This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

49417

Vol. 62, No. 183

Monday, September 22, 1997

FEDERAL RETIREMENT THRIFT

INVESTMENT BOARD

5 CFR Part 1639

Claims Collection

AGENCY: Federal Retirement Thrift

Investment Board.

ACTION: Interim rule with request for

comments.

SUMMARY: The Federal Retirement Thrift

Investment Board (Board) is issuing

interim regulations to govern the

collection of debts owed to the Board

and to other Federal agencies. The

regulations of this part are issued under

section 3 of the Federal Claims

Collection Act of 1966, Public Law 89–

508, 80 Stat. 308; the Debt Collection

Act of 1982, Public Law 97–365, 96 Stat.

1749; the Debt Collection Improvement

Act of 1996, Public Law 104–134, 110

Stat. 1321; 31 U.S.C. 3720A; and in

conformity with the Federal guidelines

for agency debt collection issued by the

Department of Justice and the General

Accounting Office (4 CFR chapter II)

and the guidelines of the Office of

Personnel Management (5 CFR part 550,

subpart K) on offsets against Federal

employee salaries.

DATES: These regulations are effective

on September 22, 1997. Written

comments must be received on or before

October 1, 1997.

ADDRESSES: Send comments to: John J.

O’Meara, General Counsel, Federal

Retirement Thrift Investment Board,

1250 H Street, NW, Washington, DC

20005; telefax number (202) 942–1676.

FOR FURTHER INFORMATION CONTACT: John

J. O’Meara, telephone number (202)

942–1660.

SUPPLEMENTARY INFORMATION: These

regulations describe a number of actions

which the Board may take to collect

debts owed to the Board. These actions

are offsets against monies owed to the

debtor by the Board or Federal agencies,

offsets against tax refunds owed to the

debtor by the Internal Revenue Service,

referral to a private collection

contractor, and referral to the

Department of Justice for the initiation

of an action in a judicial proceeding

against the debtor. These regulations

also provide that the Board will enter

into a cross-servicing agreement with

the Department of the Treasury

(Treasury) which is authorized under

the Debt Collection Improvement Act of

1996, Public Law 104–134, 110 Stat.

1321, to take all of the above-listed

actions to collect the debt for the Board.

In addition, the Board may take action

on behalf of a Federal agency to offset

the debt owed to a creditor agency

against the salary of a Board employee

or against amounts the Board owes that

are not included in net assets available

for Thrift Savings Plan benefits. The

Board anticipates that some of these

procedures may change when revised

Federal Claims Collection Standards are

issued by the Department of Justice and

Treasury later this year.

The Board does not receive an annual

appropriation of funds from Congress.

Instead, all funds under the control of

the Board come from the Thrift Savings

Fund, which it administers. For this

reason, all debts that are collected under

these regulations on behalf of the Board

will be deposited in the Thrift Savings

Fund rather than the General Fund of

the Treasury.

Regulatory Flexibility Act

I certify that these regulations will not

have a significant economic impact on

a substantial number of small entities.

Paperwork Reduction Act

I certify that these regulations do not

require additional reporting under the

criteria of the Paperwork Reduction Act

of 1980.

Waiver of Notice of Proposed

Rulemaking and 30-Day Delay of

Effective Date

Under 5 U.S.C. 553(b)(3)(B) and (d)(3),

I find that good cause exists for waiving

the general notice of proposed

rulemaking and for making these

regulations effective in less than 30

days. The Board wishes to have these

procedures in effect at the earliest

possible date in order to initiate debt

collection action against persons who

owe money to the Board.

Unfunded Mandates Reform Act of

1995

Pursuant to the Unfunded Mandates

Reform Act of 1995, section 201, Public

Law 104–4, 109 Stat. 48, 64, the effect

of these regulations on State, local, and

tribal governments and the private

sector have been assessed. This

regulation will not compel the

expenditure in any one year of $100

million or more by any State, local, and

tribal governments in the aggregate or by

the private sector. Therefore, a

statement under section 202, 109 Stat.

48, 64–65, is not required.

Submission to Congress and the

General Accounting Office

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

submitted a report containing this rule

and other required information to the

U.S. Senate, the U.S. House of

Representatives, and the Comptroller

General of the United States before

publication of this rule in today’s

Federal Register. This interim rule is

not a major rule as defined at 5 U.S.C.

804(2).

List of Subjects in 5 CFR Part 1639

Administrative practice and

procedure, Claims, Government

employees, Income taxes, Wages.

Federal Retirement Thrift Investment Board.

Roger W. Mehle,

Executive Director.

Title 5 of the Code of Federal

Regulations is amended by adding a

new Part 1639 to Chapter VI to read as

follows:

PART 1639—CLAIMS COLLECTION

Subpart A—Administrative Collection,

Compromise, Termination, and

Referral of Claims

Sec.

1639.1 Authority.

1639.2 Application of other regulations;

scope.

1639.3 Application to other statutes.

1639.4 Definitions.

1639.5 Use of credit reporting agencies.

1639.6 Contracting for collection services.

1639.7 Initial notice to debtor.

1639.8 Interest, penalty, and administrative

costs.

1639.9 Charges pending waiver or review.

1639.10 Referrals to the Department of

Justice.

1639.11 Cross-servicing agreement with the

Department of the Treasury.
49418 Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / Rules and Regulations

1639.12 Deposit of funds collected.

1639.13 Antialienation of funds in Thrift

Savings Plan participant accounts.

Subpart B—Salary Offset

1639.20 Applicability and scope.

1639.21 Waiver requests.

1639.22 Notice requirements before offset.

1639.23 Hearing.

1639.24 Certification.

1639.25 Voluntary repayment agreements

as alternative to salary offset.

1639.26 Special review.

1639.27 Procedures for salary offset.

1639.28 Coordinating salary offset with

other agencies.

1639.29 Refunds.

1639.30 Non-waiver of rights by payments.

Subpart C—Tax Refund Offset

1639.40 Applicability and scope.

1639.41 Procedures for tax refund offset.

1639.42 Notice requirements before tax

refund offset.

Subpart D—Administrative Offset

1639.50 Applicability and scope.

1639.51 Notice procedures.

1639.52 Board review.

1639.53 Written agreement for repayment.

1639.54 Requests for offset to Federal

agencies.

1639.55 Requests for offset from Federal

agencies.

1639.56 Expedited procedure.

Authority: 5 U.S.C. 8474; 31 U.S.C. 3711,

3716, 3720A.

Subpart A—Administrative Collection,

Compromise, Termination, and

Referral of Claims

§ 1639.1 Authority.

