Document ID: DOT-OST-2008-0329-0003
Agency: dot
Document Type: Rule
Title: Administrative Wage Garnishment
Posted Date: 2009-08-12T04:00Z

[Federal Register: August 12, 2009 (Volume 74, Number 154)]
[Rules and Regulations]               
[Page 40521-40523]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12au09-14]                         

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary of Transportation

49 CFR Part 89

[Docket No. OST-2008-0329]
RIN 2105-AD78

 
Administrative Wage Garnishment

AGENCY: Office of the Secretary of Transportation (OST), DOT.

ACTION: Final rule.

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SUMMARY: This final rule will implement the authority established under 
the Debt Collection Improvement Act of 1996 (DCIA) for DOT to collect 
the Department's past due indebtedness through administrative wage 
garnishment. The final rule will adopt, without change, the hearing 
procedures issued by the Department of the Treasury implementing 
administrative wage garnishment under the DCIA. This final rule would 
apply only to individuals who are not Federal employees. The final rule 
also will amend regulations on procedures for the collection of claims 
to conform DOT regulations to applicable provisions of the DCIA.

DATES: This rule is effective September 11, 2009.

FOR FURTHER INFORMATION CONTACT: Edward C. Ramos, Collections 
Specialist, Office of the Secretary of Transportation, Department of 
Transportation, 1200 New Jersey Avenue, SE., Washington, DC 20590; 
(202) 366-5905. Hearing and speech-impaired persons may access this 
number via TTY by calling the Federal Information Relay Service at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION:

Background

    In 1996, Congress enacted the Debt Collection Improvement Act of 
1996 (Pub. L. 104-134, 110 Stat. 1321-1358, approved April 26, 1996), 
which amended the Debt Collection Act of 1982. Section 31001(o) of the 
DCIA authorizes collection of Federal agency debt by administrative 
wage garnishment (section 31001(o) is codified at 31 U.S.C. 3720D). 
Wage garnishment is a legal process whereby an employer withholds 
amounts from an employee's wages and pays those amounts to the 
employee's creditor in satisfaction of a withholding order. The DCIA 
authorizes Federal agencies to garnish up to 15% of the disposable pay 
of a debtor to satisfy delinquent nontax debt owed to the United 
States. Prior to the enactment of the DCIA, agencies were required to 
obtain a court judgment before garnishing the wages of non-Federal 
employees.
    The DCIA directed the Secretary of the Treasury to issue 
implementing regulations (see 31 U.S.C. 3720D(h)) on this subject. On 
May 6, 1998 (63 FR 25136), the Department of the Treasury published a 
final rule implementing the statutory administrative wage garnishment 
requirements at 31 CFR 285.11. Paragraph (f) of 31 CFR 285.11 provides 
that ``[a]gencies shall prescribe regulations for the conduct of 
administrative wage garnishment hearings consistent with this section 
or shall adopt this section without change by reference.'' Under the 
DCIA, the Treasury Department serves as a coordinator for Federal debt 
collection through its Treasury Offset Program.
    This final rule would amend DOT's regulations at 49 CFR part 89, 
subpart B to adopt 31 CFR 285.11 in its entirety. Specifically, the 
final rule would establish a new 49 CFR 89.35 that would contain a 
cross-reference to 31 CFR 285.11.
    On December 5, 2008, the DOT published a notice of proposed

[[Page 40522]]

rulemaking in the Federal Register for the public to comment, as 
required. DOT received no comments from the public on this rule.

