This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

18850

Vol. 63, No. 73

Thursday, April 16, 1998

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Part 550

RIN 3206–AH63

Pay Administration (General);

Collection by Offset from Indebted

Government Employees

AGENCY: Office of Personnel

Management.

ACTION: Proposed rule with request for

comments.

SUMMARY: The Office of Personnel

Management is issuing proposed

changes in the salary offset regulations

to comply with the Debt Collection

Improvement Act of 1996. The principal

changes relate to the roles played by

disbursing officials and debt collection

centers with respect to salary offset.

Also included are new expedited salary

offset procedures for certain types of

recent or small-amount debts.

DATES: Comments must be received on

or before June 15, 1998.

ADDRESSES: Comments may be sent or

delivered to Donald J. Winstead,

Assistant Director for Compensation

Administration, Workforce

Compensation and Performance Service,

Office of Personnel Management, Room

7H31, 1900 E Street NW., Washington,

DC 20415, FAX: (202) 606–0824, or

email to payleave@opm.gov.

FOR FURTHER INFORMATION CONTACT: Paul

Shields, (202) 606–2858, FAX: (202)

606–0824, or email to

payleave@opm.gov.

SUPPLEMENTARY INFORMATION: For many

years, Federal agencies have made

deductions from employees’ pay to

recover debts owed to the Government.

(See 5 U.S.C. 5514.) Office of Personnel

Management (OPM) regulations provide

specific requirements for collecting

debts by offsetting salaries and

procedures for employee notification

and hearings.

The Debt Collection Improvement Act

of 1996 (section 31001 of Public Law

104–134, April 26, 1996) (DCIA) made

changes to maximize the collection of

delinquent debts owed to the

Government while minimizing the costs

of debt collection by consolidating

related functions and using interagency

teams. The DCIA requires all Federal

agencies to which outstanding

delinquent debts are owed to participate

in an annual computer match of their

delinquent debt records with records of

Federal employees. The Secretary of the

Treasury is required to establish an

inter-agency consortium to implement

this centralized salary offset computer

matching and promulgate regulations

for that program.

In addition, the DCIA established

mandatory centralized administrative

offset. Under 31 U.S.C. 3716, Federal

agencies are required to notify the

Secretary of the Treasury of all debts

which are over 180 days delinquent.

Agencies may also notify the Secretary

of the Treasury of any debt which is

delinquent for 180 days or less. The

Secretary of the Treasury and other

Federal disbursing officials will match

payments to the debtor from the Federal

Government, including Federal salary

payments, against these debts. Where a

match occurs, and all the requirements

for offset have been met, the payment

will be offset to satisfy the debt in whole

or part. Federal agencies must notify

Treasury of all debts over 180 days

delinquent, including debts owed by

Federal employees which the agency

seeks to collect from the employee’s pay

account at another agency. Thus,

compliance with the administrative

offset provisions of the DCIA will

accomplish salary offset and negate the

need to follow the procedures under

section 550.1109 in these proposed

regulations (currently section 550.1108).

The procedures outlined in section

550.1109 will continue to apply,

however, until salary offset can be

accomplished by centralized

administrative offset. It is anticipated

that the procedures under section

550.1109 will eventually be eliminated.

The DCIA amended the salary offset

law for Federal employees covered

under 5 U.S.C. 5514 as follows:

(1) Pay adjustments made to correct

clerical or administrative errors or

delays if the overpayment occurred

within the 4 pay periods preceding the

adjustment, and collection of a debt

amounting to $50 or less, are excluded

from the normally required

administrative procedures (e.g. notice

and hearing).

(2) The definition of ‘‘agency’’ is

modified to clarify that it includes

executive departments and agencies; the

United States Postal Service; the Postal

Rate Commission; the United States

Senate; the United States House of

Representatives; any court, court

administrative office, or instrumentality

in the judicial or legislative branches of

the Government; and Government

corporations.

(3) In determining the order of

deductions from pay, a levy pursuant to

the Internal Revenue Code takes

precedence over offsets under section

5514.

In response to these changes, OPM

proposes regulatory changes needed to

implement salary offsets by centralized

administrative offset, accommodate the

role of debt collection centers, modify

definitions, limit the required

procedures in some instances for small

debts and for clerical or administrative

errors or delays, and make other

conforming or clarifying changes,

including those described below.

OPM proposes to revise section

550.1102(b)(1) to remove the reference

to debts arising under the Social

Security Act in the listing of debts that

are excluded from collection via salary

offset. Under subsection (z)(2) of the

DCIA, section 204 of the Social Security

Act (42 U.S.C. 404) is amended to

authorize the Commissioner of Social

Security to collect delinquent claims by

salary offset under 5 U.S.C. 5514.

