to the Endowment’s debt collection efforts?

All provisions of the Federal Claims

Collection Standards also apply to the

regulations in this part. This part

supplements the Federal Claims

Collection Standards by prescribing

procedures and directives necessary and

appropriate for operations of the

Endowment.

§ 1150.4 What types of claims are

excluded from these regulations?

(a) The regulations in this part do not

apply to any claim as to which there is

an indication of fraud or

misrepresentation, as described in the

Federal Claims Collection Standards,

unless returned to the Endowment by

the DOJ for handling.

(b) The regulations in this subpart,

subpart B, and subpart D do not apply

to debts arising under the Internal

Revenue Code of 1986, as amended (26

U.S.C. 1 et seq.); the Social Security Act

(42 U.S.C. 301 et seq.); and the tariff

laws of the United States.

(c) Remedies and procedures

described in this part may be authorized

with respect to claims that are exempt

from the Debt Collection Act of 1982

and the Debt Collection Improvement

Act of 1996, to the extent that they are

authorized under some other statute or

the common law.

§ 1150.5 What notice will I be provided if

I owe a debt to the Endowment?

(a) When the Chairperson determines

that you owe a debt to the Endowment,

he or she will send you a written notice

(Notice). The Notice will be handdelivered or sent to you by certified

mail, return receipt requested at the

most current address known to the

Endowment. The Notice will inform you

of the following:

(1) The amount, nature, and basis of

the debt;

(2) That a designated Endowment

official has reviewed the claim and

determined that it is valid;

(3) That payment of the debt is due as

of the date of the Notice, and that the

debt will be considered delinquent if

you do not pay it within 30 days of the

date of the Notice;

(4) The Endowment’s policy

concerning interest, penalty charges,

and administrative costs (see § 1150.7),

including a statement that such

assessments must be made against you

unless excused in accordance with the

Federal Claims Collection Standards

and this part;

(5) That you have the right to inspect

and copy Endowment records

pertaining to your debt, or to receive

copies of those records if personal

inspection is impractical;

(6) That you have the opportunity to

enter into an agreement, in writing and

signed by both you and the Chairperson,

for voluntary repayment of the debt (see

§ 1150.9); and

(7) The address, telephone number,

and name of the Endowment official

available to discuss the debt.

(b) Notice of possible collection

actions. The Notice provided by the

Chairperson under paragraph (a) of this

section will also advise you that, if your

debt (including any interest, penalty

charges, and administrative costs) is not

paid within 60 days of the date of the

Notice, or you do not enter into a

voluntary repayment agreement within

60 days of the date of the Notice, then

the Endowment may enforce collection

of the debt by any or all of the following

methods:

(1) By referral to a credit reporting

agency (see § 1150.12), a collection

agency (see § 1150.13), or the DOJ (see

§ 1150.14);

(2) By transferring any debt

delinquent for more than 180 days to

the Treasury for collection under a

cross-servicing agreement with the

Treasury (see § 1150.15);

(3) If you are an Endowment

employee, by deducting money from

your disposable pay account (in the

amount and with the frequency,

approximate beginning date, and

duration specified by the Endowment)

until the debt (and all accumulated

interest, penalty charges, and

administrative costs) is paid in full (see

subpart B). Such proceedings are

governed by 5 U.S.C. 5514;

(4) If you are an employee of a Federal

agency other than the Endowment, by

initiating certification procedures to

implement a salary offset by that

Federal agency (see subpart B). Such

proceedings are governed by 5 U.S.C.

5514;

(5) By referring the debt to the

Treasury for offset against any refund of

overpayment of tax (see subpart C);

(6) By administrative offset (see

subpart D); or

(7) By liquidation of security or

collateral. When the Endowment holds

security or collateral that may be

liquidated and the proceeds applied to

your debt through the exercise of a

power of sale in the security instrument

or a nonjudicial foreclosure, such

procedures may be followed unless the

cost of disposing of the collateral will be

disproportionate to its value or special

circumstances require judicial

foreclosure.

(c) Notice of opportunity for review.

