Thursday,

December 26, 2002

Part V

Department of the 

Treasury

Fiscal Service 

31 CFR Part 285

Centralized Offset of Federal Payments to 

Collect Nontax Debts Owed to the United 

States; Final Rule

78936 Federal Register / Vol. 67, No. 248 / Thursday, December 26, 2002 / Rules and Regulations 

DEPARTMENT OF THE TREASURY

Fiscal Service 

31 CFR Part 285 

RIN 1510–AA65 

Centralized Offset of Federal Payments 

to Collect Nontax Debts Owed to the 

United States

AGENCY: Financial Management Service, 

Fiscal Service, Treasury.

ACTION: Interim rule with request for 

comments. 

SUMMARY: This interim rule describes 

the general rules and procedures 

applicable to the centralized offset of 

Federal payments to collect delinquent, 

nontax debts owed to Federal agencies. 

The Department of the Treasury’s 

Financial Management Service has 

established the Treasury Offset Program 

(TOP) in order to centralize the process 

by which Federal payments are 

withheld or reduced (in other words, 

offset) to collect delinquent debts. This 

interim rule specifically applies to the 

centralized offset of all types of Federal 

payments by Federal disbursing officials 

to collect delinquent, nontax debts 

owed to the United States. Therefore, 

this interim rule affects persons who 

owe delinquent, nontax debts to the 

United States and who receive Federal 

payments. It also affects Federal 

agencies that are owed delinquent debts 

and that disburse and certify Federal 

payments. This rule does not apply to 

collection of child support debts and 

other debts owed to States.

DATES: This rule is effective December 

26, 2002. Comments must be received 

by January 27, 2003.

ADDRESSES: All comments should be 

addressed to Gerry Isenberg, Financial 

Program Specialist, Debt Management 

Services, Financial Management 

Service, Department of the Treasury, 

401 14th Street, SW., Room 151, 

Washington, DC 20227. A copy of this 

interim rule is being made available for 

downloading from the Financial 

Management Service Web site at the 

following address: http://

www.fms.treas.gov/debt. Comments may 

also be received via the internet as 

directed on the Web site.

FOR FURTHER INFORMATION CONTACT:

Gerry Isenberg, Financial Program 

Specialist, at (202) 874–6660; Tricia 

Long, Attorney-Advisor at (202) 874–

6680.

SUPPLEMENTARY INFORMATION: 

Background 

A major goal of the Debt Collection 

Improvement Act of 1996 (DCIA), Pub. 

L. 104–134, 110 Stat. 1321–358 et seq.

(April 26, 1996), is to increase the 

collection of delinquent, nontax debts 

owed to the Federal Government. 

Among other things, the DCIA 

established a centralized process for 

withholding or reducing eligible Federal 

payments to pay the payee’s delinquent 

debt owed to the United States. See 31 

U.S.C. 3716(c), 31 U.S.C. 3720A(h), and 

31 CFR 901.3. This process is known as 

‘‘centralized offset’’ or ‘‘offset’’. 

The Financial Management Service 

(FMS), a bureau of the Department of 

the Treasury (Treasury), disburses 

almost 900 million payments annually 

for the Federal government and is 

responsible for the implementation of 

centralized offset of Federal payments 

for the collection of delinquent, nontax 

debt. To meet this and other debt 

collection responsibilities, FMS has 

established TOP. By centralizing offset 

through TOP, FMS has consolidated and 

simplified debt collection procedures 

for the Federal Government. TOP allows 

agencies to submit debts to one 

centralized location for offset of all 

eligible Federal payments. By 

submitting debts to TOP to comply with 

31 U.S.C. 3716(c)(6) (for offset of nontax 

payments), agencies simultaneously will 

meet the requirement to submit pastdue, legally enforceable debts to 

Treasury for purposes of tax refund 

offset. See 31 U.S.C. 3720A(a). TOP also 

provides a mechanism for Federal 

agencies to collect debt through the 

centralized offset of the salaries of 

Federal employees. See 31 CFR 285.7. 

TOP works as follows. Creditor 

agencies submit information about 

delinquent debts to FMS, which 

maintains the information in its 

delinquent debtor database. Payment 

agencies prepare and certify payment 

vouchers to FMS and disbursing 

officials at other Federal agencies (such 

as Department of Defense or the United 

States Postal Service), who then 

disburse payments. The payment 

vouchers contain information about the 

payment including the name and 

taxpayer identifying number (TIN) of 

the recipient. Before an eligible Federal 

payment is disbursed to a payee, FMS 

compares the payment information with 

debtor information in FMS’ delinquent 

debtor database. If the payee’s name and 

TIN match the name and TIN of a 

debtor, the disbursing official offsets the 

payment, in whole or in part, to satisfy 

the debt, to the extent legally allowed. 

FMS transmits amounts collected 

through offset to the appropriate 

creditor agencies after deducting fees, 

which FMS charges the creditor 

agencies in order to cover the cost of 

operating the offset program. The 

authority to charge fees is found at 31 

U.S.C. 3716(c)(4) and 3720A(d). If not 

otherwise prohibited by law, creditor 

agencies may add the fees to the debts 

as administrative costs, pursuant to 31 

U.S.C. 3717(e). 

FMS maintains information about a 

delinquent debt in TOP delinquent 

debtor database and continues to offset 

eligible Federal payments until the 

creditor agency suspends or terminates 

debt collection or offset activity for the 

debt. A creditor agency will suspend 

collection if the debt is subject to a 

bankruptcy stay or if other reasons 

justify suspension. See 31 CFR 903.2. A 

creditor agency will terminate collection 

of a debt if it is paid in full, 

compromised, discharged, or if other 

reasons justify termination. See 31 CFR 

903.3. 

FMS has published rules that govern 

the offset of specific payment types to 

collect delinquent, nontax debts owed 

to the United States. These rules 

address: (1) Offset of tax refund 

payments to collect delinquent, nontax 

debts owed to Federal agencies (31 CFR 

285.2); (2) offset of Federal benefit 

payments to collect delinquent, nontax 

debts owed to Federal agencies (31 CFR 

285.4); and (3) offset of Federal salary 

payments to collect debts owed to 

Federal agencies (31 CFR 285.7). 

Nothing in this rule is intended to 

contradict any provision of these more 

specific sections. Rather, this rule only 

describes requirements and procedures 

which are common to the centralized 

offset of all Federal payments to collect 

debts owed to Federal agencies. To the 

extent any provision of this rule is 

inconsistent with a more specific 

provision of sections 285.2, 285.4 or 

285.7 of this Part, the more specific 

provision shall apply. 

Section Analysis 

(a) Scope 

Paragraph (a) describes the scope of 

this section, which governs the 

centralized offset of Federal payments to 

collect delinquent, nontax debts owed 

to Federal agencies in accordance with 

the requirements of 31 U.S.C. 3716(c)(6), 

3720A(a), 26 U.S.C. 6402, and all 

applicable regulations.

This regulation only applies to the 

extent that it does not conflict with the 

more specific provisions of the rules for 

tax refund offsets (see 31 CFR 285.2), 

salary payment offsets (see 31 CFR 

285.7) and benefit payment offsets (see

31 CFR 285.4). 

Federal Register / Vol. 67, No. 248 / Thursday, December 26, 2002 / Rules and Regulations 78937

This section does not apply to 

administrative offsets that occur outside 

of TOP (known as ‘‘non-centralized 

offsets’’). Non-centralized offsets are 

governed by the Federal Claims 

Collection Standards (see 31 CFR 

901.3(c)) and agency-specific 

regulations. 

This section does not apply to the 

offset of payments to collect debts owed 

to States (see 31 CFR 285.8) or to collect 

delinquent child support payments (see

31 CFR 285.1 and 285.3). 

This section does not apply to 

garnishments or Internal Revenue 

Service levies of Federal payments. 

Offsets are not garnishments. An offset 

occurs when the Federal government 

withholds money owed to a person to 

satisfy a claim owed by that same 

person to the government. Garnishment 

is a process whereby a creditor attaches 

wages or other property belonging to a 

debtor which is in the possession of a 

third party. A levy is the means by 

which the Internal Revenue Service or 

other tax collecting authority seizes the 

delinquent taxpayer’s property. See 26 

U.S.C. 6331. Regulations governing 

garnishments and levies do not apply to 

offsets under this section. For example, 

regulations which exclude travel 

reimbursements from court-ordered, 

commercial garnishments on Federal 

pay (see 5 CFR 582.102) do not preclude 

offsets under this section. Therefore, 

payments which reimburse Federal 

employees for travel or other 

employment-related expenditures are 

subject to offset under this section, 

regardless of whether they may be 

garnished to collect debts owed to third 

parties. 

This section applies only to payments 

that a payment certifying agency has 

certified to a disbursing official for 

disbursement. It therefore does not 

apply to payments made directly with a 

government credit card. 

Lastly, the receipt of collections 

pursuant to this section does not 

preclude a Federal agency from 

pursuing all other available debt 

collection remedies simultaneously, 

provided that collections do not exceed 

the amount of the debt, including any 

interest, penalties, and administrative 

costs. 

(b) Definitions 

Paragraph (b) of this section sets forth 

definitions applicable to this rule. It is 

important to note that the terms used in 

this section are defined for purposes of 

this section only. For example, whether 

a debt is ‘‘legally enforceable’’ for 

purposes of centralized offset pursuant 

to this section has no bearing on 

whether the debt is legally enforceable 

for purposes of placing a lien on the 

debtor’s property or for some other debt 

collection purpose. 