The regulations of this part are issued

under 5 U.S.C. 8474 and 31 U.S.C. 3711,

3716, and 3720A, and in conformity

with the Federal Claims Collection

Standards, 4 CFR chapter II, prescribing

standards for administrative collection,

compromise, termination of agency

collection action, and referral to the

Department of Justice for litigation of

civil claims by the Government for

money or property, 4 CFR chapter II.

§ 1639.2 Application of other regulations;

scope.

All provisions of the Federal Claims

Collection Standards, 4 CFR chapter II,

apply to the regulations of this part.

This part supplements 4 CFR chapter II

by the prescription of procedures and

directives necessary and appropriate for

operations of the Federal Retirement

Thrift Investment Board. The Federal

Claims Collection Standards and this

part do not apply to any claim as to

which there is an indication of fraud or

misrepresentation, as described in 4

CFR 101.3, unless returned by the

Department of Justice to the Board for

handling.

§ 1639.3 Application to other statutes.

(a) The Executive Director may

exercise his or her compromise

authority for those debts not exceeding

$100,000, excluding interest, in

conformity with the Federal Claims

Collection Act of 1966, the Federal

Claims Collection Standards issued

thereunder, and this part, except where

standards are established by other

statutes or authorized regulations issued

pursuant to them.

(b) The authority of the Executive

Director of the Board to remit or

mitigate a fine, penalty, or forfeiture

will be exercised in accordance with the

standards for remission or mitigation

established in the governing statute. In

the absence of such standards, the

Federal Claims Collection Standards

will be followed to the extent

applicable.

§ 1639.4 Definitions.

As used in this part:

Administrative offset, as defined in 31

U.S.C. 3701(a)(1), means withholding

funds payable by the United States

(including funds payable to the United

States on behalf of a State government)

to, or held by the United States for, a

person to satisfy a debt owed to the

United States.

Agency means executive departments

and agencies, the United States Postal

Service, the Postal Rate Commission,

the United States Senate, the United

States House of Representatives, and

any court, court administrative office, or

instrumentality in the judicial or

legislative branches of the Government,

and Government corporations.

Board means the Federal Retirement

Thrift Investment Board, which

administers the Thrift Savings Plan and

the Thrift Savings Fund.

Certification means a written debt

claim form received from a creditor

agency which requests the paying

agency to offset the salary of an

employee.

Creditor agency means an agency of

the Federal Government to which the

debt is owed.

Debt means money owed by an

individual to the United States

including a debt owed to the Thrift

Savings Fund or to a Federal agency, but

does not include a Thrift Savings Plan

loan.

Delinquent debt means a debt that has

not been paid within the time limit

prescribed by the Board.

Disposable pay means that part of

current basic pay, special pay, incentive

pay, retirement 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,

excluding any garnishment under 5 CFR

parts 581, 582. The Board will include

the following deductions in determining

disposable pay subject to salary offset:

(1) Federal Social Security and

Medicare taxes;

(2) Federal, state, or local income

taxes, but no more than would be the

case if the employee claimed all

dependents to which he or she is

entitled and any additional amounts for

which the employee presents evidence

of a tax obligation supporting the

additional withholding;

(3) Health insurance premiums;

(4) Normal retirement contributions as

explained in 5 CFR 581.105(e);

(5) Normal life insurance premiums,

excluding optional life insurance

premiums; and

(6) Levies pursuant to the Internal

Revenue Code, as defined in 5 U.S.C.

5514(d).

Employee means a current employee

of an agency, including a current

member of the Armed Forces or Reserve

of the Armed Forces of the United

States.

Executive Director means the

Executive Director of the Federal

Retirement Thrift Investment Board, or

his or her designee.

Federal Claims Collection Standards

means the standards published at 4 CFR

chapter II.

Hearing official means an individual

responsible for conducting any hearing

with respect to the existence or amount

of a debt claimed, and rendering a

decision on the basis of the hearing.

Net Assets Available for Thrift

Savings Plan Benefits means all funds

owed to Thrift Savings Plan participants

and beneficiaries.

Notice of intent to offset or notice of

intent means a written notice from a

creditor agency to an employee which

alleges that the employee owes a debt to

the creditor agency and which apprises

the employee of certain administrative

rights.

Notice of salary offset means a written

notice from the paying agency to an

employee informing the employee that

it has received a certification from a

creditor agency and intends to begin

salary offset.

Participant means any person with an

account in the Thrift Savings Plan, or

who would have an account but for an

employing agency error.

Paying agency means the agency of

the Federal Government which employs

the individual who owes a debt to the

United States. In some cases, the

Federal Retirement Thrift Investment

Board may be both the creditor agency

and the paying agency.
Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / Rules and Regulations 49419

Payroll office means the payroll office

in the paying agency which is primarily

responsible for the payroll records and

the coordination of pay matters with the

appropriate personnel office with

respect to an employee.

Person includes a natural person or

persons, profit or non-profit

corporation, partnership, association,

trust, estate, consortium, State and local

governments, or other entity that is

capable of owing a debt to the United

States Government; however, agencies

of the United States, are excluded.

Private collection contractor means a

private debt collector under contract

with an agency to collect a non-tax debt

owed to the United States.

Salary offset means an offset to collect

a debt under 5 U.S.C. 5514 by

deduction(s) at one or more officially

established pay intervals from the

current pay account of an employee,

without his or her consent.

Tax refund offset means the reduction

of a tax refund by the amount of a pastdue legally enforceable debt owed to the

Board or a Federal agency.

Thrift Savings Fund means the Fund

described in 5 U.S.C. 8437.

Thrift Savings Plan means the Federal

Retirement Thrift Savings Plan

established by the Federal Employees’

Retirement System Act of 1986, codified

in pertinent part at 5 U.S.C. 8431 et seq..

Waiver means the cancellation,

remission, forgiveness, or non-recovery

of a debt allegedly owed by a person to

the Board or a Federal agency as

permitted or required by 5 U.S.C. 5584

or 8346(b), 10 U.S.C. 2774, 32 U.S.C.

716, or any other law.

§ 1639.5 Use of credit reporting agencies.

(a) The Board may report delinquent

debts to appropriate credit reporting

agencies by providing the following

information:

(1) A statement that the debt is valid

and is overdue;

(2) The name, address, taxpayer

identification number, and any other

information necessary to establish the

identity of the debtor;

(3) The amount, status, and history of

the debt; and

(4) The program or pertinent activity

under which the debt arose.