The Notice provided by the Chairperson

under paragraph (a) of this section will

also advise you of the opportunity to

obtain a review within the Endowment

concerning the existence or amount of

the debt, the proposed schedule for

offset of Federal employee salary

payments, or whether the debt is past

due or legally enforceable. The Notice

shall also advise you of the following:

(1) The name, address, and telephone

number of an officer or employee of the

Endowment whom you may contact

concerning procedures for requesting a

review;

(2) The method and time period for

requesting a review;

(3) That the filing of a request for a

review on or before the 60th day

following the date of the Notice will

stay the commencement of collection

proceedings;

(4) The name and address of the

officer or employee of the Endowment

to whom you should send the request

for a review;

(5) That a final decision on the review

(if one is requested) will be issued at the

earliest practical date, but not later than

60 days after the receipt of the request

for a review, unless you request, and the

review official grants, a delay in the

proceedings;

37488 Federal Register / Vol. 65, No. 116 / Thursday, June 15, 2000 / Rules and Regulations

(6) That any knowingly false or

frivolous statements, representations, or

evidence may subject you to:

(i) Disciplinary procedures

appropriate under 5 U.S.C. Chapter 75,

5 CFR part 752, or any other applicable

statute or regulations;

(ii) Penalties under the False Claims

Act (31 U.S.C. 3729–3733) or any other

applicable statutory authority; and

(iii) Criminal penalties under 18

U.S.C. 286, 287, 1001, and 1002, or any

other applicable statutory authority;

(7) Any other rights available to you

to dispute the validity of the debt or to

have recovery of the debt waived, or

remedies available to you under statutes

or regulations governing the program for

which the collection is being made; and

(8) That unless there are applicable

contractual or statutory provisions to

the contrary, amounts paid on or

deducted for the debt that are later

waived or found not owed will be

promptly refunded to you.

(d) The Endowment will respond

promptly to communications from you.

§ 1150.6 What opportunity do I have to

obtain a review of my debt within the

Endowment?

(a) Request for review. If you desire a

review within the Endowment

concerning the existence or amount of

your debt, the proposed schedule for

offset of Federal employee salary

payments, or whether the debt is past

due or legally enforceable, you must

send such a request to the officer or

employee of the Endowment designated

in the Notice (see § 1150.5(c)(4)).

(1) Your request for review must carry

your signature and fully identify and

explain with reasonable specificity all

the facts and evidence that support your

position. Your request for review should

be accompanied by available evidence

to support your contentions.

(2) Your request for review must be

received by the designated officer or

employee of the Endowment on or

before the 60th day following the date

of the Notice. Timely filing will stay the

commencement of collection

procedures. If you file a request for a

review after the 60-day period provided

for in this section, the Endowment will

accept the request if you can show that

the delay was the result of

circumstances beyond your control or

because you did not receive notice of

the filing deadline (unless you had

actual notice of the filing deadline).

(b) Inspection of Endowment records

related to the debt. (1) In accordance

with § 1150.5, if you want to inspect or

copy Endowment records related to the

debt, you must send a letter to the

Endowment official designated in the

Notice stating your intention. Your

letter must be received within 30 days

of the date of the Notice.

(2) In response to the timely request

described in paragraph (b)(1) of this

section, the designated Endowment

official will notify you of the location

and time when you may inspect and

copy records related to the debt.

(3) If personal inspection of

Endowment records related to the debt

is impractical, reasonable arrangements

will be made to send you copies of those

records.

(c) Review official. The Chairperson

shall designate an officer or employee of

the Endowment (who was not involved

in the determination of the debt) as the

review official. When required by law or

regulation, the Endowment may request

an administrative law judge to conduct

the review, or may obtain a review

official who is an official, employee, or

agent of the United States, but who is

not under the supervision or control of

the Chairperson. However, unless the

review is conducted by an official or

employee of the Endowment, any

unresolved dispute you have regarding

whether all or part of the debt is past

due or legally enforceable (for purposes

of collection by tax refund offset under

§ 1150.31) must be referred to the

Chairperson for ultimate administrative

disposition, and the Chairperson must

notify you of his or her determination.

(d) Review procedure. After you

request a review, the review official will

notify you of the form of the review to

be provided. The review official shall

determine whether an oral hearing is

required, or if a review of the written

record is sufficient, in accordance with

the Federal Claims Collection

Standards. In either case, the review

official shall conduct the review in

accordance with the Federal Claims

Collection Standards. If the review will

include an oral hearing, the notice sent

to you by the review official will set

forth the date, time, and location of the

hearing.

(e) Date of decision. The review

official will issue a written decision,

based upon either the written record or

documentary evidence and information

developed at an oral hearing, as soon as

practical, but not later than 60 days after

the date on which the Endowment

received your request for a review,

unless you request, and the review

official grants, a delay in the

proceedings.

(f) Content of review decision. The

review official will prepare a written

decision that includes:

(1) A statement of the facts presented

to support the origin, nature, and

amount of the debt;

(2) The review official’s findings,

analysis, and conclusions; and

(3) The terms of any repayment

schedule, if applicable.

(g) Interest, penalty charge, and

administrative cost accrual during

review period. Interest, penalty charges,

and administrative costs authorized by

law will continue to accrue during the

review period.

