Federal Register / Vol. 72, No. 7 / Thursday, January 11, 2007 / Rules and Regulations 1283 

Rules of Practice and Investigations. 

Currently, Rule 30–3(a)(59) contains a 

cross-reference to paragraph (e)(6)(iii) of 

Rule 19b–4 under the Securities 

Exchange Act of 1934. In connection 

with the adoption in the Original 

Release of a new paragraph (e) to Rule 

19b–4, the cross-reference to paragraph 

(e)(6)(iii) of Rule 19b–4 appearing in 

Rule 30–3(a)(59) should have been 

redesignated as paragraph (f)(6)(iii) of 

Rule 19b–4, to reflect the redesignation 

of former paragraph (e) of Rule 19b–4 as 

paragraph (f) of Rule 19b–4. This 

document corrects that cross-reference. 

List of Subjects in 17 CFR Part 200 

Administrative practice and 

procedure, Authority delegations 

(Government agencies), Organization 

and functions (Government agencies). 

■ Accordingly, 17 CFR part 200 is 

corrected by making the following 

correcting amendment: 

PART 200—ORGANIZATION; 

CONDUCT AND ETHICS; AND 

INFORMATION AND REQUESTS 

■ 1. The authority citation for Part 200 

continues to read in part as follows: 

Authority: 15 U.S.C. 77o, 77s, 77sss, 78d, 

78d–1, 78d–2, 78w, 78ll(d), 78mm, 80a–37, 

80b–11, and 7202, unless otherwise noted. 

* * * * * 

§ 200.30–3 [Amended] 

■ 2. Section 200.30–3(a)(59) is amended 

by revising the cite ‘‘(e)(6)(iii)’’ to read 

‘‘(f)(6)(iii)’’. 

Dated: January 5, 2007. 

Nancy M. Morris, 

Secretary. 

[FR Doc. E7–238 Filed 1–10–07; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

22 CFR Part 62 

[Public Notice 5654] 

Exchange Visitor Program—

Professors and Research Scholars 

AGENCY: Department of State. 

ACTION: Final Rule; Announcement of 

Effective Date for Implementation of 

Five-Year Professor and Research 

Scholar Categories. 

SUMMARY: By Notice published on 

November 1, 2006, 71 FR 64330, the 

Department of State identified 

November 4, 2006 as the effective date 

for its Final Rule published May 19, 

2005, 70 FR 28815. The effective date of 

the Final Rule had been in order to 

permit the Department of Homeland 

Security to complete modifications to 

the Student and Exchange Visitor 

Information System (SEVIS) necessary 

for implementation. However, these 

SEVIS modifications did not become 

operational until the evening of 

November 17, 2006. Accordingly, 

effective November 18, 2006, current 

and future professor and research 

scholar participants will be eligible for 

five years of program participation as 

provided in the Final Rule, as amended. 

These participants will also be subject 

to the eligibility requirements for repeat 

participation set forth in the Final Rule, 

as amended. The Final Rule was 

amended by a Federal Register 

document published on June 23, 2005, 

70 FR 36344. Requirements governing 

initial eligibility for participation as a 

professor or research scholar are 

unchanged. This document supersedes 

the Department’s document published 

November 1, 2006, and the language of 

the Department’s Final Rule published 

May 19, 2005, as it regards the rule’s 

effective date. This certification will be 

published in the Federal Register. 

DATES: Effective Date: The final rule 

published at 70 FR 28815, May 19, 

2005, and corrected at 70 FR 36344, 

June 23, 2005, is effective November 18, 

2006. 

FOR FURTHER INFORMATION CONTACT: 

Karen Hawkins, (202) 203–5072. 

Dated: December 28, 2006. 

Stanley S. Colvin, 

Director, Office of Exchange Coordination 

and Designation, Department of State. 

[FR Doc. E6–22631 Filed 1–10–07; 8:45 am] 

BILLING CODE 4710–05–P 

DEPARTMENT OF THE TREASURY 

Fiscal Service 

31 CFR Part 285 

RIN 1510–AB09 

Administrative Offset Under Reciprocal 

Agreements With States 

AGENCY: Financial Management Service, 

Fiscal Service, Treasury. 

ACTION: Interim rule with request for 

comments. 

SUMMARY: This interim rule describes 

the rules applicable to the offset of 

Federal nontax payments to collect 

delinquent debts owed to States 

pursuant to reciprocal agreements 

between the Secretary of the Treasury 

and the States. In addition to providing 

for the offset of Federal nontax 

payments, the reciprocal agreements 

will provide for the offset of State 

payments to collect delinquent, nontax 

Federal debts. The offsets described in 

this rule will be processed by the 

Treasury Offset Program (TOP). The 

Department of the Treasury’s Financial 

Management Service (FMS) established 

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 Federal nontax 

payments by Federal disbursing officials 

to collect delinquent debts owed to 

States pursuant to reciprocal 

agreements. Therefore, this interim rule 

affects persons who owe delinquent 

debts to a State of the United States and 

who receive Federal payments. It also 

affects persons who owe delinquent, 

nontax Federal debts and who receive 

payments from States. This rule does 

not apply to collection of past-due 

support debts (see 31 CFR 285.1), the 

offset of Federal tax refund payments, 

the offset of Federal salary payments, or 

the offset of other Federal payments 

excluded from offset by law. 

