[Federal Register Volume 74, Number 111 (Thursday, June 11, 2009)]
[Rules and Regulations]
[Pages 27707-27708]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-13617]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 285

RIN 1510-AB19


Debt Collection Authorities Under the Debt Collection Improvement 
Act of 1996

AGENCY: Financial Management Service, Fiscal Service, Treasury.

ACTION: Interim final rule.

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SUMMARY: The Department of the Treasury, Financial Management Service, 
is amending its regulation governing the centralized offset of federal 
payments to collect nontax debts owed to the United States. The 
amendment removes the time limitation on the collection of nontax debts 
by centralized offset, consistent with a change in the statute on which 
it is based. The statutory change, enacted as part of the Food, 
Conservation and Energy Act of 2008, allows for the use of centralized 
offset of federal payments, including federal salary payments, to 
collect nontax debts owed to the United States irrespective of the 
amount of time the debt has been outstanding.

DATES: This interim final rule is effective June 11, 2009. Comments 
must be received by August 10, 2009.

ADDRESSES: The Financial Management Service (FMS) participates in the 
U.S. government's eRulemaking Initiative by publishing rulemaking 
information on http://www.regulations.gov. Regulations.gov offers the 
public the ability to comment on, search, and view publicly available 
rulemaking materials, including comments received on rules.
    Comments on this rule, identified by docket FISCAL-FMS-2008-0002, 
should only be submitted using the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions on the Web site for submitting comments.
    Mail: Tom Dungan, Policy Analyst, Financial Management Service, 401 
14th Street, SW., Washington, DC 20227.
    The fax and e-mail methods of submitting comments on rules to FMS 
have been retired.
    Instructions: All submissions received must include the agency name 
(``Financial Management Service'') and docket number FISCAL-FMS-2008-
0002 for this rulemaking. In general, comments will be published on 
Regulations.gov without change, including any business or personal 
information provided. Comments received, including attachments and 
other supporting materials, are part of the public record and subject 
to public disclosure. Do not enclose any information in your comment or 
supporting materials that you consider confidential or inappropriate 
for public disclosure.
    You may also inspect and copy this proposed rule at: Treasury 
Department Library, Freedom of Information Act (FOIA) Collection, Room 
1428, Main Treasury Building, 1500 Pennsylvania Avenue, NW., 
Washington, DC 20220. Before visiting, you must call (202) 622-0990 for 
an appointment.

FOR FURTHER INFORMATION CONTACT: Thomas Dungan, Policy Analyst, at 
(202) 874-6660, or Tricia Long, Senior Attorney, at (202) 874-6680.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Food, Conservation and Energy Act of 2008, Public Law 110-334, 
Section 14219, 22 Stat. 923 (2008) (``the Act'') amended the Debt 
Collection Act of 1982 (as amended by the Debt Collection Improvement 
Act of 1996) to remove a restriction on the collection of debt by 
administrative offset, i.e., offset of payments pursuant to 31 U.S.C. 
3716. Prior to this change, administrative offset to collect debt was 
only available if the debt was delinquent for a period of less than ten 
years. The amendment to the law allows for the collection of debt by 
administrative offset without any time limitation and applies to any 
debt outstanding on or after the date of the enactment of the Act.
    The changes to this rule conform to the statutory language by 
removing the ten-year time limitation on the collection of nontax debt 
by administrative offset, including centralized salary offset, by 
explicitly stating that no time limitation shall apply, and by 
explaining that by removing the time limitation, all debts, including 
debts that were ineligible for collection by offset prior to the 
removal of the time limitation, may now be collected by administrative 
offset and centralized salary offset. To avoid any undue hardship, we 
have added a requirement applicable to debts that were previously 
ineligible for collection by offset because they had been outstanding 
for more than ten years. For these debts, creditor agencies must 
certify to FMS that the notice of intent to offset was sent to the 
debtor after the debt became ten years delinquent. This is intended to 
alert the debtor that his debt may now be collected by offset and 
allows the debtor additional

[[Page 27708]]

opportunities to dispute the debt, enter into a repayment agreement or 
otherwise avoid offset. This requirement applies even in a case where 
notice was sent prior to the debt becoming ten years delinquent. This 
requirement applies only with respect to debts that were previously 
ineligible for collection by offset because of the time limitation. 
This requirement does not apply to debts, such as Department of 
Education student loan debts, that could be collected by offset without 
regard to any time limitation prior to this statutory change.

II. Procedural Analyses

Administrative Procedures Act

    This rule is being issued without prior public notice and comment 
because the changes to the rule are being made to conform to statutory 
requirements. Under 5 U.S.C. 553(b) and (d)(3), good cause exists to 
determine that notice and comment rulemaking is unnecessary and 
contrary to the public interest. The amendments made by this rule 
merely mirror amendments already enacted into law. Further delay in 
making these amendments would create an inconsistency between the law 
and the regulations and would cause confusion.