(b) Before disclosing debt information

to a credit reporting agency, the Board

will:

(1) Take reasonable action to locate

the debtor if a current address is not

available; and

(2) If a current address is available,

notify the debtor by certified mail,

return receipt requested:

(i) That a designated Board official

has reviewed the claim and has

determined that the claim is valid and

over-due;

(ii) That within 60 days the Board

intends to disclose to a credit reporting

agency the information authorized for

disclosure by this section; and

(iii) That the debtor can request an

explanation of the claim, can dispute

the information in the Board’s records

concerning the claim, and can file for an

administrative review, waiver, or

reconsideration of the claim, where

applicable.

(c) At the time debt information is

submitted to a credit reporting agency,

the Board will provide a written

statement to the reporting agency that

all required actions have been taken. In

addition, the Board will, thereafter,

ensure that the credit reporting agency

is promptly informed of any substantive

change in the conditions or amount of

the debt, and promptly verify or correct

information relevant to the claim.

(d) If a debtor disputes the validity of

the debt, the credit reporting agency

will refer the matter to the appropriate

Board official. The credit reporting

agency will exclude the debt from its

reports until the Board certifies in

writing that the debt is valid.

§ 1639.6 Contracting for collection

services.

The Board will use the services of a

private collection contractor where it

determines that such use is in the best

interest of the Board. When the Board

determines that there is a need to

contract for collection services, it will—

(a) Retain sole authority to:

(1) Resolve any dispute by the debtor

regarding the validity of the debt;

(2) Compromise the debt;

(3) Suspend or terminate collection

action;

(4) Refer the debt to the Department

of Justice for litigation; and

(5) Take any other action under this

part which does not result in full

collection of the debt;

(b) Require the contractor to comply

with the Privacy Act of 1974, as

amended, to the extent specified in 5

U.S.C. 552a(m), with applicable Federal

and State laws pertaining to debt

collection practices (e.g., the Fair Debt

Collection Practices Act (15 U.S.C. 1692

et seq.)), and with applicable regulations

of the Board;

(c) Require the contractor to account

accurately and fully for all amounts

collected; and

(d) Require the contractor to provide

to the Board, upon request, all data and

reports contained in its files relating to

its collection actions on a debt.

§ 1639.7 Initial notice to debtor.

(a) When the Executive Director

determines that a debt is owed the

Board, he will send a written notice to

the debtor. The notice will inform the

debtor of the following:

(1) The amount, nature, and basis of

the debt;

(2) That payment is due immediately

after receipt of the notice;

(3) That the debt is considered

delinquent if it is not paid within 30

days of the date the notice is mailed or

hand-delivered;

(4) That interest charges (except for

State and local governments and Indian

tribes), penalty charges, and admini

strative costs may be assessed against a

delinquent debt;

(5) Any rights available to the debtor

to dispute the validity of the debt or to

have recovery of the debt waived (citing

the available review or waiver authority,

the conditions for review or waiver, and

the effects of the review or waiver

request on the collection of the debt);

and

(6) The address, telephone number,

and name of the Board official available

to discuss the debt.

(b) The Board will respond promptly

to communications from the debtor.

(c) Subsequent demand letters also

will notify the debtor of any interest,

penalty, or administrative costs which

have been assessed and will advise the

debtor that the debt may be referred to

a credit reporting agency (see § 1639.5),

a collection agency (see § 1639.6), the

Department of Justice (see § 1639.10), or

the Department of the Treasury (see

§ 1639.11), if it is not paid.

§ 1639.8 Interest, penalty, and

administrative costs.

(a) Interest. The Board will assess

interest on all delinquent debts unless

prohibited by statute, regulation, or

contract.

(1) Interest begins to accrue on all

debts from the date the initial notice is

mailed or hand-delivered to the debtor.

The Board will not recover interest if

the debt is paid within 30 days of the

date of the initial notice. The Board will

assess an annual rate of interest that is

equal to the rate of the current value of

funds to the United States Treasury (i.e.,

the Treasury tax and loan account rate)

as prescribed and published by the

Secretary of the Treasury in the Federal

Register and the Treasury Fiscal

Requirements Manual Bulletins, unless

a different rate is necessary to protect

the interests of the Board. The Board

will notify the debtor of the basis for its

finding when a different rate is

necessary to protect the Board’s

interests.
49420 Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / Rules and Regulations

(2) The Executive Director may extend

the 30-day period for payment where he

determines that such action is in the

best interest of the Board. A decision to

extend or not to extend the payment

period is final and is not subject to

further review.

(b) Penalty. The Board will assess a

penalty charge, not to exceed six

percent a year, on any portion of a debt

that is not paid within 90 days of the

initial notice.

(c) Administrative costs. The Board

will assess charges to cover

administrative costs incurred as the

result of the debtor’s failure to pay a

debt within 30 days of the date of the

initial notice. Administrative costs

include the additional costs incurred in

processing and handling the debt

because it became delinquent, such as

costs incurred in obtaining a credit

report, or in using a private collection

contractor, or service fees charged by a

Federal agency for collection activities

undertaken on behalf of the Board.

(d) Allocation of payments. A partial

payment by a debtor will be applied

first to outstanding administrative costs,

second to penalty assessments, third to

accrued interest, and then to the

outstanding debt principal.

(e) Waiver. (1) The Executive Director

may (without regard to the amount of

the debt) waive collection of all or part

of accrued interest, penalty, or

administrative costs, if he determines

that collection of these charges would

be against equity and good conscience

or not in the best interest of the Board.

(2) A decision to waive interest,

penalty charges, or administrative costs

may be made at any time before a debt

is paid. However, where these charges

have been collected before the waiver

decision, they will not be refunded. The

Executive Director’s decision to waive

or not waive collection of these charges

is final and is not subject to further

review.

§ 1639.9 Charges pending waiver or

review.

Interest, penalty charges, and

administrative costs will continue to

accrue on a debt during administrative

appeal, either formal or informal, and

during waiver consideration by the

Board, unless specifically prohibited by

a statute or a regulation.

§ 1639.10 Referrals to the Department of

Justice.

The Executive Director will refer to

the Department of Justice for litigation

all claims on which aggressive

collection actions have been taken but

which could not be collected,

compromised, suspended, or

terminated. Referrals will be made as

early as possible, consistent with

aggressive Board collection action, and

within the period for bringing a timely

suit against the debtor.

§ 1639.11 Cross-servicing agreement with

the Department of the Treasury.

The Board will enter into a crossservicing agreement with the

Department of the Treasury which will

authorize Treasury to take all of the debt

collection actions described in this part.