§ 1150.7 What interest, penalty charges,

and administrative costs will I have to pay

on a debt owed to the Endowment?

(a) Interest. (1) The Endowment will

assess interest on all delinquent debts

unless prohibited by statute, regulation,

or contract.

(2) Interest begins to accrue on all

debts from the date that the debt

becomes delinquent. The Endowment

will not recover interest if you pay the

debt within 30 days of the date on

which interest begins to accrue. The

Endowment shall assess interest at the

rate established annually by the

Secretary of the Treasury under 31

U.S.C. 3717, unless a different rate is

either necessary to protect the interests

of the Endowment or established by a

contract, repayment agreement, or

statute. The Endowment will notify you

of the basis for its finding when a

different rate is necessary to protect the

interests of the Endowment.

(3) The Chairperson may extend the

30-day period for payment without

interest where he or she determines that

such action is in the best interest of the

Endowment. A decision to extend or not

to extend the payment period is final

and is not subject to further review.

(b) Penalty. The Endowment will

assess a penalty charge, not to exceed 6

percent a year, on any portion of a debt

that is delinquent for more than 90 days.

(c) Administrative costs. The

Endowment will assess charges to cover

administrative costs incurred as a result

of your failure to pay a debt before it

becomes delinquent. Administrative

costs include the additional costs

incurred in processing and handling the

debt because it became delinquent, such

as costs incurred in obtaining a credit

report or in using a private collection

contractor, or service fees charged by a

Federal agency for collection activities

undertaken on behalf of the

Endowment.

(d) Allocation of payments. A partial

or installment payment by a debtor will

be applied first to outstanding penalty

assessments, second to administrative

costs, third to accrued interest, and

fourth to the outstanding debt principal.

(e) Additional authority. The

Endowment may assess interest, penalty

charges, and administrative costs on

Federal Register / Vol. 65, No. 116 / Thursday, June 15, 2000 / Rules and Regulations 37489

debts that are not subject to 31 U.S.C.

3717 to the extent authorized under

common law or other applicable

statutory authority.

(f) Waiver. (1) The Chairperson may

(without regard to the amount of the

debt) waive collection of all or part of

accrued interest, penalty charges, or

administrative costs, if he or she

determines that collection of these

charges would be against equity and

good conscience or not in the best

interest of the Endowment.

(2) A decision to waive interest,

penalty charges, or administrative costs

may be made at any time before a debt

is paid. However, where these charges

have been collected before the waiver

decision, they will not be refunded. The

Chairperson’s decision to waive or not

waive collection of these charges is final

and is not subject to further review.

§ 1150.8 Will failure to pay my debt affect

my eligibility for Endowment programs?

In the event that you fail to pay your

debt to the Endowment within a

reasonable period of time after the date

of the Notice of debt, the General

Counsel of the Endowment shall place

your name on the Endowment’s list of

debarred, suspended, and ineligible

contractors, grantees, and other

participants in programs sponsored by

the Endowment. You will be advised of

this action.

§ 1150.9 How can I resolve the

Endowment’s claim through a voluntary

repayment agreement?

In response to a Notice of debt, you

may propose to the Endowment that you

be allowed to repay the debt through a

voluntary repayment agreement in lieu

of the Endowment taking other

collection actions under this part.

(a) Your request to enter into a

voluntary repayment agreement must:

(1) Be in writing;

(2) Admit the existence of the debt;

and

(3) Either propose payment of the debt

(together with interest, penalty charges,

and administrative costs) in a lump

sum, or set forth a proposed repayment

schedule.

(b) The Endowment will collect

claims in full or one lump sum

whenever feasible. However, if you are

unable to pay your debt in one lump

sum, the Endowment may accept

payment in regular installments that

bear a reasonable relationship to the size

of the debt and your ability to pay.

(c) The Endowment will consider a

request to enter into a voluntary

repayment agreement in accordance

with the Federal Claims Collection

Standards. The Chairperson may request

additional information from you,

including financial statements if you

request to make payments in

installments, in order to make a

determination of whether to accept a

voluntary repayment agreement. It is

within the Chairperson’s discretion to

accept a repayment agreement instead of

proceeding with other collection actions

under this part, and to set the necessary

terms of any voluntary repayment

agreement. No repayment agreement

will be binding on the Endowment

unless it is in writing and signed by

both you and the Chairperson. At the

Endowment’s option, you may be

required to enter into a confessjudgment note or bond of indemnity

with surety as part of an agreement to

make payments in installments.

