This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

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

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

13027

Vol. 60, No. 47

Friday, March 10, 1995

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Part 582

RIN 3206—AF83

Commercial Garnishment of Federal

Employees’ Pay

AGENCY: Office of Personnel

Management.

ACTION: Final rule.

SUMMARY: The Office of Personnel

management (OPM) is finalizing its

interim regulations for processing

garnishment actions affecting Federal

employees’ pay for commercial

indebtednesses and tax obligations due

to State and local governments. This

part provides procedures and guidance

for Executive Branch agencies of the

Federal Government, not including the

Postal Service or the Postal Rate

Commission, to process commercial

garnishment orders affecting the pay of

civilian employees.

EFFECTIVE DATE: April 10, 1995.

FOR FURTHER INFORMATION CONTACT:

Murray M. Meeker, Attorney, Office of

the General Counsel, (202) 606–1980.

SUPPLEMENTARY INFORMATION: On

October 6, 1993, Congress enacted the

Hatch Act Reform Amendments of 1993,

Public law 103–94, section 9, 5 U.S.C.

5520a, which waived the Federal

Government’s sovereign immunity to

permit compliance with garnishment

orders for commercial debts and tax

indebtednesses to State and local

governments. On February 3, 1994, the

President signed Executive Order

Number 12897 which delegated

responsibility to OPM to issue

implementing regulations for most of

the Executive Branch, and on March 29,

1994, OPM issued an interim rule with

request for comments. (59 FR 14541) In

addition to receiving comments from

more than twenty Federal agencies,

private organizations, and individuals

in response to this publication, OPM

expressly elicited additional guidance

from the Office of Management and

Budget, the Department of Justice, the

Department of Labor, the Federal

Retirement Thrift Investment Board, and

the United States Postal Service.

Several commenters requested

clarification concerning whether

moneys payable to contractors would be

subject to garnishment. In response to

these requests, we have amended the

definition of employee in § 582.102(2).

The amended definition provides that

an individual whose employment is

based on a contract is not an employee

under this part. This amendment is

consistent with judicial decisions which

have recognized that Federal

employment is not contractual. See, e.g.,

United States v. The Citizens &

Southern National Bank, 889 F.2d 1067

(Fed. Cir. 1989). An employee

organization was concerned that

reemployed annuitants had been

excluded from the definition of

employee. In fact, reemployed

annuitants are included in the

definition of employee in § 582.102(2).

However, we have amended the

definition of employee to clarify that the

pay of reemployed annuitants and

reemployed retired members of the

uniformed services is subject to

garnishment.

An employee organization suggested

that OPM’s regulations indicate that

regulations pertaining to the

garnishment of the salaries of members

of the uniformed services were to be

promulgated by a separate authority. In

response to this suggestion, we have

added two additional sentences to the

definition of agency in § 582.102(1).

This employee organization also

suggested that the definition of person

be amended to include courts. In

response to this suggestion, we have

amended the definition of person in

§ 582.102(4) to include courts and other

entities that are authorized to issue legal

process.

Two commenters suggested that

Federal agencies be permitted to use

commercial garnishment as a method to

collect debts due the United States.

OPM has determined that as enacted,

Public Law 103–94 does not provide for

commercial garnishment actions by

Federal agencies. OPM’s determination

is based on several factors. The primary

reason being that Public Law 103–94

does not expressly provide for

garnishment by the Federal

Government, and there is no legislative

history reflecting such an intent.

Additionally, the principles of statutory

interpretation require that all of the

provisions of a statute be read together.

See United States v. Fausto, 484 U.S.

439, 453 (1988). In accordance with this

principle, OPM is mindful that in

processing commercial garnishment

orders, Congress has provided that debts

due the United States are to be treated

quite differently than commercial

indebtednesses. To appreciate this

difference, compare the exclusion

provision in section 462(g) of the Social

Security Act as incorporated in 5 U.S.C.

5520a(g) with the limitation provisions

of section 1673 of title 15 of the United

States Code (section 303 of the

Consumer Credit Protection Act, as

amended) as incorporated in 5 U.S.C.

5520a(b). In addition, there are several

recent United States Supreme Court

decisions which recognize a rebuttable

presumption that the term person does

not include the sovereign. See

International Primate Protection League

v. Tulane Educ. Fund, 111 S.Ct. 1700,

1707–1708 (1991); Will v. Michigan

Department of State Police, 491 U.S. 58,

64 (1989); and Mesa v. California, 489

U.S. 121, 136 (1989). In an effort to

clarify the matter, OPM has amended

the definition of person in § 582.102(4)

to expressly exclude the United States

or an agency of the United States.

OPM has considered, but rejected a

labor organizations’ comment that the

definition of pay in § 582.102(5) not

include sick pay. We believe that the

inclusion of sick pay is mandated by

express language of 5 U.S.C. 5520a(a)(4)

which expressly defines pay to include

sick pay. In accordance with guidance

received from the Department of Labor,

we have expressly excluded ‘‘amounts

received under any Federal program for

compensation for work injuries’’ from

the definition of pay in § 582.102(5).

One of the Federal agencies that

provides payroll services to a host of

Federal agencies advised OPM that they

were treating support garnishment

orders as exclusions under § 582.103.

We have amended § 582.103 to clarify

that amounts withheld in compliance

with garnishment orders based on child

and/or alimony obligations are not

exclusions under this part.
13028 Federal Register / Vol. 60, No. 47 / Friday, March 10, 1995 / Rules and Regulations

One agency requested clarification

concerning the exclusion in

§ 582.103(b)(1) of amounts withheld for

benefits payable under title II of the

Social Security Act. After consulting

with the Social Security Administration,

we have deleted that provision and

renumbered the section.

Two commenters noted the exclusion

in § 582.103(e) of all amounts

contributed to the Thrift Savings Fund

and asked whether amounts deducted

for Thrift Savings Fund loan repayments

were also to be excluded. In response to

this comment, OPM requested guidance

from the Federal Retirement Thrift

Investment Board. OPM concurs with

the Board’s conclusion that these

repayment amounts should not be

added to the list of exclusions in

§ 582.103.