These debt collection services will be

provided to the Board in accordance

with 31 U.S.C. 3701 et seq.

§ 1639.12 Deposit of funds collected.

All funds owed to the Board and

collected under this part will be

deposited in the Thrift Savings Fund.

Funds owed to other agencies and

collected under this part will be

credited to the account designated by

the creditor agency for the receipt of the

funds.

§ 1639.13 Antialienation of funds in Thrift

Savings Plan participant accounts.

In accordance with 5 U.S.C. 8437, net

assets available for Thrift Savings Plan

benefits will not be used to satisfy a

debt owed by a participant to an agency

under the regulations of this part or

under the debt collection regulations of

any agency.

Subpart B—Salary Offset

§ 1639.20 Applicability and scope.

(a) The regulations in this subpart

provide Board procedures for the

collection by salary offset of a Federal

employee’s pay to satisfy certain debts

owed to the Board or to Federal

agencies.

(b) The regulations in this subpart

apply to collections by the Executive

Director, from:

(1) Federal employees who owe debts

to the Board; and

(2) Employees of the Board who owe

debts to Federal agencies.

(c) The regulations in this subpart do

not apply to debts arising under the

Internal Revenue Code of 1986, as

amended (title 26, United States Code);

the Social Security Act (42 U.S.C. 301

et seq.); 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).

(d) Nothing in the regulations in this

subpart precludes the compromise,

suspension, or termination of collection

actions under the standards

implementing the Federal Claims

Collection Act (31 U.S.C. 3711 et seq.,

4 CFR Parts 101–105, 38 CFR 1.900—

1.994).

(e) A levy pursuant to the Internal

Revenue Code takes precedence over a

salary offset under this subpart, as

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

(f) This subpart does not apply to any

adjustment to pay arising out of an

employee’s election of coverage or a

change in coverage under a Federal

benefits program requiring periodic

deductions from pay, if the amount to

be recovered was accumulated over four

pay periods or less.

§ 1639.21 Waiver requests.

The regulations in this subpart do not

preclude an employee from requesting

waiver of an overpayment under 5

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

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

provisions pertaining to the particular

debts being collected.

§ 1639.22 Notice requirements before

offset.

Deductions under the authority of 5

U.S.C. 5514 may be made if, a minimum

of 30 calendar days before salary offset

is initiated, the Board provides the

employee with written notice that he or

she owes a debt to the Board. This

notice of intent to offset an employee’s

salary will be hand-delivered or sent by

certified mail to the most current

address that is available to the Board.

The notice provided under this section

will state:

(a) That the Board has reviewed the

records relating to the claim and has

determined that a debt is owed, the

amount of the debt, and the facts giving

rise to the debt;

(b) The Board’s intention to collect

the debt by deducting money from the

employee’s current disposable pay

account until the debt, and all

accumulated interest, penalties, and

administrative costs, is paid in full;

(c) The amount, frequency,

approximate beginning date, and

duration of the intended deductions;

(d) An explanation of the Board’s

policy concerning interest, penalties,

and administrative costs, including a

statement that such assessments must be

made unless excused in accordance

with the Federal Claims Collection

Standards, 4 CFR chapter II;

(e) The employee’s right to inspect

and copy all records pertaining to the

debt claimed or to receive copies of

those records if personal inspection is

impractical;

(f) The right to a hearing conducted by

an administrative law judge or other

impartial hearing official (i.e., a hearing

official not under the supervision or
Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / Rules and Regulations 49421

control of the Executive Director), with

respect to the existence and amount of

the debt claimed or the repayment

schedule (i.e., the percentage of

disposable pay to be deducted each pay

period), so long as a request is filed by

the employee as prescribed in § 1639.23;

(g) If not previously provided, the

opportunity (under terms agreeable to

the Board) to establish a schedule for

the voluntary repayment of the debt or

to enter into a written agreement to

establish a schedule for repayment of

the debt in lieu of offset. The agreement

must be in writing and signed by both

the employee and the Executive

Director;

(h) The name, address, and telephone

number of an officer or employee of the

Board who may be contacted concerning

procedures for requesting a hearing;

(i) The method and time period for

requesting a hearing;

(j) That the timely filing of a request

for a hearing on or before the 15th

calendar day following receipt of the

notice of intent will stay the

commencement of collection

proceedings;

(k) The name and address of the

officer or employee of the Board to

whom the request for a hearing should

be sent;

(l) That the Board will initiate

certification procedures to implement a

salary offset, as appropriate, (which may

not exceed 15 percent of the employee’s

disposable pay) not less than 30 days

from the date the employee receives the

notice of debt, unless the employee files

a timely request for a hearing;

(m) That a final decision on the

hearing (if one is requested) will be

issued at the earliest practical date, but

not later than 60 days after the filing of

the petition requesting the hearing,

unless the employee requests and the

hearing official grants a delay in the

proceedings;

(n) That any knowingly false or

frivolous statements, representations, or

evidence may subject the employee to:

(1) Disciplinary procedures

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

5 CFR part 752, or any other applicable

statute or regulations;

(2) Penalties under the False Claims

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

applicable statutory authority; and

(3) Criminal penalties under 18 U.S.C.

286, 287, 1001, and 102, or any other

applicable statutory authority;

(o) Any other rights and remedies

available to the employee under statutes

or regulations governing the program for

which the collection is being made;

(p) That unless there are applicable

contractual or statutory provisions to

the contrary, amounts paid on or

deducted for the debt which are later

waived or found not owed will be

promptly refunded to the employee; and

(q) That proceedings with respect to

the debt are governed by 5 U.S.C. 5514.

§ 1639.23 Hearing.

(a) Request for hearing. Except as

provided in paragraph (b) of this

section, an employee who desires a

hearing concerning the existence or

amount of the debt or the proposed

offset schedule must send such a

request to the Board office designated in

the notice of intent. See § 1639.22(k).

(1) The request for hearing must be

signed by the employee and fully

identify and explain with reasonable

specificity all the facts, evidence, and

witnesses, if any, that support his or her

position.

(2) The request for hearing must be

received by the designated office on or

before the 15th calendar day following

the employee’s receipt of the notice.

Timely filing will stay the

commencement of collection

procedures.

(3) The employee must also specify

whether an oral or written hearing is

requested. If an oral hearing is desired,

the request should explain why the

matter cannot be resolved by review of

the documentary evidence alone.