Notwithstanding the provisions of this

section, any reduction or compromise of

a claim will be governed by 31 U.S.C.

3711.

§ 1150.10 What is the extent of the

Chairperson’s authority to compromise

debts owed to the Endowment, or to

suspend or terminate collection action on

such debts?

(a) The Chairperson may exercise his

or her authority to compromise, or to

suspend or terminate collection action

on, those debts owed to the Endowment

and not exceeding $100,000, excluding

interest, in conformity with the Federal

Claims Collection Act of 1966, as

amended; the Federal Claims Collection

Standards issued thereunder; and this

part, except where standards are

established by other statutes or

authorized regulations issued pursuant

to them.

(b) The portion of a debt owed to the

Endowment that is unrecovered as the

result of a compromise shall be reported

to the Internal Revenue Service (IRS) as

income to the debtor.

§ 1150.11 How does subdividing or joining

debts owed to the Endowment affect the

Chairperson’s compromise, suspension, or

termination authority?

A debtor’s liability arising from a

particular transaction or contract will be

considered as a single claim in

determining whether the claim is one of

not more than $100,000, excluding

interest, for the purpose of compromise

or suspension or termination of

collection action. Such a claim may not

be subdivided to avoid the monetary

ceiling established by the Federal

Claims Collection Act of 1966, as

amended. Joining two or more claims in

a demand upon a debtor for payment of

more than $100,000 does not preclude

compromise or suspension or

termination of collection action with

regard to any one claim not exceeding

$100,000, excluding interest.

§ 1150.12 How will the Endowment use

credit reporting agencies to collect its

claims?

(a) The Endowment may report

delinquent debts to appropriate credit

reporting agencies by providing the

following information:

(1) A statement that the debt is valid

and overdue;

(2) The name, address, taxpayer

identification number, and any other

information necessary to establish the

identity of the debtor;

(3) The amount, status, and history of

the debt; and

(4) The program or pertinent activity

under which the debt arose.

(b) Before disclosing debt information

to a credit reporting agency, the

Endowment will:

(1) Take reasonable action to locate

the debtor if a current address is not

available;

(2) Provide the notice required under

§ 1150.5 if a current address is available;

and

(3) Obtain satisfactory assurances

from the credit reporting agency that it

complies with the Fair Credit Reporting

Act (15 U.S.C. 1681 et seq.) and other

Federal laws governing the provision of

credit information.

(c) At the time debt information is

submitted to a credit reporting agency,

the Endowment will provide a written

statement to the reporting agency that

all required actions have been taken. In

addition, the Endowment will,

thereafter, ensure that the credit

reporting agency is promptly informed

of any substantive change in the

conditions or amount of the debt, and

promptly verify or correct information

relevant to the debt.

(d) If a debtor disputes the validity of

the debt, the credit reporting agency

will refer the matter to the appropriate

Endowment official. The credit

reporting agency will exclude the debt

from its reports until the Endowment

certifies in writing that the debt is valid.

(e) The Endowment may disclose to a

commercial credit bureau information

concerning a commercial debt,

including the following:

(1) Information necessary to establish

the name, address, and employer

identification number of the commercial

debtor;

(2) The amount, status, and history of

the debt; and

(3) The program or pertinent activity

under which the debt arose.

37490 Federal Register / Vol. 65, No. 116 / Thursday, June 15, 2000 / Rules and Regulations

§ 1150.13 How will the Endowment

contract for collection services?

The Endowment will use the services

of a private collection contractor where

it determines that such use is in the best

interest of the Endowment. When the

Endowment determines that there is a

need to contract for collection services,

it will:

(a) Retain sole authority to:

(1) Resolve any dispute with the

debtor regarding the validity of the debt;

(2) Compromise the debt;

(3) Suspend or terminate collection

action;

(4) Refer the debt to the DOJ for

litigation; and

(5) Take any other action under this

part which does not result in full

collection of the debt;

(b) Require the contractor to comply

with the Privacy Act of 1974, as

amended, to the extent specified in 5

U.S.C. 552a(m); with the Fair Debt

Collection Practices Act (15 U.S.C.

1692–1692o) and other applicable

Federal and State laws pertaining to

debt collection practices; and with the

applicable regulations of the

Endowment in this chapter;

(c) Require the contractor to account

accurately and fully for all amounts

collected; and

(d) Require the contractor to provide

to the Endowment, upon request, all

data and reports contained in its files

related to its collection actions on a

debt.

§ 1150.14 When will the Endowment refer

claims to the DOJ?

The Chairperson will refer to the DOJ

for litigation claims on which aggressive

collection actions have been taken but

which could not be collected,

compromised, suspended, or

terminated. Referrals will be made as

early as possible, consistent with

aggressive Endowment collection

action, and within the period for

bringing a timely suit against the debtor.

