Federal Register / Vol. 75, No. 214 / Friday, November 5, 2010 / Rules and Regulations 68203 

1PBGC has an internal directive which provides 

procedures to recover debts owed to PBGC from the 

current pay account of an employee, and to process 

Continued 

■ Therefore, under the Federal Food, 

Drug, and Cosmetic Act and under 

authority delegated to the Commissioner 

of Food and Drugs, 21 CFR part 892 is 

amended as follows: 

PART 892—RADIOLOGY DEVICES 

■ 1. The authority citation for 21 CFR 

part 892 continues to read as follows: 

Authority: 21 U.S.C. 351, 360, 360c, 360e, 

360j, 371. 

■ 2. Section 892.1715 is added to 

subpart B to read as follows: 

§ 892.1715 Full-field digital mammography 

system. 

(a) Identification. A full-field digital 

mammography system is a device 

intended to produce planar digital x-ray 

images of the entire breast. This generic 

type of device may include digital 

mammography acquisition software, 

full-field digital image receptor, 

acquisition workstation, automatic 

exposure control, image processing and 

reconstruction programs, patient and 

equipment supports, component parts, 

and accessories. 

(b) Classification. Class II (special 

controls). The special control for the 

device is FDA’s guidance document 

entitled ‘‘Class II Special Controls 

Guidance Document: Full-Field Digital 

Mammography System.’’ See § 892.1(e) 

for the availability of this guidance 

document. 

Dated: November 2, 2010. 

Leslie Kux, 

Acting Assistant Commissioner for Policy. 

[FR Doc. 2010–28007 Filed 11–4–10; 8:45 am] 

BILLING CODE 4160–01–P 

PENSION BENEFIT GUARANTY 

CORPORATION 

29 CFR Parts 4003 and 4903 

Debt Collection 

AGENCY: Pension Benefit Guaranty 

Corporation. 

ACTION: Final rule. 

SUMMARY: This final rule amends the 

Pension Benefit Guaranty Corporation’s 

(PBGC) regulation on debt collection to 

conform to the Debt Collection 

Improvement Act of 1996, the Federal 

Claims Collection Standards and other 

legal requirements applicable to the 

collection of non-tax debts owed to 

PBGC. PBGC is adding salary offset and 

administrative wage garnishment to the 

collection methods allowed under the 

current regulation and making other 

changes to strengthen PBGC’s debt 

collection program. 

DATES: Effective December 6, 2010 (See 

Applicability in SUPPLEMENTARY

INFORMATION.) 

FOR FURTHER INFORMATION CONTACT: 

Margaret E. Drake, Attorney, Office of 

the General Counsel, Pension Benefit 

Guaranty Corporation, 1200 K Street, 

NW., Washington, DC 20005–4026; 202– 

326–4400 (extension 3228). (For TTY/ 

TDD users, call the Federal relay service 

toll-free at 1–800–877–8339 and ask to 

be connected to 202–326–4400 

(extension 3228)). 

SUPPLEMENTARY INFORMATION: This final 

rule revises and replaces BGC’s debt 

collection regulations found at 29 CFR 

Part 4903 to conform to the Debt 

Collection Improvement Act of 1996 

(DCIA), Public Law 104–134, 110 Stat. 

1321, 1358 (April 26, 1996), the revised 

Federal Claims Collection Standards, 31 

CFR Chapter IX (Parts 900 through 904), 

and other laws applicable to the 

collection of non-tax debt owed to the 

Government. 

Background 

In 1994, PBGC adopted a regulation 

on debt collection to provide procedures 

to implement administrative offset, as 

authorized by the Federal Claims 

Collection Act of 1966, as amended by 

the Debt Collection Act of 1982 (31 

U.S.C. 3701, et seq.), and in accordance 

with regulations issued by the 

Department of Justice and the General 

Accountability Office. In 1995, PBGC 

adopted a regulation on debt collection 

to provide procedures to implement tax 

refund offset, as required for 

participation in the Federal tax refund 

offset program authorized by 31 U.S.C. 

3720A and in accordance with 

regulations issued by the Treasury 

Department. Together, these regulations 

comprise PBGC’s current debt collection 

regulation (29 CFR part 4903) providing 

procedures for debt collection through 

administrative offset and tax refund 

offset. Administrative offset allows 

PBGC to request that debts owed to 

PBGC by a debtor (e.g., in connection 

with government contractual 

obligations) be offset by amounts 

another Federal agency may owe to the 

debtor. Likewise, other Federal agencies 

may request the collection of debts 

owed to them be offset by amounts 

PBGC may owe the debtor. Tax refund 

offset allows PBGC to request that debts 

owed to PBGC by a debtor be offset by 

amounts the Government may owe to 

the debtor. The Debt Collection 

Improvement Act of 1996 (DCIA) 

fundamentally changed the manner in 

which the Federal government is 

required to manage the collection of its 

delinquent debts. Under DCIA, Congress 

directed that the management of 

delinquent obligations is to be 

centralized at the Treasury Department 

in order to increase the efficiency of the 

Government’s collection efforts. 

Pursuant to 31 U.S.C. 3716, to utilize 

the administrative offset tools under 

DCIA, Federal agencies had to ‘‘adopt, 

without change, regulations on 

collecting by administrative offset 

promulgated by the Department of 

Justice, the Government Accountability 

Office, or the Department of the 

Treasury,’’ or promulgate their own 

regulations consistent with the 

regulations issued by the Department of 

Justice, the General Accountability 

Office, or the Department of the 

Treasury. On November 20, 2000, the 

Department of Justice and the 

Department of the Treasury revised the 

FCCS. 65 FR 70390 (Nov. 20, 2000). 

On July 22, 2010 (at 75 FR 42662), 

PBGC published a proposed rule to 

revise its regulation on debt collection 

to conform the Debt Collection 

Improvement Act of 1996, the Federal 

Claims Collections Standards, other 

legal requirements applicable to non-tax 

debts owed to PBGC, and to add salary 

offset and administrative wage 

garnishment to the collection methods 

allowed under the current regulation 

and make other changes to strengthen 

PBGC’s debt collection program. PBGC 

received no public comments on the 

proposed rule and the final regulation is 

unchanged from the proposed 

regulation. 

Overview of Final Rule 

This final regulation revises the 

procedures for the collection of non-tax 

debts owed to PBGC through 

administrative offset and tax refund 

offset. It adopts the FCCS and 

supplements it by prescribing 

procedures consistent with the FCCS, as 

necessary and appropriate for PBGC 

operations. The final regulation also 

provides for the collection of debts via 

salary offset and the use of 

administrative wage garnishment. 

Salary offset is the collection of debt 

owed by a Federal employee by 

withholding up to 15 percent of the 

employee’s disposable pay. The 

procedures for salary offset are governed 

by 5 U.S.C. 5514, and Office of 

Personnel Management (OPM) 

regulations (5 CFR part 550, subpart k). 

OPM regulations provide for salary 

offset through the Treasury Offset 

Program.1 Administrative wage 

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68204 Federal Register / Vol. 75, No. 214 / Friday, November 5, 2010 / Rules and Regulations 

requests received from another Federal agency from 

the current pay account of a PBGC employee to 

recover debts owed to the agency. 

garnishment is the collection of a debt 

owed by a former Federal employee by 

ordering a non-Federal employer to 

withhold funds from a debtor’s wages. 

The procedures for administrative wage 

garnishment are governed by 31 U.S.C. 

3720D and 31 CFR 285.11. 

As with PBGC’s current debt 

collection regulation, the final 

regulation applies to collection of debts 

to PBGC by employers (e.g., unpaid 

premium, penalty and interest under 

part 4007, information penalties under 

part 4071, and employer liability under 

part 4062) and to the recovery of benefit 

overpayments to participants in cases 

where PBGC does not recoup the 

overpayment under part 4022 (e.g., 

where a participant is not entitled to 

future annuity benefits as of the plan’s 

termination date). The final regulation 

also applies to debts owed to the United 

States by current and former PBGC 

employees. 

The final regulation does not apply to 

the collection of tax debts, which is 

governed by the Internal Revenue Code 

of 1986 (26 U.S.C. 1 et seq.) and 

regulations, policies, and procedures 

issued by the Internal Revenue Service. 

Under the final regulation, benefits 

paid by PBGC generally are not offset, 

in accordance with the anti-alienation 

provisions under 29 U.S.C. 1056(d) and 

26 U.S.C. 401(a)(13). However, benefits 

paid by PBGC could be offset under 

certain limited exceptions from those 

provisions (e.g., in certain fiduciary 

breach situations). 

Nothing in the final regulation 

precludes the use of collection 

procedures not contained in the 

regulation. For example, PBGC may 

collect unused travel advances through 

setoff of an employee’s pay under 5 

U.S.C. 5705. Moreover, certain PBGC 

efforts to obtain payment of debts 

arising out of activities under ERISA are 

authorized by and subject to 

requirements prescribed under other 

Federal statutes. PBGC’s activities will 

be consistent with such requirements, as 

well as with any other applicable 

requirements (see e.g., parts 4000, 4003, 

4007, and 4062). PBGC may use 

multiple collection methods at the same 

time to collect a debt, as permitted by 

law. Nothing in the final regulation 

requires PBGC to duplicate notices or 

administrative proceedings required by 

contract, this part, or other laws or 

regulations. 