(b) Failure to timely submit. (1) If the

employee files a request for a hearing

after the expiration of the 15th calendar

day period provided for in paragraph (a)

of this section, the Board will accept the

request if the employee can show that

the delay was the result of

circumstances beyond his or her control

or because of a failure to receive notice

of the filing deadline (unless the

employee had actual notice of the filing

deadline).

(2) An employee waives the right to

a hearing, and will have his or her

disposable pay offset in accordance with

the Board’s offset schedule, if the

employee:

(i) Fails to file a request for a hearing

and the failure is not excused; or

(ii) Fails to appear at an oral hearing

of which he or she was notified and the

hearing official does not determine that

failure to appear was due to

circumstances beyond the employee’s

control.

(c) Representation at the hearing. The

creditor agency may be represented by

legal counsel. The employee may

represent himself or herself or may be

represented by an individual of his or

her choice and at his or her own

expense.

(d) Review of Board records related to

the debt. (1) In accordance with

§ 1639.22(e), an employee who intends

to inspect or copy Board records related

to the debt must send a letter to the

official designated in the notice of intent

to offset stating his or her intention. The

letter must be received within 15

calendar days after the employee’s

receipt of the notice.

(2) In response to a timely request

submitted by the debtor, the designated

official will notify the employee of the

location and time when the employee

may inspect and copy records related to

the debt.

(3) If personal inspection is

impractical, arrangements will be made

to send copies of those records to the

employee.

(e) Hearing official. The Board may

request an administrative law judge to

conduct the hearing or the Board may

obtain a hearing official who is not

under the supervision or control of the

Executive Director.

(f) Procedure. (1) General. After the

employee requests a hearing, the

hearing official will notify the employee

of the form of the hearing to be

provided. If the hearing will be oral, the

notice will set forth the date, time, and

location of the hearing. If the hearing

will be written, the employee will be

notified that he or she should submit

arguments in writing to the hearing

official by a specified date after which

the record will be closed. This date will

give the employee reasonable time to

submit documentation.

(2) Oral hearing. An employee who

requests an oral hearing will be

provided an oral hearing, if the hearing

official determines that the matter

cannot be resolved by review of

documentary evidence alone (e.g., when

an issue of credibility is involved). The

hearing is not an adversarial

adjudication and need not take the form

of an evidentiary hearing. Witnesses

who testify in oral hearings will do so

under oath or affirmation. Oral hearings

may take the form of, but are not limited

to:

(i) Informal conferences with the

hearing official, in which the employee

and agency representative will be given

full opportunity to present evidence,

witnesses, and argument;

(ii) Informal meetings with an

interview of the employee; or

(iii) Formal written submissions, with

an opportunity for oral presentation.

(3) Record determination. If the

hearing official determines that an oral

hearing is not necessary, he or she will

make the determination based upon a

review of the available written record.

(4) Record. The hearing official must

maintain a summary record of any

hearing provided by this subpart.
49422 Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / Rules and Regulations

(g) Date of decision. The hearing

official will issue a written decision,

based upon documentary evidence and

information developed at the hearing, as

soon as practical after the hearing, but

not later than 60 days after the date on

which the petition was received by the

creditor agency, unless the employee

requests a delay in the proceedings. In

that case, the 60 day decision period

will be extended by the number of days

by which the hearing was postponed.

(h) Content of decision. The written

decision will include:

(1) A statement of the facts presented

to support the origin, nature, and

amount of the debt;

(2) The hearing official’s findings,

analysis, and conclusions; and

(3) The terms of any repayment

schedules, if applicable.

(i) Failure to appear. (1) In the

absence of good cause shown (e.g.,

excused illness), an employee who fails

to appear at a hearing will be deemed,

for the purpose of this subpart, to admit

the existence and amount of the debt as

described in the notice of intent.

(2) If the representative of the creditor

agency fails to appear, the hearing

official will proceed with the hearing as

scheduled, and make his or her

determination based upon the oral

testimony presented by the

representative(s) of the employee and

the documentary documentation

submitted by both parties.

(3) At the request of both parties, the

hearing official will schedule a new

hearing date. Both parties will be given

reasonable notice of the time and place

of this new hearing.

§ 1639.24 Certification.

(a) The Board will provide a

certification to the paying agency in all

cases in which:

(1) The hearing official determines

that a debt exists;

(2) The employee admits the existence

and amount of the debt by failing to

request a hearing; or

(3) The employee admits the existence

of the debt by failing to appear at a

hearing.

(b) The certification must be in

writing and must include:

(1) A statement that the employee

owes the debt;

(2) The amount and basis of the debt;

(3) The date the Board’s right to

collect the debt first accrued;

(4) A statement that the Board’s

regulations have been approved by the

Office of Personnel Management under

5 CFR part 550, subpart K;

(5) The amount and date of the

collection, if only a one-time offset is

required;

(6) If the collection is to be made in

installments, the number of installments

to be collected, the amount of each

installment, and the date of the first

installment, if a date other than the next

officially established pay period is

required; and

(7) Information regarding the

completion of procedures required by 5

U.S.C. 5514, including the dates of

notices and hearings provided to the

employee, or, if applicable, the

employee’s signed consent to salary

offset or a signed statement

acknowledging receipt of required

procedures.

§ 1639.25 Voluntary repayment

agreements as alternative to salary offset.

(a) In response to a notice of intent to

offset against an employee’s salary to

recover a debt owed to the Board, an

employee may propose to the Board that

he or she be allowed to repay the debt

through direct payments as an

alternative to salary offset. Any

employee who wishes to repay a debt

without salary offset must submit in

writing a proposed agreement to repay

the debt. The proposal must admit the

existence of the debt and set forth a

proposed repayment schedule. The

employee’s proposal must be received

by the official designated in the notice

of intent within 15 calendar days after

the employee received the notice.

(b) In response to a timely proposal by

the debtor, the Executive Director will

notify the employee whether the

employee’s proposed written agreement

for repayment is acceptable. It is within

the Executive Director’s discretion to

accept a repayment agreement instead of

proceeding by salary offset.

(c) If the Executive Director decides

that the proposed repayment agreement

is unacceptable, the employee will have

15 days from the date he or she received

notice of the decision to file a petition

for a hearing.

(d) If the Executive Director decides

that the proposed repayment agreement

is acceptable, the alternative arrange

ment must be in writing and signed by

both the employee and the Executive

Director.

§ 1639.26 Special review.

(a) An employee subject to salary

offset or a voluntary repayment

agreement in connection with a debt

owed to the Board may, at any time,

request that the Board conduct a special

review of the amount of the salary offset

or voluntary payment, based on

materially changed circumstances, such

as catastrophic illness, divorce, death,

or disability.

