[Federal Register Volume 62, Number 205 (Thursday, October 23, 1997)]
[Rules and Regulations]
[Pages 55162-55167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-28092]


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NATIONAL LABOR RELATIONS BOARD

29 CFR Part 102


Procedural Rules Governing Debt-Collection Procedures for 
Administrative Offset and Federal Income Tax Refund Offset

AGENCY: National Labor Relations Board.

ACTION: Final rule.

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SUMMARY: The Debt Collection Act of 1982 (Pub. L. 97-365) amended the 
Federal Claims Collection Act of 1966 to authorize the federal 
government to employ various debt collection techniques commonly 
available to the private sector, including administrative offset and 
Federal income tax refund offset. In 1992 the Congress passed and the 
President signed into law the Cash Management Improvement Act 
Amendments of 1992 which requires federal agencies to participate in 
the Internal Revenue Service (IRS) income tax refund offset program for 
the collection of delinquent debts by offset from a federal income tax 
refund that may be due the delinquent debtor. This final rule 
establishes the procedures which the Board will follow in utilizing the 
debt collection procedures authorized by the above legislation.

EFFECTIVE DATE: October 23, 1997.

FOR FURTHER INFORMATION CONTACT: John J. Toner, Executive Secretary, 
National Labor Relations Board, 1099 14th Street, NW, Room 11600, 
Washington, DC 20570. Telephone: (202) 273-1940.

SUPPLEMENTARY INFORMATION: The Debt Collection Act of 1982 (Pub. L. 97-
365) amended the Federal Claims Collection Act of 1966 to authorize the 
Federal Government to employ various debt collection techniques 
commonly available to the private sector, including administrative 
offset and Federal income tax refund offset. In 1992 the Congress 
passed and the President signed into law the Cash Management 
Improvement Act Amendments of 1992 which requires federal agencies to 
participate in the Internal Revenue Service (IRS) income tax refund 
offset program in which federal agencies refer delinquent debt to the 
IRS for collection by offset from a federal income tax refund that may 
be due the delinquent debtor. On July 24, 1996, the National Labor 
Relations Board (Board) implemented interim regulations, set forth as 
new Subparts U (administrative offset), and V (Federal income tax 
refund offset), to part 102 of the Board's Rules and Regulations, 
Series 8, (published at 61 FR 38371 and 61 FR 38373, respectively), to 
enable the Board to utilize these debt collection procedures that have 
proven to be cost effective mechanisms for collection of delinquent 
debt.
    These final rules establish the current interim rules as the means 
by which the Board will pursue debt collection permitted under the 
above statutes, with one minor change involving the clarification of a 
phrase appearing in Sec. 102.160 of Subpart U, as discussed below.
    When the Board published the interim rules on July 24, 1996, it 
determined that, because these rules merely implement a definite 
statutory scheme and its concomitant regulations, and relate to Agency 
procedure and practice, public comment on the rules was unnecessary. 
Nevertheless, the Board undertook to consider any public comments 
submitted to it on or before September 29, 1996, before issuing any 
final rules. The Board did receive comments from one organization which 
raised questions falling broadly within two categories: (1) Whether the 
regulations were needed, and (2) whether the application of the 
regulations was appropriate. We consider these comments seriatim.

[[Page 55163]]