Request for Comment on Plain Language

    Executive Order 12866 requires each agency in the Executive branch 
to write regulations that are simple and easy to understand. We invite 
comment on how to make the proposed rule clearer. For example, you may 
wish to discuss: (1) Whether we have organized the material to suit 
your needs; (2) whether the requirements of the rules are clear; or (3) 
whether there is something else we could do to make these rules easier 
to understand.

Regulatory Planning and Review

    The final rule does not meet the criteria for a ``significant 
regulatory action'' as defined in Executive Order 12866. Therefore, the 
regulatory review procedures contained therein do not apply.

Regulatory Flexibility Act Analysis

    Because no notice of rulemaking is required, the provisions of the 
Regulatory Flexibility Act (5 U.S.C. et seq.) do not apply.

List of Subjects in 31 CFR Part 285

    Administrative practice and procedure, Child support, Child 
welfare, Claims, Credits, Debts, Disability benefits, Federal 
employees, Garnishment of wages, Hearing and appeal procedures, Loan 
programs, Privacy, Railroad retirement, Railroad unemployment 
insurance, Salaries, Social Security benefits, Supplemental Security 
Income (SSI), Taxes, Veteran's benefits, Wages.

0
For the reasons set forth in the preamble, we are amending 31 CFR part 
285 as follows:

PART 285--DEBT COLLECTION AUTHORITIES UNDER THE DEBT COLLECTION 
IMPROVEMENT ACT OF 1996

0
1. The authority citation for part 285 continues to read as follows:

    Authority:  5 U.S.C. 5514; 26 U.S.C. 6402; 31 U.S.C. 321, 3701, 
3711, 3716, 3719, 3720A, 3720B, 3720D; 42 U.S.C. 664; E.O. 13019, 61 
FR 51763, 3 CFR, 1996 Comp., p. 216.


0
2. In Sec.  285.5:
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a. Remove paragraph (d)(3)(i)(C);
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b. Redesignate paragraphs (d)(3)(i)(D) and (d)(3)(i)(E) as paragraphs 
(d)(3)(i)(C) and (d)(3)(i)(D) respectively.
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c. Redesignate paragraphs (d)(6)(iii), (d)(6)(iv) and (d)(6)(v) as 
paragraphs (d)(6)(iv), (d)(6)(v) and (d)(6)(vi) respectively.
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d. Add paragraphs (d)(3)(v) and (d)(6)(iii) as follows:


Sec.  285.5  Centralized offset of Federal payments to collect nontax 
debt owed to the United States.

* * * * *
    (d) * * *
    (3) * * *
    (v) Creditor agencies may submit nontax debts to FMS for collection 
by centralized offset irrespective of the amount of time the debt has 
been outstanding. Accordingly, all nontax debts, including debts that 
were outstanding for ten years or longer prior to June 11, 2009 may be 
collected by centralized offset.
* * * * *
    (6) * * *
    (iii) For debts outstanding more than ten years on or before June 
11, 2009, the notice of intent to offset described in paragraph 
(d)(6)(ii)(A) of this section was sent to the debtor after the debt was 
outstanding for more than ten years, and that the debtor was afforded 
the rights described in paragraphs (d)(6)(ii)(B) through (E). This 
requirement will apply even in a case where notice was also sent prior 
to the debt being outstanding for ten years but does not apply to any 
debt that could be collected by offset without regard to any time 
limitation prior to June 11, 2009.


0
3. In Sec.  285.7:
0
a. Remove paragraph (d)(3)(ii);
0
b. Redesignate paragraphs (d)(3)(iii) through (d)(3)(iv) as paragraphs 
(d)(3)(ii) through (d)(3)(iii) respectively .
0
c. In paragraph (d)(4), revise all references to ``paragraph 
(d)(3)(iv)'' to read ``paragraph (d)(3)(iii)''.
0
d. Add paragraphs (d)(6) and (d)(7) as follows:


Sec.  285.7  Salary offset.

* * * * *
    (d) * * *
    (6) Creditor agencies may submit nontax debts to FMS for collection 
by centralized salary offset irrespective of the amount of time the 
debt has been outstanding. Accordingly, all nontax debts, including 
debts that were outstanding for ten years or longer prior to June 11, 
2009, may be collected by centralized salary offset.
    (7) For debts that were outstanding more than ten years on or 
before June 11, 2009, creditor agencies must certify to FMS that the 
notice described in paragraph (d)(3)(ii) of this section was sent to 
the debtor after the debt was outstanding for ten years. This 
requirement will apply even in a case where notice was also sent prior 
to the debt being outstanding for ten years but does not apply to any 
debt that could be collected by offset without regard to any time 
limitation prior to June 11, 2009.
* * * * *

    Dated: May 29, 2009.
Gary Grippo,
Acting Fiscal Assistant Secretary.
[FR Doc. E9-13617 Filed 6-10-09; 8:45 am]
BILLING CODE 4810-35-P