(c) General Rule 

Paragraph (c) of this section sets forth 

the general rule that creditor agencies 

must submit their delinquent debts to 

FMS for offset, and that disbursing 

officials must offset payments to collect 

those debts. See 31 U.S.C. 3716(c). 

(d) Requirements for Creditor Agencies 

Paragraph (d) sets forth the 

requirements for Federal creditor 

agencies with regard to centralized 

offset. As noted above, creditor agencies 

will meet the requirement to submit 

debts to Treasury for purposes of tax 

refund offset by submitting debts to 

FMS pursuant to this section. See 31 

U.S.C. 3720A(a). The requirements of 

this section take into account the 

provisions of various statutes and 

regulations which apply to the offset of 

Federal payments in general, as well as 

to specific types of Federal payments. 

Paragraph (d)(1) restates the statutory 

requirement that creditor agencies 

notify FMS of all past-due, legally 

enforceable, nontax debt which is 

delinquent for more than 180 days, for 

purposes of collection by centralized 

offset. See 31 U.S.C. 3716(c)(6). 

Paragraph (d)(1) also provides a creditor 

agency with 30 days following a 

decision on an appeal within which to 

submit a debt that is more than 180 days 

delinquent. This rule allows for an 

additional 30 days, because immediate 

transfer of a debt to FMS following a 

decision on an appeal might be 

impractical. The 30-day period provides 

debtors with an opportunity to pay the 

debt or to enter into a repayment plan 

with the creditor agency before offset 

action is taken. When a creditor agency 

determines that a debtor is unlikely to 

pay the debt or enter into a repayment 

plan within the 30-day period, it should 

submit the debt to FMS immediately 

following a decision on an appeal. 

Paragraph (d)(2) provides that creditor 

agencies may notify FMS of debts 

delinquent for less than 180 days for 

purposes of offset. FMS encourages 

agencies to submit debts to TOP as soon 

as they become eligible, in order to 

maximize collections.

Paragraph (d)(3) describes the 

requirements for a debt to be eligible for 

centralized offset. For a creditor agency 

to submit a debt to FMS for offset, the 

debt must be past due and legally 

enforceable in the amount stated by the 

creditor agency, be less than 10 years 

delinquent (unless the debt may be 

collected by offset legally if more than 

ten years delinquent, as is the case with 

judgment debts and education loans), 

have a balance greater than $25, and not 

be secured by collateral subject to 

foreclosure. Generally, the debt should 

not be secured by collateral subject to a 

pending foreclosure action unless the 

creditor agency certifies that offset will 

not affect the government’s rights to the 

secured collateral. Additionally, the 

creditor agency must certify that the 

debt is eligible for collection by offset, 

as required in paragraph (d)(6) of this 

section. 

Debts owed by foreign sovereigns are 

excluded from the mandatory 

requirement under paragraph (d)(1) that 

creditor agencies notify FMS of all pastdue, legally enforceable, nontax debt 

which is delinquent for more than 180 

days, for purposes of collection by 

centralized offset. This exclusion 

applies only to debts owed by foreign 

sovereigns and does not apply to debts 

owed by privately owned foreign 

corporations or by foreign individuals. 

This exclusion does not preclude a 

creditor agency from voluntarily 

notifying Treasury of debt owed by 

foreign sovereigns for the purpose of 

offset to the extent allowed by law. FMS 

has excluded debts owed by foreign 

sovereigns from the requirement 

described in paragraph (d)(1) pursuant 

to 31 U.S.C. 3716(c)(5). Section 

3716(c)(5) authorizes the Secretary of 

the Treasury to prescribe such rules, 

regulations, and procedures as the 

Secretary considers necessary to carry 

out centralized offset under section 

3716(c). The Secretary deems it 

necessary to exclude debts owed by 

foreign sovereigns because mandatory 

notification of such debts to Treasury 

for collection by offset could interfere 

with important foreign policy goals. 

Paragraph (d)(3)(iv) describes creditor 

agencies’ responsibilities to report 

certain debt information to Treasury on 

a report known as Treasury Report on 

Receivables (TROR). When reporting 

amounts eligible for TOP, agencies must 

report amounts that have been excluded 

from TOP and state the reasons for the 

exclusions consistent with this 

paragraph. Detailed instructions on 

completing the TROR can be found at 

http://www.fms.treas.gov/debt/dmrpts.

For purposes of this section, a debt is 

generally deemed past due or 

delinquent if it is not paid when due, 

whether that be the date specified in an 

initial notice or a date specified in a 

contract or other applicable agreement. 

Creditor agencies determine when a 

debt is delinquent based on applicable 

statutes, regulations and policies. 

Nothing in this section is intended to 

define when a debt is delinquent or 

legally enforceable for purposes of 

78938 Federal Register / Vol. 67, No. 248 / Thursday, December 26, 2002 / Rules and Regulations 

anything other than when a debt may be 

submitted to FMS for purposes of 

centralized offset. A debt is legally 

enforceable if there has been a final 

agency determination that the debt is 

due in the amount stated, and there are 

no legal bars to collection by offset. A 

debt is legally enforceable for purposes 

of this section as long as the 10-year 

limitation (or other applicable time 

limitation on offset) has not been 

exceeded, regardless of any limitation 

on when a claim may be brought in a 

civil action. Creditor agencies should 

consult with their agency counsel to 

determine the legal enforceability of 

debts for purposes of this section. 

Paragraph (d)(4) describes the 

requirements for creditor agencies to 

publish regulations regarding offset. 

Creditor agencies must promulgate 

regulations governing offset in 

accordance with 31 U.S.C. 

3716(b)(administrative offset), 

3720A(a)(tax refund offset), and 31 CFR 

901.3(b)(4)(Federal Claims Collection 

Standards) prior to submitting debts for 

offset. Additionally, creditor agencies 

must promulgate regulations in 

accordance with 5 U.S.C. 5514, 31 CFR 

285.7(d)(2), and 5 CFR 550.1104 in 

order to collect debts through the 

centralized offset of Federal salary 

payments. Creditor agencies must 

comply with the prerequisites for the 

offset of all types of Federal payments 

in order to participate fully in the 

centralized offset through TOP. If, for 

example, a creditor agency has not 

published regulations concerning the 

offset of Federal salary payments, then 

disbursing officials cannot offset salary 

payments to collect that creditor 

agency’s debts. 

Paragraph (d)(5) sets forth the 

information required for each 

delinquent debt submitted to FMS for 

offset. All of the information is 

necessary for the successful operation of 

TOP. 

Paragraph (d)(6) describes the 

certification that creditor agencies must 

provide to FMS for each debt. Creditor 

agencies must certify to FMS that the 

requirements of 31 U.S.C. 3716(a), 

3720A, 26 U.S.C. 6402, and applicable 

agency-specific statutes and regulations 

related to offset have been met. The 

creditor agency must certify the 

following for each debt: (1) the debt 

meets the requirements set forth in 

paragraph (d)(3) of this section, 

regarding debt eligibility; (2) the 

creditor agency has given the debtor due 

process pursuant to 31 U.S.C. 3716, 

3720A and 26 U.S.C. 6402; and (3) the 

creditor agency has complied with 31 

U.S.C. 3717 with respect to the 

assessment of interest, penalties and 

administrative costs. The certification 

must be executed by the head of the 

agency or by a person with delegated 

authority to make such certification on 

behalf of the head of the agency. 

With respect to the certification that 

the creditor agency has provided due 

process, neither the DCIA nor this rule 

changes the existing requirement that 

agencies provide due process prior to 

offset. Such due process requirements 

are set forth in 31 U.S.C. 3716(a), 

3720A, and any agency-specific statutes 

and regulations applicable to the debt. 

Creditor agencies must inform debtors 

by written notice that the creditor 

agencies intend to offset eligible 

payments and that the debtor has an 

opportunity to review applicable agency 

records and to seek a review of the 

determination of the debt. In accordance 

with the creditor agency’s policies and 

procedures, the debtor may provide 

evidence to the creditor agency that 

collection of the debt by administrative 

offset would result in a financial 

hardship. The debtor may also make 

alternative payment arrangements, 

which are acceptable to the creditor 

agency. There is an additional due 

process requirement when the creditor 

agency has submitted the debt for offset 

of the debtor’s Federal salary. Prior to 

offsetting a Federal salary, the creditor 

agency must notify the debtor that she 

or he has an opportunity for a hearing 

pursuant to 5 U.S.C. 5514, 5 CFR 

550.1104, and applicable creditor 

agency regulations. Such notification 

may be combined with any other due 

process notices or may be sent 

separately. 

As noted in paragraph (d)(13), nothing 

in this section requires agencies to 

duplicate any notice, review or hearing 

previously provided to the debtor. For 

example, if the agency has provided the 

debtor with a hearing concerning the 

existence of a debt, this section does not 

require an agency to provide a second 

hearing concerning the same issue in 

order to submit the debt for offset. In 

such circumstance, however, the debtor 

may be entitled to a review (or hearing, 

if a Federal employee and the agency 

seeks to offset his or her Federal salary) 

concerning any other issues not 

addressed in the previous hearing. In 

this example, the debtor may contest the 

accuracy of the current debt balance 

(i.e., whether the agency had properly 

credited payments made subsequent to 

the hearing). 

Paragraph (d)(7) explains that creditor 

agencies will be asked to update the 

certifications of debts maintained by 

FMS in order to ensure that the debts 

continue to meet the requirements of 

paragraph (d)(6), including that the 

creditor agency has properly applied 

credits to the debt balance (other than 

collections through centralized offset). 