DATES: This rule is effective January 11, 

2007. Comments must be received by 

March 12, 2007. 

ADDRESSES: All comments should be 

addressed to Thomas Dungan, Senior 

Policy Analyst, Debt Management 

Services, Financial Management 

Service, Department of the Treasury, 

401 14th Street, SW., Room 435B, 

Washington, DC 20227. Comments may 

also be submitted via the internet as 

directed on the FMS Web site at the 

following address: http:// 

www.fms.treas.gov/debt. A copy of this 

interim rule is being made available for 

downloading from the Web site. 

FOR FURTHER INFORMATION CONTACT: 

Thomas Dungan, Senior Policy Analyst, 

at (202) 874–6660, or Tricia Long, 

Senior Counsel, at (202) 874–6680. 

SUPPLEMENTARY INFORMATION: 

Background 

The Debt Collection Improvement Act 

of 1996 (DCIA), Pub. L. 104–134, 110 

Stat. 1321–358 et seq. (April 26, 1996), 

authorized Federal disbursing officials 

to withhold or reduce eligible Federal 

payments to pay the payee’s delinquent 

debt owed to the United States. See 31 

U.S.C. 3716(c). This process is known as 

‘‘administrative offset’’ or ‘‘offset.’’ The 

DCIA also provided that Federal 

payments may be offset to collect 

delinquent debts owed to States 

provided that the States enter into 

reciprocal agreements with the 

Secretary of the Treasury and meet 


cprice-sewell on PROD1PC66 with RULES
1284 Federal Register / Vol. 72, No. 7 / Thursday, January 11, 2007 / Rules and Regulations 

certain other qualifications. See 31 

U.S.C. 3716(h). 

FMS, a bureau of the Department of 

the Treasury (Treasury), is responsible 

for the implementation of centralized 

administrative offset of Federal 

payments for the collection of 

delinquent debt. FMS has established 

TOP to meet this and other debt 

collection responsibilities. By 

centralizing offset through TOP, FMS 

has consolidated and simplified debt 

collection procedures for the Federal 

Government. 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 certain other Federal 

agencies with disbursing authority (such 

as the 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 (including 

information from payments disbursed 

by other Federal agencies) with debtor 

information in FMS’s 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 to 

cover the costs of operating the offset 

program, pursuant to 31 U.S.C. 

3716(c)(4). 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). 

Section 3716(h) authorizes the 

Secretary of the Treasury to allow States 

to participate in administrative offset to 

collect delinquent State debts so long as 

the States meet the requirements of 31 

U.S.C. 3716(h), including entering into 

reciprocal agreements with the 

Secretary of the Treasury. Such 

reciprocal agreements shall contain any 

requirements that the Secretary 

considers appropriate to facilitate offset 

and prevent duplicative efforts. 

In order to determine if it is in the 

best interests of the United States and 

the States to fully implement reciprocal 

offsets under this section, FMS invited 

the States to participate in the 

development of a pilot program. Three 

States have chosen to work with FMS to 

develop and participate in the pilot. The 

purpose of the pilot is to test systems 

and procedures to facilitate offset and to 

evaluate whether the benefits of the 

program outweigh the costs. FMS will 

consider information gained from the 

operation of the pilot, in addition to 

comments received on this interim rule, 

before issuing a final rule. 

Section Analysis 

(a) Scope. Paragraph (a) describes the 

scope of this rule, which governs the 

administrative offset of Federal nontax 

payments to collect delinquent debts 

owed to States in accordance with the 

requirements of 31 U.S.C. 3716(h). This 

rule does not apply to the offset of 

Federal tax refund payments, because 

the authority for this section—31 U.S.C. 

3716—does not authorize the offset of 

Federal tax refunds to collect debts. 

This rule also does not apply to the 

offset of Federal salary payments. While 

Federal salary payments may be offset 

under 31 U.S.C. 3716, there are many 

statutes and regulations that affect 

Federal salary offsets. FMS has chosen 

not to address those authorities in this 

rule. Additionally, this rule does not 

apply to the collection of past-due 

support payments. (See 31 CFR 285.1 

for rules applicable to administrative 

offset to collect past-due support). 

(b) Definitions. Paragraph (b) of this 

rule sets forth definitions applicable to 

this rule. Unless otherwise defined in 

this rule, all terms have the meanings 

set forth in section 285.5(b) of this part. 