PBGC maintains a system of records 

to collect debts owed to PBGC by 

various individuals, PBGC–13, Debt 

Collection. See 75 FR 37842 (June 30, 

2010). 

Subpart A—4903.1 to 4903.4 

Subpart A of the final regulation 

addresses the general provisions 

applicable to the collection of non-tax 

debts owed to PBGC. Section 4903.5 

includes procedures for the collection of 

debts owed to PBGC, other than those 

subject to recoupment. 

Under § 4903.2, PBGC is not required 

to duplicate notices or administrative 

proceedings provided by contract, this 

final regulation, or other laws or 

regulations. PBGC is not required to 

provide a debtor with two hearings on 

the same issue simply because PBGC 

used two different collection tools, each 

of which requires that the debtor be 

provided with a hearing. For example, 

if PBGC has provided a debtor with 

notice of unpaid premium under part 

4007, it need not provide additional 

notice to the debtor before using this 

regulation to collect the debt owed to 

PBGC. 

Section 4903.4 states that PBGC’s 

rules under part 4000 regarding 

permissible methods of filing with 

PBGC, determining dates of filing and 

computation of time apply for purposes 

of this regulation. 

Subpart B—4903.5 to 4903.20 

Subpart B of the final regulation 

describes the procedures to be followed 

by PBGC when collecting debts owed to 

it. Among other things, subpart B 

outlines the due process procedures 

PBGC is required to follow when using 

offset (administrative, tax refund, and 

salary) to collect a debt owed to it, when 

garnishing a debtor’s non-Federal 

wages, or before reporting a debt owed 

to it to a credit bureau. Specifically, 

PBGC is required to provide debtors 

with notice of the amount and type of 

the debt, the intended collection action 

to be taken, how a debtor may pay the 

debt or make alternate payment 

arrangements, how a debtor could 

review documents related to the debt, 

and the consequences to the debtor if 

the debt is not repaid. Subpart B also 

describes how a debtor may request a 

hearing to contest the noticed debt. 

Subpart B also explains the 

circumstances under which PBGC could 

waive interest, penalties, and 

administrative costs. Such waivers are 

permitted only to the extent permitted 

by law. For example, part 4007 of this 

chapter does not permit waivers of 

interest charges on late premium 

payments. PBGC may provide 

additional guidance on how interest, 

penalties, and administrative costs are 

assessed on particular types of debts. 

Subpart B updates PBGC procedures 

to reflect changes required by DCIA. For 

example, DCIA centralized the use of 

offset by requiring agencies to refer 

debts delinquent for more than 180 days 

to the Financial Management Service 

(FMS) of the Treasury Department for 

offset. See 31 U.S.C. 3716(c)(6). FMS is 

required to offset payments to persons 

who owe delinquent debts to the 

Government. The final regulation 

revises PBGC’s regulations to comply 

with DCIA requirements for all types of 

offsets. This final regulation also 

incorporates procedures for several 

collection remedies authorized by DCIA, 

such as administrative wage 

garnishment. 

Subpart C—4903.21 to 4903.22 

Subpart C of the final regulation 

describes the procedures to be followed 

when a Federal agency, other than 

PBGC, wishes to use the offset process 

to collect a debt from a non-tax payment 

issued by PBGC as a payment agency. 

Subpart C governs the process for offsets 

that occur on a case-by-case basis to 

collect debts from payments made by 

PBGC to its employees, its vendors, and 

others whom PBGC is required or 

authorized to pay. While centralized 

offset through the Treasury Offset 

Program is the Government’s primary 

offset collection tool, this final 

regulation provides the procedures to be 

used when centralized offset is not 

otherwise available or appropriate. An 

agency’s use of the non-centralized 

administrative offset process does not 

provide grounds to invalidate any offset 

on the basis that centralized offset was 

not used. 

Compliance With Rulemaking 

Guidelines 

Executive Order 12866 

PBGC has determined that this rule is 

not a ‘‘significant regulatory action’’ 

under Executive Order 12866. 

Regulatory Flexibility Act 

PBGC certifies under section 605(b) of 

the Regulatory Flexibility Act (5 U.S.C. 

601 et seq.) that the amendments in this 

final regulation will not have a 

significant economic impact on a 

substantial number of small entities. 

The final rule is limited to procedures 

required by the Debt Collection 

Improvement Act of 1996, the Federal 

Claims Collection Standards and other 

laws applicable to the collection of nontax debts owed to the United States. 

Thus, a small entity can avoid the 

application of this rule by paying such 

debts when due. Further, insofar as the 

provisions of this rule do apply, their 

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Federal Register / Vol. 75, No. 214 / Friday, November 5, 2010 / Rules and Regulations 68205 

primary effect would be to provide 

procedural protections to persons whose 

debts are otherwise subject to collection 

by administrative offset, tax refund 

offset, salary offset or administrative 

wage garnishment. Accordingly, as 

provided in section 605 of the 

Regulatory Flexibility Act, sections 603 

and 604 do not apply. 

List of Subjects 

29 CFR Part 4003 

Administrative practice and 

procedure, Organization and functions 

(Government agencies, Pension 

insurance, Pensions. 

29 CFR Part 4903 

Claims. 

■ For the reasons given above, PBGC is 

amending 29 CFR parts 4003 and 4903 

as follows: 

PART 4003—RULES FOR 

ADMINISTRATIVE REVIEW OF 

AGENCY DECISIONS 

■ 1. The authority citation for part 4003 

continues to read as follows: 

Authority: 29 U.S.C. 1302(b)(3). 

■ 2. Amend § 4003.32 by removing 

‘‘§ 4903.33 of this chapter, by a date 60 

days (or more) thereafter’’ and replacing 

it with ‘‘part 4903 of this chapter, by the 

date’’. 

■ 3. Amend § 4003.52 by removing 

‘‘§ 4903.33 of this chapter, by a date 60 

days (or more) thereafter’’ and replacing 

it with ‘‘part 4903 of this chapter, by the 

date’’. 

■ 4. Part 4903 is revised to read as 

follows: 

PART 4903—DEBT COLLECTION 

Subpart A—General Provisions 

Sec. 

4903.1 What definitions apply to this part? 

4903.2 What do these regulations cover? 

4903.3 Do these regulations adopt the 

Federal Claims Collection Standards 

(FCCS)? 

4903.4 What rules apply for purposes of 

filing with PBGC, determining dates of 

filings, and computation of time? 

Subpart B—Procedures to Collect Debts 

Owed to PBGC 

4903.5 What notice will PBGC send to a 

debtor when collecting a debt owed to 

PBGC? 

4903.6 How will PBGC add interest, penalty 

charges, and administrative costs to a 

debt owed to PBGC? 

4903.7 When will PBGC allow a debtor to 

pay a debt owed to PBGC in installments 

instead of a lump sum? 

4903.8 When will PBGC compromise a debt 

owed to PBGC? 

4903.9 When will PBGC suspend or 

terminate debt collection on a debt owed 

to PBGC? 

4903.10 When will PBGC transfer a debt 

owed to PBGC to the Treasury 

Department’s Financial Management 

Service for collection? 

4903.11 How will PBGC use administrative 

offset (offset of non-tax Federal 

payments) to collect a debt owed to 

PBGC? 

4903.12 How will PBGC use tax refund 

offset to collect a debt owed to PBGC? 

4903.13 How will PBGC offset a Federal 

employee’s salary to collect a debt owed 

to PBGC? 

4903.14 How will PBGC use administrative 

wage garnishment to collect a debt owed 

to PBGC from a debtor’s wages? 

4903.15 How will PBGC report debts owed 

to credit bureaus to PBGC? 

4903.16 How will PBGC refer debts owed to 

private collection agencies to PBGC? 

4903.17 When will PBGC refer debts owed 

to the Department of Justice to PBGC? 

4903.18 Will a debtor who owes a debt to 

PBGC or another Federal agency, and 

persons controlled by or controlling such 

debtors, be ineligible for Federal loan 

assistance, grants, cooperative 

agreements, or other sources of Federal 

funds? 

4903.19 How does a debtor request a 

special review based on a change in 

circumstances such as a catastrophic 

illness, divorce, death, or disability? 

4903.20 Will PBGC issue a refund if money 

is erroneously collected on a debt? 

Subpart C—Procedures for Offset of PBGC 

Payments to Collect Debts Owed to Other 

Federal Agencies 

4903.21 How do other Federal agencies use 

the offset process to collect debts from 

payments issued by PBGC? 

4903.22 What does PBGC do upon receipt 

of a request to offset the salary of a PBGC 

employee to collect a debt owed by the 

employee to another Federal agency? 

Authority: 5 U.S.C. 5514; 29 U.S.C. 

1302(b); 31 U.S.C. 3701–3719, 3720A; 5 CFR 

part 550, subpart K; 31 CFR part 285; 31 CFR 

parts 900–904. 

Subpart A—General Provisions 

§ 4903.1 What definitions apply to this 

part? 

The following terms are defined in 

§ 4001.2 of this chapter: Code, PBGC, 

and Person. In addition, for purposes of 

this part: 

Administrative offset or offset means 

withholding funds payable by the 

United States (including funds payable 

by the United States on behalf of a state 

government) to, or held by the United 

States for, a person to satisfy a debt 

owed by the person. The term 

‘‘administrative offset’’ can include, but 

is not limited to, the offset of Federal 

salary, vendor, retirement, and Social 

Security benefit payments. The terms 

‘‘centralized administrative offset’’ and 

‘‘centralized offset’’ refer to the process 

by which the Treasury Department’s 

Financial Management Service offsets 

Federal payments through the Treasury 

Offset Program. 