Questions Regarding the Need for the Regulations

    The organization questioned why these procedures are necessary and 
being implemented now, and why they single out federal contractors. In 
brief, the regulations regarding administrative offset procedures 
implement a statutory scheme that specifically addresses collections of 
delinquent debt from federal contractors, a decision made in the 
enabling legislation, not by the Board in these regulations. Moreover, 
while these procedures doubtless could have been implemented earlier, 
that is no reason not to implement them now that the Board has become 
aware of their utility. As Justice Frankfurter once observed in a 
different context: ``Wisdom too often never comes, and so one ought not 
to reject it merely because it comes late.'' Henslee v. Union Planters 
Bank, 335 U.S. 595, 600 (1949) (dissenting opinion).
    The organization questioned whether the Board would be required to 
follow the provisions of Executive Order 12866 before implementing 
these regulations, specifically, the principles of regulation set forth 
in Section 1(b) of that Executive Order. However, independent 
regulatory agencies are specifically excluded from coverage of Section 
1. Further, even assuming the NLRB is covered by Section 1, these 
regulations are consistent with the regulatory principles set forth in 
that section since they implement a statutory scheme already found 
desirable by Congress.
    The organization inquired whether the Board had given any 
consideration to how the new regulations will benefit the Board. As 
noted in the Supplementary Information section accompanying publication 
of the interim rules, 61 FR 38368, the Board is entitled to utilize 
these offset provisions because debts owed pursuant to Board orders are 
in fact debts owed to the United States, the Board being the public 
agent chosen by Congress to vindicate the public policies embodied in 
the National Labor Relations Act.
    Finally, the organization expressed the opinion that, before these 
regulations could be put into effect, the Federal Acquisition 
Regulations and Defense Acquisition Regulations should be amended. 
However, amending these regulations is not something within the purview 
of the Board and, therefore, no reason not to proceed with appropriate 
debt collection methods that have been entrusted to the Board.

Questions Regarding the Application of the Regulations

    The organization notes that the regulations provide that the Agency 
``may give due consideration to the debtor's financial condition * * 
*,'' Sec. 102.160(c), and questions whether this consideration should 
be mandated. Specifically, the organization proposes that, at a 
minimum, the regulations mandate consideration of a debtor's financial 
condition, mandate that the negative impact on the debtor be minimized, 
and require notification to the debtor to solicit information on its 
financial viability if offset should occur.
    In fact, the regulations already provide that the Agency ``shall 
send written notice to the debtor,'' Sec. 102.161(b), and that this 
notice shall notify the debtor of the ``opportunity to enter into a 
written agreement with the Agency to repay the debt.'' 
Sec. 102.161(b)(7). Moreover, the ``Agency shall afford the debtor the 
opportunity to repay the debt or enter into a repayment plan which is 
agreeable to the Agency * * *.'' Sec. 102.163(a).
    These mandatory provisions provide more than ample opportunity for 
the debtor to raise, and the Agency to consider, the debtor's financial 
condition, as well as the impact of any administrative offset, prior to 
initiating an administrative offset. Providing further mandates with 
respect to the Agency's obligation to consider the debtor's financial 
condition could mire the Agency in disputes with the debtor over 
whether a particular repayment plan is adequate, thereby risking 
nonfulfillment of the Agency's responsibility to vindicate the policies 
embodied in the National Labor Relations Act.
    The organization questioned whether the regulations should address 
more specifically when administrative offset will be used. However, the 
head of the Agency already is required by 31 U.S.C. 3711 to attempt to 
collect delinquent claims, and our regulations specifically provide 
that ``Administrative offset shall be considered by the Agency only 
after attempting to collect a claim under 31 U.S.C. 3711(a).'' 
Sec. 102.160(d). Finally, a claim ``will not be referred for tax refund 
offset where administrative offset potential is found to exist.'' 
Sec. 102.173(c).
    The organization argues that the regulations should specifically 
mandate consideration of the effect of administrative offset on any 
third-party contractors whose work depends on performance by the 
debtor. We are not aware of any requirement that the Agency take this 
factor into consideration. However, as a matter of sound practice, if 
such information is presented to the Board it will, as with any 
relevent information, be duly considered.
    The organization objects to the provision in Sec. 102.164(c) that 
allows the Agency to ``effect an administrative offset * * * prior to 
the completion of the due process procedures required by this subpart, 
if failure to take the offset would substantially prejudice the 
Agency's ability to collect the debt.'' Specifically, the organization 
proposes that the rules should specify the circumstances in which this 
procedure is permitted and require identification of alternative 
sources of funds which should be pursued before due process procedures 
are suspended. We conclude that it would be impossible to enumerate all 
of the circumstances in which this procedure might be triggered. 
However, by way of example, it could be triggered if a debtor were 
winding down its business, was coming to the last payment on its last 
contract, and if the Agency did not prevent those funds from being 
disbursed, it might never be able to collect the debt. Even in such 
situations, however, the debtor is not without recourse. For, this is 
akin to seeking a protective order, a proceeding in which the debtor 
will have recourse to administrative or judicial review. Thus, although 
funds might be temporarily frozen, the debtor ultimately will receive 
full due process before the funds are finally taken.
    Finally, the organization questioned whether the Regulatory 
Flexibility Act requires an impact analysis or a flexibility analysis. 
However, for the reasons set forth in the publication of the interim 
rules, and again below, we are persuaded that the Regulatory 
Flexibility Act does not apply here.
    Notwithstanding all of the foregoing, the Board has determined that 
one minor change in the regulations is appropriate to clarify the 
meaning of a phrase appearing in Sec. 102.160 of Subpart U. Thus, in 
Sec. 102.160(c), the phrase ``an available source of funds'' is changed 
to read ``another readily available source of funds.'' In all other 
respects, the final rules that the Board now publishes are the same as 
the interim rules presently outstanding.