As defined in this rule, ‘‘administrative 

offset’’ is used to describe the offset of 

Federal payments to collect delinquent 

State debts. The definition of ‘‘State 

debt’’ expressly excludes debts owed by 

other governments. FMS has determined 

that TOP is not the appropriate tool for 

resolving issues of indebtedness 

between State, local and foreign 

governments. Also, the term ‘‘debt’’ is 

limited by statute to exclude debts owed 

by agencies of the United States. See 31 

U.S.C. 3701(c). The term ‘‘State payment 

offset’’ means the offset of State 

payments, pursuant to State law, to 

collect delinquent Federal nontax debts. 

The term ‘‘reciprocal agreement’’ is 

defined to mean a written agreement 

between FMS and a State, which will 

govern administrative offset to collect 

that State’s debts and the offset of that 

State’s payments to collect Federal 

debts. 

(c) General rule. Paragraph (c) sets 

forth the general rule that Federal 

disbursing officials are authorized to 

offset Federal payments to collect 

delinquent State debts as long as the 

requirements of 31 U.S.C. 3716(h) are 

met. Among other things, States must 

enter into reciprocal agreements with 

FMS that provide for the offset of State 

payments to collect Federal nontax 

debts. 

(d) Reciprocal agreements. Paragraph 

(d) sets forth the basic parameters for 

the reciprocal agreements between FMS 

and the States. As required by 31 U.S.C. 

3716(h)(1)(B)(i), a State must enter into 

a reciprocal agreement before it may 

collect its debts through administrative 

offset under this section. The reciprocal 

agreement will contain more detailed 

provisions consistent with this rule. A 

reciprocal agreement will not 

necessarily require that each party will 

offset the exact same types of payments. 

FMS and the State shall determine 

which payments will be part of the 

offset programs in order to make the 

agreements mutually beneficial and, 

thus, reciprocal. 

(e) Requirements for administrative 

offset. Paragraph (e) sets forth the 

requirements for collecting State debts 

by administrative offset of Federal 

payments. State debts must meet the 

same eligibility requirements for 

administrative offset as Federal debts 

are required to meet under 31 CFR 

285.5(d)(3)(i). States must comply with 

the same certification requirements as 

Federal agencies under 31 CFR 

285.5(d)(6) except for requirements that 

are clearly inapplicable to 

administrative offset under this section. 

The specific exceptions are 

establishment of Federal salary offset 

procedures and the requirement to 

assess interest on Federal debts. 

Additionally, with respect to 

paragraph (d)(6)(ii) of section 285.5 of 

this part, States will only be required to 

certify that they have complied with the 

requirements of 31 U.S.C. 3716 and this 

section; States are not required to certify 

compliance with 31 U.S.C. 3720A or 26 

U.S.C. 6402, both of which apply to 

Federal tax refund offsets. States shall 

also certify that they have complied 

with any requirements imposed by State 

law or procedure that may be applicable 

to administrative offset under this 

section. 

(f) Debts previously submitted by 

States for tax refund offset. Pursuant to 

31 CFR 285.8, States have submitted 

delinquent State income tax obligations 

to FMS for collection by Federal tax 

refund offset. At the time of submission, 

States certified the debts in substantially 

the same manner as required under this 

rule, including that the State has given 

the debtor notice of the State’s intention 

to collect the debt through offset of 

Federal tax refunds. State income tax 

obligations may also be collected by 

administrative offset under this rule. 

FMS has determined that it is 

unnecessary to require the States to 


cprice-sewell on PROD1PC66 with RULES
Federal Register / Vol. 72, No. 7 / Thursday, January 11, 2007 / Rules and Regulations 1285 

certify those debts again as a condition 

to eligibility for administrative offset 

under this rule. However, with respect 

to these debts, within 30 days of an 

administrative offset under this section, 

the State must notify the debtor in 

writing that the debtor may exercise the 

due process rights set forth in paragraph 

(e) of this rule, if the State has not 

previously notified the debtor that 

Federal payments other than tax refunds 

are subject to administrative offset, and 

the debtor has not exercised his or her 

due process rights prior to the 

submission of the debt to FMS. This 

paragraph also notes that nothing in this 

rule requires the State to duplicate any 

notice or any opportunity for a hearing 

or review previously provided to the 

debtor. 

(g) Federal Payments subject to 

administrative offset under this section. 

Paragraph (g) states that the types of 

Federal payments that will be offset to 

collect a State’s debts shall be set forth 

in the reciprocal agreement. A number 

of payment types are expressly excluded 

from administrative offset under this 

rule. In accordance with the statutory 

prohibitions contained in 31 U.S.C. 