One agency commented that some of

its employees were attempting to reduce

their liability for garnishment orders by

increasing their voluntary allotments.

We would emphasize that only the

items listed as exclusions in § 582.103

may be deducted from an employeeobligor’s pay before a garnishment is

processed. It may, therefore, be

necessary to terminate a voluntary

allotment in order to comply with a

commercial garnishment order.

While one agency correctly noted that

our exclusion for debts due the United

States in § 582.103(a) does not list the

various types of debts due the United

States or the order of precedence for

such debts, the General Accounting

Office already maintains such a list.

While three Federal agencies

expressed disagreement with the

statement in § 582.202(a) that legal

process need not expressly name the

agency as a garnishee, this statement is

mandated by the decision of the United

States Court of Appeals for the Federal

Circuit that was announced in Millard v.

United States, 916 F.2d 1 (Fed. Cir.

1990). We have amended § 582.202(a) in

response to one agency’s comment to

expressly include interrogatories.

One commenter noted that the interim

regulations permitted State courts to

garnish the salaries of persons who live

and work in a different State and

concluded that this raised ‘‘a possible

constitutional question’’ as to the

legality of the regulations. In fact, the

Federal Government has been honoring

garnishment orders based on child

support and alimony obligations that

extended beyond State boundaries for

many years and OPM disagrees with any

suggestion that such orders or the

regulations that provide for the

processing of such orders might be

unconstitutional merely because they

effect employee-obligors who live and/

or work in other States. More

importantly, OPM believes that this is

another area where the Federal

Government’s responsibilities as an

employer are limited and that an

employing Federal agency is not

required to review each order to

determine whether the court that issued

the order had lawfully acquired

jurisdiction over the out-of-State

obligor. See United States v. Morton,

467 U.S. 822, 828–830 (1984). This same

commenter also suggested that the

regulations be amended to require that

in addition to providing the employeeobligor with a copy of the legal process,

Federal agencies should be required to

provide employee-obligors with copies

of any other documents submitted with

the legal process. OPM is confident that

Federal agencies will use their

discretion to provide their employees

with copies of any accompanying

documents that will be helpful or

informative to the employee. However,

to require that employing agencies

provide all documentation regardless of

relevance or potential value to the

employee-obligor would, we believe,

place an undue burden on Federal

agencies.

Two agencies commented on the fact

that § 582.202(b) does not mandate

service by certified or registered mail.

This provision is in accordance with the

express language of 5 U.S.C. 5520a(c)(1)

and does reflect a change from the

provisions applicable to service of

process for garnishment of child support

and alimony obligations. OPM

emphasizes that agencies may not

construe may to mean must; it was the

clear intent of Congress to permit less

restrictive service of process under this

part.

Several commenters, including an

employee organization and a law firm

that wrote on behalf of a collectors

association, expressed a need to clarify

the fact that a creditor need not

necessarily know or provide all of the

information listed in § 582.203(a),

particularly the employee-obligor’s date

of birth or social security number, in

order to have a garnishment order

processed by a Federal agency. In an

effort to clarify this fact, we have

amended § 582.203(a). In response to a

request from the Treasury Department,

we have added a new section, § 582.204,

concerning electronic disbursement.

Several commenters noted that two

provisions in the interim regulations—

§ 582.303(a) which reiterates the

requirement in 5 U.S.C. 5520a(d) that

agencies respond to interrogatories and

§ 582.306(c) which states that agencies

shall provide information concerning

subsequent employment—may conflict

with the Privacy Act, 5 U.S.C. 552a, as

implemented by numerous Federal

regulations including OPM’s own

disclosure regulations codified at 5 CFR

297.402, which permit disclosure in

response to legal process only where the

legal process is signed by a judge. While

it might be argued that 5 U.S.C. 5520a(d)

should be construed as an implicit

exception to the Privacy Act and to the

regulations that agencies have

promulgated to implement the Privacy

Act, OPM strongly recommends that

agencies establish routine uses that will

enable them to respond to

interrogatories served in accordance

with this part and, where appropriate, to

provide subsequent employment

information, notwithstanding the

absence of a judge’s signature or some

other omission otherwise barred by the

agency’s disclosure restrictions.

An employee organization

commented that OPM exceeded its

statutory authority by providing in

§ 582.303(a) that agencies may respond

to garnishment orders after 30 days

where a longer period is provided by

local law as well as by State law as

expressly stated in 5 U.S.C. 5520a(d).

While OPM concurs that section

5520a(d) expressly refers only to State

law, references to State law have

historically included both State and

local law. See, e.g., Ex parte Virginia,

100 U.S. 339 (1879), as discussed in

Civil Rights Cases, 109 U.S. 3, 57–58

(1883) (Harlan, J., dissenting). For the

same reason, we have declined to

amend § 582.402 to exclude references

to local law.

One agency suggested that

§ 582.303(a) be amended to clarify that

agencies need only respond once to

legal process. We have amended

§ 582.303(a) in response to this

suggestion.

One agency commenter noted that

§ 582.303 was redundant and suggested

that the word effectively be replaced

with the word validly. We have

amended this section in response to

these comments.

OPM received conflicting agency

recommendations concerning the action

to be taken where an employee-obligor

appeals a garnishment action, and we

have decided not to amend § 582.305(c)

at this time.

An association of collection attorneys

commented that in the collection world

there are two major areas: commercial

and retail with commercial referring to

the collection of debts from firms and

retail referring to collection from

consumers. While we appreciate the fact

that our terminology is not consistent

with the nomenclature used by some

private attorneys, we have determined
Federal Register / Vol. 60, No. 47 / Friday, March 10, 1995 / Rules and Regulations 13029

that no other term would be as generally

understood as the term commercial for

the purpose of distinguishing

garnishment actions under this part

from garnishment actions based on

child support and alimony obligations.

Several commenters requested that

the regulations clarify the effect of a

garnishment order for child support

and/or alimony on the processing of a

commercial garnishment order. In

response to these requests, we have

amended §§ 582.305(f) and 582.402(a) to

better explain the interrelationship

between the two types of legal process.