OPM proposes to revise section

550.1102(b)(2) to reflect elimination of

the General Accounting Office’s role in

waiving certain overpayment debt

claims against Federal employees,

consistent with Public Law 104–316

(October 19, 1996) and the Office of

Management and Budget

‘‘Determination with Respect to the

Transfer of Functions Pursuant to Public

Law 104–316,’’ dated December 17,

1996.

OPM proposes to revise section

550.1104(d)(3) to clarify that, in a salary

offset notice to an employee, the

‘‘amount’’ of a deduction may be

expressed as a percentage of pay, not to

exceed 15 percent of disposable pay.

The requirements to include the

commencement date and duration of

deductions in the salary offset notice are

removed, since this information is not
Federal Register / Vol. 63, No. 73 /Thursday, April 16, 1998 / Proposed Rules 18851

required by law and its inclusion can

pose an unnecessary administrative

burden. Also, when the deduction

amount is expressed as a percentage of

disposable pay, which can change over

a period of time, the duration of

deductions cannot be specified.

However, debtor employees can easily

estimate the duration of deductions by

dividing the total debt amount by the

initial dollar amount of the initial

deduction.

OPM proposes a new section

550.1107(c) to clarify that a

determination of a hearing official that

a debt may not be collected via salary

offset under 5 U.S.C. 5514 does not

preclude the creditor agency from

seeking collection of a debt it considers

to be valid through other appropriate

means, since the hearing official’s

determination pertains only to salary

offset. This is consistent with

Comptroller General opinion B–211626,

December 19, 1984.

When final regulations are published,

covered agencies will be required to

make necessary conforming changes in

their agency salary offset regulations.

Under 5 CFR 550.1105(b), significant

proposed changes in creditor agency

regulations must be submitted to OPM

for review and approval. However, as

long as these changes in agency

regulations are made merely to conform

with the changes made in OPM

regulations, no OPM review will be

required.

Regulatory Flexibility Act

I certify that these regulations would

not have a significant economic impact

on a substantial number of small entities

because they would only apply to

Federal agencies and employees.

List of Subjects in 5 CFR Part 550

Administrative practice and

procedure, Claims, Government

employees, Wages.

Office of Personnel Management.

Janice R. Lachance,

Director.

Accordingly, OPM is proposing to

amend part 550 of title 5 of the Code of

Federal Regulations as follows:

PART 550—PAY ADMINISTRATION

(GENERAL)

Subpart K—Collection by Offset From

Indebted Government Employees

1. The authority citation for subpart K

of part 550 continues to read as follows:

Authority: 5 U.S.C. 5514; sec. 8(1) of E.O.

11609; redesignated in sec. 2–1 of E.O.

12107.

2. In § 550.1102, paragraph (b) is

revised to read as follows:

§ 550.1102 Scope.

* * * * *

(b) Applicability. This subpart and 5

U.S.C. 5514 apply in recovering certain

debts by administrative offset, except

where the employee consents to the

recovery, from the current pay account

of the employee. Because salary offset is

a type of administrative offset, debt

collection procedures for salary offset

which are not specified in 5 U.S.C. 5514

and this subpart should be consistent

with the provisions of the Federal

Claims Collections Standards (FCCS, as

defined in § 550.1103) (dealing with

administrative offset generally) and 31

CFR part 285 (dealing with centralized

administrative offset under 31 U.S.C.

3716). Section 550.1108 addresses the

use of centralized administrative offset

procedures to effect salary offset.

Generally, the procedures under

§ 550.1109 should apply only when

centralized administrative offset cannot

be accomplished.

(1) Excluded debts. The procedures

contained in this subpart do not apply

to debts arising under the Internal

Revenue Code (26 U.S.C. 1 et seq.) or

the tariff laws of the United States; or to

any case where collection of a debt by

salary offset is explicitly provided for or

prohibited by another statute (e.g., travel

advances in 5 U.S.C. 5705 and employee

training expenses in 5 U.S.C. 4108).

(2) Waiver requests. This subpart does

not preclude an employee from

requesting waiver of an erroneous

payment under 5 U.S.C. 5584, 10 U.S.C.

2774, or 32 U.S.C. 716, or in any way

questioning the amount or validity of a

debt, in the manner prescribed by the

head of the responsible agency.

Similarly, this subpart does not

preclude an employee from requesting

waiver of the collection of a debt under

any other applicable statutory authority.

