31 U.S.C. § 3716 (MONEY AND FINANCE)
§ 3716. Administrative offset
(a) After trying to collect a claim from a person under section 3711(a) of this title, the head of an executive, judicial, or legislative agency may collect the claim by administrative offset. The head of the agency may collect by administrative offset only after giving the debtor—
(1) written notice of the type and amount of the claim, the intention of the head of the agency to collect the claim by administrative offset, and an explanation of the rights of the debtor under this section;
(2) an opportunity to inspect and copy the records of the agency related to the claim;
(3) an opportunity for a review within the agency of the decision of the agency related to the claim; and
(4) an opportunity to make a written agreement with the head of the agency to repay the amount of the claim.
(b) Before collecting a claim by administrative offset, the head of an executive, judicial, or legislative agency must either—
(1) 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
(2) prescribe regulations on collecting by administrative offset consistent with the regulations referred to in paragraph (1).
(c)
(1)
(A) Except as otherwise provided in this subsection, a disbursing official of the Department of the Treasury, the Department of Defense, the United States Postal Service, the Department of Health and Human Services, or any other government corporation, or any disbursing official of the United States designated by the Secretary of the Treasury, shall offset at least annually the amount of a payment which a payment certifying agency has certified to the disbursing official for disbursement, by an amount equal to the amount of a claim which a creditor agency has certified to the Secretary of the Treasury pursuant to this subsection.
(B) An agency that designates disbursing officials pursuant to section 3321(c) of this title is not required to certify claims arising out of its operations to the Secretary of the Treasury before such agency’s disbursing officials offset such claims.
(C) Payments certified by the Department of Education under a program administered by the Secretary of Education under title IV of the Higher Education Act of 1965 shall not be subject to administrative offset under this subsection.
(2) Neither the disbursing official nor the payment certifying agency shall be liable—
(A) for the amount of the administrative offset on the basis that the underlying obligation, represented by the payment before the administrative offset was taken, was not satisfied; or
(B) for failure to provide timely notice under paragraph (8).
(3)
(A)
(i) Notwithstanding any other provision of law (including sections 207 and 1631(d)(1) of the Social Security Act (42 U.S.C. 407 and 1383(d)(1)), section 413(b) of Public Law 91–173 (30 U.S.C. 923(b)), and section 14 of the Act of August 29, 1935 (45 U.S.C. 231m)), except as provided in clause (ii), all payments due to an individual under—
(I) the Social Security Act,
(II) part B of the Black Lung Benefits Act, or
(III) any law administered by the Railroad Retirement Board (other than payments that such Board determines to be tier 2 benefits),
shall be subject to offset under this section.
(ii) An amount of $9,000 which a debtor may receive under Federal benefit programs cited under clause (i) within a 12-month period shall be exempt from offset under this subsection. In applying the $9,000 exemption, the disbursing official shall—
(I) reduce the $9,000 exemption amount for the 12-month period by the amount of all Federal benefit payments made during such 12-month period which are not subject to offset under this subsection; and
(II) apply a prorated amount of the exemption to each periodic benefit payment to be made to the debtor during the applicable 12-month period.
For purposes of the preceding sentence, the amount of a periodic benefit payment shall be the amount after any reduction or deduction required under the laws authorizing the program under which such payment is authorized to be made (including any reduction or deduction to recover any overpayment under such program).
(B) The Secretary of the Treasury shall exempt from administrative offset under this subsection payments under means-tested programs when requested by the head of the respective agency. The Secretary may exempt other payments from administrative offset under this subsection upon the written request of the head of a payment certifying agency. A written request for exemption of other payments must provide justification for the exemption under standards prescribed by the Secretary. Such standards shall give due consideration to whether administrative offset would tend to interfere substantially with or defeat the purposes of the payment certifying agency’s program. The Secretary shall report to the Congress annually on exemptions granted under this section.
(C) The provisions of sections 205(b)(1), 809(a)(1), and 1631(c)(1) of the Social Security Act shall not apply to any administrative offset executed pursuant to this section against benefits authorized by title II, VIII, or title XVI of the Social Security Act, respectively.
(D) This section shall apply to payments made after the date which is 90 days after the enactment of this subparagraph (or such earlier date as designated by the Secretary of Health and Human Services) with respect to claims or debts, and to amounts payable, under title XVIII of the Social Security Act.