(b) To assist the Board in determining

whether an offset would prevent the

employee from meeting essential

subsistence expenses (costs incurred for

food, housing, clothing, transportation,

and medical care), the employee will

submit a detailed statement and

supporting documents for the employee,

his or her spouse, and dependents,

indicating:

(1) Income from all sources;

(2) Assets;

(3) Liabilities;

(4) Number of dependents;

(5) Expenses for food, housing,

clothing, and transportation;

(6) Medical expenses; and

(7) Exceptional expenses, if any.

(c) If the employee requests a special

review under this section, the employee

must file an alternative proposed salary

offset or payment schedule and a

statement, with supporting documents,

showing why the current salary offset or

payments result in an extreme financial

hardship to the employee.

(d) The Executive Director will

evaluate the statement and supporting

documents, and determine whether the

original offset or repayment schedule

imposes an extreme financial hardship

on the employee. The Executive

Director will notify the employee in

writing of his determination, including,

if appropriate, a revised offset or

payment schedule.

(e) If the special review results in a

revised offset or repayment schedule,

the Board will provide a new

certification to the paying agency.

§ 1639.27 Procedures for salary offset.

(a) The Board will coordinate salary

deductions under this subpart.

(b) The Board’s payroll office will

determine the amount of an employee’s

disposable pay and will implement the

salary offset.

(c) Deductions will begin within three

official pay periods following receipt by

the Board’s payroll office of certification

for the creditor agency.

(d) Types of collection—

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

the debt is equal to or less than 15

percent of disposable pay, the debt

generally will be collected through one

lump-sum offset.

(2) Installment deductions.

Installment deductions will be made

over a period not greater than the

anticipated period of employment. The

size and frequency of installment

deductions will bear a reasonable

relation to the size of the debt and the

employee’s ability to pay. However, the

amount deducted from any period will

not exceed 15 percent of the disposable

pay from which the deduction is made
Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / Rules and Regulations 49423

unless the employee has agreed in

writing to the deduction of a greater

amount.

(3) Deductions from final check. A

deduction exceeding the 15 percent

disposable pay limitation may be made

from any final salary payment under 31

U.S.C. 3716 and the Federal Claims

Collection Standards, 4 CFR chapter II,

in order to liquidate the debt, whether

the employee is being separated

voluntarily or involuntarily.

(4) Deductions from other sources. If

an employee subject to salary offset is

separated from the Board, and the

balance of the debt cannot be liquidated

by offset of the final salary check, the

Board may offset any later payments of

any kind against the balance of the debt,

as allowed by 31 U.S.C. 3716 and the

Federal Claims Collection Standards, 4

CFR chapter II.

(e) Multiple debts. In instances where

two or more creditor agencies are

seeking salary offsets, or where two or

more debts are owed to a single creditor

agency, the Board’s payroll office may,

at its discretion, determine whether one

or more debts should be offset

simultaneously within the 15 percent

limitation.

(f) Precedence of debts owed to the

Board. For Board employees, debts

owed to the Board generally take

precedence over debts owed to other

agencies. In the event that a debt to the

Board is certified while an employee is

subject to a salary offset to repay

another agency, the Board may decide

whether to have the first debt repaid in

full before collecting the claim or

whether changes should be made in the

salary deduction being sent to the other

agency. If debts owed the Board can be

collected in one pay period, the Board

payroll office may suspend the salary

offset to the other agency for that pay

period in order to liquidate the debt to

the Board. When an employee owes two

or more debts, the best interests of the

Board will be the primary con sideration

in the payroll office’s determination of

the order in which the debts should be

collected.

§ 1639.28 Coordinating salary offset with

other agencies.

(a) Responsibility of the Board as the

creditor agency. (1) The Board will

coordinate debt collections with other

agencies and will, as appropriate:

(i) Arrange for a hearing or special

review upon proper petitioning by the

debtor; and

(ii) Prescribe, upon consultation with

the General Counsel, the additional

practices and procedures that may be

necessary to carry out the intent of this

subpart.

(2) The Board will ensure:

(i) That each notice of intent to offset

is consistent with the requirements of

§ 1639.22;

(ii) That each certification of debt that

is sent to a paying agency is consistent

with the requirements of § 1639.24; and

(iii) That hearings are properly

scheduled.

(3) Requesting recovery from current

paying agency. Upon completion of the

procedures established in these

regulations and pursuant to 5 U.S.C.

5514, the Board will provide the paying

agency with a certification as provided

in § 1639.24.

(4) If the employee is in the process

of separating and has not received a

final salary check or other final

payment(s) from the paying agency, the

Board must submit a debt claim to the

paying agency for collection under 31

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

certify the total amount of its collection

on the debt and notify the employee and

the Board. If the paying agency’s

collection does not fully satisfy the debt,

and the paying agency is aware that the

debtor is entitled to payments from the

Civil Service Retirement and Disability

Fund or other similar payments that

may be due the debtor employee from

other Federal Government sources, the

paying agency will provide written

notice of the outstanding debt to the

agency responsible for making the other

payments to the debtor employee. The

written notice will state that the

employee owes a debt, the amount of

the debt, and that the provisions of this

section have been fully complied with.

The Board must submit a properly

certified claim to the agency responsible

for making the payments before the

collection can be made.

(5) Separated employee. If the

employee is already separated and all

payments due from his or her former

paying agency have been paid, the

Board may request, unless otherwise

prohibited, that money due and payable

to the employee from the Civil Service

Retirement and Disability Fund (5 CFR

part 831, subpart R, or 5 CFR part 845,

subpart D) or other similar funds, be

administratively offset to collect the

debt.

(6) Employee transfer. When an

employee transfers from one paying

agency to another paying agency, the

Board will not repeat the due process

procedures described in 5 U.S.C. 5514

and this subpart to resume the

collection. The Board will submit a

properly certified claim to the new

paying agency and will subsequently

review the debt to make sure the

collection is resumed by the new paying

agency.

(b) Responsibility of the Board as the

paying agency. (1) Complete claim.

When the Board receives a certified

claim from a creditor agency,

deductions should be scheduled to

begin within three officially established

pay intervals. Before deductions can

begin, the employee will receive a

written notice from the Board including:

(i) A statement that the Board has

received a certified debt claim from the

creditor agency;

(ii) The amount of the debt claim;

(iii) The date salary offset deductions

will begin, and

(iv) The amount of such deductions.