§ 1150.15 Will the Endowment use a crossservicing agreement with the Treasury to

collect its claims?

(a) The Endowment will enter into a

cross-servicing agreement that

authorizes the Treasury to take the

collection actions described in this part

on behalf of the Endowment. These debt

collection services will be provided to

the Endowment in accordance with 31

U.S.C. Chapter 37.

(b) The Endowment shall transfer to

the Treasury any past due, legally

enforceable, non-tax debt that has been

delinquent for a period of 180 days or

more so that the Secretary of the

Treasury may take appropriate action in

accordance with 31 U.S.C. 3716, 5

U.S.C. 5514, the Federal Claims

Collection Standards, 5 CFR 550.1108,

and 31 CFR part 285. The categories of

debts described in 31 U.S.C. 3711(g)(2)

are excluded from transfer under this

paragraph (b).

§ 1150.16 May I use the Endowment’s

failure to comply with these regulations as

a defense?

No. The failure of the Endowment to

comply with any standard prescribed in

the Federal Claims Collection Standards

or these regulations shall not be

available to any debtor as a defense.

Subpart B—Salary Offset

§ 1150.20 What debts are included or

excluded from coverage of these

regulations on salary offset?

(a) The regulations in this subpart

provide Endowment procedures for the

collection by salary offset of a Federal

employee’s pay to satisfy certain debts

owed to the Endowment or to other

Federal agencies.

(b) The regulations in this subpart do

not apply to any case where collection

of a debt by salary offset is explicitly

provided for or prohibited by another

statute.

(c) Nothing in the regulations in this

subpart precludes the compromise,

suspension, or termination of collection

actions under the Federal Claims

Collection Act of 1966, as amended, or

the Federal Claims Collection

Standards.

(d) A levy pursuant to the Internal

Revenue Code takes precedence over a

salary offset under this subpart, as

provided in 5 U.S.C. 5514(d).

(e) This subpart does not apply to any

adjustment to pay arising out of your

election of coverage or a change in

coverage under a Federal benefits

program requiring periodic deductions

from pay, if the amount to be recovered

was accumulated over four or fewer pay

periods.

§ 1150.21 May I ask the Endowment to

waive an overpayment that otherwise would

be collected by offsetting my salary as a

Federal employee?

Yes. The regulations in this subpart

do not preclude you from requesting

waiver of an overpayment under 5

U.S.C. 5584 or 8346(b), 10 U.S.C. 2774,

32 U.S.C. 716, or other statutory

provisions pertaining to the particular

debts being collected.

§ 1150.22 What are the Endowment’s

procedures for salary offset?

(a) The Endowment will coordinate

salary deductions under this subpart as

appropriate.

(b) If you are an Endowment

employee, the Endowment’s payroll

office will determine the amount of your

disposable pay and will implement the

salary offset.

(c) Deductions will begin within three

official pay periods following receipt by

the Endowment’s payroll office of

certification of debt from the creditor

agency.

(d) Types of collection.

(1) Lump-sum offset. If the amount of

the debt is equal to or less than 15

percent of disposable pay, the debt

generally will be collected through one

lump-sum offset.

(2) Installment deductions.

Installment deductions will be made

over a period not greater than the

anticipated period of employment. The

size and frequency of installment

deductions will bear a reasonable

relation to the size of the debt and your

ability to pay. However, the amount

deducted from any period will not

exceed 15 percent of the disposable pay

from which the deduction is made

unless you have agreed in writing to the

deduction of a greater amount. If

possible, installment payments will be

sufficient in size and frequency to

liquidate the debt in three years or less.

(3) Deductions from final check. A

deduction exceeding the 15 percent of

disposable pay limitation may be made

from any final salary payment under 31

U.S.C. 3716 and the Federal Claims

Collection Standards, in order to

liquidate the debt, whether the

employee is being separated voluntarily

or involuntarily.

(4) Deductions from other sources. If

an employee subject to salary offset is

separated from the Endowment, and the

balance of the debt cannot be liquidated

by offset of the final salary check, then

the Endowment may offset later

payments of any kind against the

balance of the debt, as allowed by 31

U.S.C. 3716 and the Federal Claims

Collection Standards.

(e) Multiple debts. In instances where

two or more creditor agencies are

seeking salary offsets, or where two or

more debts are owed to a single creditor

agency, the Endowment’s payroll office

may, at its discretion, determine

whether one or more debts should be

offset simultaneously within the 15

percent limitation.