Periodic updates are required to ensure 

that information about the debts is 

current and accurate.

Paragraph (d)(8) also explains that the 

certification required by paragraphs 

(d)(6) and (d)(7) of this section, and any 

other information regarding delinquent 

debts transmitted to FMS, will be made 

in a form and manner as prescribed by 

FMS. The form may include, but is not 

limited to, electronic data transmission. 

In order to submit certifications 

electronically, a creditor agency must 

sign an agreement with FMS agreeing 

that the creditor agency will certify 

debts in accordance with instructions 

from FMS, that any person who the 

creditor agency allows to certify debts 

electronically will have the delegated 

authority to certify the debts on behalf 

of the head of the agency, and that such 

person knows that they are certifying to 

all of the requirements of paragraph 

(d)(6) of this section and any other terms 

of the certification as set forth in the 

agreement. FMS will require any 

agreement regarding electronic 

certification to be re-executed 

periodically, usually on an annual basis. 

This periodic execution will ensure that 

creditor agency personnel remain aware 

of their responsibilities and authorities 

when certifying debts for centralized 

offset. 

Paragraph (d)(9) explains that 

agencies which designate disbursing 

officials pursuant to 31 U.S.C. 3321(c) 

are not required to certify debts arising 

out of their own operations for purposes 

of centralized offset under this section 

prior to collecting such claims by offset. 

For example, if the Department of 

Defense (DOD) is about to disburse a 

payment to a person who also owes a 

delinquent debt to it, DOD may offset 

such payment, in accordance with 

applicable law, without first certifying 

the debt to FMS for purposes of 

centralized offset. 

Paragraph (d)(10) describes the 

creditor agencies’ responsibility to 

correct and update information 

contained in delinquent debt records. 

While information about a debt is 

maintained in TOP’s delinquent debtor 

database, the creditor agency remains 

responsible for administering the debt. 

This means that the creditor agency 

remains responsible for answering 

inquiries about the debts, negotiating 

agreements with the debtor, maintaining 

records applicable to the debt, and 

applying any amounts received with 

respect to the debt other than amounts 

collected through centralized offset. 

Creditor agencies make all decisions 

Federal Register / Vol. 67, No. 248 / Thursday, December 26, 2002 / Rules and Regulations 78939

concerning their debts. Creditor 

agencies determine whether debts are 

eligible for offset and whether offset 

funds should be returned to debtors 

who claim that the debts were not 

eligible for offset. 

If creditor agencies receive funds from 

any source other than centralized offset, 

they must submit the updated balance 

information to FMS; however, FMS will 

apply any funds received through 

centralized offset to the debt balances 

within TOP and notify creditor agencies 

of such collections. 

Creditor agencies are also responsible 

for notifying FMS immediately if there 

is a change in the status of the legal 

enforceability of any debt. For example, 

if a creditor agency learns that a debtor 

has filed for bankruptcy protection and 

the automatic stay is in effect, that 

creditor agency must notify FMS, in the 

manner prescribed by FMS, that the 

debt is no longer legally enforceable. 

Likewise, if the bankruptcy is 

dismissed, the debt has not been 

discharged, and there are no other legal 

obstacles to collection, the creditor 

agency should notify FMS immediately 

that the debt is once again legally 

enforceable. As a practical matter, this 

means that creditor agencies must have 

procedures in place to track the status 

of their debts which are in bankruptcy 

and to update FMS promptly. Creditor 

agencies should seek legal advice from 

their agency counsel concerning the 

impact of the Bankruptcy Code, 

particularly 11 U.S.C. 106, 362, and 553, 

on pending, contemplated or completed 

collections by offset. 

If a debt is being collected and 

serviced by FMS or another debt 

collection center, pursuant to 31 U.S.C. 

3711(g), FMS, or the applicable debt 

collection center, will manage the 

creditor agency’s responsibilities under 

paragraph (d)(10) of this section. 

Paragraph (d)(11) addresses debts 

which have been transferred to FMS or 

a Treasury-designated debt collection 

center for purposes of collection 

pursuant to 31 U.S.C. 3711(g) (known as 

‘‘cross-servicing’’) or which have been 

referred to the Department of Justice 

(DOJ) for enforced collection. A debt 

collection center will also be 

responsible for submitting debts it is 

servicing to TOP on behalf of the 

creditor agencies. FMS, on behalf of the 

creditor agencies, will submit debts in 

its cross-servicing program to TOP in 

accordance with the requirements of 

this section. See 31 CFR 285.11 for 

certification requirements when 

transferring debts to FMS for debt 

collection purposes. DOJ will submit 

debts to FMS for centralized offset on 

behalf of the creditor agency, as DOJ 

deems appropriate, for all debts which 

have been referred to DOJ for collection 

enforcement. 

Paragraph (d)(12) explains that if a 

creditor agency has determined that the 

offset amount allowed by law would 

result in financial hardship to the 

debtor, and that a lesser offset amount 

is reasonable and appropriate based 

upon the debtor’s financial 

circumstances, then the creditor agency 

may specify that the disbursing official 

offset a lesser amount. 

(e) Payments Made By the United States 

Paragraph (e) discusses the rules 

applicable to Federal payments covered 

by this section. This section generally 

applies to all Federal payments 

(regardless of the payment mechanism 

used, e.g., check or electronic funds 

transfer), unless offset against such type 

of payment is expressly prohibited 

under the DCIA or other Federal statute. 

See 31 U.S.C. 3716(e)(2). 

Paragraph (e)(1) notes that judgments 

paid pursuant to 31 U.S.C. 1304 

(Judgments, awards and compromise 

settlements) are eligible for centralized 

offset pursuant to 31 U.S.C. 3716(c). 

Nothing in this rule affects the setoff of 

amounts to be paid pursuant to such a 

judgment in accordance with 31 U.S.C. 

3728 (Setoff against judgments), which 

authorizes the Secretary of the Treasury 

to withhold amounts to be paid on a 

judgment to offset a debt. Setoff under 

section 3728 occurs before the Secretary 

certifies the payment for disbursement. 

This rule, however, only addresses 

centralized offset of such payments after 

the Secretary has certified them for 

disbursement. See volume I, part 6, 

chapter 3100 of the Treasury Financial 

Manual for information on the setoff 

and certification of judgment fund 

payments. 

Paragraph (e)(2) provides a list of 

payment types that are excluded from 

offset. In addition to payments exempt 

by law, this rule exempts from offset all 

Federal loan payments other than 

payments for travel advances pursuant 

to 31 U.S.C. 3716(c)(5). Section 

3716(c)(5) authorizes the Secretary of 

the Treasury to prescribe such rules, 

regulations, and procedures as the 

Secretary considers necessary to carry 

out centralized offset under section 

3716(c). The Secretary deems it 

necessary to exempt Federal loan 

payments other than travel advances 

from centralized offset. If a loan 

payment is offset, the debtor/payee pays 

off one agency by creating a debt owed 

to another agency. The government’s 

interests in debt collection through 

offset are not advanced by paying off a 

debt owed to one agency by creating a 

debt owed to another. Therefore, 

pursuant to 31 U.S.C. 3716(c)(5), the 

Secretary exempts Federal loan 

payments other than travel advances 

from centralized offset. 

Although travel advance payments to 

Federal employees are considered loans, 

except in limited circumstances (see 54 

Comp. Gen. 190, 191 (B–180672, 

September 5, 1974) and 1994 WL 

158116 (B–251865, April 28, 1994)), the 

Secretary does not deem it necessary to 

exempt travel advances from centralized 

offset under this section for three 

reasons. First and foremost, Federal 

employees are ethically obligated to 

‘‘satisfy in good faith their obligations as 

citizens, including all just financial 

obligations, especially those such as 

Federal, State, or local taxes that are 

imposed by law.’’ See 5 CFR 

2635.101(b)(12). If the Federal employee 

is unable to pay a debt, the employee 

should contact the creditor agency to 

make satisfactory repayment 

arrangements in order to avoid offsets of 

travel advances under this section. 

Absent such action by the Federal 

employee, any travel advances made to 

that employee should be offset to pay an 

employee’s delinquent debts. The 

employee remains responsible for 

traveling, if required for the 

performance of his or her duties. 

Second, unlike traditional Federal loan 

programs, travel advances are short-term 

debts, which are repaid as soon as the 

employee travels. Third, delinquent 

debtors are barred from receiving 

Federal loans (see 31 U.S.C. 3720B), yet 

agencies generally do not access 

employees’ credit reports or other 

sources of information to verify whether 

an employee owes a delinquent Federal 

debt prior to issuing a travel advance. 

Failing a bar by the agency issuing the 

travel advance, it is appropriate for the 

Government to offset the travel advance 

payment to satisfy the employee’s 

delinquent debts.

Paragraph (e)(3) explains that specific 

rules apply to the centralized offset of 

tax refunds, certain benefit payments 

and Federal salary payments. See 31 

CFR 285.2, 285.4, and 285.7, 

respectively. This section applies only 

to the extent that it is not inconsistent 

with the provisions of the rules that 

apply to each payment type. 

Paragraph (e)(4) states that a payment 

made jointly to two or more persons 

(i.e., ‘‘joint payees’’), may be offset in its 

entirety to satisfy the debt of any one of 

the joint payees. FMS assumes that joint 

payments are made to persons who each 

own an undivided interest in the whole 

payment. A joint payee who believes 

that he or she is entitled to a portion of 

the monies that have been offset must 

78940 Federal Register / Vol. 67, No. 248 / Thursday, December 26, 2002 / Rules and Regulations 

contact the payment agency which 

issued the payment. The payment 

agency must determine, based upon 

applicable laws and policies, if a refund 

of any portion of the offset amount is 

appropriate. If a couple files a joint 

Federal income tax return, and a 

resulting refund is offset to collect a 

debt which is owed by only one of the 

spouses, the spouse that does not owe 

the debt (i.e., the ‘‘injured spouse’’) 

must contact the Internal Revenue 

Service to claim the portion of the tax 

refund to which he or she is entitled. 