One commenter requested that OPM

delete § 582.305(k) because by

permitting Federal agencies to charge

fees in commercial garnishment actions

while not having a similar provision

relating to support garnishment actions,

OPM’s regulations were possibly

discriminatory against women. OPM

would emphasize that while the child

support and alimony garnishment

provisions in the Social Security Act do

not provide for administrative costs or

processing fees, Congress has expressly

provided for such fees in the processing

of commercial garnishment actions. See

5 U.S.C. 5520a(j)(2).

In response to an employee

organization’s suggestion, we have

amended § 582.305(k) concerning the

administrative fees. Three commenters

suggested that OPM establish uniform

administrative fees. Instead, OPM has

deferred to individual agencies to

determine whether administrative fees

should be assessed and in what amounts

based on their own cost figures. OPM

has been advised that several agencies

have established and have begun to

assess administrative fees based on their

costs in processing commercial

garnishment orders.

While 5 U.S.C. 5520a(h)(1) provides

that legal process shall be processed on

a first come, first served basis, the laws

in several jurisdictions, including

California and the District of Columbia,

provide that legal process may only be

satisfied on a ‘‘one at a time’’ basis.

Based on this information, we have

amended § 582.402(a) in an effort to

eliminate any confusion that may exist

in these jurisdictions. In accordance

with guidance received from the

Department of Labor, we have also

amended § 582.402(a) to provide that

administrative costs or fees provided

under § 582.305(k) must be included in

the amounts subject to the garnishment

restrictions of the Consumer Credit

Protection Act. In other words, an

agency may not withhold more than

25% of an employee-obligor’s aggregate

disposable earnings in order to offset

administrative costs. Rather, the amount

to be withheld in compliance with the

legal process would have to be reduced

in order that the administrative costs

could be recovered without exceeding

the maximum garnishment limitations.

OPM received comments from two

Federal agencies concerning the

processing of garnishment orders where

the employee-obligor has filed a

bankruptcy petition. We have amended

§ 582.305(l) in accordance with these

recommendations. One individual

commented that the regulations failed to

recognize exemptions which employees

may be entitled to under various

provisions of State law. We would

direct the commenter to § 582.402(a)

which encompasses these exemption

provisions.

However, we would also emphasize

that it is primarily the employeeobligor’s responsibility and not the

employee-obligor’s employer’s

responsibility to ensure that the debtor

is allowed all of the exemptions to

which the employee-obligor is entitled

under State law.

Four commenters recommended that

§ 582.402(b) be amended to apply only

where the bankruptcy action is under

Chapter 13, and one agency commented

that § 582.402(b) should also include

Federal tax levies. In response to these

comments and after conferring with the

Department of Labor which administers

the Consumer Credit Protection Act, we

have amended § 582.402(b) to

incorporate these recommendations.

While OPM is sympathetic to agencies

and individuals who complained that

the time limitations, particularly with

regard to notifying employees stationed

overseas, are too short, these time

limitations are statutory and OPM’s

implementing time limit provisions

only repeat these statutory limits. See 5

U.S.C. 5520a(d). OPM does not believe

that it has the authority to extend these

time limits even where the garnishment

order being processed will affect the pay

of an employee stationed overseas. See

Federal Election Commission v.

Democratic Senatorial Campaign

Committee, 454 U.S. 27, 32 (1981).

Two commenters expressed concern

regarding whether any time limit

existed concerning the age of the

underlying judgment that the

garnishment order was attempting to

enforce. Because Public Law 103–94

does not address this issue, we believe

that the answer would depend on the

law of the jurisdiction from which the

garnishment order was issued and that,

in any event, as long as the order was

‘‘regular on its face,’’ it would not be the

employing agency’s burden to

determine whether the garnishment

order had been issued in accordance

with the limitation provisions of the

jurisdiction from which the order was

issued. See United States v. Morton,

supra, at 828–830 (the Federal

Government need only ascertain that

legal process is ‘‘regular on its face’’). In

other words, this is an issue that the

employee-obligor would be responsible

for contesting rather than the employing

agency. Similarly, we do not believe

that the agency bears the burden of

determining when garnishment orders

themselves expire, except, of course,

where the order, on its face, indicates

when it will expire.

While most of the comments focused

on the interim regulations, several

commenters stressed the need for a

garnishment application form. In

response to these requests, OPM sought

and obtained approval from the Office

of Management and Budget to issue a

voluntary garnishment application form.

In addition, OPM has elicited

suggestions from several other Federal

agencies concerning a voluntary

application form and is currently

reviewing those suggestions.

One agency requested additional

guidance concerning what action should

be taken where an agency is advised

that the garnishment action should

either be terminated or that the amount

being garnished should be reduced as a

result of a payment having been made

or an agreement having been reached

between the parties. While OPM has not

attempted at this time to promulgate

regulations that would dictate the

actions that must be taken in such

situations, OPM urges agencies to

exercise their discretion in determining

when a garnishment action should be

terminated or modified as a result of

such payments or agreements between

the parties.

An issue that provoked numerous

comments concerned the payment of

interest. For the most part, it is our

understanding that agencies have had

no particular difficulty in garnishing

amounts for interest that were included

in the judgment total or judgment

amount provided in the garnishment

order, but several States, including

Maryland and Hawaii, issue orders that

do not expressly state a dollar figure for

all of the interest that may be subject to

garnishment. While 5 U.S.C. 5520a(b)

provides that Federal agencies will be

‘‘subject to legal process in the same

manner and to the same extent as if the

agency were a private person,’’ section

5520a(a)(3)(B) defines legal process, in

pertinent part, as a writ, order, or

summons that orders the employing

agency to withhold ‘‘an amount’’ from

the employee-obligor’s pay. There is,

therefore, an ambiguity in the statute as
13030 Federal Register / Vol. 60, No. 47 / Friday, March 10, 1995 / Rules and Regulations

concerns the garnishment of sums such

as interest that are not expressly

included in the order, and absent clearer

statutory language, OPM declines at this

time to promulgate a regulation that

would require agencies to compute and

pay interest that is not included in the

amount specified in the garnishment

order.