3716(h), disbursing officials may not 

offset the following payments to collect 

debts under this rule: (a) Any payments 

exempted from offset as set forth in 31 

CFR 285.5(e)(2); (b) payments due to an 

individual under the Social Security 

Act; (c) payments due an individual 

pursuant to part B of the Black Lung 

Benefits Act; and (d) payments due an 

individual pursuant to any law 

administered by the Railroad Retirement 

Board. Additionally, as explained 

above, offset of Federal tax refunds and 

salary payments are not authorized by 

this rule. 

(h) Conducting the administrative 

offset. Paragraph (h) instructs Federal 

disbursing officials to conduct 

administrative offset under this rule in 

the same manner as under 31 CFR 

285.5. This paragraph also specifies the 

priority for applying offset funds when 

a payment matches with multiple debts 

in TOP. FMS uses TOP to collect many 

types of delinquent debts under various 

legal authorities. If a payment matches 

with multiple debts, the disbursing 

official shall apply offset amounts to all 

other types of debts collected by offset 

under subpart A of 31 CFR part 285 (i.e., 

debts owed to Federal agencies and past 

due support debts) before applying any 

available amounts to a debt under this 

rule. Additionally, in accordance with 

31 U.S.C. 3716(c)(8), a levy pursuant to 

the Internal Revenue Code has 

precedence over offsets under this 

section. Disbursing officials, therefore, 

will satisfy a levy to collect tax debts 

prior to offsetting funds under this 

section. 

(i) Liability of disbursing officials and 

payment agencies. Paragraph (i) restates 

the statutory provision that disbursing 

officials and payment agencies shall not 

be liable to the payee for nonpayment of 

any amounts offset under this rule. 

(j) Notification to a State of Federal 

debt. Paragraph (j) addresses the 

requirements for offsetting a State 

payment to collect a Federal debt. State 

payment offset is governed by the law 

of the State conducting the offset. This 

paragraph provides that all State law 

requirements that Federal creditor 

agencies must meet for State payment 

offset shall be set forth in the reciprocal 

agreement. Such requirements shall not 

exceed the requirements for collecting 

Federal debts by administrative offset 

under 31 CFR 285.5(d). This paragraph 

also provides that FMS will certify to 

the State conducting the offset that the 

Federal debts FMS submits to the State 

have been certified as valid and legally 

enforceable in accordance with 31 

U.S.C. 3716(a). 

(k) Conducting State payment offset. 

Paragraph (k) provides that States shall 

conduct State payment offset pursuant 

to the State’s laws and regulations. The 

paragraph sets forth two requirements 

regarding State payment offset that 

parallel requirements for conducting 

administrative offset. First, in the case 

of a State payment that is payable to two 

or more joint payees, the entire payment 

shall be subject to offset to collect the 

debt of any one of the payees, unless 

prohibited by State law. Such 

prohibition must be set forth in the 

reciprocal agreements. Because the 

Treasury Offset Program only matches 

one debtor at a time per payment, FMS 

will generally not enter into reciprocal 

agreements that prohibit offsetting a 

payment to collect a debt owed by only 

one of the joint payees. Second, 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 the 

payment, the State disbursing official 

shall only offset such payments for the 

debts of the person having the beneficial 

interest. For example, if a State makes 

a payment to a minor child, and the 

payment is made payable to that child’s 

parent as the representative payee for 

that child, the State shall not offset the 

payment to collect a debt that the parent 

owes to the United States. 

Paragraph (k) also sets forth the 

requirement that the State notify the 

payee of any State payment offset. 

While the reciprocal agreement may set 

forth additional requirements, this rule 

requires, at a minimum, that the notice 

inform the payee of the type and 

amount of the payment that was offset, 

the identity of the Federal agency that 

requested the offset, and a contact point 

within the Federal agency that will 

handle concerns regarding the offset. 

Operationally, FMS will provide this 

information to the State at the time FMS 

requests the State payment offset. 

(l) Limitations. Paragraph (l) sets forth 

limitations on the collectibility of both 

Federal and State debts. Debts shall 

remain eligible for State payment offset 

or administrative offset, as applicable, 

so long as the debts remain valid and 

legally enforceable for purposes of 

offset. Among other things, this means 

that, unless otherwise provided by law, 

the debt has not been outstanding for 

more than 10 years. See 31 U.S.C. 

3716(e). The 10-year limitation, 

however, does not apply to collecting 

debts reduced to judgment by 

administrative offset. See the Federal 

Claims Collection Standards at 31 CFR 

901.3(a)(4). There are no time 

limitations on collecting Federal 

judgments. Many State judgments are 

also not subject to time limitations. 

Therefore, this rule states that a Federal 

or State debt that has been reduced to 

judgment shall remain enforceable for 

purposes of administrative offset for as 

long as the judgment remains 

enforceable against the debtor under the 

laws applicable to the judgment. 