Executive Order 12866

    As noted above, the regulatory review provisions of Executive Order 
12866 do not apply to independent regulatory agencies. However, even if 
they did, these rules would not be classified as ``significant rules'' 
under Section 6 of Executive Order 12866, because they will not result 
in (1) an annual effect on the economy of $100 million or more;

[[Page 55164]]

(2) a major increase in costs or prices for consumers, individual 
industries, Federal, State, or local government agencies, or geographic 
regions; or (3) significant adverse effects on competition, employment, 
investment, productivity, innovation, or on the ability of United 
States-based enterprises to compete with foreign-based enterprises in 
domestic or foreign markets. Accordingly, no regulatory impact 
assessment is required.

Regulatory Flexibility Act

    Because no notice of proposed rule-making is required for 
procedural rules, the requirements of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.) pertaining to regulatory flexibility analysis do 
not apply to these rules. However, even if the Regulatory Flexibility 
Act were to apply, the NLRB certifies that these rules will not have a 
significant economic impact on a substantial number of small business 
entities as they merely set forth procedures to be followed by the 
Agency in attempting to collect outstanding debts.

Paperwork Reduction Act

    These rules are not subject to Section 3504(h) of the Paperwork 
Reduction Act (44 U.S.C. 3501) since they do not contain any new 
information collection requirements.

Small Business Regulatory Enforcement Fairness Act

    Because these rules relate to Agency procedure and practice and 
merely implement a definitive statutory scheme and the requirements 
contained in regulations promulgated by the Department of Justice, the 
General Accounting Office, the Internal Revenue Service, and the 
Treasury Department, the Board has determined that the Congressional 
review provisions of the Small Business Regulatory Enforcement Fairness 
Act (5 U.S.C. 801) do not apply.

List of Subjects in 29 CFR Part 102

    Administrative practice and procedure, Labor management relations.

    To enable the Agency to collect delinquent debts by way of 
administrative offset and Federal income tax refund offset, the Board 
amends 29 CFR part 102 as follows:

PART 102--RULES AND REGULATIONS, SERIES 8

    1. The authority citation for 29 CFR part 102 continues to read as 
follows:

    Authority: Section 6, National Labor Relations Act, as amended 
(29 U.S.C. 151, 156). Section 102.117(c) also issued under Section 
552(a)(4)(A) of the Freedom of Information Act, as amended (5 U.S.C. 
552(a)(4)(A)). Sections 102.143 through 102.155 also issued under 
Section 504(c)(1) of the Equal Access to Justice Act, as amended (5 
U.S.C. 504(c)(1)).

    2. Subparts U and V to part 102 are revised to read as follows:

Subpart U--Debt-Collection Procedures by Administrative Offset

Sec.
102.156  Administrative offset; purpose and scope.
102.157  Definitions.
102.158  Agency requests for administrative offsets and cooperation 
with other Federal agencies.
102.159  Exclusions.
102.160  Agency responsibilities.
102.161  Notification
102.162   Examination and copying of records related to the claim; 
opportunity for full explanation of the claim.
102.163  Opportunity for repayment.
102.164  Review of the obligation.
102.165  Cost shifting.
102.166  Additional administrative collection action.
102.167  Prior provision of rights with respect to debt.