3. In § 550.1103, the definitions of

agency, creditor agency, disposable pay,

and FCCS are revised, and the definition

of debt collection center is added in

alphabetical order, to read as follows:

§ 550.1103 Definitions.

* * * * *

Agency means an executive

department or agency; the United States

Postal Service; the Postal Rate

Commission; the United States Senate;

the United States House of

Representatives; any court, court

administrative office, or instrumentality

in the judicial or legislative branches of

the Government; or a Government

corporation.

Creditor Agency means the agency to

which the debt is owed, including a

debt collection center when acting in

behalf of a creditor agency in matters

pertaining to the collection of a debt (as

provided in § 550.1110).

* * * * *

Debt collection center means the

Department of the Treasury or other

Government agency or division

designated by the Secretary of the

Treasury with authority to collect debts

on behalf of creditor agencies in

accordance with 31 U.S.C. 3711(g).

Disposable pay means that part of

current basic pay, special pay, incentive

pay, retired pay, retainer pay, or in the

case of an employee not entitled to basic

pay, other authorized pay remaining

after the deduction of any amount

required by law to be withheld (other

than deductions to execute garnishment

orders in accordance with parts 581 and

582 of this chapter). Among the legally

required deductions that must be

applied first to determine disposable

pay are levies pursuant to the Internal

Revenue Code (Title 26, United States

Code) and deductions described in

§ 581.105 (b) through (f) of this chapter.

* * * * *

FCCS means the Federal Claims

Collection Standards published in 4

CFR 101 through 105.

* * * * *

4. Section 550.1104 is amended, in

paragraph (d), in the second sentence of

the introductory text, by removing ‘‘or

his designee’’ and adding in its place

‘‘(or authorized designee)’; in paragraph

(d)(4), by adding ‘‘as defined in

§ 550.1103’’ after ‘‘FCCS’’; in paragraph

(d)(6), by removing ‘‘(4 CFR 102.2(e))’’

and adding in its place ‘‘(see the

FCCS)’’; in paragraph (e)(1), by adding

the word ‘‘creditor’’ before the second

appearance of the word ‘‘agency’; in

paragraph (g)(2), by removing ‘‘4 CFR

102.3(c)’’ and adding in its place ‘‘the

FCCS’’; in paragraph (m), by removing

‘‘4 CFR 102.3’’ and adding in its place

‘‘the FCCS’’; in paragraph (n), by

removing ‘‘4 CFR 102.13’’ and adding in

its place ‘‘the FCCS’’; and by revising

paragraphs (c) and (d)(3) to read as

follows:

§ 550.1104 Agency regulations.

* * * * *

(c) Exception to entitlement to notice,

hearing, written responses, and final

decisions. In regulations covering

internal collections, an agency shall

except from the provisions of paragraph

(b) of this section—

(1) Any adjustment to pay arising out

of an employee’s election of coverage or

a change in coverage under a Federal
18852 Federal Register / Vol. 63, No. 73 /Thursday, April 16, 1998 / Proposed Rules

benefits program requiring periodic

deductions from pay, if the amount to

be recovered was accumulated over 4

pay periods or less;

(2) A routine intra-agency adjustment

of pay that is made to correct an

overpayment of pay attributable to

clerical or administrative errors or

delays in processing pay documents, if

the overpayment occurred within the 4

pay periods preceding the adjustment

and, at the time of such adjustment, or

as soon thereafter as practical, the

individual is provided written notice of

the nature and the amount of the

adjustment and point of contact for such

adjustment; or

(3) Any adjustment to collect a debt

amounting to $50 or less, if, at the time

of such adjustment, or as soon thereafter

as practical, the individual is provided

written notice of the nature and the

amount of the adjustment and a point of

contact for contesting such adjustment.

(d) * * *

(3) The frequency and amount of the

intended deduction (stated as a fixed

dollar amount or as a percentage of pay,

not to exceed 15 percent of disposable

pay) and the intention to continue the

deductions until the debt is paid in full

or otherwise resolved;

* * * * *

§ 550.1106 [Amended]

5. Section 550.1106 is amended by

removing ‘‘4 CFR 102.3(b)(3)’’ and

adding ‘‘the FCCS as defined in

§ 550.1103’’ in its place.

§ 550.1107 Obtaining the services of a

hearing official.