(m) Fees. Paragraph (m) states that 

FMS will deduct a fee from amounts 

offset pursuant to this rule. As required 

by 31 U.S.C. 3716(c)(4), the fee will be 

in an amount that FMS has determined 

to be sufficient to reimburse FMS for the 

full cost of conducting offsets under this 

section. FMS will notify States and 

Federal agencies of the amount of the 

fee in advance. 

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, for the following reasons, 

that a comment period would be 

unnecessary and contrary to the public 

interest. The DCIA provision 

authorizing the offset of Federal 

payments to collect delinquent debt 

owed to the States pursuant to 

reciprocal agreements was effective on 

August 26, 1996. A comment period is 

unnecessary because this interim rule 

does not change the ongoing offset 

process under the TOP, but rather 

provides guidance for State agencies 

and Federal disbursing officials to 

facilitate the addition of State debts into 

TOP. Under this interim rule, State 


cprice-sewell on PROD1PC66 with RULES
1286 Federal Register / Vol. 72, No. 7 / Thursday, January 11, 2007 / Rules and Regulations 

agencies are required to provide to the 

debtor the same pre-offset notice, 

opportunities, and rights to dispute the 

debt and seek waiver as currently 

required under 31 U.S.C. 3716 and 

3720A and implementing regulations. 

Since this interim rule provides 

important guidance ensuring that 

debtors receive appropriate notices and 

opportunities from States that elect to 

participate, FMS believes that it is in the 

public interest to issue this interim rule 

without opportunity for prior public 

comment. 

For the same reasons, 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)(3). The public is invited to 

submit comments on the interim rule, 

which will be taken into account before 

a final rule is issued. 

Regulatory Analysis 

This interim rule is not a significant 

regulatory action as defined in 

Executive Order 12866. Because no 

notice of proposed rulemaking is 

required for this rule, the provisions of 

the Regulatory Flexibility Act (5 U.S.C. 

601 et seq.) do not apply. 

Federalism 

This rule has been reviewed under 

Executive Order 13132, Federalism. 

This rule will not have substantial 

direct effects on the States, on the 

relationship between the national 

government and the States, or on 

distribution of power and 

responsibilities among the various 

levels of government. Participation in 

the program governed by this rule is 

voluntary for the States, and this rule 

only sets forth the general procedures 

for State participation. Additionally, as 

described above, FMS has worked 

closely with States in the development 

of a pilot program that will operate 

pursuant to this interim rule. As part of 

that collaborative process, FMS has 

consulted with the States participating 

in the pilot regarding the provisions of 

this rule and the operational 

requirements for participation. 

Therefore, in accordance with Executive 

Order 13132, it is determined that this 

rule does not have sufficient federalism 

implications to warrant the preparation 

of a federalism summary impact 

statement. 

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, 3720B, 3720D; 42 U.S.C. 664; E.O. 

13019, 61 FR 51763, 3 CFR, 1996 Comp., p. 

216. 

■ 2. Section 285.6 is added to part 285, 

subpart A, to read as follows: 

§ 285.6 Administrative offset under 

reciprocal agreements with states. 

(a) Scope. (1) This section sets forth 

the rules that apply to the 

administrative offset of Federal nontax 

payments to collect delinquent debts 

owed to States. As set forth in 31 U.S.C. 

3716(h), States may participate in 

administrative offset so long as they 

meet certain requirements, including 

entering into reciprocal agreements with 

the Secretary of the Treasury. Such 

reciprocal agreements may contain any 

requirements that the Secretary 

considers appropriate to facilitate offset. 

Participation in offset under this section 

is voluntary for both FMS and the 

States. This section prescribes the 

minimum requirements for such 

reciprocal agreements, including 

provisions applicable to the offset of 

State payments, pursuant to State law, 

to collect delinquent Federal debts. 

Such offsets are defined in this section 

as ‘‘State payment offsets.’’

(2) This section does not apply to the 

offset of Federal salary payments, 

Federal tax refunds (see 31 CFR 285.8), 

or the collection of past-due support 

debts (see 31 CFR 285.1 and 285.3). 

(b) Definitions. (1) Unless otherwise 

defined in paragraph § 285.5(b) of this 

subpart. 

(2) For purposes of this section: 

Administrative offset has the meaning 

set forth in 31 U.S.C. 3701(a) and 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. The term debt in 

this definition means a State debt. 

Debtor means a person who owes a 

debt to the United States or a State. 

Federal debt 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 term includes debt 

administered by a third party acting as 

an agent for the Federal Government. 

For purposes of this section, the term 

‘‘Federal 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). 

Offset means withholding funds 

payable to a person to satisfy a debt 

owed by the payee. 

Participating State means a State that 

has entered into a reciprocal agreement 

under this section. 

Reciprocal agreement means a written 

agreement between FMS and a State, 

entered into pursuant to 31 U.S.C. 

§ 3716(h), which provides for 

administrative offset and State payment 

offset. 