(4) The Secretary of the Treasury may charge a fee sufficient to cover the full cost of implementing this subsection. The fee may be collected either by the retention of a portion of amounts collected pursuant to this subsection, or by billing the agency referring or transferring a claim for those amounts. Fees charged to the agencies shall be based on actual administrative offsets completed. Amounts received by the United States as fees under this subsection shall be deposited into the account of the Department of the Treasury under section 3711(g)(7) of this title, and shall be collected and accounted for in accordance with the provisions of that section.
(5) The Secretary of the Treasury in consultation with the Commissioner of Social Security and the Director of the Office of Management and Budget, may prescribe such rules, regulations, and procedures as the Secretary of the Treasury considers necessary to carry out this subsection. The Secretary shall consult with the heads of affected agencies in the development of such rules, regulations, and procedures.
(6)
(A) Any Federal agency that is owed by a person a past due, legally enforceable nontax debt that is over 120 days delinquent, including nontax debt administered by a third party acting as an agent for the Federal Government, shall notify the Secretary of the Treasury of all such nontax debts for purposes of administrative offset under this subsection.
(B) The Secretary of the Treasury shall notify Congress of any instance in which an agency fails to notify the Secretary as required under subparagraph (A).
(7)
(A) The disbursing official conducting an administrative offset with respect to a payment to a payee shall notify the payee in writing of—
(i) the occurrence of the administrative offset to satisfy a past due legally enforceable debt, including a description of the type and amount of the payment otherwise payable to the payee against which the offset was executed;
(ii) the identity of the creditor agency requesting the offset; and
(iii) a contact point within the creditor agency that will handle concerns regarding the offset.
(B) If the payment to be offset is a periodic benefit payment, the disbursing official shall take reasonable steps, as determined by the Secretary of the Treasury, to provide the notice to the payee not later than the date on which the payee is otherwise scheduled to receive the payment, or as soon as practical thereafter, but no later than the date of the administrative offset. Notwithstanding the preceding sentence, the failure of the debtor to receive such notice shall not impair the legality of such administrative offset.
(8) A levy pursuant to the Internal Revenue Code of 1986 shall take precedence over requests for administrative offset pursuant to other laws.
(d) Nothing in this section is intended to prohibit the use of any other administrative offset authority existing under statute or common law.
(e)
(1) Notwithstanding any other provision of law, regulation, or administrative limitation, no limitation on the period within which an offset may be initiated or taken pursuant to this section shall be effective.
(2) This section does not apply when a statute explicitly prohibits using administrative offset or setoff to collect the claim or type of claim involved.
(f) The Secretary may waive the requirements of sections 552a(o) and (p) of title 5 for administrative offset or claims collection upon written certification by the head of a State or an executive, judicial, or legislative agency seeking to collect the claim that the requirements of subsection (a) of this section have been met.
(g) The Data Integrity Board of the Department of the Treasury established under 552a(u) of title 5 shall review and include in reports under paragraph (3)(D) of that section a description of any matching activities conducted under this section. If the Secretary has granted a waiver under subsection (f) of this section, no other Data Integrity Board is required to take any action under section 552a(u) of title 5.
(h)
(1) The Secretary may, in the discretion of the Secretary, apply subsection (a) with respect to any past-due, legally-enforceable debt owed to a State if—
(A) the appropriate State disbursing official requests that an offset be performed; and
(B) a reciprocal agreement with the State is in effect which contains, at a minimum—
(i) requirements substantially equivalent to subsection (b) of this section; and
(ii) any other requirements which the Secretary considers appropriate to facilitate the offset and prevent duplicative efforts.
(2) This subsection does not apply to—
(A) the collection of a debt or claim on which the administrative costs associated with the collection of the debt or claim exceed the amount of the debt or claim;
(B) any collection of any other type, class, or amount of claim, as the Secretary considers necessary to protect the interest of the United States; or
(C) the disbursement of any class or type of payment exempted by the Secretary of the Treasury at the request of a Federal agency.
(3) In applying this section with respect to any debt owed to a State, subsection (c)(3)(A) shall not apply.
(Added Pub. L. 97–452, § 1(16)(A), Jan. 12, 1983, 96 Stat. 2471; amended Pub. L. 104–134, title III, § 31001(c)(1), (d)(2), (e), (f), Apr. 26, 1996, 110 Stat. 1321–359, 1321–362; Pub. L. 106–169, title II, § 251(b)(10), Dec. 14, 1999, 113 Stat. 1856; Pub. L. 108–271, § 8(b), July 7, 2004, 118 Stat. 814; Pub. L. 110–234, title XIV, § 14219(a), May 22, 2008, 122 Stat. 1482; Pub. L. 110–246, § 4(a), title XIV, § 14219(a), June 18, 2008, 122 Stat. 1664, 2244; Pub. L. 110–275, title I, § 189(b), July 15, 2008, 122 Stat. 2590; Pub. L. 113–101, § 5, May 9, 2014, 128 Stat. 1153.)
text: Historical and Revision Notes
Revised Section
Source (U.S. Code)
Source (Statutes at Large)
3716(a)
31 App.:954(a) (words before last comma), (c).
July 19, 1966, Pub. L. 89–508, 80 Stat. 308, § 5(a)–(d); added Oct. 25, 1982, Pub. L. 97–365, § 10(2), 96 Stat. 1754.