§ 1150.23 How will the Endowment

coordinate salary offsets with other

agencies?

(a) Responsibilities of the Endowment

as the creditor agency. Upon completion

of the procedures established in this

subpart and pursuant to 5 U.S.C. 5514,

Federal Register / Vol. 65, No. 116 / Thursday, June 15, 2000 / Rules and Regulations 37491

the Endowment must submit a claim to

a paying agency.

(1) In its claim, the Endowment must

certify, in writing, the following:

(i) That the employee owes the debt;

(ii) The amount and basis of the debt;

(iii) The date the Endowment’s right

to collect the debt first accrued; and

(iv) That the Endowment’s regulations

in this subpart have been approved by

OPM under 5 CFR part 550, subpart K.

(2) If the collection must be made in

installments, the Endowment’s claim

will also advise the paying agency of the

amount or percentage of disposable pay

to be collected in each installment. The

Endowment may also advise the paying

agency of the number of installments to

be collected and the date of the first

installment, if that date is other than the

next officially established pay period.

(3) The Endowment shall also include

in its claim:

(i) The employee’s written consent to

the salary offset;

(ii) The employee’s signed statement

acknowledging receipt of the procedures

required by 5 U.S.C. 5514; or

(iii) Information regarding the

completion of procedures required by 5

U.S.C. 5514, including the actions taken

and the dates of those actions.

(4) If the employee is in the process

of separating and has not received a

final salary check or other final

payment(s) from the paying agency, the

Endowment must submit its claim to the

paying agency for collection under 31

U.S.C. 3716. The paying agency will

(under its regulations adopted under 5

U.S.C. 5514 and 5 CFR part 550, subpart

K), certify the total amount of its

collection on the debt and notify the

employee and the Endowment. If the

paying agency’s collection does not

fully satisfy the debt, and the paying

agency is aware that the debtor is

entitled to payments from the Civil

Service Retirement and Disability Fund

or other similar payments that may be

due the debtor employee from other

Federal government sources, then

(under its regulations adopted under 5

U.S.C. 5514 and 5 CFR part 550, subpart

K), the paying agency will provide

written notice of the outstanding debt to

the agency responsible for making the

other payments to the debtor employee.

The written notice will state that the

employee owes a debt, the amount of

the debt, and that the provisions of this

section have been fully complied with.

However, the Endowment must submit

a properly certified claim under this

paragraph (a)(4) to the agency

responsible for making the payments

before the collection can be made.

(5) Separated employee. If the

employee is already separated and all

payments due from his or her former

paying agency have been paid, the

Endowment may request, unless

otherwise prohibited, that money due

and payable to the employee from the

Civil Service Retirement and Disability

Fund or other similar funds be

administratively offset to collect the

debt.

(6) Employee transfer. When an

employee transfers from one paying

agency to another paying agency, the

Endowment will not repeat the due

process procedures described in 5

U.S.C. 5514 and this subpart to resume

the collection. The Endowment will

submit a properly certified claim to the

new paying agency and will

subsequently review the debt to ensure

that the collection is resumed by the

new paying agency.

(b) Responsibilities of the Endowment

as the paying agency. (1) Complete

claim. When the Endowment receives a

certified claim from a creditor agency

(under the creditor agency’s regulations

adopted under 5 U.S.C. 5514 and 5 CFR

part 550, subpart K), deductions should

be scheduled to begin within three

officially established pay intervals.

Before deductions can begin, the

employee will receive a written notice

from the Endowment including:

(i) A statement that the Endowment

has received a certified claim from the

creditor agency;

(ii) The amount of the claim;

(iii) The date salary offset deductions

will begin; and

(iv) The amount of such deductions.

(2) Incomplete claim. When the

Endowment receives an incomplete

certification of debt from a creditor

agency, the Endowment will return the

claim with a notice that the creditor

agency must comply with the

procedures required under 5 U.S.C.

5514 and 5 CFR part 550, subpart K, and

must properly certify a claim to the

Endowment before the Endowment will

take action to collect from the

employee’s current pay account.

(3) The Endowment is not authorized

to review the merits of the creditor

agency’s determination with respect to

the amount or validity of the debt

certified by the creditor agency.

(4) Employees who transfer from the

Endowment to another paying agency.

If, after the creditor agency has

submitted the claim to the Endowment,

the employee transfers from the

Endowment to a different paying agency

before the debt is collected in full, the

Endowment will certify the total

amount collected on the debt and notify

the employee and the creditor agency in

writing. The notification to the creditor

agency will include information on the

employee’s transfer.

§ 1150.24 Under what conditions will the

Endowment make a refund of amounts

collected by salary offset?