A process serving company in the

District of Columbia advised OPM that

while some agencies facilitate service of

process on their employees, other

agencies did not. In response to this

information, OPM requested guidance

from the Justice Department and was

advised that when it comes to gaining

access to restricted Governmental

worksites, process servers have no more

rights than anyone else and that a

regulatory provision concerning this

matter would be inappropriate.

Executive Order 12866, Regulatory

Review

This rule has been reviewed by the

Office of Management and Budget in

accordance with Executive Order 12866.

Regulatory Flexibility Act

I certify that these regulations will not

have significant economic impact on a

substantial number of small entities

because their effects are limited to

Federal employees and their creditors.

List of Subjects in 5 CFR Part 582

Claims.

Office of Personnel Management.

Lorraine A. Green,

Deputy Director.

Accordingly, OPM is revising part 582

of title 5, Code of Federal Regulations as

follows:

PART 582—COMMERCIAL

GARNISHMENT OF FEDERAL

EMPLOYEES’ PAY

Subpart A—Purpose, Definitions, and

Exclusions

Sec.

582.101 Purpose.

582.102 Definitions.

582.103 Exclusions.

Subpart B—Service of Legal Process

582.201 Agent to receive process.

582.202 Service of legal process.

582.203 Information minimally required to

accompany legal process.

582.204 Electronic disbursement.

Subpart C—Compliance With Legal Process

582.301 Suspension of payment.

582.302 Notification of employee-obligor.

582.303 Response to legal process or

interrogatories.

582.304 Nonliability for disclosure.

582.305 Honoring legal process.

582.306 Lack of entitlement by the

employee-obligor to pay from the agency

served with legal process.

Subpart D—Consumer Credit Protection Act

Restrictions

582.401 Aggregate disposable earnings.

582.402 Maximum garnishment limitations.

Subpart E—Implementation by Agencies

582.501 Rules, regulations, and directives

by agencies.

Appendix A to part 582—List of Agents

Designated to Accept Legal Process

Authority: 5 U.S.C. 5520a; 15 U.S.C. 1673;

E.O. 12897

Subpart A—Purpose, Definitions, and

Exclusions

§ 582.101 Purpose.

Section 5520a of title 5 of the United

States Code provides that with certain

exceptions set forth in this part, pay

from an agency to an employee is

subject to legal process in the same

manner and to the same extent as if the

agency were a private person. The

purpose of this part is to implement the

objectives of section 5520a as they

pertain to each executive agency of the

United States Government, except with

regard to employees of the United States

Postal Service, the Postal Rate

Commission, and the General

Accounting Office.

§ 582.102 Definitions.

In this part—(1) Agency means each

agency of the executive branch of the

Federal Government, excluding the

United States Postal Service, the Postal

Rate Commission, and the General

Accounting Office; agency does not

include the government of the District of

Columbia or the territories and

possessions of the United States.

(Section 5520a(j)(1) of title 5 of the

United States Code provides that

separate implementing regulations shall

be promulgated by the legislative branch

and the judicial branch; section

5520a(k) provides that separate

implementing regulations shall be

promulgated with regard to members of

the uniformed services; and Executive

Order 12897 provides that separate

implementing regulations shall be

promulgated with regard to employees

of the United States Postal Service. The

regulations promulgated for employees

of the United States Postal Service also

apply to employees of the Postal Rate

Commission.)

(2) Employee or employee-obligor

means an individual who is employed

by an agency as defined in this section,

including reemployed annuitants and

retired members of the uniformed

services who are employed by an

agency. Employee does not include a

retired employee, member of the

uniformed services, a retired member of

the uniformed services, or an individual

whose service is based on a contract,

including individuals who provide

personal services based on a contract

with an agency.

(3) Legal process means any writ,

order, summons, or other similar

process in the nature of garnishment,

which may include an attachment, writ

of execution, court ordered wage

assignment, or tax levy from a State or

local government, which—

(i) Is issued by:

(A) A court of competent jurisdiction,

including Indian tribal courts, within

any State, territory, or possession of the

United States, or the District of

Columbia. As stated in § 582.101, pay is

subject to legal process in the same

manner and to the same extent as if the

agency were a private person. There is,

therefore, no requirement in this part

that, for example, legal process be

signed by a Judge; or.

(B) An authorized official pursuant to

an order of a court of competent

jurisdiction or pursuant to State or local

law; or

(C) A State agency authorized to issue

income withholding notices pursuant to

State or local law; and

(ii) Orders an agency to withhold an

amount from the pay of an employeeobligor and to make a payment of such

withholding to a person, for a

specifically described satisfaction of a

legal debt of the employee-obligor, or

recovery of attorney fees, interest, or

court costs;

(4) Person may include an individual,

partnership, corporation, association,

joint venture, private organization or

other legal entity, and includes the

plural of that term; person may include

any of the entities that may issue legal

process as set forth in § 582.102(3)(i)

(A), (B), and (C), and a State or local

government as well as a foreign entity

or a foreign governmental unit, but does

not include the United States or an

agency of the United States.

(5) In conformance with 5 U.S.C.

5520a, pay means basic pay; premium

pay paid under chapter 55, subchapter

V, of title 5 of the United States Code;

any payment received under chapter 55,

subchapters VI, VII, or VIII, of title 5 of

the United States Code; severance pay

and back pay under chapter 55,

subchapter IX, of title 5 of the United

States Code; sick pay, and any other

paid leave; incentive pay; locality pay

(including interim geographic

adjustments, special pay adjustments for

law enforcement officers, and localitybased comparability payments); back

pay awards; and any other
Federal Register / Vol. 60, No. 47 / Friday, March 10, 1995 / Rules and Regulations 13031

compensation paid or payable for

personal services, whether such

compensation is demoninated as pay,

wages, salary, lump-sum leave

payments, commission, bonus, award,

or otherwise; but does not include

amounts received under any Federal

program for compensation for work

injuries; awards for making suggestions,

reimbursement for expenses incurred by

an individual in connection with

employment, or allowances in lieu

thereof as determined by the employing

agency.

§ 582.103 Exclusions.