3716(b)
31 App.:954(b).
3716(c)(1)
31 App.:954(a) (words after last comma).
3716(c)(2)
31 App.:954(d).
In the subchapter, the words “or his designee” are omitted as unnecessary.
In subsection (a)(1), the words “head of the” are added for consistency in the revised title and with other titles of the United States Code.
In subsection (b)(1), the word “Government” is added for consistency in the revised title and with other titles of the Code.
In subsection (b)(3), the word “civil” is added for consistency in the revised title and with other titles of the Code.
In subsection (c)(2), the word “either” is omitted as surplus.
heading: Editorial Notes
heading: References in Text
text: The Higher Education Act of 1965, referred to in subsec. (c)(1)(C), is Pub. L. 89–329, Nov. 8, 1965, 79 Stat. 1219. Title IV of the Act is classified generally to subchapter IV (§ 1070 et seq.) of chapter 28 of Title 20, Education. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of Title 20 and Tables.
The Social Security Act, referred to in subsec. (c)(3)(A)(i)(I), (C), (D), is act Aug. 14, 1935, ch. 531, 49 Stat. 620, which is classified generally to chapter 7 (§ 301 et seq.) of Title 42, The Public Health and Welfare. Titles II, VIII, XVI, and XVIII of the Act are classified generally to subchapters II (§ 401 et seq.), VIII (§ 1001 et seq.), XVI (§ 1381 et seq.), and XVIII (§ 1395 et seq.), respectively, of chapter 7 of Title 42. Sections 205(b)(1), 809(a)(1), and 1631(c)(1) of the Act are classified to sections 405(b)(1), 1009(a)(1), and 1383(c)(1), respectively, of Title 42. For complete classification of this Act to the Code, see section 1305 of Title 42 and Tables.
The Black Lung Benefits Act, referred to in subsec. (c)(3)(A)(i)(II), is title IV of Pub. L. 91–173, Dec. 30, 1969, 83 Stat. 792. Part B of the Act is classified generally to part B (§ 921 et seq.) of subchapter IV of chapter 22 of Title 30, Mineral Lands and Mining. For complete classification of this Act to the Code, see section 901(b) of Title 30 and Tables.
The enactment of this subparagraph, referred to in subsec. (c)(3)(D), refers to the date of enactment of Pub. L. 110–275, which was approved July 15, 2008.
The Internal Revenue Code of 1986, referred to in subsec. (c)(8), is classified to Title 26, Internal Revenue Code.
heading: Codification
text: Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246.
heading: Amendments
text: 2014—Subsec. (c)(6). Pub. L. 113–101 designated existing provisions as subpar. (A), substituted “120 days” for “180 days”, and added subpar. (B).
2008—Subsec. (c)(1)(A). Pub. L. 110–275, § 189(b)(1), inserted “the Department of Health and Human Services,” after “United States Postal Service,”.
Subsec. (c)(3)(D). Pub. L. 110–275, § 189(b)(2), added subpar. (D).
Subsec. (e). Pub. L. 110–246, § 14219(a), amended subsec. (e) generally. Prior to amendment, subsec. (e) read as follows: “This section does not apply—
“(1) to a claim under this subchapter that has been outstanding for more than 10 years; or
“(2) when a statute explicitly prohibits using administrative offset or setoff to collect the claim or type of claim involved.”
2004—Subsec. (b)(1). Pub. L. 108–271 substituted “Government Accountability Office” for “General Accounting Office”.
1999—Subsec. (c)(3)(C). Pub. L. 106–169 substituted “sections 205(b)(1), 809(a)(1),” for “sections 205(b)(1)” and “title II, VIII,” for “either title II”.
1996—Subsec. (a). Pub. L. 104–134, § 31001(c)(1), substituted “the head of an executive, judicial, or legislative agency” for “the head of an executive or legislative agency” in introductory provisions.