The IRS Web site, found at www.irs.gov,

contains instructions for the injured 

spouse to make a claim for his or her 

portion of the tax refund. At the time of 

writing, such claims are processed on 

IRS Form 8379. 

Paragraph (e)(5) states that payments 

made to representative payees (i.e., the 

named payee is receiving the payment 

solely in the person’s capacity as a 

representative for the beneficiary of the 

payment) will only be offset to collect 

delinquent debt owed by the payment 

beneficiary. For example, if a payment 

is made to an attorney solely for the 

benefit of his or her client, FMS will 

offset such payment only to collect a 

debt owed by the client. FMS will not 

offset the payment to collect a debt 

owed by the named payee attorney. 

Payment agencies are responsible for 

properly identifying representative 

payees. 

Paragraph (e)(6) addresses the offset of 

payments which have been assigned to 

a third party (known as ‘‘assigned 

payments’’). In certain circumstances, 

FMS may offset an assigned payment to 

collect debts owed by either the assignor 

or the assignee. See 31 U.S.C. 3716(e)(2) 

(offset permissible if not prohibited). 

For example, if a Federal contractor has 

assigned the right to receive payment 

under a Federal contract to a financial 

institution, FMS may offset the payment 

to collect a debt owed by either the 

contractor or the financial institution. 

FMS will offset assigned payments 

made to Federal contractors within the 

limits of 41 U.S.C. 15, 31 U.S.C. 3727 

and implementing regulations 

(including, as applicable, the Federal 

Acquisition Regulation (48 CFR Chapter 

1)). This rule does not address the 

validity of any assignment of payments. 

At the time of the publication of this 

regulation, FMS has not yet fully 

implemented offset of assigned 

payments. FMS will provide guidance 

to payment agencies prior to 

implementation. 

Paragraph (e)(7) describes how 

payment agencies may request that the 

Secretary exempt payment types from 

centralized offset and how the Secretary 

will evaluate and respond to such 

requests. The DCIA requires the 

Secretary to exempt from centralized 

offset payments made under meanstested programs when the head of the 

payment agency requests such 

exemption in writing. The DCIA also 

authorizes the Secretary to exempt 

payments made under non-means-tested 

programs at the written request of the 

head of the payment agency. See 31 

U.S.C. 3716(c)(3)(B). FMS has published 

and made available on its Web site 

(www.fms.treas.gov/debt) standards and 

procedures for the exemption of classes 

of payments from centralized offset. 

Paragraph (e)(7)(i) explains when an 

exemption request for means-tested 

payments will be granted. Paragraph 

(e)(7)(ii) explains that the Secretary may 

exempt non-means-tested payments in 

accordance with the published 

standards. Paragraph (e)(7)(iii) explains 

that the requests for exemptions must be 

made in writing following guidance 

issued by FMS pursuant to 31 U.S.C. 

3716(c)(3)(B). Exemptions apply to 

classes of payments and not to 

individual payments. A list of payments 

exempt from offset may be found on the 

FMS Web site at www.fms.treas.gov/

debt.

Consistent with the foregoing 

paragraph, contracting officials at 

Federal agencies do not have the 

authority to exempt contract payments 

from centralized offset. Payments are 

exempt from centralized offset only if 

expressly made exempt by statute or if 

the Secretary grants an exemption. 

Therefore, contract clauses prohibiting a 

Federal agency from offsetting a 

payment generally do not apply to 

centralized offset pursuant to this 

section, regardless of whether such 

clauses may be effective as to offsets 

made by the contracting agency 

pursuant to other authorities. 

Paragraph (e)(8) explains that 

payment agencies must prepare and 

submit payment vouchers in the manner 

prescribed by FMS or other disbursing 

official, in order to maximize the 

number of legally-eligible offsets. Also, 

payment agencies are responsible for 

notifying the Secretary of any legal bars 

to offset of payments which the agency 

certifies for payment. 

Paragraph (e)(9) explains that when a 

payment is offset, both the disbursing 

official and the payment agency have 

met their obligations with respect to 

making the payment. Neither the 

payment agency nor the disbursing 

official is liable for any portion of the 

payment which was offset. See 31 

U.S.C. 3716(c)(2). For example, if an 

agency certifies a payment to a Federal 

contractor for work completed, and that 

payment is offset to collect a delinquent 

debt that the contractor owes to another 

Federal agency, the contractor has been 

paid in full for its services. When the 

creditor agency credits the offset 

amount to the contractor’s delinquent 

debt, the contractor has received full 

value for the services performed under 

the contract. Payment agencies should 

be careful not to issue an overpayment 

to a contractor who claims non-receipt 

of payment after the initial payment is 

offset to pay the contractor’s debt. 

Contractors should contact the creditor 

agency to which the debt is owed for 

questions about the debt or to make 

repayment arrangements. 

(f) Offset 

Paragraph (f) describes the offset 

process, including amounts to be offset 

and the priority of how offsets are 

applied when it is determined that a 

payee owes more than one delinquent 

debt. Generally, a payment will be offset 

by the lesser of the amount of the 

payment, or the amount of the 

delinquent debt, including associated 

interest, penalties, and administrative 

costs. The offset amount is limited for 

certain Federal payments. See for 

example, 31 CFR 285.4 and 285.7 for 

limitations on offsets of certain Federal 

benefit payments and Federal salaries. 

Creditor agencies may specify that a 

lesser amount be offset based on a 

written agreement between the creditor 

agency and the debtor, or based upon 

the creditor agency’s determination that 

the amount allowed by law would 

create a financial hardship.

Paragraph (f)(2) establishes that a 

recurring Federal retirement annuity 

payment made by the Office of 

Personnel Management (OPM) will be 

offset up to a maximum of 25 percent 

to collect a delinquent debt under this 

section. For example, if an OPM annuity 

payment is $850.00, the amount offset 

would be no more than $212.50. 

Although the DCIA did not expressly 

provide for any such limitation on OPM 

recurring retirement annuity payments, 

limitations apply to other types of 

payments considered income. For 

example, the Consumer Credit 

Protection Act limits the amount of pay 

subject to garnishment by a private 

creditor to 25% under most 

circumstances. Limitations on other 

types of Federal payments, such as 

Federal salary and social security 

payments apply. Therefore, as 

authorized by 31 U.S.C. 3716(c)(5), the 

Secretary has determined that a 

limitation on the offsets of OPM 

retirement payments is necessary to 

carry out the centralized offset program. 

After balancing the Government’s 

Federal Register / Vol. 67, No. 248 / Thursday, December 26, 2002 / Rules and Regulations 78941

interest in collecting large dollar debts 

within a reasonable time frame with the 

interest of the debtor/payee in receiving 

some retirement income, FMS has 

determined that a 25% limitation 

should be applied. 

Paragraph (f)(3) describes the order in 

which deductions will be applied when 

more than one delinquent debt is 

submitted to FMS for the same payee. If 

the Internal Revenue Service has served 

a tax levy through TOP, amounts 

deducted will first be applied to such 

tax levy. Deductions for tax levies are 

not governed by this section, but have 

a higher legal priority. See 31 U.S.C. 

3716(c)(8). Remaining amounts will be 

applied in the following order; first, to 

debts for past-due support assigned to a 

State pursuant to sections 402(a)(26) 

and 471(a)(17) of the Social Security 

Act; second, to debts owed to Federal 

agencies; third, to any qualifying past 

due support debts not assigned to a 

State; and fourth, to debts owed to 

States for obligations other than pastdue support. 

Paragraph (f)(3) also explains what 

happens when a recurring payment is 

being offset to collect a debt, and a debt 

with a higher legal priority is submitted 

to TOP. The debtor may not, in all such 

cases, receive an additional warning 

notice when the offsets are applied to 

the higher priority debt. See paragraph 

(g)(2) of this section. For example, FMS 

collects delinquent tax debts through 

TOP when the Internal Revenue Service 

serves a levy. Levies to collect 

delinquent tax debts have a higher legal 

priority than offsets to collect nontax 

debts. See 31 U.S.C. 3716(c)(8). If a 

recurring payment is being offset under 

this section to collect a nontax debt 

when the Internal Revenue Service 

serves a levy to collect a tax debt, offsets 

may be interrupted until the tax levy is 

satisfied or released. In this case, 

immediately upon satisfaction of the tax 

debt, FMS may resume offsetting the 

payment to collect the Federal nontax 

debt without further warning notice to 

the debtor. As with all offsets, the 

disbursing official (or FMS, on behalf of 

the disbursing official) will send an 

offset notice (see paragraph (g)(3)) at the 

time of the offset. 