Sec. 102.156  Administrative offset; purpose and scope.

    The regulations in this subpart specify the Agency procedures that 
will be followed to implement the administrative offset procedures set 
forth in the Debt Collection Act of 1982 (Pub. L. 97-365), 31 U.S.C. 
3716.


Sec. 102.157  Definitions.

    (a) The term administrative offset means the withholding of money 
payable by the United States to, or held by the United States on behalf 
of, a person to satisfy a debt owed the United States by that person.
    (b) The term debtor is any person against whom the Board has a 
claim.
    (c) The term person does not include any agency of the United 
States, or any state or local government.
    (d) The terms claim and debt are synonymous and interchangeable. 
They refer to an amount of money or property which has been determined 
by an appropriate Agency official to be owed to the United States from 
any person, organization, or entity, except another federal agency.
    (e) A debt is considered delinquent if it has not been paid by the 
date specified in the Agency's initial demand letter (Sec. 102.161), 
unless satisfactory payment arrangements have been made by that date, 
or if, at any time thereafter, the debtor fails to satisfy his 
obligations under a payment agreement with the Agency.


Sec. 102.158  Agency requests for administrative offsets and 
cooperation with other Federal agencies.

    Unless otherwise prohibited by law, the Agency may request that 
monies due and payable to a debtor by another Federal agency be 
administratively offset in order to collect debts owed the Agency by 
the debtor. In requesting an administrative offset, the Agency will 
provide the other Federal agency holding funds of the debtor with 
written certification stating:
    (a) That the debtor owes the Board a debt (including the amount of 
debt); and
    (b) That the Agency has complied with the applicable Federal Claims 
Collection Standards, including any hearing or review.


Sec. 102.159  Exclusions.

    (a) (1) The Agency is not authorized by the Debt Collection Act of 
1982 (31 U.S.C. 3716) to use administrative offset with respect to:
    (i) Debts owed by any State or local government;
    (ii) Debts arising under or payments made under the Social Security 
Act, the Internal Revenue Code of 1954, or the tariff laws of the 
United States; or
    (iii) When a statute explicitly provides for or prohibits using 
administrative offset to collect the claim or type of claim involved.
    (2) No claim that has been outstanding for more than 10 years after 
the Board's right to collect the debt first accrued may be collected by 
means of administrative offset, unless facts material to the right to 
collect the debt were not known and could not reasonably have been 
known by the official of the Agency who was charged with the 
responsibility to discover and collect such debts until within 10 years 
of the initiation of the collection action. A determination of when the 
debt first accrued should be made according to existing laws regarding 
the accrual of debts, such as under 28 U.S.C. 2415. Unless otherwise 
provided by contract or law, debts or payments owed the Board which are 
not subject to administrative offset under 31 U.S.C. 3716 may be 
collected by administrative offset under the common law or other 
applicable statutory authority, pursuant to this paragraph or Board 
regulations established pursuant to such other statutory authority.
    (b) Collection by offset against a judgment obtained by a debtor 
against the United States shall be accomplished in accordance with 31 
U.S.C. 3728.


Sec. 102.160  Agency responsibilities.

    (a) The Agency shall provide appropriate written or other guidance 
to

[[Page 55165]]

Agency officials in carrying out this subpart, including the issuance 
of guidelines and instructions, which may be deemed appropriate. The 
Agency shall also take such administrative steps as may be appropriate 
to carry out the purposes and ensure the effective implementation of 
this subpart.
    (b) Before collecting a claim by means of administrative offset, 
the Agency must ensure that administrative offset is feasible, 
allowable and appropriate, and must notify the debtor of the Agency's 
policies for collecting a claim by means of administrative offset.
    (c) Whether collection by administrative offset is feasible is a 
determination to be made by the Agency on a case-by-case basis, in the 
exercise of sound discretion. The Agency shall consider not only 
whether administrative offset can be accomplished, both practically and 
legally, but also whether administrative offset will further and 
protect the best interests of the United States Government. In 
appropriate circumstances, the Agency may give due consideration to the 
debtor's financial condition, and it is not expected that 
administrative offset will be used in every available instance, 
particularly where there is another readily available source of funds. 
The Agency may also consider whether administrative offset would 
substantially interfere with or defeat the purposes of the program 
authorizing the payments against which offset is contemplated.
    (d) Administrative offset shall be considered by the Agency only 
after attempting to collect a claim under 31 U.S.C. 3711(a).