Administrative wage garnishment 

means the process by which a Federal 

agency orders a non-Federal employer 

to withhold amounts from a debtor’s 

wages to satisfy a debt, as authorized by 

31 U.S.C. 3720D, 31 CFR 285.11, and 

this part. 

Agency or Federal agency means an 

executive department or agency; a 

military department; the United States 

Postal Service; the Postal Regulatory 

Commission; any nonappropriated fund 

instrumentality described in 5 U.S.C. 

2105(c); the United States Senate; the 

United States House of Representatives; 

any court, court administrative office, or 

instrumentality in the judicial or 

legislative branches of the Government; 

or a Government corporation. 

Creditor agency means any Federal 

agency that is owed a debt. 

Debt means any amount of money, 

funds or property that has been 

determined by an appropriate official of 

the Federal Government to be owed to 

the United States government, including 

government-owned corporations, by a 

person. As used in this part, the term 

‘‘debt’’ can include a debt owed to 

PBGC, but does not include debts 

arising under the Internal Revenue Code 

of 1986 (26 U.S.C. 1 et seq.). 

Debtor means a person who owes a 

debt to the United States. 

Delinquent debt means a debt that has 

not been paid by the date specified in 

the agency’s initial written demand for 

payment or applicable agreement or 

instrument (including a postdelinquency payment agreement) unless 

other satisfactory payment arrangements 

have been made. 

Disposable pay has the same meaning 

as that term is defined in 5 CFR 

550.1103. 

Employee or Federal employee means 

a current employee of PBGC or other 

Federal agency, including a current 

member of the uniformed services, 

including the Army, Navy, Air Force, 

Marine Corps, Coast Guard, 

Commissioned Corps of the National 

Oceanic and Atmospheric 

Administration, Commissioned Corps of 

the Public Health Service, the National 

Guard, and the reserve forces of the 

uniformed services. 

FCCS means the Federal Claims 

Collection Standards, 31 CFR parts 900– 

904. 

Financial Management Service (FMS) 

means the Treasury Department bureau 

that is responsible for the centralized 

collection of delinquent debts through 

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68206 Federal Register / Vol. 75, No. 214 / Friday, November 5, 2010 / Rules and Regulations 

the offset of Federal payments and other 

means. 

Payment agency or Federal payment 

agency means any Federal agency that 

transmits payment requests in the form 

of certified payment vouchers, or other 

similar forms, to a disbursing official for 

disbursement. The payment agency may 

be the agency that employs the debtor. 

In some cases, PBGC may be both the 

creditor agency and payment agency. 

Salary offset means a type of 

administrative offset to collect a debt 

under Section 5514 of Title 5 of the 

United States Code and 5 CFR part 550, 

subpart K by deduction(s) at one or 

more officially established pay intervals 

from the current pay account of an 

employee with or without his or her 

consent. 

Tax debt means a debt arising under 

the Code. 

Tax refund offset means the reduction 

by the IRS of a tax overpayment payable 

to a taxpayer by the amount of past-due, 

legally enforceable debt owed by that 

taxpayer to a Federal agency pursuant to 

Treasury regulations. 

§ 4903.2 What do these regulations cover? 

(a) Scope. This part provides 

procedures for the collection of debts 

owed to PBGC, other than those subject 

to recoupment (29 CFR 4022, subpart E). 

This part also provides procedures for 

collection of other debts owed to the 

United States when a request for offset 

of a payment, for which PBGC is the 

payment agency, is received by PBGC 

from another agency (for example, when 

a PBGC employee owes a student loan 

debt to the United States Department of 

Education). 

(b) Applicability. 

(1) This part applies to PBGC when 

collecting a debt owed to PBGC; to 

persons who owe debts to PBGC; to 

persons controlled by or controlling 

persons who owe debts to a Federal 

agency, and to Federal agencies 

requesting offset of a payment issued by 

PBGC as a payment agency (including 

salary payments to PBGC employees). 

(2) This part does not apply to debts 

owed to PBGC being collected through 

recoupment under subpart E of part 

4022 of this chapter. Benefits paid by 

PBGC generally will not be offset, 

subject to limited exceptions (e.g., in 

certain fiduciary breach situations). 

(3) This part does not apply to tax 

debts, to any debt based in whole or in 

part on conduct in violation of the 

antitrust laws, nor to any debt for which 

there is an indication of fraud or 

misrepresentation, as described in 

§ 900.3 of the FCCS, unless the debt is 

returned by the Department of Justice to 

PBGC for handling. 

(4) Nothing in this part precludes the 

use of other statutory or regulatory 

authority to collect or dispose of any 

debt. See, for example, 5 U.S.C. 5705, 

Advancements and Deductions, which 

authorizes PBGC to recover travel 

advances by offset of up to 100 percent 

of a Federal employee’s accrued pay. 

See, also, 5 U.S.C. 4108, governing the 

collection of training expenses. 

(5) To the extent that provisions of 

laws, other regulations, and PBGC 

enforcement policies differ from the 

provisions of this part, those provisions 

of law, other regulations, and PBGC 

enforcement policies apply to the 

remission or mitigation of fines, 

penalties, and forfeitures, and to debts 

arising under ERISA, rather than the 

provisions of this part. 

(c) Additional policies and 

procedures. PBGC may, but is not 

required to, promulgate additional 

policies and procedures consistent with 

this part, the FCCS, and other applicable 

law, policies, and procedures. 

(1) PBGC does not intend this 

regulation to prohibit PBGC from 

demanding the return of specific 

property or the payment of its value. 

(2) The failure of PBGC to comply 

with any provision in this regulation 

will not serve as a defense to the 

existence of the debt. 

(d) Duplication not required. Nothing 

in this part requires PBGC to duplicate 

notices or administrative proceedings 

required by contract, this part, or other 

laws or regulations. 

(e) Use of multiple collection 

remedies allowed. PBGC and other 

Federal agencies may simultaneously 

use multiple collection remedies to 

collect a debt, except as prohibited by 

law. This part is intended to promote 

aggressive debt collection, using for 

each debt all available and appropriate 

collection remedies. To provide PBGC 

with flexibility in determining which 

remedies will be most efficient in 

collecting the particular debt, these 

remedies are not listed in any 

prescribed order. 

§ 4903.3 Do these regulations adopt the 

Federal Claims Collection Standards 

(FCCS)? 

This part adopts and incorporates all 

provisions of FCCS. This part also 

supplements the FCCS by prescribing 

procedures consistent with FCCS, as 

necessary and appropriate for PBGC 

operations. 

§ 4903.4 What rules apply for purposes of 

filing with PBGC, determining dates of 

filings, and computation of time? 

(a) How and where to file. PBGC 

applies the rules in subpart A of part 

4000 of this chapter to determine 

permissible methods of filing with 

PBGC under this part. See § 4000.4 of 

this chapter for information on where to 

file. 

(b) Date of filing. PBGC applies the 

rules in subpart C of part 4000 of this 

chapter to determine the date that a 

submission under this part was filed 

with PBGC. 

(c) Computation of time. PBGC 

applies the rules of subpart D of part 

4000 of this chapter to compute any 

time period under this part. 

Subpart B—Procedures To Collect 

Debts Owed to PBGC 

§ 4903.5 What notice will PBGC send to a 

debtor when collecting a debt owed to 

PBGC? 

(a) Notice requirements. PBGC will 

collect debts owed to PBGC. PBGC will 

promptly send at least one written 

notice to a debtor informing the debtor 

of the consequences of failing to pay or 

otherwise resolve a debt owed to PBGC. 

The notice(s) will be sent to the debtor 

at the most current address of the debtor 

in PBGC’s records. Generally, before 

starting the collection actions described 

in §§ 4903.6 and 4903.10 through 

4903.18 of this part, PBGC will send no 

more than two written notices to the 

debtor. The notice will explain why the 

debt is owed to PBGC, the amount of the 

debt, how a debtor may pay the debt or 

make alternate repayment arrangements, 

how a debtor may review non-privileged 

documents related to the debt, how a 

debtor may dispute the debt, the 

collection remedies available to PBGC if 

the debtor refuses or otherwise fails to 

pay the debt, and other consequences to 

the debtor if the debt is not paid. Except 

as otherwise provided in paragraph (b) 

of this section, the written notice(s) will 

explain to the debtor: 

(1) The nature and amount of the 

debt, and the facts giving rise to the 

debt; 

(2) How interest, penalties, and 

administrative costs are added to the 

debt, the date by which payment must 

be made to avoid such charges, and that 

such assessments must be made unless 

excused in accordance with 31 CFR 

901.9 (see § 4903.6 of this part); 

(3) The date by which payment 

should be made to avoid the enforced 

collection actions described in 

paragraph (a)(6) of this section; 

(4) PBGC’s willingness to discuss 

alternative payment arrangements and 

how the debtor may enter into a written 

agreement to repay the debt under terms 

acceptable to PBGC (see § 4903.7 of this 

part); 

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Federal Register / Vol. 75, No. 214 / Friday, November 5, 2010 / Rules and Regulations 68207 

(5) The name, address, and telephone 

number of a contact person or office 

within PBGC; 

(6) PBGC’s intention to enforce 

collection by taking one or more of the 

following actions if the debtor fails to 

pay or otherwise resolve the debt: 

(i) Offset. Offset the debtor’s receipt of 

Federal payments, including income tax 

refunds, salary, certain benefit payments 

(such as Social Security), Federal 

retirement (i.e., CSRS or FERS), vendor, 

travel reimbursements and advances, 

and other Federal payments (see 

§§ 4903.11 through 4903.13 of this part); 

(ii) Private collection agency. Refer 

the debt to a private collection agency 

(see § 4903.16 of this part); 

(iii) Credit bureau reporting. Report 

the debt to a credit bureau (see 

§ 4903.15 of this part); 

(iv) Administrative wage garnishment. 