(2) Incomplete claim. When the Board

receives an incomplete certification of

debt from a creditor agency, the Board

will return the debt claim with a notice

that procedures under 5 U.S.C. 5514 and

5 CFR part 550, subpart K, must be

followed and a properly certified debt

claim received before action will be

taken to collect from the employee’s

current pay account.

(3) Review. The Board is not

authorized to review the merits of the

creditor agency’s determination with

respect to the amount or validity of the

debt certified by the creditor agency.

(4) Employees who transfer from one

paying agency to another. If, after the

creditor agency has submitted the debt

claim to the Board, the employee

transfers from the Board to a different

paying agency before the debt is

collected in full, the Board will certify

the total amount collected on the debt

and notify the employee and the

creditor agency in writing. The

notification to the creditor agency will

include information on the employee’s

transfer.

§ 1639.29 Refunds.

(a) If the Board is the creditor agency,

it will promptly refund any amount

deducted under the authority of 5 U.S.C.

5514, when:

(1) The debt is waived or all or part

of the funds deducted are otherwise

found not to be owed; or

(2) An administrative or judicial order

directs the Board to make a refund.

(b) Unless required or permitted by

law or contract, refunds under this

section will not bear interest.

§ 1639.30 Non-waiver of rights by

payments.

An employee’s involuntary payment

of all or any portion of a debt being

collected under this subpart must not be

construed as a waiver of any rights

which the employee may have under 5

U.S.C. 5514 or any other provisions of

a written contract or law, unless there

are statutory or con tractual provisions

to the contrary.
49424 Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / Rules and Regulations

Subpart C—Tax Refund Offset

§ 1639.40 Applicability and scope.

(a) The regulations in this subpart

implement 31 U.S.C. 3720A which

authorizes the Department of the

Treasury to reduce a tax refund by the

amount of a past-due legally enforceable

debt owed to a Federal agency.

(b) For purposes of this section, a

past-due legally enforceable debt

referable to the Department of the

Treasury is a debt that is owed to the

Board; and:

(1) Is at least $25.00 dollars;

(2) Except in the case of a judgment

debt, has been delinquent for at least

three months and will not have been

delinquent more than 10 years at the

time the offset is made;

(3) Cannot be currently collected

under the salary offset provisions of 5

U.S.C. 5514;

(4) Is ineligible for administrative

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

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

collected by administrative offset under

31 U.S.C. 3716(a) by the Board against

amounts payable to the debtor by the

Board;

(5) With respect to which the Board

has given the debtor at least 60 days to

present evidence that all or part of the

debt is not past due or legally

enforceable, has considered evidence

presented by the debtor, and has

determined that an amount of the debt

is past due and legally enforceable;

(6) Which has been disclosed by the

Board to a credit reporting agency as

authorized by 31 U.S.C. 3711(e), unless

the credit reporting agency would be

prohibited from reporting information

concerning the debt by reason of 15

U.S.C. 1681c;

(7) With respect to which the Board

has notified or has made a reasonable

attempt to notify the debtor that:

(i) The debt is past due, and

(ii) Unless repaid within 60 days

thereafter, the debt will be referred to

the Department of the Treasury for offset

against any overpayment of tax; and

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

3720A and the Department of Treasury

regulations relating to the eligibility of

a debt for tax return offset have been

satisfied.

§ 1639.41 Procedures for tax refund offset.

(a) The Board will be the point of

contact with the Department of the

Treasury for administrative matters

regarding the offset program.

(b) The Board will ensure that the

procedures prescribed by the

Department of the Treasury are followed

in developing information about pastdue debts and submitting the debts to

the IRS.

(c) The Board will submit a

notification of a taxpayer’s liability for

past-due legally enforceable debt to the

Department of the Treasury which will

contain:

(1) The name and taxpayer identifying

number (as defined in section 6109 of

the Internal Revenue Code, 26 U.S.C.

6109) of the person who is responsible

for the debt;

(2) The dollar amount of the past-due

and legally enforceable debt;

(3) The date on which the original

debt became past due;

(4) A statement certifying that, with

respect to each debt reported, all of the

requirements of eligibility of the debt for

referral for the refund offset have been

satisfied. See § 1639.40(b).

(d) The Board shall promptly notify

the Department of the Treasury to

correct Board data submitted when it:

(1) Determines that an error has been

made with respect to a debt that has

been referred;

(2) Receives or credits a payment on

the debt; or

(3) Receives notice that the person

owing the debt has filed for bankruptcy

under Title 11 of the United States Code

or has been adjudicated bankrupt and

the debt has been discharged.

(e) When advising debtors of an intent

to refer a debt to the Department of the

Treasury for offset, the Board will also

advise the debtors of all remedial

actions available to defer or prevent the

offset from taking place.

§ 1639.42 Notice requirements before tax

refund offset.

(a) The Board must notify, or make a

reasonable attempt to notify, the person:

(1) The amount of the debt and that

the debt is past due; and

(2) Unless repaid within 60 days, the

debt will be referred to the Department

of the Treasury for offset against any

refund of overpayment of tax.

(b) The Board will provide a mailing

address for forwarding any written

correspondence and a contact name and

telephone number for any questions

concerning the offset.

(c) The Board will give the individual

debtor at least 60 days from the date of

the notice to present evidence that all or

part of the debt is not past due or legally

enforceable. The Board will consider the

evidence presented by the individual

and will make a determination whether

any amount of the debt is past due and

legally enforceable. For purposes of this

section, evidence that collection of the

debt is affected by a bankruptcy

proceeding involving the individual

will bar referral of the debt to the

Department of the Treasury.

(d) Notice given to a debtor under

paragraphs (a), (b), and (c) of this

section shall advise the debtor of how

he or she may present evidence to the

Board that all or part of the debt is not

past due or legally enforceable. Such

evidence may not be referred to, or

considered by, individuals who are not

officials, employees, or agents of the

United States in making the

determination required under paragraph

(c) of this section. Unless such evidence

is directly considered by an official or

employee of the Board, and the

determination required under paragraph

(c) of this section has been made by an

official or employee of the Board, any

unresolved dispute with the debtor

regarding whether all or part of the debt

is past due or legally enforceable must

be referred to the Board for ultimate

administrative disposition, and the

Board must directly notify the debtor of

its determination.

Subpart D—Administrative Offset

§ 1639.50 Applicability and scope.

(a) The regulations in this subpart

apply to the collection of debts owed to

the Board, or from a request for an offset

received by the Board from a Federal

agency. Administrative offset is

authorized under section 5 of the

Federal Claims Collection Act of 1966,

as amended by the Debt Collection Act

of 1982 (31 U.S.C. 3716). The

regulations in this subpart are consistent

with the Federal Claims Collection

Standards on administrative offset

issued jointly by the Department of

Justice and the General Accounting

Office as set forth in 4 CFR 102.3.