State has the meaning set forth in 31 

U.S.C. 3701(b)(2) and includes the 

several states of the United States, the 

District of Columbia, American Samoa, 

Guam, the United States Virgin Islands, 

the Commonwealth of the Northern 

Mariana Islands, and the 

Commonwealth of Puerto Rico. 

State debt means any amount of 

money, funds or property that has been 

determined by an appropriate State 

official to be owed to that State by a 

person, organization, or entity, except 

the United States, a foreign sovereign, or 

another State (including local 

governments within a State). For 

purposes of this rule, the term includes 

debt administered by a third party 

acting as an agent for the State. 

State payment offset means 

withholding funds payable by a State to, 

or held by a State for, a person to satisfy 

a debt owed by the payee to the United 

States. 

(c) General rule. FMS and other 

disbursing officials of the Federal 

Government will conduct 

administrative offset to collect past-due 

State debts certified to FMS, and 

participating States will conduct State 

payment offset to collect delinquent 

Federal debts in accordance with the 

terms of reciprocal agreements entered 

into between the States and FMS, acting 

on behalf of the Secretary. Upon 

notification of a delinquent State debt 


cprice-sewell on PROD1PC66 with RULES
Federal Register / Vol. 72, No. 7 / Thursday, January 11, 2007 / Rules and Regulations 1287 

from a participating State to FMS, 

disbursing officials of the United States 

shall offset the Federal payments 

specified in the reciprocal agreement to 

collect the State debt. The amount 

offset, minus an offset fee, shall be 

forwarded to the State to be distributed 

in accordance with applicable laws and 

procedures. Upon notification of a 

delinquent Federal debt from FMS to a 

participating State, authorized officials 

of the participating State shall conduct 

State payment offset as specified in the 

applicable reciprocal agreement to 

collect the Federal debt. 

(d) Reciprocal agreements. (1) FMS 

may enter into reciprocal agreements 

with States for administrative offset and 

State payment offset. The agreements 

shall contain any requirements which 

FMS considers appropriate to facilitate 

the offset and prevent duplicative 

efforts, and shall require States to 

prescribe procedures governing the 

collection of delinquent State debts 

which are substantially similar to 

requirements imposed on Federal 

agencies pursuant to 31 U.S.C. 

§ 3716(b). States may prescribe such 

procedures through legislation or 

regulations, as deemed appropriate by 

State officials. States which have 

entered into a reciprocal agreement with 

FMS pursuant to this section may 

thereafter request, in the manner 

prescribed in the reciprocal agreement, 

that administrative offsets be performed. 

Such requests shall be made by the 

appropriate State disbursing official, 

which, for purposes of this section, 

means an appropriate official of the 

State agency that is responsible for 

collecting the State debt. Reciprocal 

agreements must be signed by a State 

official authorized to enter into such 

agreements. 

(2) Once FMS has entered into a 

reciprocal agreement with a State 

pursuant to this section, FMS may 

request that the State perform State 

payment offsets to collect delinquent 

Federal debts in accordance with the 

terms of the reciprocal agreement. 

(3) A duly executed reciprocal 

agreement is required before a State may 

request an administrative offset 

pursuant to 31 U.S.C. 3716(h). 

(e) Requirements for submitting State 

debts for administrative offset—(1) Debt 

eligibility. A State debt submitted to 

FMS for collection by administrative 

offset must meet the debt eligibility 

requirements of 31 CFR 285.5(d)(3)(i). 

(2) Certification. At the time a 

participating State notifies FMS of a 

State debt for purposes of collection by 

administrative offset under this section, 

the State shall comply with the 

certification requirements set forth in 

paragraph 31 CFR 285.5(d)(6) with the 

following two exceptions: 

(i) Paragraph (d)(6)(ii)(E)—Federal 

salary offset; and 

(ii) Paragraph (d)(6)(iii)—Federal 

requirements for the assessment of 

interest and penalties to Federal debts. 

Additionally, with respect to paragraph 

(d)(6)(ii) of § 285.5, States shall only be 

required to certify that they have 

complied with the requirements of 31 

U.S.C. 3716 (not 31 U.S.C. 3720A or 26 

U.S.C. 6402) and this section 285.6. 

States shall also certify that they have 

complied with any requirements 

imposed by State law or procedure that 

may be applicable to administrative 

offset. 

(f) State debts submitted to FMS for 

tax refund offset prior to the effective 

date of this section. A State shall be 

deemed to have complied with the 

requirements of paragraph (e)(2) of this 

section with respect to any State debt 

that the State certified to Treasury prior 

to the effective date of this section for 

collection pursuant to 31 CFR 285.8, 

Offset of tax refund payments to collect 

state income tax obligations. However, 

within 30 days of an administrative 

offset under this section, the State shall 

notify the debtor in writing that the 

debtor may exercise the rights set forth 

in the applicable sections of 31 CFR 

285.5(d) as set forth in paragraph (e) of 

this section, only if the State has not 

previously informed the debtor in 

writing that Federal payments other 

than tax refunds may be offset to collect 

the State debt, and the debtor has not 

exercised such rights previously with 

respect to the State debt that was 

collected by the offset. Nothing in this 

section requires any State to duplicate 

any notice or any opportunity for a 

hearing or review provided to the debtor 

prior to administrative offset. 

