[Federal Register Volume 62, Number 183 (Monday, September 22, 1997)]
[Rules and Regulations]
[Pages 49417-49425]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-24741]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

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

[[Page 49417]]


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FEDERAL RETIREMENT THRIFT INVESTMENT BOARD

5 CFR Part 1639


Claims Collection

AGENCY: Federal Retirement Thrift Investment Board.

ACTION: Interim rule with request for comments.

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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.

[[Page 49418]]

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


Sec. 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.


Sec. 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.


Sec. 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.


Sec. 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.

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    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 past-due 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.


Sec. 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.


Sec. 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.


Sec. 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 Sec. 1639.5), a collection agency (see 
Sec. 1639.6), the Department of Justice (see Sec. 1639.10), or the 
Department of the Treasury (see Sec. 1639.11), if it is not paid.


Sec. 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.

[[Page 49420]]

    (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.


Sec. 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.


Sec. 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.


Sec. 1639.11  Cross-servicing agreement with the Department of the 
Treasury.

    The Board will enter into a cross-servicing 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.


Sec. 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.


Sec. 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


Sec. 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.


Sec. 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.


Sec. 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

[[Page 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 Sec. 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.


Sec. 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 Sec. 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 Sec. 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.

[[Page 49422]]

    (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.


Sec. 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.


Sec. 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.


Sec. 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.


Sec. 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

[[Page 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.


Sec. 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 Sec. 1639.22;
    (ii) That each certification of debt that is sent to a paying 
agency is consistent with the requirements of Sec. 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 Sec. 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.


Sec. 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.


Sec. 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.

[[Page 49424]]

Subpart C--Tax Refund Offset


Sec. 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.


Sec. 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 
past-due 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 
Sec. 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.


Sec. 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


Sec. 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

[[Page 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.


Sec. 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.


Sec. 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 Sec. 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.


Sec. 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.


Sec. 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.


Sec. 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.


Sec. 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 
Secs. 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