Subsec. (b). Pub. L. 104–134, § 31001(d)(2)(A), amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: “Before collecting a claim by administrative offset under subsection (a) of this section, the head of an executive or legislative agency must prescribe regulations on collecting by administrative offset based on—
“(1) the best interests of the United States Government;
“(2) the likelihood of collecting a claim by administrative offset; and
“(3) for collecting a claim by administrative offset after the 6-year period for bringing a civil action on a claim under section 2415 of title 28 has expired, the cost effectiveness of leaving a claim unresolved for more than 6 years.”
Pub. L. 104–134, § 31001(c)(1), substituted “the head of an executive, judicial, or legislative agency” for “the head of an executive or legislative agency” in introductory provisions.
Subsec. (c). Pub. L. 104–134, § 31001(d)(2)(D), added subsec. (c). Former subsec. (c) redesignated (e).
Subsec. (c)(2). Pub. L. 104–134, § 31001(d)(2)(B), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “when a statute explicitly provides for or prohibits using administrative offset to collect the claim or type of claim involved.”
Subsec. (d). Pub. L. 104–134, § 31001(d)(2)(D), added subsec. (d).
Subsec. (e). Pub. L. 104–134, § 31001(d)(2)(C), redesignated subsec. (c) as (e).
Subsecs. (f) to (h). Pub. L. 104–134, § 31001(e), (f), added subsecs. (f) to (h).
heading: Statutory Notes and Related Subsidiaries
heading: Effective Date of 2008 Amendment
text: Pub. L. 110–275, title I, § 189(c), July 15, 2008, 122 Stat. 2591, provided that: “The amendments made by this section [amending this section and section 1395kk of Title 42, The Public Health and Welfare] shall take effect on the date of the enactment of this Act [July 15, 2008].”
Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, except as otherwise provided, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of Title 7, Agriculture.
Pub. L. 110–234, title XIV, § 14219(b), May 22, 2008, 122 Stat. 1483, and Pub. L. 110–246, § 4(a), title XIV, § 14219(b), June 18, 2008, 122 Stat. 1664, 2245, provided that: “The amendment made by subsection (a) [amending this section] shall apply to any debt outstanding on or after the date of the enactment of this Act [June 18, 2008].”
[Pub. L. 110–234 and Pub. L. 110–246 enacted identical provisions. Pub. L. 110–234 was repealed by section 4(a) of Pub. L. 110–246, set out as a note under section 8701 of Title 7, Agriculture.]
heading: Offsets From Social Security Payments
text: Pub. L. 104–134, title III, § 31001(a)(2)(B), Apr. 26, 1996, 110 Stat. 1321–358, provided that: “Subparagraph (A) of section 3716(c)(3) of title 31, United States Code (as added by subsection (d)(2) of this section), shall apply only to payments made after the date which is 4 months after the date of the enactment of this Act [Apr. 26, 1996].”
heading: Executive Documents
heading: Ex. Ord. No. 13019. Supporting Families: Collecting Delinquent Child Support Obligations
text: Ex. Ord. No. 13019, Sept. 28, 1996, 61 F.R. 51763, provided that:
The Debt Collection Improvement Act of 1996, Public Law 104–134 [§ 31001] (110 Stat. 1321–358 et seq.) [see Short Title of 1996 Amendment note set out under section 3701 of this title], was enacted into law on April 26, 1996, as part of the Omnibus Consolidated Rescissions and Appropriations Act of 1996. While the primary purpose of the Debt Collection Improvement Act is to increase the collection of nontax debts owed to the Federal Government, the Act also contains important provisions that can be used to assist families in collecting past-due child support obligations.
The failure of some parents to meet their child support obligations threatens the health, education, and well-being of their children. Compounding this problem, States have experienced difficulties enforcing child support obligations once a parent has moved to another State. With this Executive order, my Administration takes additional steps to support our children and strengthen American families by facilitating the collection of delinquent child support obligations from persons who may be entitled or eligible to receive certain Federal payments or Federal assistance.
Accordingly, by the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
Section 1. Administrative Offsets. (a)(1) The Secretary of the Treasury (“the Secretary”), in accordance with the provisions of the Debt Collection Improvement Act of 1996 and to the extent permitted by law, and in consultation with the Secretary of Health and Human Services and other affected agencies, shall promptly develop and implement procedures necessary for the Secretary to collect past-due child support debts by administrative offset, and shall issue such rules, regulations, and procedures as the Secretary, in consultation with the heads of affected agencies, deems appropriate to govern administrative offsets by the Department of the Treasury and other executive departments and agencies that disburse Federal payments.