In determining the amount of pay

subject to garnishment under this part,

there shall be excluded amounts which:

(a) Are owed by the employee-obligor

to the United States;

(b) Are required by law to be

deducted from the employee-obligor’s

pay, including, but not limited to

amounts deducted in compliance with

the Federal Insurance and Contributions

Act (FICA), including amounts

deducted for Medicare and for Old Age,

Survivor, and Disability Insurance

(OASDI);

(c) Are properly withheld for Federal,

State, or local income tax purposes, if

the withholding of the amounts is

authorized or required by law and if

amounts withheld are not greater than

would be the case if the employeeobligor claimed all dependents to which

the employee-obligor were entitled. The

withholding of additional amounts

pursuant to section 3402(i) of title 26 of

the United States Code may be

permitted only when the employeeobligor presents evidence of a tax

obligation which supports the

additional withholding;

(d) Are deducted as health insurance

premiums;

(e) Are deducted as normal retirement

contributions, not including amounts

deducted for supplementary coverage.

For purposes of this section, all amounts

contributed under sections 8351 and

8432(a) of title 5 of the United States

Code to the Thrift Savings Fund are

deemed to be normal retirement

contributions. Except as provided in

this paragraph, amounts voluntarily

contributed toward additional

retirement benefits are considered to be

supplementary;

(f) Are deducted as normal life

insurance premiums from salary or

other remuneration for employment, not

including amounts deducted for

supplementary coverage. Federal

Employees’ Group Life Insurance

premiums for ‘‘Basic Life’’ coverage are

considered to be normal life insurance

premiums; all optional Federal

Employees’ Group Life Insurance

premiums and any life insurance

premiums paid for by allotment are

considered to be supplementary.

(g) Amounts withheld in compliance

with legal process based on child

support and/or alimony indebtedness

are not exclusions.

Subpart B—Service of Legal Process

§ 582.201 Agent to receive process.

(a) Except as provided in appendix A

to this part, appendix A to 5 CFR part

581 lists agents designated to accept

service of process under part 581 and

this part.

(b) United States Attorneys are not

considered appropriate agents to accept

service of process.

§ 582.202 Service of legal process.

(a) A person using this part shall serve

interrogatories and legal process on the

agent to receive process as explained in

§ 582.201. Where the legal process is

directed to an agency, and the purpose

of the legal process is to compel an

agency to garnish an employee’s pay,

the legal process need not expressly

name the agency as a garnishee.

(b) Service of legal process may be

accomplished by certified or registered

mail, return receipt requested, or by

personal service only upon the agent to

receive process as explained in

§ 582.201, or if no agent has been

designated, then upon the head of the

employee-obligor’s employing agency.

The designated agent shall note the date

and time of receipt on the legal process.

(c) Parties bringing garnishment

actions shall comply with the service of

process provisions in this section.

Service will not be effective where

parties fail to comply with the service

of process provisions of this section,

notwithstanding whether the person

bringing the garnishment action has

complied with the service of process

requirements of the jurisdiction issuing

the legal process.

§ 582.203 Information minimally required

to accompany legal process.

(a) Sufficient identifying information

must accompany the legal process in

order to enable processing by the

agency. Parties seeking garnishment

actions, therefore, should provide as

many of the following identifying pieces

of information concerning the

employee-obligor as possible:

(1) Full name;

(2) Date of birth;

(3) Employment number or social

security number;

(4) Component of the agency for

which the employee-obligor works;

(5) Official duty station or worksite;

and

(6) Home address or current mailing

address.

(b) If the information submitted is not

sufficient to identify the employeeobligor, the legal process shall be

returned directly to the court, or other

authority, with an explanation of the

deficiency. However, prior to returning

the legal process, if there is sufficient

time prior to the time limits imposed in

§ 582.303, an attempt should be made to

inform the person who caused the legal

process to be served, or the person’s

representative, that it will not be

honored unless adequate identifying

information is supplied.

§ 582.204 Electronic disbursement.

The party designated to receive the

garnished funds may forward a written

request to the garnishing agency to have

the funds remitted by electronic funds

transfer, rather than by paper check. The

request shall include the designated

party’s name, address, and deposit

account number, and the name, address,

and 9-digit routing transit number of the

designated party’s financial institution.

Written requests accompanying service

of process will be honored beginning

with the first remission of garnished

funds. Written requests received by the

agency subsequent to service of process

will be honored in as timely a manner

as the agency deems feasible.

Subpart C—Compliance With Legal

Process

§ 582.301 Suspension of payment.

Upon proper service of legal process

as specified in §§ 582.202 and 582.203,

the agency shall suspend, i.e., withhold,

payment of such moneys for the amount

necessary to permit compliance with the

legal process in accordance with this

part.

§ 582.302 Notification of employee-obligor.

(a) As soon as possible, but not later

than 15 calendar days after the date of

valid service of legal process, the agent

designated to accept legal process shall

send to the employee-obligor, at his or

her duty station or last known home

address, written notice that such

process has been served, including a

copy of the legal process;

(b) The agency may provide the

employee-obligor with the following

additional information:

(1) Copies of any other documents

submitted in support of or in addition

to the legal process;

(2) Notice that the United States does

not represent the interests of the

employee-obligor in the pending legal

proceedings; and
13032 Federal Register / Vol. 60, No. 47 / Friday, March 10, 1995 / Rules and Regulations

(3) Advice that the employee-obligor

may wish to consult legal counsel

regarding defenses to the legal process

that he or she may wish to assert.

§ 582.303 Response to legal process or

interrogatories.

(a) Whenever the designated agent is

validly served with legal process, the

agent shall respond within 30 calendar

days after receipt, or within such longer

period as may be prescribed by

applicable State or local law. The agent

shall also respond within this time

period to interrogatories which

accompany legal process.

Notwithstanding State law, an agent

need only respond once to legal process.

(b) If State or local law authorizes the

issuance of interrogatories prior to or

after the issuance of legal process, the

agent shall respond to the

interrogatories within 30 calendar days

after being validly served, or within

such longer period as may be prescribed

by applicable State or local law.

§ 582.304 Nonliability for disclosure.