(g) Notices 

Paragraph (g) describes the two types 

of notices that disbursing officials will 

provide to the debtor/payee—warning 

notices and offset notices. Where the 

payment offset is a recurring payment, 

the disbursing official (or FMS, on 

behalf of the disbursing official) will 

send a warning notice prior to the first 

offset. The warning notice will state 

when the offsets will begin and the 

anticipated amount of the offset. When 

the offset will begin may be stated as a 

certain number of days or number of 

payments from the date of the warning 

notice. If appropriate, the anticipated 

amount of the offset may be stated as a 

percentage of the payment. Recipients of 

recurring payments also will receive 

offset notices at the time the disbursing 

official offsets the payments. Where the 

payment offset represents a one-time 

payment or non-recurring payment, the 

disbursing official will not send a 

warning notice. The disbursing official 

(or FMS on behalf of the disbursing 

official) will send an offset notice at the 

time the offset occurs. Offset notices 

identify the payment, the amount offset, 

the creditor agency that requested the 

offset, and the name of a contact within 

the creditor agency. Pursuant to 31 

U.S.C. 3716(c)(7)(B), the failure of the 

debtor to receive an offset notice shall 

not impair the legality of the offset. 

(h) Notification to Creditor and Payment 

Agencies 

Paragraph (h) explains the 

information that creditor and payment 

agencies will receive when an offset 

occurs. 

(i) Disposition of Amounts Collected 

Paragraph 285.5(i) describes the 

process for disposition of amounts 

collected by means of offset. After 

offsetting a payment, FMS will normally 

deduct any fees charged in accordance 

with paragraph 285.5(j) before 

transmitting the remaining amount to 

the appropriate creditor agency. 

Alternatively, FMS may bill the creditor 

agency. 

If FMS learns that an offset has been 

taken erroneously, FMS will notify the 

creditor agency of the erroneous offset, 

and will collect the amount paid under 

the erroneous offset by deducting the 

amount from future amounts payable to 

the creditor agency. An erroneous offset 

occurs when the payee was not entitled 

to the payment or there was another 

error in the payment or offset process. 

Erroneous offsets do not include offsets 

which occurred because the creditor 

agency should not have certified the 

debt. If a debt should not have been 

certified for offset, the creditor agency 

will resolve the matter directly with the 

debtor. Generally, a disbursing official is 

not responsible for refunding money to 

debtors if a debt should not have been 

collected by offset. 

(j) Fees 

Paragraph (j) describes the fee that 

FMS will charge for its services under 

this section. The fee may include 

administrative fees charged by salary 

paying agencies that match their salary 

payments with debts in the TOP 

database and conduct the offset of, or 

calculate the correct amount to be offset 

from, Federal salary payments on behalf 

of disbursing officials. Under 31 U.S.C. 

3716(c)(4), FMS’ fee may cover the full 

cost of implementing centralized offset, 

including certain costs incurred by nonTreasury disbursing officials performing 

offsets. In accordance with 31 U.S.C. 

3711(g)(7), FMS may reimburse nonTreasury disbursing officials for certain 

expenses associated with 

governmentwide debt collection unless 

otherwise prohibited by law.

(k) Waiver of Certain Provisions Under 

the Computer Matching Privacy and 

Protection Act of 1988 

The DCIA includes provisions 

intended to simplify the matching 

process involving delinquent debtor 

records certified by creditor agencies 

and payment records certified by 

payment agencies for purposes of 

offsetting payments other than tax 

refunds. In particular, where a creditor 

agency certifies that the due process 

requirements of 31 U.S.C. 3716(a) have 

been met, the DCIA authorizes the 

Secretary to waive provisions of the 

Computer Matching and Privacy 

Protection Act of 1988 (CMPPA), Pub. L. 

No. 100–503, as amended, that require 

matching agreements, as well as post 

match notice and verification of the 

results of individual matches. See 5 

U.S.C. 552a(o) and (p). Once a waiver 

has been granted by the Secretary, the 

DCIA also simplifies the CMPPA review 

and reporting requirements codified at 5 

U.S.C. 552a(u) by placing all such 

responsibility with the data integrity 

board of the Department of the Treasury. 

Paragraph (k) of this section provides 

notice that this waiver authority has 

been delegated to FMS, and clarifies 

that FMS has granted a general waiver 

for all agencies that certify to FMS that 

the requirements of paragraph (d)(6) of 

this section have been met. A waiver is 

not required for matching debts for 

purposes of tax refund offset. See 5 

U.S.C. 552a(a)(8)(B). 

Special Analysis 

FMS is promulgating this interim rule 

without opportunity for prior public 

comment pursuant to the 

Administrative Procedure Act, 5 U.S.C. 

553 (the ‘‘APA’’), because FMS has 

determined that a comment period 

would be unnecessary, impracticable, 

and contrary to the public interest. 

Because no notice of proposed 

rulemaking is required, the provisions 

of the Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) do not apply. 

78942 Federal Register / Vol. 67, No. 248 / Thursday, December 26, 2002 / Rules and Regulations 

The public is invited to submit 

comments on the interim rule which 

will be taken into account before a final 

rule is issued. 

FMS has determined that good cause 

exists to make this interim rule effective 

upon publication without providing the 

30-day period between publication and 

the effective date contemplated by 5 

U.S.C. 553(d). The purpose of a delayed 

effective date is to afford persons 

affected by a rule a reasonable time to 

prepare for compliance. However, in 

this case, as required by the DCIA, 

agencies already participate in TOP. 

Inasmuch as this interim rule provides 

important guidance that is expected to 

facilitate implementation of the 

authority contained in the law, FMS 

believes that good cause exists to make 

the rule effective upon publication. 

Regulatory Analysis 

This interim rule is not a significant 

regulatory action as defined in 

Executive Order 12866. It is hereby 

certified that this rule will not have a 

significant impact on a substantial 

number of small entities. Therefore a 

regulatory flexibility analysis is not 

required. This regulation will not 

impose significant costs on small 

businesses, because this regulation only 

impacts small businesses who receive 

payments from Federal agencies and 

who are delinquent on debts owed to 

the Federal government.

List of Subjects in 31 CFR Part 285 

Administrative practice and 

procedure, Black lung benefits, Child 

Support, Claims, Credit, Debts, 

Disability benefits, Federal employees, 

Garnishment of wages, Hearing and 

appeal procedures, Loan programs, 

Privacy, Railroad retirement, Railroad 

unemployment insurance, Salaries, 

Social Security benefits, Supplemental 

Security Income (SSI), Taxes, Veteran’s 

benefits, Wages.

Authority and Issuance 

For the reasons set forth in the 

preamble, 31 CFR part 285 is amended 

as follows:

PART 285—DEBT COLLECTION 

AUTHORITIES UNDER THE DEBT 

COLLECTION IMPROVEMENT ACT OF 

1996 

1. The authority citation for part 285 

continues to read as follows:

Authority: 5 U.S.C. 5514; 26 U.S.C. 6402; 

31 U.S.C. 321, 3701, 3711, 3716, 3719, 

3720A, 3720D; E.O. 13019; 3 CFR, 1996 

Comp., p. 216.

2. Section 285.5 is added to Part 285, 

Subpart A, to read as follows:

§ 285.5 Offset of Federal payments to 

collect nontax debt owed to the United 

States. 

(a) Scope. (1) This section governs the 

centralized offset of Federal payments to 

collect delinquent, nontax debts owed 

to Federal agencies in accordance with 

31 U.S.C. 3716, 3720A and 26 U.S.C. 

6402 and applicable regulations. The 

Department of the Treasury’s Financial 

Management Service (FMS) administers 

centralized offset through the Treasury 

Offset Program. Offset occurs when the 

Federal government withholds part or 

all of a debtor’s Federal payment to 

satisfy the debtor’s delinquent debt 

owed to the government. 

(2) Special rules apply to the 

collection of delinquent, nontax debts 

through the centralized offset of certain 

types of Federal payments, including 

tax refunds (31 CFR 285.2), Federal 

benefit payments (31 CFR 285.4), and 

Federal salary payments (31 CFR 285.7). 

While this rule applies to such 

payments, nothing in this rule is 

intended to contradict any provision of 

those more specific sections. To the 

extent any provision of this rule is 

inconsistent with a more specific 

provision of §§ 285.2, 285.4 or 285.7 of 

this part, the more specific provision 

shall apply. 

(3) The receipt of collections pursuant 

to this section does not preclude a 

Federal agency from pursuing other debt 

collection remedies in conjunction with 

centralized offset. Nothing in this 

section precludes an agency from 

pursuing all available debt collection 

remedies simultaneously, provided that 

collections do not exceed the amount of 

the debt, including any interest, 

penalties, and administrative costs.

(b) Definitions. As used in this 

section: 

Agency or Federal agency means a 

department, agency or subagency, court, 

court administrative office, or 

instrumentality in the executive, 

judicial, or legislative branch of the 

Federal Government, including 

government corporations. 

Centralized offset means the offset of 

Federal payments through the Treasury 

Offset Program to collect debts which 

creditor agencies have certified 

pursuant to 31 U.S.C. 3716(c), 3720A(a) 

and applicable regulations. The term 

‘‘centralized offset’’ includes the 

Treasury Offset Program’s processing of 

offsets of Federal payments disbursed 

by disbursing officials other than FMS. 

Creditor agency has the same meaning 

as found at 31 U.S.C. 3701(e)(1) and 

means any Federal agency that is owed 

a claim or debt that seeks to collect that 

claim or debt through offset of Federal 

payments. 

Debt or claim has the meaning 

contained in 31 U.S.C. 3701(b) and 

means any amount of money, funds, or 

property that has been determined by an 

appropriate official of the Federal 

government to be owed to the United 

States by a person, organization, or 

entity, except another Federal agency. 

The terms ‘‘debt’’ and ‘‘claim’’ are 

synonymous and include debt 

administered by a third party acting as 

an agent for the Federal Government. 