(a) If the Endowment is the creditor

agency, it will promptly refund any

amount deducted under the authority of

5 U.S.C. 5514, when:

(1) The debt is waived or all or part

of the funds deducted are otherwise

found not to be owed (unless expressly

prohibited by statute or regulation); or

(2) An administrative or judicial order

directs the Endowment to make a

refund.

(b) Unless required or permitted by

law or contract, refunds under this

section will not bear interest.

§ 1150.25 Will the collection of a claim by

salary offset act as a waiver of my rights to

dispute the claimed debt?

Your involuntary payment of all or

any portion of a debt under this subpart

will not be construed as a waiver of any

rights that you may have under 5 U.S.C.

5514 or other provisions of a law or

written contract, unless there are

statutory or contractual provisions to

the contrary.

Subpart C—Tax Refund Offset

§ 1150.30 Which debts can the Endowment

refer to the Treasury for collection by

offsetting tax refunds?

(a) The regulations in this subpart

implement 31 U.S.C. 3720A, which

authorizes the Treasury to reduce a tax

refund by the amount of a past-due,

legally enforceable debt owed to a

Federal agency.

(b) For purposes of this section, a

past-due, legally enforceable debt

referable to the Treasury for tax refund

offset is a debt that is owed to the

Endowment and:

(1) Is at least $25.00;

(2) Except in the case of a judgment

debt, has been delinquent for at least

three months and will not have been

delinquent more than 10 years at the

time the offset is made;

(3) Cannot currently be collected

under the salary offset provisions of 5

U.S.C. 5514;

(4) Is ineligible for administrative

offset under 31 U.S.C. 3716(a) by reason

of 31 U.S.C. 3716(c)(2) or cannot be

collected by administrative offset under

31 U.S.C. 3716(a) by the Endowment

against amounts payable to the debtor

by the Endowment;

(5) With respect to which the

Endowment has

(i) given the debtor at least 60 days to

present evidence that all or part of the

debt is not past due or legally

enforceable,

37492 Federal Register / Vol. 65, No. 116 / Thursday, June 15, 2000 / Rules and Regulations

(ii) considered evidence presented by

the debtor, and

(iii) determined that an amount of the

debt is past due and legally enforceable;

(6) Has been disclosed by the

Endowment to a credit reporting agency

as authorized by 31 U.S.C. 3711(e) and

§ 1150.12 of this part, unless the credit

reporting agency would be prohibited

from reporting information concerning

the debt by reason of 15 U.S.C. 1681c;

(7) With respect to which the

Endowment has notified or has made a

reasonable attempt to notify the debtor

that:

(i) The debt is past due, and

(ii) Unless repaid within 60 days of

the date of the Notice, the debt may be

referred to the Treasury for offset against

any refund of overpayment of tax; and

(8) All other requirements of 31 U.S.C.

3720A and the Treasury regulations

relating to the eligibility of a debt for tax

return offset (31 CFR 285.2) have been

satisfied.

§ 1150.31 What are the Endowment’s

procedures for collecting debts by tax

refund offset?

(a) The Chairperson will be the point

of contact with the Treasury for

administrative matters regarding the

offset program.

(b) The Endowment will ensure that

the procedures prescribed by the

Treasury are followed in developing

information about past-due debts and

submitting the debts to the Treasury.

(c) The Endowment will submit to the

Treasury a notification of a taxpayer’s

liability for past-due legally enforceable

debt. This notification will contain the

following:

(1) The name and taxpayer

identification number of the debtor;

(2) The amount of the past-due and

legally enforceable debt;

(3) The date on which the original

debt became past due; and

(4) A statement certifying that, with

respect to each debt reported, all of the

requirements of § 1150.30(b) have been

satisfied.

(d) For purposes of this section, notice

that collection of the debt is affected by

a bankruptcy proceeding involving the

debtor will bar referral of the debt to the

Treasury.

(e) The Endowment shall promptly

notify the Treasury to correct data when

it:

(1) Determines that an error has been

made with respect to a debt that has

been referred;

(2) Receives or credits a payment on

the debt; or

(3) Receives notice that the person

owing the debt has filed for bankruptcy

under Title 11 of the United States Code

or has been adjudicated bankrupt and

the debt has been discharged.

(f) When advising debtors of an intent

to refer a debt to the Treasury for offset,

the Endowment will also advise debtors

of remedial actions available to defer the

offset or prevent it from taking place.

Subpart D—Administrative Offset

§ 1150.40 Under what circumstances will

the Endowment collect amounts that I owe

to the Endowment (or some other Federal

agency) by offsetting the debt against

payments that the Endowment (or some

other Federal agency) owes me?