Garnish the debtor’s wages through 

administrative wage garnishment (see 

§ 4903.14 of this part); 

(v) Litigation. Whether PBGC will 

initiate litigation under 29 U.S.C. 1302 

to collect the debt or refer the debt to 

the Department of Justice to initiate 

litigation to collect the debt (see 

§ 4903.17 of this part); 

(vi) Treasury Department’s Financial 

Management Service. Refer the debt to 

the Financial Management Service for 

collection (see § 4903.10 of this part); 

(7) That debts over 180 days 

delinquent must be referred to the 

Financial Management Service for the 

collection actions described in 

paragraph (a)(6) of this section (see 

§ 4903.10 of this part); 

(8) How the debtor may inspect and 

copy non-privileged records related to 

the debt; 

(9) How the debtor may request a 

review of PBGC’s determination that the 

debtor owes a debt to PBGC and present 

evidence that the debt is not delinquent 

or legally enforceable (see §§ 4903.11(c) 

and 4903.12(c) of this part); 

(10) How a debtor who is an 

individual may request a hearing if 

PBGC intends to garnish the debtor’s 

private sector (i.e., non-Federal) wages 

(see § 4903.14(a) of this part), including: 

(i) The method and time period for 

requesting a hearing; 

(ii) That a request for a hearing, timely 

filed on or before the 15th business day 

following the date of the mailing of the 

notice, will stay the commencement of 

administrative wage garnishment, but 

not other collection procedures; and 

(iii) The name and address of the 

office to which the request for a hearing 

should be sent. 

(11) How a debtor who is an 

individual and a Federal employee 

subject to Federal salary offset may 

request a hearing (see § 4903.13(e) of 

this part), including: 

(i) The method and time period for 

requesting a hearing; 

(ii) That a request for a hearing, timely 

filed on or before the 15th day following 

receipt of the notice, will stay the 

commencement of salary offset, but not 

other collection procedures; 

(iii) The name and address of the 

office to which the request for a hearing 

should be sent; 

(iv) That PBGC will refer the debt to 

the debtor’s employing agency or to the 

Financial Management Service to 

implement salary offset, unless the 

employee files a timely request for a 

hearing; 

(v) That a final decision on the 

hearing, if requested, will be issued at 

the earliest practicable date, but not 

later than 60 days after the filing of the 

request for a hearing, unless the 

employee requests and the hearing 

official grants a delay in the 

proceedings; 

(vi) That any knowingly false or 

frivolous statements, representations, or 

evidence may subject the Federal 

employee to penalties under the False 

Claims Act (31 U.S.C. 3729–3731) or 

other applicable statutory authority, and 

criminal penalties under 18 U.S.C. 286, 

287, 1001, and 1002, or other applicable 

statutory authority; 

(vii) That unless prohibited by 

contract or statute, amounts paid on or 

deducted for the debt which are later 

waived or found not owed to the United 

States will be promptly refunded to the 

employee; and 

(viii) That proceedings with respect to 

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

and 31 U.S.C. 3716. 

(12) How the debtor may request a 

waiver of the debt, if applicable. See, for 

example, § 4903.6 and § 4903.13(f) of 

this part. 

(13) How the debtor’s spouse may 

claim his or her share of a joint income 

tax refund by filing Form 8379 with the 

Internal Revenue Service (see http:// 

www.irs.gov); 

(14) How the debtor may exercise 

other rights and remedies, if any, 

available to the debtor under statutory 

or regulatory authority under which the 

debt arose. 

(15) That certain debtors and, if 

applicable, persons controlled by or 

controlling such debtors, may be 

ineligible for Federal Government loans, 

guaranties and insurance, grants, 

cooperative agreements or other Federal 

funds (see 28 U.S.C. 3201(e); 31 U.S.C. 

3720B, 31 CFR 285.13, and § 4903.18(a) 

of this part); and 

(16) That the debtor should advise 

PBGC of a bankruptcy proceeding of the 

debtor or another person liable for the 

debt being collected. 

(b) Exceptions to notice requirements. 

PBGC may omit from a notice to a 

debtor one or more of the provisions 

contained in paragraphs (a)(6) through 

(a)(16) of this section if PBGC, in 

consultation with its legal counsel, 

determines that any provision is not 

legally required given the collection 

remedies to be applied to a particular 

debt. 

(c) Respond to debtors; comply with 

FCCS. PBGC should respond promptly 

to communications from debtors and 

comply with other FCCS provisions 

applicable to the administrative 

collection of debts. See 31 CFR part 901. 

§ 4903.6 How will PBGC add interest, 

penalty charges, and administrative costs 

to a debt owed to PBGC? 

(a) Assessment and notice. PBGC will 

assess interest, penalties and 

administrative costs on PBGC debts in 

accordance with the provisions of 31 

U.S.C. 3717, 31 CFR 901.9 and other 

applicable requirements. Administrative 

costs, including the costs of processing 

and handling a delinquent debt, will be 

determined by PBGC. PBGC will explain 

in the notice to the debtor how interest, 

penalties, costs, and other charges are 

assessed, unless the requirements are 

included in a contract or other legally 

binding agreement. 

(b) Waiver of interest, penalties, and 

administrative costs. Unless otherwise 

required by law, regulation, or contract, 

PBGC will not charge interest if the 

amount due on the debt is paid within 

30 days of the date from which the 

interest accrues. See 31 U.S.C. 3717(d). 

To the extent permitted by law, PBGC 

may waive interest, penalties, and 

administrative costs, or any portion 

thereof, in appropriate circumstances 

consistent with the FCCS. 

(c) Accrual during suspension of debt 

collection. In most cases, interest, 

penalties and administrative costs will 

continue to accrue during any period 

when collection has been suspended for 

any reason (for example, when the 

debtor has requested a hearing). PBGC 

may suspend accrual of any or all of 

these charges in appropriate 

circumstances consistent with the 

FCCS. 

§ 4903.7 When will PBGC allow a debtor to 

pay a debt owed to PBGC in installments 

instead of a lump sum? 

If a debtor is financially unable to pay 

the debt in a lump sum, PBGC may 

accept payment of a debt in regular 

installments, in accordance with the 

provisions of 31 CFR 901.8. 

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§ 4903.8 When will PBGC compromise a 

debt owed to PBGC? 

If PBGC cannot collect the full 

amount of a debt owed to PBGC, PBGC 

may compromise the debt in accordance 

with the provisions of 31 CFR part 902. 

§ 4903.9 When will PBGC suspend or 

terminate debt collection on a debt owed to 

PBGC? 

If, after pursuing all appropriate 

means of collection, PBGC determines 

that a debt owed to PBGC is 

uncollectible, PBGC may suspend or 

terminate debt collection activity in 

accordance with the provisions of 31 

CFR part 903. Termination of debt 

collection activity by PBGC does not 

discharge the indebtedness. 

§ 4903.10 When will PBGC transfer a debt 

owed to PBGC to the Treasury 

Department’s Financial Management 

Service for collection? 

(a) PBGC will transfer a debt owed to 

PBGC that is more than 180 days 

delinquent to the Financial Management 

Service for debt collection services, a 

process known as ‘‘cross-servicing.’’ See 

31 U.S.C. 3711(g) and 31 CFR 285.12. 

PBGC may transfer debts owed to PBGC 

that are delinquent 180 days or less to 

the Financial Management Service in 

accordance with the procedures 

described in 31 CFR 285.12. The 

Financial Management Service takes 

appropriate action to collect or 

compromise the transferred PBGC debt, 

or to suspend or terminate collection 

action thereon, in accordance with the 

statutory and regulatory requirements 

and authorities applicable to the debt 

owed to PBGC and the collection action 

to be taken. See 31 CFR 285.12(b) and 

285.12(c)(2). Appropriate action can 

include, but is not limited to, contact 

with the debtor, referral of the debt 

owed to PBGC to the Treasury Offset 

Program, private collection agencies, or 

the Department of Justice; reporting of 

the debt to credit bureaus, and/or 

administrative wage garnishment. 

(b) At least 60 days prior to 

transferring a debt owed to PBGC to the 

Financial Management Service, PBGC 

will send notice to the debtor as 

required by § 4903.5 of this part. PBGC 

will certify to the Financial 

Management Service that the debt is 

valid, delinquent, legally enforceable, 

and that there are no legal bars to 

collection. In addition, PBGC will 

certify its compliance with all 

applicable due process and other 

requirements as described in this part 

and other Federal laws. See 31 CFR 

285.12(i) regarding the certification 

requirement. 

(c) As part of its debt collection 

process, the Financial Management 

Service uses the Treasury Offset 

Program to collect debts owed to PBGC 

by administrative and tax refund offset. 