(2) The Secretary may enter into reciprocal agreements with States concerning the collection by the Secretary of delinquent child support debts through administrative offsets.
(b) The Secretary of Health and Human Services shall, within 120 days of the date of this order, implement procedures necessary to report to the Secretary of the Treasury information on past-due child support claims referred by States (including claims enforced by States pursuant to cooperative agreements with or by Indian tribal governments) to the Department of Health and Human Services.
(c) The head of each executive department and agency that certifies payments to the Secretary or to another disbursing official shall review each class of payments that the department or agency certifies to determine if any such class should be exempt from offset and, if any class is so identified, submit to the Secretary a request for such an exemption together with the reasons therefor. With respect to classes of payments under means-tested programs existing on the date of this order, such submission shall be made within 30 days of the date of this order. With respect to classes of payments other than payments under means-tested programs existing on the date of this order, such submissions shall be made within 30 days of the date the Secretary establishes standards pursuant to section 3716(c)(3) of title 31, United States Code. With respect to a class of payments established after the date of this order, such submissions shall be made not later than 30 days after such class is established.
(d) The head of each executive department and agency that certifies payments to the Secretary shall promptly implement any rule, regulation, or procedure issued by the Secretary pursuant to this section.
(e) The head of each executive department and agency that is authorized by law to disburse payments shall promptly implement any rule, regulation, or procedure issued by the Secretary pursuant to this section and shall:
(1) match, consistent with computer privacy matching laws, the payment certification records of such department or agency with records of persons delinquent in child support payments as directed by the Secretary; and
(2) conduct administrative offsets to collect delinquent child support payments.
(f) The Secretary shall, to the extent permitted by law, share with the Secretary of Health and Human Services any information contained in payment certification records of persons who are delinquent in child support obligations that would assist in the collection of such debts, whether or not an administrative offset is conducted.
Sec. 2. Denial of Federal Assistance. (a) The Secretary shall, to the extent permitted by law, ensure that information concerning individuals whose payments are subject to administrative offset because of delinquent child support obligations is made available to the head of each executive department and agency that provides Federal financial assistance to individuals.
(b) In conformance with section 2(e) of this order, the head of each executive department and agency shall, with respect to any individuals whose payments are subject to administrative offset because of a delinquent child support obligation, promptly implement procedures to deny Federal financial assistance to such individuals.
(c) The Attorney General, in consultation with the Secretary of Health and Human Services and other affected agencies, shall promptly issue guidelines for departments and agencies concerning minimum due-process standards to be included in the procedures required by subsection (b) of this section.
(d) For purposes of this section, Federal financial assistance means any Federal loan (other than a disaster loan), loan guarantee, or loan insurance.
(e)(1) A class of Federal financial assistance shall not be subject to denial if the head of the concerned department or agency determines:
(A) in consultation with the Attorney General and the Secretary of Health and Human Services, that such action:
(i) is not permitted by law; or
(ii) would likely result in valid legal claims for damages against the United States;
(B) that such action would be inconsistent with the best interests of the child or children with respect to whom a child support obligation is owed; or
(C) that such action should be waived.
(2) The head of each executive department and agency shall provide written notification to the Secretary upon determining that the denial of a class of Federal financial assistance is not permitted by law or should be waived.
(f) The head of each executive department and agency shall:
(1) review all laws under the jurisdiction of the department or agency that do not permit the denial of Federal financial assistance to individuals and whose payments are subject to administrative offset because of a delinquent child support obligation and, where appropriate, transmit to the Director of the Office of Management and Budget recommendations for statutory changes; and
(2) to the extent practicable, review all rules, regulations, and procedures implementing laws under the jurisdiction of the department or agency governing the provision of any Federal financial assistance to individuals and, where appropriate, conform such rules, regulations, and procedures to the provisions of this order and the rules, regulations, and procedures issued by the Secretary pursuant to section 1 of this order.
Sec. 3. Reports. (a) The head of each executive department and agency shall provide to the Secretary such information as the Secretary may request concerning the implementation of this order, the provisions of the Debt Collection Improvement Act of 1996 applicable to delinquent child support obligations, and the rules, regulations, and procedures issued by the Secretary pursuant to section 1 of this order.
(b) The Secretary shall report annually to the President concerning the implementation by departments and agencies of this order and the provisions of the Debt Collection Improvement Act of 1996 applicable to delinquent child support obligations.
Sec. 4. Judicial Review. This order does not create any right or benefit, substantive or procedural, enforceable at law by a party against the United States, its agencies, its officers, or any person.
William J. Clinton.