Sec. 102.161  Notification.

    (a) The Agency shall send a written demand to the debtor in terms 
which inform the debtor of the consequences of failure to cooperate. In 
the demand letter, the Agency shall provide the name of an Agency 
employee who can provide a full explanation of the claim. When the 
Agency deems it appropriate to protect the Government's interests (for 
example, to prevent the statute of limitations, 28 U.S.C. 2415, from 
expiring), written demand may be preceded by other appropriate actions.
    (b) In accordance with guidelines established by the Agency, the 
Agency official responsible for collection of the debt shall send 
written notice to the debtor, informing such debtor as appropriate:
    (1) Of the nature and amount of the Board's claim;
    (2) Of the date by which payment is to be made (which normally 
should be not more than 30 days from the date that the initial 
notification was mailed or hand delivered);
    (3) Of the Agency's intention to collect by administrative offset 
and of the debtor's rights in conjunction with such an offset;
    (4) That the Agency intends to collect, as appropriate, interest, 
penalties, administrative costs and attorneys fees;
    (5) Of the rights of such debtor to a full explanation of the 
claim, of the opportunity to inspect and copy Agency records with 
respect to the claim and to dispute any information in the Agency's 
records concerning the claim;
    (6) Of the debtor's right to administrative appeal or review within 
the Agency concerning the Agency's claim and how such review shall be 
obtained;
    (7) Of the debtor's opportunity to enter into a written agreement 
with the Agency to repay the debt; and
    (8) Of the date on which, or after which, an administrative offset 
will begin.


Sec. 102.162  Examination and copying of records related to the claim; 
opportunity for full explanation of the claim.

    Following receipt of the demand letter specified in Sec. 102.161, 
and in conformity with Agency guidelines governing such requests, the 
debtor may request to examine and copy publicly available records 
pertaining to the debt, and may request a full explanation of the 
Agency's claim.


Sec. 102.163  Opportunity for repayment.

    (a) The Agency shall afford the debtor the opportunity to repay the 
debt or enter into a repayment plan which is agreeable to the Agency 
and is in a written form signed by such debtor. The Agency may deem a 
repayment plan to be abrogated if the debtor should, after the 
repayment plan is signed, fail to comply with the terms of the plan.
    (b) The Agency has discretion and should exercise sound judgment in 
determining whether to accept a repayment agreement in lieu of 
administrative offset.


Sec. 102.164  Review of the obligation.

    (a) The debtor shall have the opportunity to obtain review by the 
Agency of the determination concerning the existence or amount of the 
debt as set forth in the notice. In cases where the amount of the debt 
has been fully liquidated, the review is limited to ensuring that the 
liquidated amount is correctly represented in the notice.
    (b) The debtor seeking review shall make the request in writing to 
the Agency, not more than 15 days from the date the demand letter was 
received by the debtor. The request for review shall state the basis 
for challenging the determination. If the debtor alleges that the 
Agency's information relating to the debt is not accurate, timely, 
relevant or complete, the debtor shall provide information or 
documentation to support this allegation.
    (c) The Agency may effect an administrative offset against a 
payment to be made to a debtor prior to the completion of the due 
process procedures required by this subpart, if failure to take the 
offset would substantially prejudice the Agency's ability to collect 
the debt; for example, if the time before the payment is to be made 
would not reasonably permit the completion of due process procedures. 
Administrative offset effected prior to completion of due process 
procedures must be promptly followed by the completion of those 
procedures. Amounts recovered by administrative offset, but later found 
not owed to the Agency, will be promptly refunded.
    (d) Upon completion of the review, the Agency's reviewing official 
shall transmit to the debtor the Agency's decision. If appropriate, 
this decision shall inform the debtor of the scheduled date on or after 
which administrative offset will begin. The decision shall also, if 
appropriate, indicate any changes in information to the extent such 
information differs from that provided in the initial notification to 
the debtor under 102.161.
    (e) Nothing in this subpart shall preclude the Agency from sua 
sponte reviewing the obligation of the debtor, including a 
reconsideration of the Agency's determination concerning the debt, and 
the accuracy, timeliness, relevance, and completeness of the 
information on which the debt is based.