(g) Federal Payments subject to 

administrative offset under this section. 

(1) The Federal payments that will be 

offset to collect a participating State’s 

debts shall be set forth in the reciprocal 

agreement. Federal payments that are 

excluded from administrative offset 

under this section include: 

(i) Any payments described in 31 CFR 

285.5(e)(2) ‘‘Payments excluded from 

offset’’; 

(ii) Payments due to an individual 

under the Social Security Act; 

(iii) Payments due an individual 

pursuant to part B of the Black Lung 

Benefits Act; 

(iv) Payments due an individual 

pursuant to any law administered by the 

Railroad Retirement Board; 

(v) Federal tax refunds; and 

(vi) Federal salary payments. 

(h) Conducting the administrative 

offset. (1) Disbursing officials shall 

conduct administrative offset under this 

section in the same manner as set forth 

in 31 CFR 285.5(f) through (i). 

(2) When a payee owes more than one 

delinquent State debt which has been 

referred to FMS for collection, amounts 

will be applied to delinquent State debts 

under this section after any amounts 

offset pursuant to any other section of 

this subpart A and any amounts levied 

pursuant 26 U.S.C. 6331. 

(i) Liability of disbursing officials and 

payment agencies. Neither the Federal 

disbursing official nor the agency 

authorizing the Federal payment shall 

be liable to a debtor for the amount of 

the administrative offset on the basis 

that the underlying obligation, 

represented by the payment before the 

administrative offset was taken, was not 

satisfied. 

(j) Notification to a State of Federal 

debt. (1) A State may set forth in the 

reciprocal agreement the requirements 

for FMS to follow when submitting a 

Federal debt for collection by State 

payment offset. Such agreements shall 

set forth all requirements contained in 

State law for the State payment offset. 

Such requirements, however, may not 

exceed the requirements for collecting 

Federal debts by administrative offset as 

set forth in § 285.5(d) of this subpart. 

(2) FMS shall certify to a participating 

State that each debt FMS submits for 

State payment offset has been certified 

by the Federal creditor agency to be 

delinquent, valid, and legally 

enforceable in the amount stated, and 

that the Federal creditor agency owed 

the debt has complied with the 

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

to submitting the debt for offset. 

(k) Conducting State payment offset. 

(1) An official of a participating State 

shall conduct State payment offset 

pursuant to the laws and regulations of 

the participating State; provided that: 

(i) If a payment is owed jointly to 

more than one payee, the entire 

payment shall be offset for a debt of 

either payee, unless otherwise 

prohibited by law or regulation; and 

(ii) 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 the 

payment, the disbursing official shall 

offset that payment only to collect debts 

owed by the person having the 

beneficial interest in the payment. 

(2) Any prohibitions on offsetting a 

joint payment described in paragraph 

(k)(1)(i) of this section shall be set forth 

in the reciprocal agreement. 

(3) An official of the participating 

State shall notify the payee of the State 


cprice-sewell on PROD1PC66 with RULES
1288 Federal Register / Vol. 72, No. 7 / Thursday, January 11, 2007 / Rules and Regulations 

payment offset. The reciprocal 

agreement may contain detailed 

guidance and procedures regarding 

sending such notice, but shall, at a 

minimum require that the notice inform 

the payee of: 

(i) The type and amount of the 

payment that was offset; 

(ii) The identity of the Federal agency 

that requested the offset; and 

(iii) A contact point within the 

Federal agency that will handle 

concerns regarding the offset. 

(l) Limitations. A debt properly 

submitted to FMS or the State for 

administrative offset or State payment 

offset shall remain subject to collection 

until withdrawn by the entity that 

submitted the debt for collection, 

provided the debt remains past-due and 

legally enforceable for purposes of 

administrative offset or State payment 

offset, as applicable. A debt which has 

been reduced to a judgment shall 

remain legally enforceable for purposes 

of administrative offset and State 

payment offset for as long as the 

judgment remains enforceable against 

the debtor. 

(m) Fees. FMS shall deduct a fee from 

each administrative offset and State 

payment offset amount before 

transferring the balance of the offset 

funds to the State or Federal agency 

owed the debt. Pursuant to 31 U.S.C. 

3716(c)(4), the fee will be in an amount 

that FMS has determined to be 

sufficient to reimburse FMS for the full 

cost of the offset procedure. FMS will 

notify the States and creditor agencies, 

annually and in advance, of the amount 

of the fee FMS will charge for each 

offset. 

Dated: January 4, 2007. 