For purposes of this section, the term 

‘‘debt’’ does not include debts arising 

under the Internal Revenue Code of 

1986 (26 U.S.C. 1 et seq.), the tariff laws 

of the United States, or the Social 

Security Act (42 U.S.C. 301 et seq.), 

except to the extent provided in sections 

204(f) and 1631(b)(4) of such Act (42 

U.S.C. 404(f) and 1383(b)(4)(A), 

respectively) and 31 U.S.C. 3716(c). 

Debt collection center means a 

Federal agency or a unit or subagency 

within a Federal agency that has been 

designated by the Secretary to collect 

debt owed to the United States. 

Debtor means a person who owes a 

debt to the United States. 

Delinquent or past-due refers to the 

status of a debt and means a debt has 

not been paid by the date specified in 

the agency’s initial written demand for 

payment, or applicable agreement or 

instrument (including a postdelinquency payment agreement), 

unless other payment arrangements 

satisfactory to the creditor agency have 

been made. Nothing in this section is 

intended to define whether a debt is 

delinquent or past-due for purposes 

other than offset under this section. 

Delinquent debt record means 

information about a past-due, legally 

enforceable debt submitted by a creditor 

agency to FMS for purposes of offset in 

accordance with the provisions of this 

section. Information about a past-due, 

legally enforceable debt includes, but is 

not limited to, the amount of the debt 

and the debtor’s name, address, and 

taxpayer identifying number. 

Disbursing official means an official 

who has authority to disburse public 

money pursuant to 31 U.S.C. 3321 or 

another law, including an official of the 

Department of the Treasury, the 

Department of Defense, the United 

States Postal Service, or any other 

government corporation, or any official 

of the United States designated by the 

Secretary of the Treasury to disburse 

public money. 

FMS means the Financial 

Management Service, a bureau of the 

Department of the Treasury and its 

disbursing office. FMS is responsible for 

administering centralized offset. 

Federal Register / Vol. 67, No. 248 / Thursday, December 26, 2002 / Rules and Regulations 78943

Legally enforceable refers to a 

characteristic of a debt and means there 

has been a final agency determination 

that the debt, in the amount stated, is 

due, and there are no legal bars to 

collection by offset. Debts that are not 

legally enforceable for purposes of this 

section include, but are not limited to, 

debts subject to the automatic stay in 

bankruptcy proceedings or debts 

covered by a statute that prohibits 

collection of such debt by offset. For 

example, if a delinquent debt is the 

subject of a pending administrative 

review process required by statute or 

regulation, and if collection action 

during the review process is prohibited, 

the debt is not considered legally 

enforceable for purposes of this section. 

Nothing in this section is intended to 

define whether a debt is legally 

enforceable for purposes other than 

offset under this section. 

Match means the taxpayer identifying 

number and name (or derivative thereof) 

of the payee on a payment record are the 

same as the taxpayer identifying number 

and name of the debtor on a delinquent 

debt record. 

Offset means withholding funds 

payable by the United States to, or held 

by the United States for, a person to 

satisfy a debt owed by the payee. 

Past-due has the same meaning as 

‘‘delinquent’’, as defined above. 

Payee means a person who is due a 

payment from a disbursing official as 

certified by the payment agency. For 

purposes of this section, a ‘‘payee’’ is a 

person who is entitled to the benefit of 

all or part of a payment from a 

disbursing official. 

Payment agency means any agency 

that transmits payment requests, in the 

form of certified payment vouchers or 

other similar forms, to a disbursing 

official for disbursement. 

Payment record means information 

contained on a payment request, in the 

form of a certified payment voucher or 

other similar form, that has been 

transmitted to a disbursing official for 

disbursement in accordance with the 

provisions of 31 U.S.C. 3325 and 3528 

or other applicable law. For purposes of 

matching, ‘‘payment record’’ may 

include information extracted from a 

payment request. Such information 

could include, but is not limited to, the 

amount and type of payment and the 

payee’s name, address, and taxpayer 

identifying number. 

Person means an individual, 

corporation, partnership, association, 

organization, State or local government, 

or any other type of entity other than a 

Federal agency. 

Recurring payment means a payment 

to an individual that is expected to be 

payable to a payee at regular intervals, 

at least four times annually. The term 

‘‘recurring payment’’ does not include 

payments made pursuant to a Federal 

contract, grant or cooperative 

agreement. 

Representative payee means a person 

named as payee on the payment 

voucher certified by the payment agency 

who is acting on behalf of a person 

entitled to receive the benefit of all or 

part of the payment. 

Secretary means the Secretary of the 

Treasury. 

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 

individual, the taxpayer identifying 

number is generally the individual’s 

social security number.

(c) General rule. (1) Creditor agencies 

shall submit delinquent debts to FMS 

for purposes of offset in accordance 

with paragraph (d) of this section. 

(2) Disbursing officials shall compare 

payment records with delinquent debt 

records submitted to FMS for collection 

by offset. When a match occurs, and all 

other requirements for offset have been 

met, the disbursing official shall offset 

the payment to satisfy, in whole or part, 

the payee’s debt to the extent allowed 

by law. The disbursing official shall pay 

any amounts not offset to the payee. See

paragraphs (e), (f), (g), and (h) of this 

section. 

(d) Requirements for creditor 

agencies—(1) Mandatory notification of 

delinquent debts. As required by 31 

U.S.C. 3716(c)(6), and in accordance 

with the provisions of this section, a 

creditor agency shall notify FMS of all 

legally enforceable debts over 180 days 

delinquent that are owed to the creditor 

agency. By complying with this 

requirement, creditor agencies will 

satisfy the requirement of 31 U.S.C. 

3720A(a) to notify the Secretary of past 

due, legally enforceable debt for 

purposes of tax refund offset. If a debt 

which is over 180 days delinquent is 

considered not legally enforceable 

solely because it is under review as 

described in paragraph (d)(6)(ii)(C) of 

this section, the agency must submit the 

debt to FMS for collection by offset 

within 30 days of completing the 

review. 

(2) Discretionary notification of 

delinquent debts. Creditor agencies may 

notify FMS of any debt that is less than 

180 days delinquent, so long as the 

requirements of paragraph (d)(3) of this 

section are met. 

(3) Debt eligibility. (i) A debt 

submitted to FMS for collection by 

centralized offset must be: 

(A) Past-due in the amount stated by 

the creditor agency; 

(B) Legally enforceable; 

(C) Less than 10 years delinquent, 

unless the debt legally may be offset if 

more than 10 years delinquent; 

(D) More than $25, or such other 

amount as FMS may prescribe; and 

(E) Not secured by collateral subject to 

a pending foreclosure action, unless the 

creditor agency certifies that offset will 

not affect the Government’s rights to the 

secured collateral. 

(ii) The creditor agency must certify 

that the debt is eligible for collection by 

offset, as required in paragraph (d)(6) of 

this section. 

(iii) Debts owed by foreign sovereigns 

may be referred to Treasury Offset 

Program at the discretion of the creditor 

agency to the extent allowed by law, but 

are excluded from mandatory referral 

under paragraph (d)(1) of this section. 

(iv) In accordance with 31 U.S.C. 3719 

and the procedures promulgated 

thereunder, creditor agencies must 

report to Treasury the amount of debt 

over 180 days delinquent eligible for the 

Treasury Offset Program. The 

procedures require that such report 

include the amount of debt over 180 

days delinquent that the creditor agency 

has determined is not eligible for the 

Treasury Offset Program and the reasons 

for such determination. 

(4) Creditor agency regulations. Prior 

to submitting a debt to FMS for 

purposes of offset, Federal agencies 

shall prescribe regulations in 

accordance with the requirements of 31 

U.S.C. 3716(b), 31 CFR 901.3(b)(4), 31 

U.S.C. 3720A(a), and 31 CFR 285.2(c). 

Before submitting debts to FMS for 

purposes of offsetting Federal salary 

payments, creditor agencies must also 

publish regulations pursuant to 5 U.S.C. 

5514, 31 CFR 285.7(d)(2), and 5 CFR 

550.1104. 

(5) Delinquent debt information 

requirements. For each debt submitted 

to FMS for offset, the creditor agency 

shall provide the following information:

(i) Name and taxpayer identifying 

number of the person who owes the 

debt; 

(ii) Debtor’s address last known to the 

creditor agency; 

(iii) The amount of the debt 

(including, as applicable, interest, 

penalties and administrative costs) and 

the date on which the debt became 

delinquent; 

(iv) The contact within the creditor 

agency who will handle questions, 

concerns or communications regarding 

the debt; 

(v) Written certification as required in 

paragraph (d)(6) of this section; and 

78944 Federal Register / Vol. 67, No. 248 / Thursday, December 26, 2002 / Rules and Regulations 

(vi) Other information as may be 

requested by FMS. 

(6) Creditor agency certification. At 

the time the creditor agency notifies 

FMS of a debt for purposes of collection 

by offset, the creditor agency shall 

provide, in the manner required by 

FMS, written certification to FMS that: 

(i) The debt meets the requirements 

described in paragraph (d)(3)(i) of this 

section; 

(ii) In compliance with 31 U.S.C. 

3716, 3720A, 26 U.S.C. 6402, and 

applicable regulations, the creditor 

agency has made a reasonable attempt to 

provide each debtor with: 

(A) Written notification, at least sixty 

days prior to submitting the debt and at 

the debtor’s most current address 

known to the agency, of the nature and 

the amount of the debt, the intention of 

the creditor agency to collect the debt 

through offset, and an explanation of the 

rights of the debtor; 

(B) An opportunity to inspect and 

copy the records of the creditor agency 

with respect to the debt; 

(C) An opportunity for a review 

within the creditor agency of the 

determination of indebtedness, 

including the opportunity to present 

evidence that all or part of the debt is 

not past-due or legally enforceable; 

(D) An opportunity to enter into a 

written repayment agreement with the 

creditor agency; and 

(E) In the case of Federal employees, 

an opportunity for a hearing prior to 

submitting the debt for Federal salary 

offset. See 5 U.S.C. 5514 and 5 CFR 

550.1104. (See 31 CFR 285.7(d), which 

describes the authority to waive the 

salary offset certification as a 

prerequisite to referring the debt for 

other types of offsets.) 