Sec. 102.165  Cost shifting.

    Costs incurred by the Agency in connection with referral of debts 
for administrative offset will be added to the debt and thus increase 
the amount of the offset. Such costs may include administrative costs 
and attorneys fees.


Sec. 102.166  Additional administrative collection action.

    Nothing contained in this subpart is intended to preclude the 
Agency from utilizing any other administrative or legal remedy which 
may be available.


Sec. 102.167  Prior provision of rights with respect to debt.

    To the extent that the rights of the debtor in relation to the same 
debt have been previously provided for under some other statutory or 
regulatory authority, the Agency is not required to

[[Page 55166]]

duplicate those efforts before effecting administrative offset.

Subpart V--Debt Collection Procedures by Federal Income Tax Refund 
Offset

102.168  Federal income tax refund offset; purpose and scope.
102.169  Definitions.
102.170  Agency referral to IRS for tax referral effect; Agency 
responsibilities.
102.171  Cost shifting.
102.172  Minimum referral amount.
102.173  Relation to other collection efforts.
102.174  Debtor notification.
102.175  Agency review of the obligation.
102.176  Prior provision of rights with respect to debt.


Sec. 102.168  Federal income tax refund offset; purpose and scope.

    The regulations in this subpart specify the Agency procedures that 
will be followed in order to implement the federal income tax refund 
offset procedures set forth in 26 U.S.C. 6402(d) of the Internal 
Revenue Code (Code), 31 U.S.C. 3720A, and 301.6402-6 of the Treasury 
Regulations on Procedure and Administration (26 CFR 301.6402-6). This 
statute and the implementing regulations of the Internal Revenue 
Service (IRS) at 26 CFR 301.6402-6 authorize the IRS to reduce a tax 
refund by the amount of a past-due legally enforceable debt owed to the 
United States. The regulations apply to past-due legally enforceable 
debts owed to the Agency by individuals and business entities. The 
regulations are not intended to limit or restrict debtor access to any 
judicial remedies to which he or she may otherwise be entitled.


Sec. 102.169  Definitions.

    (a) Tax refund offset refers to the IRS income tax refund offset 
program operated under authority of 31 U.S.C. 3720A.
    (b) Past-due legally enforceable debt is a delinquent debt 
administratively determined to be valid, whereon no more than 10 years 
have lapsed since the date of delinquency (unless reduced to judgment), 
and which is not discharged under a bankruptcy proceeding or subject to 
an automatic stay under 11 U.S.C. 362.
    (c) Individual refers to a taxpayer identified by a social security 
number (SSN).
    (d) Business entity refers to an entity identified by an employer 
identification number (EIN).
    (e) Taxpayer mailing address refers to the debtor's current mailing 
address as obtained from IRS.
    (f) Memorandum of understanding refers to the agreement between the 
Agency and IRS outlining the duties and responsibilities of the 
respective parties for participation in the tax refund offset program.


Sec. 102.170  Agency referral to IRS for tax referral effect; Agency 
responsibilities.

    (a) As authorized and required by law, the Agency may refer past-
due legally enforceable debts to the Internal Revenue Service (IRS) for 
collection by offset from any overpayment of income tax that may 
otherwise be due to be refunded to the taxpayer. By the date and in the 
manner prescribed by the IRS, the Agency may refer for tax refund 
offset past-due legally enforceable debts. Such referrals shall include 
the following information:
    (1) Whether the debtor is an individual or a business entity;
    (2) The name and taxpayer identification number (SSN or EIN) of the 
debtor who is responsible for the debt;
    (3) The amount of the debt;
    (4) A designation that the Agency is referring the debt and (as 
appropriate) Agency account identifiers.
    (b) The Agency will ensure the confidentiality of taxpayer 
information as required by IRS in its Tax Information Security 
Guidelines.
    (c) As necessary, the Agency will submit updated information at the 
times and in the manner prescribed by IRS to reflect changes in the 
status of debts or debtors referred for tax refund offset.
    (d) Amounts erroneously offset will be refunded by the Agency or 
IRS in accordance with the Memorandum of Understanding.