See 31 CFR 285.12(g). Under the 

Treasury Offset Program, before a 

Federal payment is disbursed, the 

Financial Management Service 

compares the name and taxpayer 

identification number (TIN) of the payee 

with the names and TINs of debtors that 

have been submitted by Federal 

agencies and states to the Treasury 

Offset Program database. If there is a 

match, the Financial Management 

Service (or, in some cases, another 

Federal disbursing agency) offsets all or 

a portion of the Federal payment, 

disburses any remaining payment to the 

payee, and pays the offset amount to the 

creditor agency. Federal payments 

eligible for offset include, but are not 

limited to, income tax refunds, salary, 

travel advances and reimbursements, 

retirement and vendor payments, and 

Social Security and other benefit 

payments. 

§ 4903.11 How will PBGC use 

administrative offset (offset of non-tax 

Federal payments) to collect a debt owed to 

PBGC? 

(a) Centralized administrative offset 

through the Treasury Offset Program. 

(1) In most cases, the Financial 

Management Service uses the Treasury 

Offset Program to collect debts owed to 

PBGC by the offset of Federal payments. 

See § 4903.10(c) of this part. If not 

already transferred to the Financial 

Management Service under § 4903.10 of 

this part, PBGC will refer debt over 180 

days delinquent to the Treasury Offset 

Program for collection by centralized 

administrative offset. See 31 U.S.C. 

3716(c)(6); 31 CFR part 285, subpart A; 

and 31 CFR 901.3(b). PBGC may refer to 

the Treasury Offset Program for offset 

any debt owed to PBGC that has been 

delinquent for 180 days or less. 

(2) At least 60 days prior to referring 

a debt owed to PBGC to the Treasury 

Offset Program, in accordance with 

paragraph (a)(1) of this section, PBGC 

will send notice to the debtor in 

accordance with the requirements of 

§ 4903.5 of this part. PBGC will certify 

to the Financial Management Service, 

that the debt is valid, delinquent, and 

legally enforceable, and that there are no 

legal bars to collection by offset. In 

addition, PBGC will certify its 

compliance with the requirements in 

this part. 

(b) Non-centralized administrative 

offset for debts owed to PBGC. 

(1) When centralized administrative 

offset through the Treasury Offset 

Program is not available or appropriate, 

PBGC may collect past-due, legally 

enforceable debts owed to PBGC 

through non-centralized administrative 

offset. See 31 CFR 901.3(c). In these 

cases, PBGC may offset a payment 

internally or make an offset request 

directly to a Federal payment agency. 

(2) At least 30 days prior to offsetting 

a payment internally or requesting a 

Federal payment agency to offset a 

payment, PBGC will send notice to the 

debtor in accordance with the 

requirements of § 4903.5 of this part. 

When referring a debt owed to PBGC for 

offset under this paragraph (b), PBGC 

will certify that the debt is valid, 

delinquent, and legally enforceable, and 

that there are no legal bars to collection 

by offset. In addition, PBGC will certify 

its compliance with these regulations 

concerning administrative offset. See 

31 CFR 901.3(c)(2)(ii). 

(c) Administrative review. The notice 

described in § 4903.5 of this part will 

explain to the debtor how to request an 

administrative review of PBGC’s 

determination that the debtor owes a 

debt to PBGC and how to present 

evidence that the debt is not delinquent 

or legally enforceable. In addition to 

challenging the existence and amount of 

the debt owed to PBGC, the debtor may 

seek a review of the terms of repayment. 

In most cases, PBGC will provide 

administrative review based upon the 

written record, including 

documentation provided by the debtor. 

PBGC may provide the debtor with a 

reasonable opportunity for an oral 

hearing when the debtor requests 

reconsideration of the debt owed to 

PBGC, and PBGC determines that the 

question of the indebtedness cannot be 

resolved by review of the documentary 

evidence. Unless otherwise required by 

law, an oral hearing under this section 

is not required to be a formal 

evidentiary hearing. PBGC will carefully 

document all significant matters 

discussed at the hearing. PBGC may 

suspend collection through 

administrative offset and/or other 

collection actions pending the 

resolution of a debtor’s dispute. 

(d) Procedures for expedited offset. 

Under the circumstances described in 

31 CFR 901.3(b)(4)(iii), PBGC may offset 

against a payment to be made to the 

debtor prior to sending a notice to the 

debtor, as described in § 4903.5 of this 

part, or completing the procedures 

described in paragraph (b)(2) and (c) of 

this section. PBGC will give the debtor 

notice and an opportunity for review as 

soon as practicable and promptly refund 

any money ultimately found not to have 

been owed to the Government. 

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Federal Register / Vol. 75, No. 214 / Friday, November 5, 2010 / Rules and Regulations 68209 

§ 4903.12 How will PBGC use tax refund 

offset to collect a debt owed to PBGC? 

(a) Tax refund offset. In most cases, 

the Financial Management Service uses 

the Treasury Offset Program to collect 

debts owed to PBGC by the offset of tax 

refunds and other Federal payments. 

See § 4903.10(c) of this part. If not 

already transferred to the Financial 

Management Service under § 4903.10 of 

this part, PBGC will refer to the 

Treasury Offset Program any past-due, 

legally enforceable debt for collection by 

tax refund offset. See 26 U.S.C. 6402(d), 

31 U.S.C. 3720A and 31 CFR 285.2. 

(b) Notice. At least 60 days prior to 

referring a debt owed to the Treasury 

Offset Program, PBGC will send notice 

to the debtor in accordance with the 

requirements of § 4903.5 of this part. 

PBGC will certify to the Financial 

Management Service’s Treasury Offset 

Program that the debt is past due and 

legally enforceable in the amount 

submitted, and that the PBGC has made 

reasonable efforts to obtain payment of 

the debt as described in 31 CFR 

285.2(d). In addition, PBGC will certify 

its compliance with all applicable due 

process and other requirements 

described in this part and other Federal 

laws. See 31 U.S.C. 3720A(b) and 

31 CFR 285.2. 

(c) Administrative review. The notice 

described in § 4903.5 of this part will 

provide the debtor with at least 60 days 

prior to the initiation of tax refund offset 

to request an administrative review as 

described in § 4903.11(c) of this part. 

PBGC may suspend collection through 

tax refund offset and/or other collection 

actions pending the resolution of the 

debtor’s dispute. 

§ 4903.13 How will PBGC offset a Federal 

employee’s salary to collect a debt owed to 

PBGC? 

(a) Federal salary offset. 

(1) Salary offset is used to collect 

debts owed to the United States or 

PBGC by Federal employees. If a Federal 

employee owes PBGC a debt, PBGC may 

offset the employee’s Federal salary to 

collect the debt in the manner described 

in this section. For information on how 

a Federal agency other than PBGC may 

collect debt from the salary of a PBGC 

employee, see §§ 4903.21 and 4903.22, 

subpart C, of this part. 

(2) Nothing in this part requires PBGC 

to collect a debt in accordance with the 

provisions of this section if Federal law 

allows other means to collect. See, for 

example, 5 U.S.C. 5705 (travel advances 

not used for allowable travel expenses 

are recoverable from the employee or 

his estate by setoff against accrued pay 

and other means) and 5 U.S.C. 4108 

(recovery of training expenses). 

(3) PBGC may use the administrative 

wage garnishment procedure described 

in § 4903.14 of this part to collect from 

an individual’s non-Federal wages a 

debt owed to PBGC. 

(b) Centralized salary offset through 

the Treasury Offset Program. As 

described in § 4903.10(a) of this part, 

PBGC will refer debts owed to PBGC to 

the Financial Management Service for 

collection by administrative offset, 

including salary offset, through the 

Treasury Offset Program. When 

possible, PBGC will attempt salary offset 

through the Treasury Offset Program 

before applying the procedures in 

paragraph (c) of this section. See 5 CFR 

550.1108 and 550.1109. 

(c) Non-centralized salary offset for 

debts owed to PBGC. When centralized 

salary offset through the Treasury Offset 

Program is not available or appropriate, 

PBGC may collect delinquent debts 

owed to PBGC through non-centralized 

salary offset. See 5 CFR 550.1109. In 

these cases, PBGC may offset a payment 

internally or make a request directly to 

a Federal payment agency to offset a 

salary payment to collect a delinquent 

debt owed to PBGC by a Federal 

employee. Thirty (30) days prior to 

offsetting internally or requesting a 

Federal agency to offset a salary 

payment, PBGC will send notice to the 

debtor in accordance with the 

requirements of § 4903.5 of this part. 

When referring a debt owed to PBGC for 

offset, PBGC will certify to the payment 

agency that the debt is valid, delinquent 

and legally enforceable in the amount 

stated, and there are no legal bars to 

collection by salary offset. In addition, 

PBGC will certify that all due process 

and other prerequisites to salary offset 

have been met. See 5 U.S.C. 5514, 31 

U.S.C. 3716(a), and this section for a 

description of the due process and other 

prerequisites for salary offset. 

(d) When prior notice not required. 

PBGC is not required to provide prior 

notice to an employee when the 

following adjustments are made by 

PBGC to a PBGC employee’s pay: 

(1) Any adjustment to pay arising out 

of any 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 4 pay 

periods or less; 

(2) A routine intra-agency adjustment 

of pay that is made to correct an 

overpayment of pay attributable to 

clerical or administrative errors or 

delays in processing pay documents, if 

the overpayment occurred within the 4 

pay periods preceding the adjustment, 

and, at the time of such adjustment, or 

as soon thereafter as practicable, the 

individual is provided written notice of 

the nature and the amount of the 

adjustment and the point of contact for 

contesting such adjustment; or 

(3) Any adjustment to collect a debt 

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

of such adjustment, or as soon thereafter 

as practicable, the individual is 

provided written notice of the nature 

and the amount of the adjustment and 

a point of contact for contesting such 

adjustment. 