(iii) The creditor agency has complied 

with all statutes, regulations, and 

policies applicable to the creditor 

agency’s assessment of interest, 

penalties and administrative costs 

(including, as applicable, 31 U.S.C. 

3717), and that the creditor agency has 

provided a written notice to debtors 

explaining the creditor agency’s 

requirements concerning any such 

charges assessed against those debtors; 

(iv) The individual signing the 

certification has the delegated authority 

to execute the certification on behalf of 

the head of the creditor agency; and 

(v) such additional information that 

FMS may from time to time require in 

compliance with law, regulation or 

policy. 

(7) Updating Certification. After a 

debt has been submitted to FMS for 

purposes of collection by offset, the 

creditor agency shall provide, at least 

annually, in the manner and time 

frames required by FMS, written 

certification to FMS that: 

(i) The debt continues to meet the 

requirements described in paragraph 

(d)(3) of this section; and 

(ii) The creditor agency has properly 

credited all collections to the debt 

balance (other than collections received 

through centralized offset). 

(8) FMS instructions to creditor 

agencies. Agencies will provide the 

certification in a form and manner 

prescribed by FMS. FMS will instruct 

agencies as to the form such written 

certifications will take and how 

certifications can be delivered to FMS, 

including, but not limited to, the use of 

electronic data transmission. 

(9) Agencies which are both creditor 

and disbursing officials. A creditor 

agency that also designates disbursing 

officials pursuant to 31 U.S.C. 3321(c) is 

not required to certify debts arising out 

of its operations to FMS before such 

agency’s disbursing officials offset to 

collect such claims. This paragraph 

(d)(9) does not apply to FMS when it 

submits debts which it is servicing 

pursuant to 31 U.S.C. 3711(g). 

(10) Correcting and updating debt 

information. (i) When submitting debts 

for offset, the creditor agency must 

properly credit all collections, other 

than collections received from 

centralized offset. 

(ii) The creditor agency shall update 

delinquent debt records, in the manner 

and time frames required by FMS, to 

reflect any amounts credited by the 

creditor agency to the debtor’s account 

after submission of the debt to FMS 

(other than credits for amounts collected 

by centralized offset). 

(iii) The creditor agency may update 

delinquent debt records to reflect any 

increases in the amount of the debt 

submitted to FMS for collection by 

offset provided that the creditor agency 

has complied with the requirements of 

paragraph (d)(6) of this section with 

regard to the increased amounts. 

(iv) The creditor agency shall notify 

FMS immediately of any change in the 

status of the legal enforceability of the 

debt—for example, if the creditor 

agency receives notice that the debtor 

has filed for bankruptcy protection.

(v) The creditor agency shall notify 

FMS if it has returned any moneys to 

the debtor/payee because of an offset 

that should not have occurred, as 

described in paragraph (i)(2) of this 

section. 

(11) Debts at FMS, a debt collection 

center, or the Department of Justice. If 

a creditor agency has transferred a debt 

to FMS or a Treasury-designated debt 

collection center pursuant to 31 U.S.C. 

3711(g) and 31 CFR 285.12, or if a 

creditor agency has referred a debt to 

the Department of Justice for enforced 

collection, then FMS, the debt 

collection center, or the Department of 

Justice, as the case may be, is 

responsible for submitting the debt 

information to FMS to satisfy the 

creditor agency’s obligations under 31 

U.S.C. 3716(c)(6) and this section. 

(12) Certification of amount to be 

offset if different than maximum 

allowed by law. Generally, the amount 

of an offset will be calculated as set 

forth in paragraph (f)(2) of this section. 

If the creditor agency certifies to FMS 

that the creditor agency has determined 

the offset amount allowed by law would 

result in financial hardship to the debtor 

and that a lesser offset amount 

(specified either in dollar amount or as 

a percentage of the payment) is 

reasonable and appropriate based on the 

debtor’s financial circumstances, then 

the disbursing official shall offset such 

lesser amount specified by the creditor 

agency. 

(13) Duplication of notices not 

required. Nothing in this section 

requires any creditor agency to 

duplicate any notice or opportunity for 

hearing or review provided to the debtor 

prior to offset. 

(e) Payments made by the United 

States—(1) Payments eligible for offset.

Except as set forth in paragraph (e)(2) of 

this section, all Federal payments are 

eligible for offset under this section. 

Eligible Federal payments include, but 

are not limited to, Federal wage, salary, 

and retirement payments, vendor and 

expense reimbursement payments, 

certain benefit payments, travel 

advances and reimbursements, grants, 

fees, refunds, judgments (including 

those certified for payment pursuant to 

31 U.S.C. 1304), tax refunds, and other 

payments made by Federal agencies. 

(2) Payments excluded from offset 

under this section. This section does not 

apply to the following payments: 

(i) Black Lung Part C benefit 

payments, or Railroad Retirement tier 2 

payments; 

(ii) Payments made under the tariff 

laws of the United States; 

(iii) Veterans Affairs benefit payments 

to the extent such payments are exempt 

from offset pursuant to 38 U.S.C. 5301; 

(iv) Payments made under any 

program administered by the Secretary 

of Education under title IV of the Higher 

Education Act of 1965 for which 

payments are certified by the 

Department of Education; 

(v) Payments made under any other 

Federal law if offset is expressly 

prohibited by Federal statute; 

(vi) Payments made under any 

program for which the Secretary has 

Federal Register / Vol. 67, No. 248 / Thursday, December 26, 2002 / Rules and Regulations 78945

granted an exemption in accordance 

with the provisions of 31 U.S.C. 

3716(c)(3)(B) and paragraph (e)(7) of this 

section; and 

(vii) Federal loan payments other than 

travel advances. 

(3) Specific rules for certain payment 

types. (i) Specific rules apply with 

respect to the offset of the following 

types of payments: 

(A) Social Security benefit payments 

(excluding Supplemental Security 

Income payments), Black Lung (part B) 

payments, and Railroad Retirement 

(other than tier 2) payments to the 

extent such payments are subject to 

offset under 31 U.S.C. 3716(c)(3)(A) (see

31 CFR 285.4); 

(B) Federal salary payments (see 31 

CFR 285.7; 5 CFR 550.1101 through 

550.1108); and 

(C) Tax refund payments (see 31 CFR 

285.2). 

(ii) This section governs the offset of 

such payments to the extent that this 

section is not inconsistent with the 

special rules that apply for a particular 

type of payment. 

(4) Payments made to joint payees. If 

a payment is certified to more than one 

payee (i.e., joint payees), the entire 

payment (including a tax refund 

payment) will be subject to offset for a 

debt of either payee, unless otherwise 

prohibited by law or regulation. See 31 

CFR 285.2(g) regarding offset of joint tax 

refunds and claims to return offset 

funds to the non-debtor, joint payee. 

(5) Payments made to representative 

payees. If a payment is made to a person 

solely in that person’s capacity as a 

representative payee for another person 

having the beneficial interest in a 

payment, the disbursing official shall 

offset that payment only to collect debts 

owed by the person having the 

beneficial interest in the payment. 

Payment agencies are responsible for 

identifying representative payees. 

(6) Assigned payments. (i) If a person, 

including a Federal contractor, assigns 

the right to receive a Federal payment 

to a third party (the ‘‘assignee’’), the 

assigned payment will be subject to 

offset to collect a delinquent debt owed 

by the assignee.

(ii) An assigned payment will also be 

subject to offset to collect delinquent 

debts owed by the assignor unless: 

(A) In accordance with 41 U.S.C. 

15(e)–(f), the payment has been properly 

assigned to a financial institution 

pursuant to a Federal contract, the 

contract contains provisions prohibiting 

the payment from being reduced or 

offset for debts owed by the contractor, 

and the debt arose independently of the 

contract; or 

(B) pursuant to 31 U.S.C. 3727, the 

payment is being made to the assignee 

as settlement or satisfaction of a claim 

brought by the assignee against the 

creditor agency based upon the contract, 

and the debt of the contractor arises 

independently of the contract; or 

(C) the debtor has properly assigned 

the right to such payments and the debt 

arose after the effective date of the 

assignment. 

(7) Payment agency requests for 

exemptions from centralized offset 

pursuant to 31 U.S.C. 3716(c)(3)(B)—(i) 

Means-tested payments. The Secretary 

will exempt from centralized offset 

payments made under means-tested 

programs when requested by the head of 

the agency making such payments. For 

purposes of this section ‘‘means-tested 

programs’’ are those which base 

eligibility on a determination that the 

income and/or assets of the beneficiary 

are inadequate to provide the 

beneficiary with an adequate standard 

of living without program assistance. 

(ii) Payments made under programs 

which are not means-tested. Upon 

written request from the payment 

agency, the Secretary may exempt 

classes of payments which are not 

means-tested. Payment agencies may 

request that the Secretary exempt 100% 

of each payment in a payment class or 

that the Secretary exempt a specific 

lesser percentage. The Secretary will 

consider such requests under standards 

prescribed by the Secretary and 

published on the FMS Web site. See 

www.fms.treas.gov/debt.