Overview of the Administrative Wage Garnishment Process

    Readers should refer to the Department of the Treasury regulation 
at 31 CFR 285.11 for details regarding the administrative wage 
garnishment procedures that would be adopted by this final rule. For 
the convenience of readers, the following presents a very brief 
overview of the rules and procedures codified at 31 CFR 285.11.
    1. Notice to debtor. At least 30 days before the agency initiates 
garnishment proceedings, the agency will give the debtor written notice 
informing him or her of the nature and amount of the debt, the 
intention of the agency to collect the debt through deductions from 
pay, and an explanation of the debtor's rights regarding the proposed 
action.
    2. Rights of debtor. The agency will provide the debtor with an 
opportunity to inspect and copy records related to the debt, to 
establish a repayment agreement, and to receive a hearing concerning 
the existence or amount of the debt and the terms of a repayment 
schedule. A hearing must be held prior to the issuance of a withholding 
order if the debtor's request is timely received. For hearing requests 
that are not received in the specified timeframe, the agency need not 
delay the issuance of a withholding order prior to conducting a 
hearing. An agency may not garnish the wages of a debtor who has been 
involuntarily separated from employment until that individual has been 
reemployed continuously for at least 12 months. The debtor bears the 
responsibility of notifying the agency of the circumstances surrounding 
an involuntary separation from employment.
    3. Hearing official. The Department of the Treasury regulations 
authorize the head of each agency to designate any qualified individual 
as a hearing official. This final rule would provide that any hearing 
required to establish DOT's right to collect a debt through 
administrative wage garnishment will be conducted by a qualified 
individual selected by the Secretary of Transportation. The hearing 
official is required to issue a written decision no later than 60 days 
after the request for a hearing is made. The hearing official's 
decision is the final agency action for purposes of judicial review.
    4. Employer's responsibilities. The Treasury Department will send 
to the employer of a delinquent debtor a wage garnishment order 
directing that the employer pay a portion of the debtor's wages to the 
Federal Government. The employer is required to certify certain payment 
information about the debtor. Employers are not required to vary their 
normal pay cycles in order to comply with these requirements. Employers 
are prohibited from taking disciplinary actions against the debtor 
because the debtor's wages are subject to administrative garnishment. 
An agency may sue an employer for amounts not properly withheld from 
the wages payable to the debtor.
    5. Garnishment amounts. As provided in the DCIA, no more than 15% 
of the debtor's disposable pay for each pay period may be garnished. 
Special rules apply to calculating the amount to be withheld from a 
debtor's pay that is subject to multiple withholding orders. A debtor 
may request a review by the agency of the amount being garnished under 
a wage garnishment order based on materially changed circumstances, 
such as disability, divorce, or catastrophic illness, which result in 
financial hardship.

Rulemaking Analyses and Notices

E.O. 12866 and DOT Regulatory Policies and Procedures

    The agency has evaluated this final rule in accordance with 
existing regulatory policies and procedures and has concluded that it 
is a nonsignificant regulatory action under E.O. 12866, and a 
nonsignificant rule under section 5(a)(4) of the DOT Regulatory 
Policies and Procedures (44 FR 11034, February 26, 1979).
    The final rule is not a significant regulatory action under E.O. 
12866 because it will not have an annual effect on the economy of $100 
million or more or adversely affect in a material way the economy, a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
governments or communities; will not create a serious inconsistency 
with an action planned or underway by another Federal agency; will not 
materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; and will not raise novel legal or policy issues arising out of 
legal mandates, the President's priorities, or the principles of the 
Executive Order.

Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed and approved this final rule, and in so 
doing certifies that this final rule would not have a significant 
economic impact on a substantial number of small entities. Although 
many small employers will be subject to the requirements of this final 
rule, the requirements will not have a significant economic impact on 
these entities.
    Employers of delinquent debtors must certify certain information 
about the debtor such as the debtor's employment status and earnings. 
This information is contained in the employer's payroll records. 
Therefore, it will not take a significant amount of time or result in a 
significant cost for an employer to complete the certification form. 
Even if an employer is served withholding orders on several employees 
over the course of a year, the cost imposed on the employer to complete 
the certifications would not have a significant economic impact on an 
entity. Employers are not required to vary their normal pay cycles in 
order to comply with a withholding order issued pursuant to this final 
rule.

Executive Order 13132 (Federalism)

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on State and local 
governments and is not required by statute, or the rule preempts State 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive Order.
    This final rule does not have federalism implications and does not 
impose substantial direct compliance costs on State and local 
governments or preempt State law within the meaning of the Executive 
Order.

Executive Order 13084

    This rule has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13084 (``Consultation and 
Coordination with Indian Tribal Governments''). Because this rule would 
not significantly or uniquely affect the Indian tribal communities, and 
would not impose substantial direct compliance costs, the funding and 
consultation requirements of the Executive Order do not apply.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 establishes 
requirements for Federal agencies to assess the effects of their 
regulatory actions on State, local, and tribal governments and the 
private sector.
    This rule would not impose a Federal mandate on any State, local, 
or tribal government, or on the private sector,

[[Page 40523]]

within the meaning of the Unfunded Mandates Reform Act of 1995.

Executive Order 12372 (Intergovernmental Review)

    The regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities do 
not apply to this program.

Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. 3501 et seq.) addresses the 
collection of information by the Federal government from individuals, 
small businesses and State and local government and seeks to minimize 
the burdens such information collection requirements might impose. A 
collection of information includes requiring answers to identical 
questions posed to, or identical reporting or recordkeeping 
requirements imposed on, ten or more persons, other than agencies, 
instrumentalities or employees of the United States.
    This final rule contains information that would apply to 
individuals and possibly small entities. However, there are no 
reporting or other collection requirements associated with this final 
rule, even though it relates to an employer's certification of certain 
information about the debtor, such as the debtor's employment status 
and earnings, which would be inquiries on a one-time basis. In any 
case, comments in this area are welcomed.

National Environmental Policy Act

    In accordance with 24 CFR 50.19(c)(1) of the Department's 
regulations, this final rule does not direct, provide for assistance or 
loan and mortgage insurance for, or otherwise govern or regulate, real 
property acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction, or establish, revise, or provide for 
standards for construction or construction materials, manufactured 
housing, or occupancy. Therefore, this final rule is categorically 
excluded from the requirements of the National Environmental Policy Act 
(42 U.S.C. 4321 et seq.).

Energy Impact

    Executive Order 13211 requires Federal agencies to prepare a 
Statement of Energy Effects for any ``significant energy action.'' See 
66 FR 28355 (May 22, 2001). Under the Executive Order a ``significant 
energy action'' is defined as any action by an agency that promulgates 
or is expected to lead to the promulgation of a final rule or 
regulation, including notices of inquiry, advance notices of final 
rulemaking, and notices of final rulemaking: (1)(i) That is a 
significant regulatory action under Executive Order 12866 or any 
successor order, and (ii) is likely to have a significant adverse 
effect on the supply, distribution, or use of energy; or (2) that is 
designated by the Administrator of the Office of Information and 
Regulatory Affairs as a significant energy action. OST has evaluated 
this final rule in accordance with Executive Order 13211.
    The Department has determined that this final rule is not likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy. Consequently, the Department has determined that this final 
rule is not a ``significant energy action'' within the meaning of the 
Executive Order.

Privacy Act Statement

    Anyone is able to search the electronic form of all comments 
received into any of DOT's dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc). You may review DOT's 
complete Privacy Act Statement published in the Federal Register on 
April 11, 2000 (Volume 65, Number 70, Pages 19477-78) or you may visit: 
http://www.regulations.gov.

Regulation Identification Number

    A regulation identification number (RIN) is assigned to each 
regulatory action listed in the Unified Agenda of Federal Regulations. 
The Regulatory Information Service Center publishes the Unified Agenda 
in April and October of each year. The RIN contained in the heading of 
this document can be used to cross reference this action with the 
Unified Agenda.

List of Subjects in 49 CFR Part 89

    Claims, Income taxes.

 The Final Rule

0
For the reasons set forth in the preamble, OST amends Part 89 of 
chapter I, subtitle A of title 49, Code of Federal Regulations, as set 
forth below:

PART 89--IMPLEMENTATION OF THE FEDERAL CLAIMS COLLECTION ACT

0
1. The authority citation for 49 CFR part 89, subpart B is revised to 
read as follows:

    Authority: Public Law 89-508; Public Law 89-365, secs. 3, 10, 
11, 13(b), 31 U.S.C. 3701-3720A; Public Law 98-167; Public Law 98-
369; Public Law 99-578; Public Law 101-552, 31 U.S.C. 3711(a)(2); 31 
CFR 3711, 3716-3720E.

0
2. Add Sec.  89.35 to subpart B to read as follows:

Sec.  89.35  Administrative wage garnishment.

    (a) General. The Secretary may use administrative wage garnishment 
for debts referred to cross-servicing at Financial Management Service, 
Department of Treasury. Regulations in 31 CFR 285.11 govern the 
collection of debts owed to federal agencies through administrative 
wage garnishment. Whenever the Financial Management Service collects a 
debt for the Secretary using administrative wage garnishment, the 
statutory administrative requirements in 31 CFR 285.11 will govern.
    (b) Hearing official. Any hearing required to establish the 
Secretary's right to collect a debt through administrative wage 
garnishment shall be conducted by a qualified individual selected at 
the discretion of the Secretary of Transportation, as specified in 31 
CFR 285.11. The qualified individual may include an Administrative Law 
Judge.

    Issued this 30th day of July 2009, at Washington, DC.
Ray LaHood,
Secretary of Transportation.
[FR Doc. E9-19344 Filed 8-11-09; 8:45 am]

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