(e) Administrative review— 

(1) Request for administrative review. A 

Federal employee who has received a 

notice that his or her debt will be 

collected by means of salary offset may 

request administrative review 

concerning the existence or amount of 

the debt owed to PBGC. The Federal 

employee also may request 

administrative review concerning the 

amount proposed to be deducted from 

the employee’s pay each pay period. 

The employee must send any request for 

administrative review in writing to the 

office designated in the notice described 

in § 4903.5. See § 4903.5(a)(11). The 

request must be received by the 

designated office on or before the 15th 

day following the employee’s receipt of 

the notice. The employee must sign the 

request and specify whether an oral 

hearing is requested. If an oral hearing 

is requested, the employee must explain 

why the matter cannot be resolved by 

review of the documentary evidence 

alone. All travel expenses incurred by 

the Federal employee in connection 

with an in-person hearing will be borne 

by the employee. See 31 CFR 

901.3(a)(7). 

(2) Failure to submit timely request for 

administrative review. If the employee 

fails to submit a request for 

administrative review within the time 

period described in paragraph (e)(1) of 

this section, salary offset may be 

initiated. However, PBGC may accept a 

late request for administrative review if 

the employee can show that the late 

request was the result of circumstances 

beyond the employee’s control or 

because of a failure to receive actual 

notice of the filing deadline. 

(3) Reviewing official. PBGC must 

obtain the services of a reviewing 

official who is not under the 

supervision or control of the Director of 

the PBGC. PBGC may enter into 

interagency support agreements with 

other agencies to provide reviewing 

officials. 

(4) Notice of administrative review. 

After the employee requests 

administrative review, the designated 

reviewing official will inform the 

employee of the form of the review to 

be provided. For oral hearings, the 

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notice will set forth the date, time and 

location of the hearing. For 

determinations based on review of 

written records, the notice will notify 

the employee of the date by which he 

or she should submit written arguments 

to the designated reviewing official. The 

reviewing official will give the 

employee reasonable time to submit 

documentation in support of the 

employee’s position. The reviewing 

official will schedule a new hearing date 

if requested by both parties. The 

reviewing official will give both parties 

reasonable notice of the time and place 

of a rescheduled hearing. 

(5) Oral hearing. The reviewing 

official will conduct an oral hearing if 

the official determines that the matter 

cannot be resolved by review of 

documentary evidence alone. The 

hearing need not take the form of an 

evidentiary hearing, but may be 

conducted in a manner determined by 

the reviewing official, including but not 

limited to: 

(i) Informal conferences (in person or 

electronically) with the reviewing 

official, in which the employee and 

agency representative will be given a 

reasonable opportunity to present 

evidence, witnesses and argument; 

(ii) Informal meetings with an 

interview of the employee by the 

reviewing official; or 

(iii) Formal written submissions, with 

an opportunity for oral presentation. 

(6) Determination based on review of 

written record. If the reviewing official 

determines that an oral hearing is not 

necessary, the official will make the 

determination based upon a review of 

the available written record, including 

any documentation submitted by the 

employee in support of his or her 

position. See 31 CFR 901.3(a)(7). 

(7) Failure to appear or submit 

documentary evidence. In the absence of 

good cause shown (for example, 

excused illness), if the employee fails to 

appear at an oral hearing or fails to 

submit documentary evidence as 

required for administrative review, the 

employee will have waived the right to 

administrative review, and salary offset 

may be initiated. Further, the employee 

will have been deemed to admit the 

existence and amount of the debt owed 

to PBGC as described in the notice of 

intent to offset. If PBGC’s representative 

fails to appear at an oral hearing, the 

reviewing official will proceed with the 

hearing as scheduled, and make his or 

her determination based upon the oral 

testimony presented and the 

documentary evidence submitted by 

both parties. 

(8) Burden of proof. PBGC will have 

the initial burden to prove the existence 

and amount of the debt owed to PBGC. 

Thereafter, if the employee disputes the 

existence or amount of the debt, the 

employee must prove by a 

preponderance of the evidence that no 

such debt exists or that the amount of 

the debt is incorrect. In addition, the 

employee may present evidence that the 

proposed terms of the repayment 

schedule are unlawful, would cause a 

financial hardship to the employee, or 

that collection of the debt may not be 

pursued due to operation of law. 

(9) Record. The reviewing official will 

maintain a summary record of any 

hearing provided by this part. Witnesses 

will testify under oath or affirmation in 

oral hearings. See 31 CFR 901.3(a)(7). 

(10) Date of decision. The reviewing 

official will issue a written opinion 

stating the official’s decision, based 

upon documentary evidence and 

information developed during the 

administrative review, as soon as 

practicable after the review, but not later 

than 60 days after the date on which the 

request for review was received by 

PBGC. If the employee (or the parties 

jointly) requests a delay in the 

proceedings, the deadline for the 

decision may be postponed by the 

number of days by which the review 

was postponed. When a decision is not 

timely rendered, PBGC will waive 

interest and penalties applied to the 

debt owed to PBGC for the period 

beginning with the date the decision is 

due and ending on the date the decision 

is issued. 

(11) Content of decision. The written 

decision will include: 

(i) A statement of the facts presented 

to support the origin, nature, and 

amount of the debt owed to PBGC; 

(ii) The reviewing official’s findings, 

analysis, and conclusions; and 

(iii) The terms of any repayment 

schedules, if applicable. 

(12) Final agency action. The 

reviewing official’s decision will be 

final. 

(f) Waiver not precluded. Nothing in 

this part precludes an employee from 

requesting waiver of an overpayment 

under 5 U.S.C. 5584 or 8346(b), 32 

U.S.C. 716, or other statutory authority. 

PBGC may grant such waivers when it 

would be against equity and good 

conscience or not in the United States’ 

best interest to collect such debts, in 

accordance with those authorities, 5 

CFR 550.1102(b)(2). 

(g) Salary offset process— 

(1) Determination of disposable pay. 

PBGC will implement salary offset when 

requested to do so by PBGC, as 

described in paragraph (c) of this 

section, or another agency, as described 

in § 4903.21 of this part. If the debtor is 

not employed by PBGC, the agency 

employing the debtor will determine the 

amount of the employee’s disposable 

pay and will implement salary offset 

upon request. 

(2) When salary offset begins. 

Deductions will begin within three 

official pay periods following receipt of 

the creditor agency’s request for offset or 

after a decision has been issued 

following a request for a hearing. 

(3) Amount of salary offset. The 

amount to be offset from each salary 

payment will be up to 15 percent of a 

debtor’s disposable pay, subject to the 

requirements of 15 U.S.C. 1673, as 

follows: 

(i) If the amount of the debt is equal 

to or less than 15 percent of the 

disposable pay, such debt generally will 

be collected in a lump sum payment; 

(ii) Installment deductions will be 

made over a period of no greater than 

the anticipated period of employment. 

An installment deduction will not 

exceed 15 percent of the disposable pay 

from which the deduction is made 

unless the employee has agreed in 

writing to the deduction of a greater 

amount, or the creditor agency has 

determined that smaller deductions are 

appropriate based on the employee’s 

ability to pay. 

(4) Final salary payment. After the 

employee has separated either 

voluntarily or involuntarily from the 

payment agency, the payment agency 

may make a lump sum deduction 

exceeding 15 percent of disposable pay 

from any final salary or other payments 

pursuant to 31 U.S.C. 3716 in order to 

satisfy a debt owed to PBGC. 

(h) Payment agency’s responsibilities. 

(1) As required by 5 CFR 550.1109, if 

the employee separates from the 

payment agency from which PBGC has 

requested salary offset, the payment 

agency must certify the total amount of 

its collection and notify PBGC and the 

employee of the amounts collected. If 

the payment agency knows that the 

employee is entitled to payments from 

the Civil Service Retirement Fund and 

Disability Fund, the Federal Employee 

Retirement System, or other similar 

payments, it must provide written 

notification to the agency responsible 

for making such payments that the 

debtor owes a debt to PBGC, the amount 

of the debt, and that PBGC has complied 

with the provisions of this section. 

PBGC must submit a properly certified 

claim to the agency responsible for 

making such payments before the 

collection can be made. 

(2) If the employee is already 

separated from employment and all 

payments due from his or her former 

payment agency have been made, PBGC 

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Federal Register / Vol. 75, No. 214 / Friday, November 5, 2010 / Rules and Regulations 68211 

may request that money due and 

payable to the employee from the Civil 

Service Retirement Fund and Disability 

Fund, the Federal Employee Retirement 

System, or other similar funds, be 

administratively offset to collect the 

debt. Generally, PBGC will collect such 

monies through the Treasury Offset 

Program as described in § 4903.10(c) of 

this part. 

(3) When an employee transfers to 

another agency, PBGC should resume 

collection with the employee’s new 

payment agency in order to continue 

salary offset. 

§ 4903.14 How will PBGC use 

administrative wage garnishment to collect 

a debt owed to PBGC from a debtor’s 

wages? 