(a) No agency employee whose duties

include responding to interrogatories

pursuant to § 582.303(b), shall be

subject to any disciplinary action or

civil or criminal liability or penalty for

any disclosure of information made in

connection with the carrying out of any

duties pertaining directly or indirectly

to answering such interrogatories.

(b) However, an agency would not be

precluded from taking disciplinary

action against an employee who

consistently or purposely failed to

provide correct information requested

by interrogatories.

§ 582.305 Honoring legal process.

(a) The agency shall comply with

legal process, except where the process

cannot be complied with because:

(1) It is not regular on its face.

(2) The legal process would require

the withholding of funds not deemed

pay as described in § 582.102(a)(5).

(3) It does not comply with section

5520a of title 5 of the United States

Code or with the mandatory provisions

of this part; or

(4) An order of a court of competent

jurisdiction enjoining or suspending the

operation of the legal process has been

served on the agency.

(b) While an agency will not comply

with legal process which, on its face,

indicates that it has expired or is

otherwise no longer valid, legal process

will be deemed valid notwithstanding

the fact that the underlying debt and/or

the underlying judgment arose prior to

the effective date of section 5520a of

title 5 of the United States Code.

(c) While the filing of an appeal by an

employee-obligor will not generally

delay the processing of a garnishment

action, if the employee-obligor

establishes to the satisfaction of the

employee-obligor’s agency that the law

of the jurisdiction which issued the

legal process provides that the

processing of the garnishment action

will be suspended during an appeal and

if the employee-obligor establishes that

he or she has filed an appeal, the

employing agency shall comply with the

applicable law of the jurisdiction and

delay or suspend the processing of the

garnishment action.

(d) Under the circumstances set forth

in § 582.305 (a) or (b), or where the

agency is directed by the Justice

Department not to comply with the legal

process, the agency shall respond

directly to the court, or other authority,

setting forth its reasons for noncompliance with the legal process. In

addition, the agency shall inform the

person who caused the legal process to

be served, or the person’s

representative, that the legal process

will not be honored. Thereafter, if

litigation is initiated or appears

imminent, the agency shall immediately

refer the matter to the United States

Attorney for the district from which the

legal process issued. To ensure

uniformity in the executive branch,

agencies which have statutory authority

to represent themselves in court shall

coordinate their representation with the

United States Attorney.

(e) In the event that an agency is

served with more than one legal process

or garnishment order with respect to the

same payments due or payable to the

same employee, the agency shall satisfy

such processes in priority based on the

time of service: Provided, That in no

event will the total amount garnished

for any pay or disbursement cycle

exceed the applicable limitation set

forth in § 582.402. Provided further,

That processes which are not limited in

time shall preserve their priority based

on time of service until fully satisfied.

Generally, a modified order will retain

its original priority while a time limited

order will lose its priority after it has

expired.

(f) Legal process to which an agency

is subject under sections 459, 461, and

462 of the Social Security Act (42 U.S.C.

659, 661, and 662) for the enforcement

of an employee’s legal obligation to

provide child support or to make

alimony payments, including child

support or alimony arrearages, shall

have priority over any legal process to

which an agency is subject under this

part. In addition to having priority,

compliance with legal process to which

an agency is subject under sections 459,

461, and 462 of the Social Security Act

may exhaust the moneys available for

compliance with legal process under

this part. See § 582.402(a).

(g) Neither the United States, an

executive agency, nor any disbursing

officer shall be liable for any payment

made from moneys due from, or payable

by, the United States to any individual

pursuant to legal process regular on its

face, if such payment is made in

accordance with this part. Where an

agency initially determines that legal

process should not be honored, if it

subsequently determines that its initial

determination was erroneous, it may

correct its initial determination and

honor the legal process. If an agency

corrects an error or is required to do so

by a court or other authority, under no

circumstances will the agency be

required to pay more than if it had

originally honored the legal process.

(h) Agencies affected by legal process

served under this part shall not be

required to vary their normal pay or

disbursement cycles to comply with the

legal process. However, legal process,

valid at the time of service, which is

received too late to be honored during

the disbursement cycle in which it is

received, shall be honored, to the extent

that the legal process may be satisfied,

during the next disbursement cycle

within the limits set forth in § 582.402.

The fact that the legal process may have

expired during this period would not

relieve the agency of its obligation to

honor legal process which was valid at

the time of service. If, in the next

disbursement cycle, no further payment

will be due from the agency to the

employee-obligor, the agency shall

follow the procedures set forth in

§ 582.306.

(i) Agencies need not establish escrow

accounts in order to comply with legal

process. Therefore, even if the amount

garnished by an agency in one

disbursement cycle is not sufficient to

satisfy the entire indebtedness, the

agency need not retain those funds until

the amount retained would satisfy the

entire indebtedness. On the contrary,

agencies will, in most instances, remit

the garnished amount after each

disbursement cycle. Agencies need not

pro-rate payments for less than a full

disbursement cycle.

(j) If an agency receives legal process

which is regular on its face, the agency

shall not be required to ascertain

whether the authority which issued the

legal process had obtained personal

jurisdiction over the employee-obligor.

(k) At the discretion of the executive

agency, the agency’s administrative

costs in executing a garnishment may be
Federal Register / Vol. 60, No. 47 / Friday, March 10, 1995 / Rules and Regulations 13033

added to the garnishment amount and

the agency may retain costs recovered as

offsetting collections. To facilitate

recovery of these administrative costs,

an administrative fee may be assessed

for each legal process that is received

and processed by an agency, provided

that the fee constitutes the agency’s

administrative costs in executing the

garnishment action.

(l) Where an employee-obligor has

filed a bankruptcy petition under

section 301 or 302 of title 11 of the

United States Code, or is the debtor

named in an involuntary petition filed

under section 303 of title 11, the agency

must cease garnishment proceedings

affected by the automatic stay provision,

section 362(a) of title 11. Upon filing a

petition in bankruptcy or upon learning

that he or she is the debtor named in an

involuntary petition, the employeeobligor should immediately notify the

agency. To enable the agency to

determine if the automatic stay applies,

the employee-obligor should provide

the agency with a copy of the filing or

a letter from counsel stating that the

petition was filed and indicating the

court and the case number, the chapter

under which the petition was filed,

whether State or federal exemptions

were elected, and the nature of the

claim underlying the garnishment order.