6. Section 550.1107 is amended, in

paragraph (a), by removing ‘‘4 CFR

102.1’’ and adding ‘‘the FCCS as defined

in § 550.1103’’ in its place; in paragraph

(b), by removing ‘‘4 CFR 102.1’’ and

adding ‘‘the FCCS’’ in its place; and by

adding a new paragraph (c) to read as

follows:

* * * * *

(c) The determination of a hearing

official designated under this section is

considered to be an official certification

regarding the existence and amount of

the debt for purposes of executing salary

offset under 5 U.S.C. 5514. A creditor

agency may make a certification to the

Secretary of the Treasury under

§ 550.1108 or a paying agency under

§ 550.1109 regarding the existence and

amount of the debt based on the

certification of a hearing official. If a

hearing official determines that a debt

may not be collected via salary offset,

but the creditor agency finds that the

debt is still valid, the creditor agency

may still seek collection of the debt

through other means, such as offset of

other Federal payments, litigation, etc.

7. Section 550.1108 is redesignated as

§ 550.1109 and is amended by removing

the ‘‘(b)’’ after ‘‘5514’’ in paragraph

(a)(3), adding ‘‘claim’’ after the first

appearance of ‘‘debt’’ in paragraph

(b)(2), removing ‘‘creditor agency’s’’ in

paragraph (b)(3), and adding

introductory text at the beginning of the

section; and a new § 550.1108 is added

to read as follows:

§ 550.1108 Requesting recovery through

centralized administrative offset.

Under 31 U.S.C. 3716, creditor

agencies must notify the Secretary of the

Treasury of all debts over 180 days

delinquent (as defined in the FCCS, see

§ 550.1103) so that recovery may be

made by centralized administrative

offset. This includes those debts the

agency seeks to recover from the pay

account of an employee of another

agency via salary offset. The Secretary of

the Treasury and other Federal

disbursing officials will match

payments, including Federal salary

payments, against these debts. Where a

match occurs, and all the requirements

for offset have been met, the payment

will be offset to satisfy the debt in whole

or part. Prior to offset of the pay account

of an employee, an agency must comply

with the requirements of 5 U.S.C. 5514,

this subpart, and agency regulations

issued thereunder. Specific procedures

for notifying the Secretary of the

Treasury of debt for purposes of

collection by centralized administrative

offset are contained in 31 CFR part 285

and the FCCS. At their discretion,

creditor agencies may notify the

Secretary of the Treasury of debts that

have been delinquent for 180 days or

less, including debts the agency seeks to

recover from the pay account of an

employee via salary offset.

§ 550.1109 Requesting recovery from the

paying agency.

When possible, salary offset through

the centralized administrative offset

procedures in § 550.1108 should be

attempted before applying the

procedures in this section.

* * * * *

8. A new section § 550.1110 is added

to read as follows:

§ 550.1110 Debt collection centers.

A debt collection center may act in

behalf of a creditor agency to collect

claims via salary offset consistent with

this section, subject to any limitations

on its authority established by the

creditor agency it represents or by the

U.S. Department of the Treasury.

(a) A debt collection center may be

authorized to enter into a written

agreement with the indebted employee

regarding the repayment schedule or, in

the absence of such agreement, to

establish the terms of the repayment

schedule.

(b) A debt collection center may make

certifications to the Secretary of the

Treasury under § 550.1108 or to a

paying agency under § 550.1109 based

on the certifications it has received from

the creditor agency or a hearing official.

(c) A debt collection center

responsible for collecting a particular

debt may not act in behalf of a creditor

agency for the purpose of making

determinations regarding the existence

or amount of that debt.

(d) A debt collection center

responsible for collecting a particular

debt may arrange for a hearing on the

existence or amount of the debt or the

repayment schedule by an

administrative law judge or,

alternatively, another hearing official

not under the supervision or control of

the head of the creditor agency or the

debt collection center.

[FR Doc. 98–9972 Filed 4–15–98; 8:45 am]

BILLING CODE 6325–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 98–NM–87–AD]

RIN 2120–AA64

Airworthiness Directives; British

Aerospace Model BAe 146–200A

Series Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Notice of proposed rulemaking

(NPRM).

SUMMARY: This document proposes the

adoption of a new airworthiness

directive (AD) that is applicable to

certain British Aerospace Model BAe

146–200A series airplanes. This

proposal would require a one-time

inspection of the gust damper of the

elevator control system to determine if

the gust damper is properly charged,

and of the horizontal stabilizer to detect

cracking of elevator hinge rib 1; and

corrective action, if necessary. This

proposal is prompted by the issuance of

mandatory continuing airworthiness

information by a foreign civil

airworthiness authority. The actions

specified by the proposed AD are

intended to detect and correct cracking