(a) The regulations in this subpart

apply to the collection of any debts you

owe to the Endowment, or to any

request from another Federal agency

that the Endowment collect a debt you

owe by offsetting your debt against a

payment the Endowment owes you.

Administrative offset is authorized

under Section 5 of the Federal Claims

Collection Act of 1966, as amended (31

U.S.C. 3716). The Endowment shall

carry out administrative offset in

accordance with the provisions of the

Federal Claims Collection Standards;

the regulations in this subpart are

intended only to supplement the

provisions of the Federal Claims

Collection Standards.

(b) The Chairperson, after attempting

to collect a debt you owe to the

Endowment under Section 3(a) of the

Federal Claims Collection Act of 1966,

as amended (31 U.S.C. 3711(a)), may

collect the debt by administrative offset,

subject to the following:

(1) The debt you owe is certain in

amount; and

(2) It is in the best interest of the

Endowment to collect your debt by

administrative offset because of the

decreased costs of collection and

acceleration in the payment of the debt.

(c) No collection by administrative

offset will be made on any debt that has

been outstanding for more than 10 years

unless facts material to the Endowment

or a federal agency’s right to collect the

debt were not known, and reasonably

could not have been known, by the

official or officials responsible for

discovering and collecting the debt.

(d) The regulations in this subpart do

not apply to:

(1) A case in which administrative

offset of the type of debt involved is

explicitly prohibited by statute; or

(2) Debts owed to the Endowment by

Federal agencies.

§ 1150.41 How will the Endowment request

that my debt to the Endowment be collected

by offset against some payment that

another Federal agency owes me?

The Chairperson may request that

funds due and payable to you by

another Federal agency instead be paid

to the Endowment to satisfy a debt you

owe to the Endowment. In requesting

administrative offset, the Endowment

will certify in writing to the Federal

agency that is holding funds for you:

(a) That you owe the debt;

(b) The amount and basis of the debt;

and

(c) That the Endowment has complied

with the requirements of 31 U.S.C. 3716,

its own administrative offset regulations

in this subpart, and the applicable

provisions of the Federal Claims

Collection Standards with respect to

providing you with due process.

§ 1150.42 What procedures will the

Endowment use to collect amounts I owe to

a Federal agency by offsetting a payment

that the Endowment would otherwise make

to me?

(a) Any Federal agency may request

that the Endowment administratively

offset funds due and payable to you in

order to collect a debt you owe to that

agency. The Endowment will initiate

the requested offset only upon:

(1) Receipt of written certification

from the creditor agency stating:

(i) That you owe the debt;

(ii) The amount and basis of the debt;

(iii) That the agency has prescribed

regulations for the exercise of

administrative offset; and

(iv) That the agency has complied

with its own administrative offset

regulations and with the applicable

provisions of the Federal Claims

Collection Standards, including

providing you with any required

hearing or review; and

(2) A determination by the

Chairperson that offsetting funds

payable to you by the Endowment in

order to collect a debt owed by you

would be in the best interest of the

United States as determined by the facts

and circumstances of the particular

case, and that such an offset would not

otherwise be contrary to law.

(b) Multiple debts. In instances where

two or more creditor agencies are

seeking administrative offsets, or where

two or more debts are owed to a single

creditor agency, the Endowment may, in

its discretion, allocate the amount it

owes to you to the creditor agencies in

accordance with the best interest of the

United States as determined by the facts

and circumstances of the particular

case, paying special attention to

applicable statutes of limitations.

§ 1150.43 When may the Endowment make

an offset in an expedited manner?

The Endowment may effect an

administrative offset against a payment

to be made to you before completion of

the procedures required by §§ 1150.41

Federal Register / Vol. 65, No. 116 / Thursday, June 15, 2000 / Rules and Regulations 37493

and 1150.42 if failure to take the offset

would substantially jeopardize the

Endowment’s ability to collect the debt

and the time before the payment is to be

made does not reasonably permit the

completion of those procedures. An

expedited offset will be followed

promptly by the completion of those

procedures. Amounts recovered by

offset, but later found not to be owed to

the Endowment, will be promptly

refunded.

§ 1150.44 Can a judgment I have obtained

against the United States be used to satisfy

a debt that I owe to the Endowment?

Collection by offset against a

judgment obtained by a debtor against

the United States will be accomplished

in accordance with 31 U.S.C. 3728.

Dated: June 12, 2000.

Hope O’Keeffe,

Acting General Counsel.

[FR Doc. 00–15173 Filed 6–14–00; 8:45 am]

BILLING CODE 7537–01–P