§ 582.306 Lack of entitlement by the

employee-obligor to pay from the agency

served with legal process.

(a) When legal process is served on an

agency and the individual identified in

the legal process as the employeeobligor is found not to be entitled to pay

from the agency, the agency shall follow

the procedures set forth in the legal

process for that contingency or, if no

procedures are set forth therein, the

agency shall return the legal process to

the court, or other authority from which

it was issued, and advise the court, or

other authority, that the identified

employee-obligor is not entitled to any

pay from the agency.

(b) Where it appears that the

employee-obligor is only temporarily

not entitled to pay from the agency, the

court, or other authority, shall be fully

advised as to why, and for how long, the

employee-obligor’s pay will not be

garnished, if that information is known

by the agency and if disclosure of that

information would not be prohibited.

(c) In instances where an employeeobligor separates from employment with

an agency that had been honoring a

continuing legal process, the agency

shall inform the person who caused the

legal process to be served, or the

person’s representative, and the issuing

court, or other authority, that the

garnishment action is being

discontinued. In cases where the

employee-obligor has been employed by

either another agency or by a private

employer, and where this information is

known by the agency, the agency shall

provide the person with the designated

agent for the new employing agency or

with the name and address of the

private employer.

Subpart D—Consumer Credit

Protection Act Restrictions

§ 582.401 Aggregate disposable earnings.

In accordance with the Consumer

Credit Protection Act, the aggregate

disposable earnings under this part are

the employee-obligor’s pay less those

amounts excluded in accordance with

§ 582.103.

582.402 Maximum garnishment

limitations.

Pursuant to section 1673(a)(1) of title

15 of the United States Code (the

Consumer Credit Protection Act, as

amended) and the Department of Labor

regulations to title 29, Code of Federal

Regulations, part 870, the following

limitations are applicable:

(a) Unless a lower maximum

limitation is provided by applicable

State or local law, the maximum part of

an employee-obligor’s aggregate

disposable earnings subject to

garnishment to enforce any legal debt

other than an order for child support or

alimony, including any amounts

withheld to offset administrative costs

as provided for in § 582.305(k), shall not

exceed 25 percent of the employeeobligor’s aggregate disposable earnings

for any workweek. As appropriate, State

or local law should be construed as

providing a lower maximum limitation

where legal process may only be

processed on a one at a time basis.

Where an agency is garnishing 25

percent or more of an employeeobligor’s aggregate disposable earnings

for any workweek in compliance with

legal process to which an agency is

subject under sections 459, 461, and 462

of the Social Security Act, no additional

amount may be garnished in compliance

with legal process under this part.

Furthermore, the following dollar

limitations, which are contained in title

29 of the Code of Federal Regulations,

part 870, must be applied in

determining the garnishable amount of

the employee’s aggregate disposable

earnings:

(1) If the employee-obligor’s aggregate

disposable earnings for the workweek

are in excess of 40 times the Fair Labor

Standards Act (FLSA) minimum hourly

wage, 25 percent of the employeeobligor’s aggregate disposable earnings

may be garnished. For example, when

the FLSA minimum wage rate is $4.25

per hour, this rate multiplied by 40

equals $170.00 and thus, if an

employee-obligor’s disposable earnings

are in excess of $170.00 for a workweek,

25 percent of the employee-obligor’s

disposable earnings are subject to

garnishment.

(2) If the employee-obligor’s aggregate

disposable earnings for a workweek are

less than 40 times the FLSA minimum

hourly wage, garnishment may not

exceed the amount by which the

employee-obligor’s aggregate disposable

earnings exceed 30 times the current

minimum wage rate. For example, at an

FLSA minimum wage rate of $4.25 per

hour, the amount of aggregate

disposable earnings which may not be

garnished is $127.50 [$4.25×30]. Only

the amount above $127.50 is

garnishable.

(3) If the employee-obligor’s aggregate

disposable earnings in a workweek are

equal to or less than 30 times the FLSA

minimum hourly wage, the employeeobligor’s earnings may not be garnished

in any amount.

(b) There is no limit on the percentage

of an employee-obligor’s aggregate

disposable earnings that may be

garnished for a Federal, State or local

tax obligation or in compliance with an

order of any court of the United States

having jurisdiction over bankruptcy

cases under Chapter 13 of title 11 of the

United States Code. Orders from courts

having jurisdiction over bankruptcy

cases under Chapter 7 or Chapter 11 of

the United States Code are subject to the

maximum garnishment restrictions in

§ 582.402(a).

Subpart E—Implementation by

Agencies

§ 582.501 Rules, regulations, and

directives by agencies.

Appropriate officials of all agencies

shall, to the extent necessary, issue

implementing rules, regulations, and/or

directives that are consistent with this

part.

Appendix A to Part 582—List of Agents

Designated To Accept Legal Process

Note: The agents designated to accept legal

process are listed in appendix A to part 581

of this chapter. This appendix A to part 582

provides listings only for those executive

agencies where the designations differ from

those found in appendix A to part 581 of this

chapter.

I. Departments

Department of Defense. Defense Finance

and Accounting Service, Cleveland

Center, Office of General Counsel,
13034 Federal Register / Vol. 60, No. 47 / Friday, March 10, 1995 / Rules and Regulations

Attention: Code L, P.O. Box 998002,

Cleveland, OH 44199–8002, (216)

522–5301.

Agents for receipt of all legal process

for all Department of Defense civilian

employees except where another agent

has been designated as set forth below.

For requests that apply to employees

of the Army and Air Force Exchange

Service or to civilian employees of the

Defense Contract Audit Agency (DCAA)

and the Defense Logistics Agency (DLA)

who are employed outside the United

States: See appendix A to part 581 of

this chapter.