Sec. 102.171  Cost shifting.

    Costs incurred by the Agency in connection with referral of debts 
for tax refund offset will be added to the debt and thus increase the 
amount of the offset. Such costs may include administrative costs and 
attorneys fees.


Sec. 102.172  Minimum referral amount.

    The minimum amount of a debt otherwise eligible for Agency referral 
to the IRS is $25 for individual debtors and $100 for business debtors. 
The amount referred may include the principal portion of the debt, as 
well as any accrued interest, penalties, administrative cost charges, 
and attorney fees.


Sec. 102.173  Relation to other collection efforts.

    (a) Tax refund offset is intended to be an administrative 
collection remedy to be utilized consistent with IRS requirements for 
participation in the program, and the costs and benefits of pursuing 
alternative remedies when the tax refund offset program is readily 
available. To the extent practical, the requirements of the program 
will be met by merging IRS requirements into the Agency's overall 
requirements for delinquent debt collection.
    (b) As appropriate, debts of an individual debtor of $100 or more 
will be reported to a consumer or commercial credit reporting agency 
before referral for tax refund offset.
    (c) Debts owed by individuals will be screened for administrative 
offset potential using the most current information reasonably 
available to the Agency, and will not be referred for tax refund offset 
where administrative offset potential is found to exist.


Sec. 102.174  Debtor notification.

    (a) The Agency shall send appropriate written demand to the debtor 
in terms which inform the debtor of the consequences of failure to 
repay debts or claims owed the Board.
    (b) Before the Agency refers a debt to IRS for tax refund offset, 
it will make a reasonable attempt to notify the debtor that:
    (1) The debt is past-due;
    (2) Unless the debt is repaid or a satisfactory repayment agreement 
is established within 60 days thereafter, the debt will be referred to 
IRS for offset from any overpayment of tax remaining after taxpayer 
liabilities of greater priority have been satisfied; and
    (3) The debtor will have a minimum of 60 days from the date of 
notification to present evidence that all or part of the debt is not 
past due or legally enforceable, and the Agency will consider this 
evidence in a review of its determination that the debt is past due and 
legally enforceable. The debtor will be advised where and to whom 
evidence is to be submitted.
    (c) The Agency will make a reasonable attempt to notify the debtor 
by using the most recent address information available to the Agency or 
obtained from the IRS, unless written notification to the Agency is 
received from the debtor stating that notices from the Agency are to be 
sent to a different address.
    (d) The notification required by paragraph (b) of this section and 
sent to the address specified in paragraph (c) of this section may, at 
the option of the Agency, be incorporated into demand letters required 
by paragraph (a) of this section.


Sec. 102.175  Agency review of the obligation.

    (a) The Agency official responsible for collection of the debt will 
consider any evidence submitted by the debtor as a result of the 
notification required by Sec. 102.174 and notify the debtor of the

[[Page 55167]]

result. If appropriate, the debtor will also be advised where and to 
whom to request a review of any unresolved dispute.
    (b) The debtor will be granted 30 days from the date of the 
notification required by paragraph (a) of this section to request a 
review of the determination of the Agency official responsible for 
collection of the debt on any unresolved dispute. The debtor will be 
advised of the result.


Sec. 102.176  Prior provision of rights with respect to debt.

    To the extent that the rights of the debtor in relation to the same 
debt have been previously provided under some other statutory or 
regulatory authority, including administrative offset procedures set 
forth in Subpart U, the Agency is not required to duplicate those 
efforts before referring a debt for tax refund offset.

    By Direction of the Board.
John J. Toner,
Executive Secretary, National Labor Relations Board.
[FR Doc. 97-28092 Filed 10-22-97; 8:45 am]
BILLING CODE 7545-01-P