Kenneth R. Papaj, 

Commissioner. 

[FR Doc. E7–127 Filed 1–10–07; 8:45 am] 

BILLING CODE 4810–35–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[CGD01–07–006] 

Drawbridge Operation Regulations; 

Acushnet River, New Bedford and 

Fairhaven, MA 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of temporary deviation 

from regulations. 

SUMMARY: The Commander, First Coast 

Guard District, has issued a temporary 

deviation from the regulation governing 

the operation of the Route 6 highway 

bridge across the Acushnet River, mile 

0.0, between New Bedford and 

Fairhaven, Massachusetts. Under this 

temporary deviation a 30-minute 

advance notice for bridge openings shall 

be required between 7 a.m. and 5 p.m., 

Monday through Friday, from January 8, 

2007 through February 2, 2007. This 

deviation is necessary to facilitate 

emergency bridge fender repairs. 

DATES: This deviation is effective from 

January 8, 2007 through February 2, 

2007. 

ADDRESSES: Materials referred to in this 

document are available for inspection or 

copying at the First Coast Guard 

District, Bridge Branch Office, 408 

Atlantic Avenue, Boston, 

Massachusetts, 02110, between 7 a.m. 

and 3 p.m., Monday through Friday, 

except Federal holidays. The telephone 

number is (617) 223–8364. The First 

Coast Guard District Bridge Branch 

Office maintains the public docket for 

this temporary deviation. 

FOR FURTHER INFORMATION CONTACT: John 

McDonald, Project Officer, First Coast 

Guard District, at (617) 223–8364. 

SUPPLEMENTARY INFORMATION: The Route 

6 highway bridge, across the Acushnet 

River, mile 0.0, between New Bedford 

and Fairhaven, Massachusetts, has a 

vertical clearance in the closed position 

of 8 feet at mean high water and 12 feet 

at mean low water. The existing 

drawbridge operation regulations are 

listed at 33 CFR 117.585. 

The owner of the bridge, 

Massachusetts Highway Department, 

requested a temporary deviation to 

facilitate emergency bridge protective 

fender repairs. The bridge fender system 

on the east channel was recently 

damaged by a vessel allision. The 

damaged fender system must be 

repaired as soon as possible in the 

interest of navigational safety. 

Under this temporary deviation the 

Route 6 highway bridge shall require at 

least a 30-minute advance notice for 

bridge openings between 7 a.m. and 5 

p.m., Monday through Friday, from 

January 8, 2007 through February 2, 

2007. 

The bridge will continue to open in 

accordance with the normal operating 

schedule which requires the bridge to 

open on the hour between 6 a.m. and 10 

a.m. and at a quarter past the hour 

between 11:15 a.m. and 6:15 p.m. 

However, in order to perform necessary 

bridge repairs, a 30 minute advance 

notice for such openings is required 

between 7 a.m. and 5 p.m., Mondays 

through Fridays from January 8 through 

February 2, 2007. 

During this period the bridge shall 

open at any time for vessels whose draft 

exceeds 15 feet. However, such vessels 

must also provide 30 minute advance 

notice. 

In accordance with 33 CFR 117.35, 

this work will be performed with all due 

speed in order to return the bridge to 

normal operation as soon as possible. 

Should the bridge maintenance 

authorized by this temporary deviation 

be completed before the end of the 

effective period published in this notice, 

the Coast Guard will rescind the 

remainder of this temporary deviation, 

and the bridge shall be returned to its 

normal operating schedule. Notice of 

the above action shall be provided to the 

public in the Local Notice to Mariners 

and the Federal Register, where 

practicable. 

This deviation from the operating 

regulations is authorized under 33 CFR 

117.35. 

Dated: January 3, 2007. 

Gary Kassof, 

Bridge Program Manager, First Coast Guard 

District. 

[FR Doc. E7–240 Filed 1–10–07; 8:45 am] 

BILLING CODE 4910–15–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[CGD01–06–139] 

Drawbridge Operation Regulations; 

Shaw Cove, New London, CT 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of temporary deviation 

from regulations. 

SUMMARY: The Commander, First Coast 

Guard District, has issued a temporary 

deviation from the regulation governing 

the operation of the Amtrak Bridge 

across Shaw Cove, mile 0.0., at New 

London, Connecticut. Under this 

temporary deviation, an advance notice 

shall be required for bridge openings 

during designated bridge opening time 

periods each day from January 5, 2007 

through March 30, 2007; however, 

bridge openings shall be provided at any 

time for DDLC Energy, if at least a 24- 

hour advance notice is given. This 

deviation is necessary to facilitate 

scheduled bridge maintenance. 

DATES: This deviation is effective from 

January 5, 2007 through March 30, 2007. 

ADDRESSES: Materials referred to in this 

document are available for inspection or 

copying at the First Coast Guard 


cprice-sewell on PROD1PC66 with RULES