For requests that apply to civilian

employees of the Army Corps of

Engineers, the National Security

Agency, the Defense Intelligence

Agency, and non-appropriated fund

civilian employees of the Air Force,

serve the following offices:

Army Corps of Engineers. U.S. Army

Corps of Engineers, Omaha District,

Central Payroll Office, Attn:

Garnishments, P.O. Box 1439 DTS,

Omaha, NE 68101–1439, (402) 221–

4060.

Army Nonappropriated Fund

Employees in Europe. Commander,

266th Theater Finance Command,

NAF Payroll, Unit #29001–07, APO

AE 09007–0137, 011–49–6221–57–

7752, DSN 379–7752.

National Security Agency. General

Counsel, National Security Agency/

Central Security Service, 9800 Savage

Rd., Ft. George G. Meade, MD 20755–

6000, (301) 688–6705.

Defense Intelligence Agency. Office of

General Counsel, Defense Intelligence

Agency, Pentagon, 2E238,

Washington, DC 20340–1029, (202)

697–3945.

Air Force Nonappropriated Fund

Employees. Office of General Counsel,

Air Force Services Agency, 10100

Reunion Place, Suite 503, San

Antonio, TX 78216–4138, (210) 652–

7051.

For civilian employees of the Army,

Navy and Marine Corps who are

employed outside the United States,

serve the following offices:

Army Civilian Employees in Europe.

Commander, 266th Theater Finance

Command, ATTN: AEUCF–CPF, APO

AE 09007–0137, 011–49–6221–57–

6303/2136, DSN 370–6303/2136.

Army Civilian Employees in Japan.

Commander, U.S. Army Finance and

Accounting Office, Japan, ATTN:

APAJ–RM–FA–E–CP, Unit 45005,

APO AP 96343–0087, DSN 233–3362.

Army Civilian Employees in Korea.

Commander, 175th Finance and

Accounting Office, Korea, ATTN:

EAFC–FO (Civilian Pay), Unit 15300,

APO AP 96205–0073, 011–822–791–

4599, DSN 723–4599.

Army Civilian Employees in Panama.

DCSRM Finance & Accounting Office,

ATTN: SORM–FAP–C, Unit 7153,

APO AA 34004–5000, 011–507–287–

6766, DSN 287–5312.

Navy and Marine Corps Civilian

Employees Overseas. Director of the

Office of Civilian Personnel

Management, Office of Counsel,

Office of Civilian Personnel

Management (OCPM–OL),

Department of the Navy, 800 N.

Quincy Street, Arlington, VA 22203–

1990, (703) 696–4717.

Navy and Marine Corps

Nonappropriated Fund Employees. The

agents are the same as those designated

to receive garnishment orders of Navy

and Marine Corps nonappropriated fund

personnel for the collection of child

support and alimony, published at 32

CFR part 734 (1994 ed.), except as

follows:

For non-civil service civilian

personnel of the Navy Exchanges or

related nonappropriated fund

instrumentalities administered by the

Navy Exchange Service Command:

Commander, Navy Exchange Service

Command, ATTN: Human Resources

Beverly Building, 3280 Virginia Beach

Boulevard, Virginia Beach, VA 23453–

5274, (804) 631–3675.

For non-civil service civilian

personnel of Marine Corps

nonappropriated fund instrumentalities,

process may be served on the

Commanding Officer of the employing

activity ATTN: Morale, Welfare and

Recreation Director.

Department of the Interior. Chief,

Payroll Operations Division Attn:

Code: D–2605, Bureau of Reclamation.

Administrative Service Center,

Department of the Interior, P.O. Box

272030, 7201 West Mansfield Avenue,

Denver, CO 80227–9030, (303) 969–

7739.

[FR Doc. 95–5951 Filed 3–9–95; 8:45 am]

BILLING CODE 6325–01–M

5 CFR Part 843

RIN 3206–AF91

Federal Employees Retirement

System—Computation of the Basic

Employee Death Benefit for Customer

Officers

AGENCY: Office of Management.

ACTION: Final rule.

SUMMARY: The Office of Personnel

Management (OPM) is issuing final

regulations concerning the use of

overtime and premium pay in

determining the final annual rate of

basic pay of customs officers under the

Federal Employees Retirement System

(FERS). These regulations establish the

methodology (similar to the one that

OPM uses for other flexible schedule

employees) that the employing agency

will use to compute customs officers’

‘‘final annual rate of basic pay’’ for

determining FERS ‘‘basic employee

death benefit.’’ The regulations are

necessary to implement the changes in

the statutory definition of basic pay

under FERS made by the Omnibus

Budget Reconciliation Act of 1993.

EFFECTIVE DATE: April 10, 1995.

FOR FURTHER INFORMATION CONTACT:

Harold L. Siegelman, (202) 606–0299.

SUPPLEMENTARY INFORMATION: On

October 5, 1994, we published (at 59 FR

50705) proposed regulations to

implement section 13812 of the

Omnibus Budget Reconciliation Act of

1993, Pub. L. 103–66, concerning the

use of overtime and premium pay in

determining the final annual rate of

basic pay of customs officers under the

Federal Employees Retirement System

(FERS). Section 13812 of Pub. L. 103–

66 amended section 8331(3) of title 5,

United States Code, the definition of

basic pay under the Civil Service

Retirement System (CSRS), to include,

as basic pay for CSRS computations,

certain overtime pay for customs

officers. Section 8401(4) of title 5,

United States Code, provides that the

CSRS definition of basic pay in section

8331(3) applies to FERS. For customs

officers, basic pay includes the regular

pay under the general schedule, any

applicable locality pay, and allowable

overtime pay up to $12,500 per fiscal

year. Basic pay is used to compute final

salary for the basic employee death

benefit under FERS.

We proposed a methodology for

determining final salary similar to the

one used for determining the ‘‘final

annual rate of basic pay’’ of intermittent

employees for the FERS basic employee

death benefit established in section

843.102 of Title 5, Code of Federal

Regulations. We received no comments

on the proposed regulations. We are

now issuing final regulations to adopt

that methodology.

Regulatory Flexibility Act

I certify that this regulation will not

have a significant economic impact on

a substantial number of small entities

because the regulation will only affect

Federal employees and agencies and

retirement payments to retired

Government employees and their

survivors.