(a) PBGC is authorized to collect debts 

owed to PBGC from an individual 

debtor’s wages by means of 

administrative wage garnishment in 

accordance with the requirements of 31 

U.S.C. 3720D and 31 CFR 285.11. This 

part adopts and incorporates all of the 

provisions of 31 CFR 285.11 concerning 

administrative wage garnishment, 

including the hearing procedures 

described in 31 CFR 285.11(f). PBGC 

may use administrative wage 

garnishment to collect a delinquent debt 

unless the debtor is making timely 

payments under an agreement to pay the 

debt in installments (see § 4903.7 of this 

part). Thirty (30) days prior to initiating 

an administrative wage garnishment, 

PBGC will send notice to the debtor in 

accordance with the requirements of 

§ 4903.5 of this part, including the 

requirements of § 4903.5(a)(10) of this 

part. For debts referred to the Financial 

Management Service under § 4903.10 of 

this part, PBGC may authorize the 

Financial Management Service to send a 

notice informing the debtor that 

administrative wage garnishment will 

be initiated and how the debtor may 

request a hearing as described in 

§ 4903.5(a)(10) of this part. If a debtor 

makes a timely request for a hearing, 

administrative wage garnishment will 

not begin until a hearing is held and a 

decision is sent to the debtor. PBGC will 

determine whether the matter requires 

an oral hearing or if a determination 

based upon review of the written record 

is sufficient. PBGC will provide the 

debtor with a reasonable opportunity for 

an oral hearing when it determines that 

the issues in dispute cannot be resolved 

by a review of the documentary 

evidence. See 31 CFR 285.11(f)(1)–(4). 

Even if a debtor’s hearing request is not 

timely, PBGC may suspend collection 

by administrative wage garnishment in 

accordance with the provisions of 31 

CFR 285.11(f)(5). All travel expenses 

incurred by the debtor in connection 

with an in-person hearing will be borne 

by the debtor. 

(b) This section does not apply to 

Federal salary offset, the process by 

which PBGC collects debts owed to 

PBGC from the salaries of Federal 

employees (see § 4903.13 of this part). 

§ 4903.15 How will PBGC report debts 

owed to PBGC to credit bureaus? 

PBGC will report delinquent debts 

owed to PBGC to credit bureaus in 

accordance with the provisions of 31 

U.S.C. 3711(e), 31 CFR 901.4, and the 

Office of Management and Budget 

Circular A–129, ‘‘Policies for Federal 

Credit Programs and Non-tax 

Receivables.’’ At least 60 days prior to 

reporting a delinquent debt to a 

consumer reporting agency, PBGC will 

send notice to the debtor in accordance 

with the requirements of § 4903.5 of this 

part. PBGC may authorize the Financial 

Management Service to report to credit 

bureaus those delinquent debts owed to 

the PBGC that have been transferred to 

the Financial Management Service 

under § 4903.10 of this part. 

§ 4903.16 How will PBGC refer debts owed 

to PBGC to private collection agencies? 

PBGC will transfer delinquent debts 

owed to PBGC to the Financial 

Management Service to obtain debt 

collection services provided by private 

collection agencies. See § 4903.10 of this 

part. 

§ 4903.17 When will PBGC refer debts 

owed to PBGC to the Department of 

Justice? 

PBGC may initiate litigation pursuant 

to 29 U.S.C. 1302 with delinquent debts 

on which aggressive collection activity 

has been taken in accordance with this 

part and that should not be 

compromised, and on which collection 

activity should not be suspended or 

terminated. Alternatively, PBGC may 

refer debts owed to PBGC having a 

principal balance over $100,000, or such 

higher amount as authorized by the 

Attorney General, to the Department of 

Justice for approval of any compromise 

of a debt or suspension or termination 

of collection activity. See §§ 4903.8 and 

4903.9 of this part; 31 CFR 902.1, 903.1, 

and part 904. PBGC may authorize the 

Financial Management Service to refer 

to the Department of Justice for 

litigation those delinquent debts that 

have been transferred to the Financial 

Management Service under § 4903.10 of 

this part. 

§ 4903.18 Will a debtor who owes a debt to 

PBGC or another Federal agency, and 

persons controlled by or controlling such 

debtors, be ineligible for Federal loan 

assistance, grants, cooperative 

agreements, or other sources of Federal 

funds? 

(a) Delinquent debtors are ineligible 

for and barred from obtaining Federal 

loans or loan insurance or guaranties. 

As required by 31 U.S.C. 3720B and 31 

CFR 901.6, PBGC will not extend 

financial assistance in the form of a 

loan, loan guarantee, or loan insurance 

to any person delinquent on a debt 

owed to a Federal agency. PBGC may 

issue standards under which it may 

determine that persons controlled by or 

controlling such delinquent debtors are 

similarly ineligible in accordance with 

31 CFR 285.13(c)(2). This prohibition 

does not apply to disaster loans. PBGC 

may extend credit after the delinquency 

has been resolved. See 31 CFR 285.13. 

(b) This section does not apply to 

loans provided to multi-employer 

pension plans pursuant to 29 U.S.C. 

1431, 29 CFR 4261.1 and 4281.47. 

(c) A debtor who has a judgment lien 

against the debtor’s property for a debt 

to the United States is not eligible to 

receive grants, loans or funds directly or 

indirectly from the United States until 

the judgment is paid in full or otherwise 

satisfied. This prohibition does not 

apply to funds to which the debtor is 

entitled as beneficiary. PBGC may 

promulgate regulations to allow for 

waivers of this ineligibility. See 28 

U.S.C. 3201(e). 

§ 4903.19 How does a debtor request a 

special review based on a change in 

circumstances such as catastrophic illness, 

divorce, death, or disability? 

(a) Material change in circumstances. 

A debtor who owes a debt to PBGC may, 

at any time, request a special review by 

PBGC of the amount of any offset, 

administrative wage garnishment, or 

voluntary payment, based on materially 

changed circumstances beyond the 

control of the debtor such as, but not 

limited to, catastrophic illness, divorce, 

death, or disability. 

(b) Inability to pay. For purposes of 

this section, in determining whether an 

involuntary or voluntary payment 

would prevent the debtor from meeting 

essential subsistence expenses (e.g., 

costs incurred for food, housing, 

clothing, transportation, and medical 

care), the debtor must submit a detailed 

statement and supporting documents for 

the debtor, his or her spouse, and 

dependents, indicating: 

(1) Income from all sources; 

(2) Assets; 

(3) Liabilities; 

(4) Number of dependents; 

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68212 Federal Register / Vol. 75, No. 214 / Friday, November 5, 2010 / Rules and Regulations 

(5) Expenses for food, housing, 

clothing, and transportation; 

(6) Medical expenses; 

(7) Exceptional expenses, if any; and 

(8) Any additional materials and 

information that PBGC may request 

relating to ability or inability to pay the 

amount(s) currently required. 

(c) Alternative payment arrangement. 

If the debtor requests a special review 

under this section, the debtor must 

submit an alternative proposed payment 

schedule and a statement to PBGC, with 

supporting documents, showing why 

the current offset, garnishment or 

repayment schedule imposes an extreme 

financial hardship on the debtor. PBGC 

will evaluate the statement and 

documentation and determine whether 

the current offset, garnishment, or 

repayment schedule imposes extreme 

financial hardship on the debtor. PBGC 

will notify the debtor in writing of such 

determination, including, if appropriate, 

a revised offset, garnishment, or 

payment schedule. If the special review 

results in a revised offset, garnishment, 

or repayment schedule, PBGC will 

notify the appropriate Federal agency or 

other persons about the new terms. 

§ 4903.20 Will PBGC issue a refund if 

money is erroneously collected on a debt? 

PBGC will promptly refund to a 

debtor any amount collected on a debt 

owed to PBGC when the debt is waived 

or otherwise found not to be owed to the 

United States, or as otherwise required 

by law. 

Subpart C—Procedures for Offset of 

PBGC Payments To Collect Debts 

Owed to Other Federal Agencies 

§ 4903.21 How do other Federal agencies 

use the offset process to collect debts from 

payments issued by PBGC? 

(a) Offset of PBGC payments to collect 

debts owed to other Federal agencies. 

(1) In most cases, Federal agencies 

submit debts to the Treasury Offset 

Program to collect delinquent debts 

from payments issued by PBGC and 

other Federal agencies, a process known 

as ‘‘centralized offset.’’ When centralized 

offset is not available or appropriate, 

any Federal agency may ask PBGC 

(when acting as a ‘‘payment agency’’) to 

collect a debt owed to such agency by 

offsetting funds payable to a debtor by 

PBGC, including salary payments issued 

to PBGC employees. This section and 

§ 4903.21 of this subpart C apply when 

a Federal agency asks PBGC to offset a 

payment issued by PBGC to a person 

who owes a debt to the United States. 

(2) This subpart C does not apply to 

debts owed to PBGC. See §§ 4903.11 

through 4903.13 of this part for offset 

procedures applicable to debts owed to 

PBGC. 

(3) This subpart C does not apply to 

the collection of non-PBGC debts 

through tax refund offset. See 31 CFR 

285.2 for tax refund offset procedures. 

(4) Benefits paid by PBGC generally 

will not be offset, subject to limited 

exceptions (e.g., in certain fiduciary 

breach situations). 