(iii) Procedures for requesting 

exemptions. The head of the payment 

agency must make a request for 

exemption in writing. The request must 

comply with the procedures published 

by FMS and made available at its Web 

site. See www.fms.treas.gov/debt.

(iv) Exemptions apply to classes of 

payments. The Secretary will only 

exempt classes of payments. Requests 

for exemption of individual payments 

will not be considered. 

(8) Payment agency responsibilities.

(i) Payment agencies shall prepare and 

submit payment vouchers in the manner 

prescribed by the disbursing official to 

ensure that all payments legally eligible 

for offset will be offset and all payments 

not eligible will not be offset. Payment 

agencies shall notify the disbursing 

agency, in the manner prescribed by 

FMS, that a payment is a recurring 

payment. 

(ii) Payment agencies shall also 

review the nature of payments the 

agency certifies and notify FMS of any 

legal bars to centralized offset of 

payments. 

(9) Payment and disbursing officials 

have satisfied the obligation underlying 

the payment. When an offset occurs, the 

debtor has received payment in full for 

the underlying obligation represented 

by the payment. Pursuant to 31 U.S.C. 

3716(c)(2)(A), neither the disbursing 

official nor the payment agency shall be 

liable for the amount of the offset on the 

basis that the underlying obligation was 

not satisfied. For example, if an agency 

certifies a payment to a Federal 

contractor for work completed or 

services provided, and that payment is 

offset to collect a delinquent debt that 

the contractor owes to another Federal 

agency, the contractor has been paid in 

full for its services. When the creditor 

agency credits the offset amount to the 

contractor’s delinquent debt, the 

contractor has received full value for the 

services performed under the contract. 

(f) Offset—(1) When offset occurs.

When a match occurs and all other 

requirements for offset under 31 U.S.C. 

3716(c), 3720A, and applicable 

regulations have been met, the 

disbursing official shall offset the 

payee’s Federal payment to satisfy, in 

whole or part, the debt owed by the 

debtor. Offsets will continue until the 

debt, including any interest, penalties, 

and administrative costs, is paid in full 

or otherwise resolved to the satisfaction 

of the creditor agency. 

(2) Offset amount. (i) Except as 

otherwise provided in 31 CFR 285.4(e) 

and 285.7(g) (addressing centralized 

offset of certain Federal benefit 

payments and salary payments, 

respectively), the disbursing official 

shall offset the lesser of: 

(A) The amount of the payment as 

shown on the payment record; or 

(B) The amount of the debt, including 

any interest, penalties and 

administrative costs; or 

(C) In the case of retirement annuity 

payments certified by the Office of 

Personnel Management, up to twentyfive percent of the amount of the 

payment as shown on the payment 

record. 

(ii) Notwithstanding paragraph 

(f)(2)(i) of this section, if a creditor 

agency has specified another amount, 

either in dollars or as a percentage of the 

payment, pursuant to paragraph (d)(15) 

of this section, the disbursing official 

shall offset the amount specified by the 

creditor agency.

(3) Priorities for collecting multiple 

debts owed by the payee. (i) A levy 

pursuant to the Internal Revenue Code 

of 1986 shall take precedence over 

deductions under this section. 

(ii) When a payment may be offset to 

collect more than one debt under this 

section, amounts offset will be applied: 

78946 Federal Register / Vol. 67, No. 248 / Thursday, December 26, 2002 / Rules and Regulations 

(A) First, to satisfy any past due 

support debts assigned to a State 

pursuant to sections 402(a)(26) and 

471(a)(17) of the Social Security Act (see

26 U.S.C. 6402(c) and sections 285.1 

and 285.3 of this part); 

(B) Second, to satisfy any debts owed 

to Federal agencies; 

(C) Third, to satisfy any qualifying 

past-due support claims not assigned to 

a State (see 26 U.S.C. 6402(c) and 

sections 285.1 and 285.3 of this part); 

and 

(D) Fourth, to any debts owed to 

States for debts other than past-due 

support (see § 285.8 of this part). 

(iii) If a recurring payment is being 

offset to collect a debt when another 

debt owed by the payee with a higher 

priority is submitted to FMS, and if the 

amount that may be legally offset from 

such payment is insufficient to satisfy 

both debts, then collections for the first, 

lower-priority debt will be suspended or 

reduced until the debt with the higher 

priority is satisfied or is otherwise 

uncollectible. 

(g) Notices—(1) Warning notice by 

disbursing official to payee/debtor.

Before offsetting a recurring payment, 

the disbursing official, or FMS on behalf 

of the disbursing official, will notify the 

payee in writing when offsets will begin 

(which may be stated as a number of 

days or number of payments from the 

time of the notice) and the anticipated 

amount of such offset (which may be 

stated as a percentage of the payment). 

Such notice shall also provide the 

information contained in 

paragraph(g)(3) of this section. 

(2) No additional warning notice 

when collections are suspended and 

resumed. As described in paragraph 

(f)(3)(iii) of this section, FMS may 

suspend or reduce the application of 

collections from a recurring payment for 

one debt when another debt, which is 

owed by the same debtor and has a 

higher legal priority, is submitted to 

FMS for collection. The disbursing 

official is not required to send 

additional warning notices when 

collections for the lower priority debt 

resume; however, pursuant to paragraph 

(g)(3) of this section, each offset will be 

accompanied by an offset notice, which 

explains how the offset amounts were 

applied. 

(3) Offset notice. When an offset 

occurs under this section, the disbursing 

official, or FMS on behalf of the 

disbursing official, shall notify the 

payee in writing that an offset has 

occurred including: 

(i) A description of the payment and 

the amount of offset taken; 

(ii) The identity of the creditor agency 

requesting the offset; and 

(iii) A contact point within the 

creditor agency who will handle 

concerns regarding the offset. 

(h) Notification to creditor and 

payment agencies. (1) FMS will notify 

the creditor agency of all offsets made 

to collect the creditor agency’s debts. 

Such notification shall include the 

complete name and taxpayer identifying 

number of each debtor/payee, the total 

amounts collected from each debtor/

payee’s payment, and the amount of any 

fees charged by FMS and any other 

disbursing official conducting offsets. 

FMS will not advise the creditor agency 

of the source of payment from which 

such amounts were collected. 

(2) When a non-Treasury disbursing 

official conducts the offset, that 

disbursing official will transmit to FMS 

all of the information necessary for FMS 

to send notification under paragraph 

(h)(1) of this section, including the 

amount of any fees that the creditor 

agency is responsible for paying.

(3) FMS will make available to the 

payment agency the information 

contained in the notification of offset, so 

that the payment agency may direct any 

questions concerning the claim to the 

appropriate contact person in the 

creditor agency. 

(i) Disposition of amounts collected.

(1) FMS will transmit amounts collected 

for debts, less fees charged pursuant to 

paragraph (j) of this section, to the 

appropriate creditor agency or agencies. 

Alternatively, FMS may bill the creditor 

agency for any fees charged pursuant to 

paragraph (j) of this section. 

(2) If FMS learns from a paying 

agency that a payment should not have 

been made, and thus not offset, FMS 

will notify the creditor agency. FMS 

may deduct the offset amount from 

future amounts payable to the creditor 

agency. Alternatively, upon FMS’s 

request, the creditor agency shall return 

promptly to the disbursing official an 

amount equal to the amount of the offset 

(without regard to whether any other 

amounts payable to such disbursing 

official have been paid). 

(3) Generally, the disbursing official is 

not responsible for refunding money to 

debtors. The creditor agency shall notify 

FMS any time the creditor agency 

returns all or any part of an offset 

payment to an affected payee. FMS and 

the creditor agency shall adjust the 

debtor records appropriately. 

(j) Fees. FMS may charge a fee 

sufficient to cover the full cost of 

implementing the centralized offset 

program, including the amount of any 

fees charged by other disbursing 

officials conducting an offset under this 

section. FMS may deduct the fees from 

amounts collected by offset or may bill 

the creditor agencies. FMS will charge 

fees only for actual offsets collected. 

(k) Waiver of certain provisions under 

the Computer Matching Privacy and 

Protection Act of 1988. As authorized by 

31 U.S.C. 3716(f), FMS, under a 

delegation of authority from the 

Secretary, has waived certain 

requirements of the Computer Matching 

and Privacy Protection Act of 1988, Pub. 

L. No. 100–503, as amended, for 

matches between delinquent debt 

records and payment records for offset 

purposes upon written certification by 

the head of the creditor agency that the 

requirements of 31 U.S.C. 3716(a) have 

been met. Specifically, for 

administrative offset of Federal 

payments other than tax refunds, FMS 

has waived the requirements for a 

computer matching agreement 

contained in 5 U.S.C. 552a(o) and for 

post-match notice and verification 

contained in 5 U.S.C. 552a(p) so long as 

the creditor agency provides 

certification to FMS in accordance with 

the provisions of paragraph (d)(6) of this 

section. Such waiver is not necessary for 

offset of Federal tax refunds, pursuant to 

5 U.S.C. 552a(a)(8)(B). The Data 

Integrity Board of the Department of the 

Treasury shall review and include in 

reports under 5 U.S.C. 552a(u)(3)(D) a 

description of the matching activities 

conducted for centralized offset under 

this section. No other Data Integrity 

Board is required to take any action 

under 5 U.S.C. 552a(u) concerning these 

computerized comparisons.

Dated: December 19, 2002. 

Richard L. Gregg, 

Commissioner.

[FR Doc. 02–32572 Filed 12–24–02; 8:45 am] 

BILLING CODE 4810–35–P