(b) The Executive Director, after

attempting to collect a debt owed to the

Board under section 3(a) of the Federal

Claims Collection Act of 1966, as

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

collect the debt by administrative offset,

subject to the following:

(1) The debt is certain in amount; and

(2) It is in the best interest of the

Board to collect the debt by

administrative offset because of the

decreased costs of collection and

acceleration in the payment of the debt.

(c) The Executive Director may

initiate administrative offset with regard

to debts owed by a person to a Federal

agency, so long as the funds to be offset

are not payable from net assets available

for Thrift Savings Plan benefits. The

head of the creditor agency, or his or her

designee, must submit a written request

for the offset with a certification that the

debt exists and that the person has been

afforded the necessary due process

rights.

(d) The Executive Director may

request another agency that holds funds

payable to a Fund debtor to pay the
Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / Rules and Regulations 49425

funds to the Board in settlement of the

debt. The Board will provide

certification that:

(1) The debt exists; and

(2) The person has been afforded the

necessary due process rights.

(e) If the six-year period for bringing

action on a debt provided in 28 U.S.C.

2415 has expired, then administrative

offset may be used to collect the debt

only if the costs of bringing such an

action are likely to be less than the

amount of the debt.

(f) No collection by administrative

offset will be made on any debt that has

been outstanding for more than 10 years

unless facts material to the Board or a

Federal agency’s right to collect the debt

were not known, and reasonably could

not have been known, by the official or

officials responsible for discovering and

collecting the debt.

(g) The regulations in this subpart do

not apply to:

(1) A case in which administrative

offset of the type of debt involved is

explicitly provided for or prohibited by

another statute; or

(2) Debts owed to the Board by

Federal agencies or by any State or local

government.

§ 1639.51 Notice procedures.

Before collecting any debt through

administrative offset, the Board will

send a notice of intent to offset to the

debtor by certified mail, return receipt

requested, at the most current address

that is available to the Board. The notice

will provide:

(a) A description of the nature and

amount of the debt and the intention of

the Board to collect the debt through

administrative offset;

(b) An opportunity to inspect and

copy the records of the Board with

respect to the debt;

(c) An opportunity for review within

the Board of the determination of the

Board with respect to the debt; and

(d) An opportunity to enter into a

written agreement for repaying the

amount of the debt.

§ 1639.52 Board review.

(a) A debtor may dispute the existence

of the debt, the amount of debt, or the

terms of repayment. A request to review

a disputed debt must be submitted to

the Board official who provided the

notice of intent to offset within 30

calendar days of the debtor’s receipt of

the written notice described in

§ 1639.51.

(b) If the debtor requests an

opportunity to inspect or copy the

Board’s records concerning the disputed

claim, the Board will grant 10 business

days for the review. The time period

will be measured from the time the

request for inspection is granted or from

the time the debtor receives a copy of

the records.

(c) Pending the resolution of a dispute

by the debtor, transactions in any of the

debtor’s account(s) maintained in the

Board may be temporarily suspended to

the extent of the debt that is owed.

Depending on the type of transaction,

the suspension could preclude its

payment, removal, or transfer, as well as

prevent the payment of interest or

discount due on the transaction. Should

the dispute be resolved in the debtor’s

favor, the suspension will be

immediately lifted.

(d) During the review period, interest,

penalties, and administrative costs

authorized by law will continue to

accrue.

(e) If the debtor does not exercise the

right to request a review within the time

specified in this section or if, as a result

of the review, it is determined that the

debt is due and no written agreement is

executed, then administrative offset will

be ordered in accordance with the

regulations in this subpart without

further notice.

§ 1639.53 Written agreement for

repayment.

A debtor who admits liability but

elects not to have the debt collected by

administrative offset will be afforded an

opportunity to negotiate a written

agreement for repaying the debt. If the

financial condition of the debtor does

not support the ability to pay in one

lump sum, the Board may consider

reasonable installments. No installment

arrangement will be considered unless

the debtor submits a financial statement,

executed under penalty of perjury,

reflecting the debtor’s assets, liabilities,

income, and expenses. The financial

statement must be submitted within 10

business days of the Board’s request for

the statement. At the Board’s option, a

confess-judgment note or bond of

indemnity with surety may be required

for installment agreements.

Notwithstanding the provisions of this

section, any reduction or compromise of

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

3711.

§ 1639.54 Requests for offset to Federal

agencies.

The Executive Director may request

that funds due and payable to a debtor

by another Federal agency be paid to the

Board in payment of a debt owed to the

Board by that debtor. In requesting

administrative offset, the Board, as

creditor, will certify in writing to the

Federal agency holding funds of the

debtor:

(a) That the debtor owes the debt;

(b) The amount and basis of the debt;

and

(c) That the Board has complied with

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

own administrative offset regulations in

this subpart, and the applicable

provisions of 4 CFR part 102 with

respect to providing the debtor with due

process.

§ 1639.55 Requests for offset from Federal

agencies.

Any Federal agency may request that

funds due and payable to its debtor by

the Board be administratively offset in

order to collect a debt owed to that

agency by the debtor, so long as the

funds are not payable from net assets

available for Thrift Savings Plan

benefits. The Board will initiate the

requested offset only:

(a) Upon receipt of written

certification from the creditor agency

stating:

(1) That the debtor owes the debt;

(2) The amount and basis of the debt;

(3) That the agency has prescribed

regulations for the exercise of

administrative offset; and

(4) That the agency has complied with

its own administrative offset regulations

and with the applicable provisions of 4

CFR part 102, including providing any

required hearing or review; and

(b) Upon a determination by the

Board that collection by offset against

funds payable by the Board would be in

the best interest of the United States as

determined by the facts and

circumstances of the particular case,

and that such an offset would not

otherwise be contrary to law.

§ 1639.56 Expedited procedure.

The Board may effect an

administrative offset against a payment

to be made to the debtor before

completion of the procedures required

by §§ 1639.51 and 1639.52 if failure to

take the offset would substantially

jeopardize the Board’s ability to collect

the debt and the time before the

payment is to be made does not

reasonably permit the completion of

those procedures. An expedited offset

will be promptly followed by the

completion of those procedures.

Amounts recovered by offset, but later

found not to be owed to the Board, will

be promptly refunded.

[FR Doc. 97–24741 Filed 9–19–97; 8:45 am]

BILLING CODE 6760–01–U