(b) Administrative offset (including 

salary offset); certification. PBGC will 

initiate a requested offset only upon 

receipt of written certification from the 

creditor agency that the debtor owes the 

past-due, legally enforceable debt in the 

amount stated, and that the creditor 

agency has fully complied with all 

applicable due process and other 

requirements contained in 31 U.S.C. 

3716, 5 U.S.C. 5514, and the creditor 

agency’s regulations, as applicable. 

Offsets will continue until the debt is 

paid in full or otherwise resolved to the 

satisfaction of the creditor agency. 

(c) Where a creditor agency makes 

requests for offset. Requests for offset 

under this section must be sent to 

PBGC, ATTN: Chief Financial Officer, 

1200 K Street, NW., Washington, DC 

20005. 

(d) Incomplete certification. PBGC 

will return an incomplete debt 

certification to the creditor agency with 

notice that the creditor agency must 

comply with paragraph (b) of this 

section before action will be taken to 

collect a debt from a payment issued by 

PBGC. 

(e) Review. PBGC 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. 

(f) When PBGC will not comply with 

offset request. PBGC will comply with 

the offset request of another agency 

unless PBGC determines, in 

consultation with that agency, that the 

offset would not be in the best interests 

of the United States, or would otherwise 

be contrary to law. 

(g) Multiple debts. When two or more 

creditor agencies are seeking offsets 

from payments made to the same 

person, or when two or more debts are 

owed to a single creditor agency, PBGC 

may determine the order in which the 

debts will be collected or whether one 

or more debts should be collected by 

offset simultaneously. 

(h) Priority of debts owed to PBGC. 

For purposes of this section, debts owed 

to PBGC generally take precedence over 

debts owed to other agencies. PBGC may 

determine whether to pay debts owed to 

other agencies before paying a debt 

owed to PBGC. PBGC will determine the 

order in which the debts will be 

collected based on the best interests of 

the United States. 

§ 4903.22 What does PBGC do upon 

receipt of a request to offset the salary of 

a PBGC employee to collect a debt owed by 

the employee to another Federal agency? 

(a) Notice to a PBGC employee. When 

PBGC receives proper certification of a 

debt owed by one of its employees, 

PBGC will send a written notice to the 

employee indicating that a certified debt 

claim has been received from the 

creditor agency, the amount of the debt 

claimed to be owed by the creditor 

agency, the date deductions from salary 

will begin, and the amount of such 

deductions. PBGC will begin deductions 

from the employee’s pay at the next 

officially established pay interval. 

(b) Amount of deductions from a 

PBGC employee’s salary. The amount 

deducted under § 4903.21(b) of this part 

will be the lesser of the amount of the 

debt certified by the creditor agency or 

an amount up to 15 percent of the 

debtor’s disposable pay so long as that 

amount does not exceed limitations 

imposed by 15 U.S.C. 1673. Deductions 

will continue until PBGC knows that the 

debt is paid in full or until otherwise 

instructed by the creditor agency. 

Alternatively, the amount offset may be 

an amount agreed upon, in writing, by 

the debtor and the creditor agency. See 

§ 4903.13(g) (salary offset process). 

(c) When the debtor is no longer 

employed by PBGC—(1) Offset of final 

and subsequent payments. If a PBGC 

employee retires or resigns or if his or 

her employment ends before collection 

of the debt is complete, PBGC will 

continue to offset, under 31 U.S.C. 3716, 

up to 100 percent of an employee’s 

subsequent payments until the debt is 

paid or otherwise resolved. Such 

payments include a debtor’s final salary 

payment, lump-sum leave payment, and 

other payments payable to the debtor by 

PBGC. See 31 U.S.C. 3716 and 5 CFR 

550.1104(l) and 550.1104(m). 

(2) Notice to the creditor agency. If the 

employee is separated from PBGC before 

the debt is paid in full, PBGC will 

certify to the creditor agency the total 

amount of its collection. If PBGC knows 

that the employee is entitled to 

payments from the Civil Service 

Retirement and Disability Fund, Federal 

Employee Retirement System, or other 

similar payments, PBGC will provide 

written notice to the agency making 

such payments that the debtor owes a 

debt (including the amount) and that the 

provisions of 5 CFR 550.1109 have been 

fully complied with. The creditor 

agency is responsible for submitting a 

certified claim to the agency responsible 

for making such payments before 

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Federal Register / Vol. 75, No. 214 / Friday, November 5, 2010 / Rules and Regulations 68213 

collection may begin. Generally, 

creditor agencies will collect such 

monies through the Treasury Offset 

Program as described in § 4903.10(c) of 

this part. 

(3) Notice to the debtor. PBGC will 

provide to the debtor a copy of any 

notices sent to the creditor agency under 

paragraph (c)(2) of this section. 

(d) When the debtor transfers to 

another Federal agency—(1) Notice to 

the creditor agency. If the debtor 

transfers to another Federal agency 

before the debt is paid in full, PBGC will 

notify the creditor agency and will 

certify the total amount of its collection 

on the debt. PBGC will provide a copy 

of the certification to the creditor 

agency. The creditor agency is 

responsible for submitting a certified 

claim to the debtor’s new employing 

agency before collection may begin. 

(2) Notice to the debtor. PBGC will 

provide to the debtor a copy of any 

notices and certifications sent to the 

creditor agency under paragraph (d)(1) 

of this section. 

(e) Request for hearing official. PBGC 

will provide a hearing official upon the 

creditor agency’s request with respect to 

a PBGC employee. See 5 CFR 

550.1107(a). 

Issued in Washington, DC, this 1st day of 

November 2010. 

Joshua Gotbaum, 

Director, Pension Benefit Guaranty 

Corporation. 

[FR Doc. 2010–28020 Filed 11–4–10; 8:45 am] 

BILLING CODE 7709–01–P 

DEPARTMENT OF DEFENSE 

Department of the Navy 

32 CFR Part 706 

Certifications and Exemptions Under 

the International Regulations for 

Preventing Collisions at Sea, 1972 

AGENCY: Department of the Navy, DoD. 

ACTION: Final rule. 

SUMMARY: The Department of the Navy 

(DoN) is amending its certifications and 

exemptions under the International 

Regulations for Preventing Collisions at 

Sea, 1972 (72 COLREGS), to reflect that 

the Deputy Assistant Judge Advocate 

General (DAJAG) (Admiralty and 

Maritime Law) has determined that USS 

OSCAR AUSTIN (DDG 79) is a vessel of 

the Navy which, due to its special 

construction and purpose, cannot fully 

comply with certain provisions of the 

72 COLREGS without interfering with 

its special function as a naval ship. The 

intended effect of this rule is to warn 

mariners in waters where 72 COLREGS 

apply. 

DATES: This rule is effective November 

5, 2010 and is applicable beginning 

October 13, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Lieutenant Commander Ted Cook, 

JAGC, U.S. Navy, Admiralty Attorney, 

(Admiralty and Maritime Law), Office of 

the Judge Advocate General, Department 

of the Navy, 1322 Patterson Ave., SE., 

Suite 3000, Washington Navy Yard, DC 

20374–5066, telephone number: 202– 

685–5040. 

SUPPLEMENTARY INFORMATION: Pursuant 

to the authority granted in 33 U.S.C. 

1605, the DoN amends 32 Code of 

Federal Regulations (CFR) Part 706. 

This amendment provides notice that 

the DAJAG (Admiralty and Maritime 

Law), under authority delegated by the 

Secretary of the Navy, has certified that 

USS OSCAR AUSTIN (DDG 79) is a 

vessel of the Navy which, due to its 

special construction and purpose, 

cannot fully comply with the following 

specific provisions of 72 COLREGS 

without interfering with its special 

function as a naval ship: Annex I, 

paragraph 3(c), pertaining to the 

placement of task lights not less than 

two meters from the fore and aft 

centerline of the ship in the athwartship 

direction. The DAJAG (Admiralty and 

Maritime Law) has also certified that the 

lights involved are located in closest 

possible compliance with the applicable 

72 COLREGS requirements. 

Moreover, it has been determined, in 

accordance with 32 CFR Parts 296 and 

701, that publication of this amendment 

for public comment prior to adoption is 

impracticable, unnecessary, and 

contrary to public interest since it is 

based on technical findings that the 

placement of lights on this vessel in a 

manner differently from that prescribed 

herein will adversely affect the vessel’s 

ability to perform its military functions. 

List of Subjects in 32 CFR Part 706 

Marine safety, Navigation (water), and 

Vessels. 

■ For the reasons set forth in the 

preamble, amend part 706 of title 32 of 

the CFR as follows: 

PART 706—CERTIFICATIONS AND 

EXEMPTIONS UNDER THE 

INTERNATIONAL REGULATIONS FOR 

PREVENTING COLLISIONS AT SEA, 

1972 

■ 1. The authority citation for part 706 

continues to read as follows: 

Authority: 33 U.S.C. 1605. 

■ 2. Section 706.2 is amended in Table 

Four, Paragraph 15 by adding the 

following entry for USS OSCAR 

AUSTIN (DDG 79) in alphanumerical 

order by DDG number: 

§ 706.2 Certifications of the Secretary of 

the Navy under Executive Order 11964 and 

33 U.S.C. 1605. 

* * * * * 

Table Four 

* * * * * 

15. * * * 

Vessel Number 

Horizontal distance 

from the fore and aft 

centerline of the vessel 

in the athwartship 

direction 

*******

USS OSCAR AUSTIN ............................................................................................................ DDG 79 ..................... 1.89 meters. 

*******

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