Debt Collection, 42662-42672 [2010-18008]

Download as PDF 42662 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Proposed Rules acknowledge receipt of comments, and we consider all comments as originals. If you are commenting on behalf of an association, business, or other entity, your comment must include the entity’s name as well as your name and position title. If you comment via Regulations.gov, please include the entity’s name in the ‘‘Organization’’ blank of the comment form. If you comment via postal mail, please submit your entity’s comment on letterhead. You may also write to the Administrator before the comment closing date to ask for a public hearing. The Administrator reserves the right to determine whether to hold a public hearing. Confidentiality All submitted comments and attachments are part of the public record and subject to disclosure. Do not enclose any material in your comments that you consider to be confidential or that is inappropriate for public disclosure. emcdonald on DSK2BSOYB1PROD with PROPOSALS Public Disclosure On the Federal e-rulemaking portal, Regulations.gov, we will post, and the public may view, copies of this advance notice, selected supporting materials, and any electronic or mailed comments we receive about this proposal. A direct link to the Regulations.gov docket containing this advance notice and the posted comments received on it is available on the TTB Web site at https://www.ttb.gov/tobacco/tobaccorulemaking.shtml under Notice No. 106. You may also reach the docket containing this advance notice and the posted comments received on it through the Regulations.gov search page at https://www.regulations.gov. All posted comments will display the commenter’s name, organization (if any), city, and State, and, in the case of mailed comments, all address information, including e-mail addresses. We may omit voluminous attachments or material that we consider unsuitable for posting. You and other members of the public may view copies of this advance notice, any related supporting materials, and any electronic or mailed comments we receive about this proposal by appointment at the TTB Information Resource Center, 1310 G Street, NW., Washington, DC 20220. You may also obtain copies at 20 cents per 8.5 x 11 inch page. Contact our information specialist at the above address or by telephone at 202–453–2270 to schedule an appointment or to request copies of comments or other materials. VerDate Mar<15>2010 16:13 Jul 21, 2010 Jkt 220001 Drafting Information Jennifer Berry of the Regulations and Rulings Division drafted this advance notice. Signed: April 28, 2010. John J. Manfreda, Administrator. Approved: May 26, 2010. Timothy E. Skud, Deputy Assistant Secretary (Tax, Trade, and Tariff Policy) . [FR Doc. 2010–17957 Filed 7–21–10; 8:45 am] BILLING CODE 4810–31–P PENSION BENEFIT GUARANTY CORPORATION 29 CFR Parts 4003 and 4903 Debt Collection Pension Benefit Guaranty Corporation. ACTION: Proposed rule. AGENCY: This proposed rule would revise the Pension Benefit Guaranty Corporation’s 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. This proposed rule would 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. DATES: Comments must be received by September 20, 2010. ADDRESSES: Comments may be submitted by any of the following methods: • Federal eRulemaking Portal: https:// www.regulations.gov. Follow the Web site instructions for submitting comments. • E-mail: reg.comments@pbgc.gov. • Fax: 202–326–4224. • Mail or Hand Delivery: Legislative and Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005– 4026. Comments received, including personal information provided, will be posted to https://www.pbgc.gov. Copies of comments may also be obtained by writing to Disclosure Division, Office of General Counsel, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005–4026, or calling 202–326–4040 during normal business hours. (TTY and TDD users may call the Federal relay service tollSUMMARY: PO 00000 Frm 00052 Fmt 4702 Sfmt 4702 free at 1–800–877–8339 and ask to be connected to 202–326–4040.) 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 proposed rule will revise and replace the PBGC’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 E:\FR\FM\22JYP1.SGM 22JYP1 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Proposed Rules emcdonald on DSK2BSOYB1PROD with PROPOSALS 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). Overview of Proposed Regulatory Changes This proposed regulation would revise the procedures for the collection of non-tax debts owed to PBGC through administrative offset and tax refund offset. It would adopt the FCCS and supplement it by prescribing procedures consistent with the FCCS, as necessary and appropriate for PBGC operations. The proposed regulation would also provide 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 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 the PBGC’s current debt collection regulation, the proposed regulation would apply 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 1 PBGC has an internal directive which provides procedures to recover debts owed to PBGC from the current pay account of an employee, and to process requests received from another Federal agency from the current pay account of a PBGC employee to recover debts owed to the agency. VerDate Mar<15>2010 16:13 Jul 21, 2010 Jkt 220001 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 proposed regulation would also apply to debts owed to the United States by current and former PBGC employees. The proposed regulation would 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 proposed regulation, benefits paid by PBGC generally would not be 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 proposed regulation would preclude the use of collection procedures not contained in the regulation. For example, PBGC would be able to 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. Whether, and to what extent, such requirements apply to the collection of a debt by PBGC, 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 would be able to use multiple collection methods at the same time to collect a debt, as permitted by law. Nothing in this 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 65 FR 25397 (May 1, 2000). Subpart A—4903.1 to 4903.4 Subpart A of this proposed regulation addresses the general provisions applicable to the collection of non-tax debts owed to PBGC. Proposed § 4903.5 includes procedures for the collection of debts owed to PBGC, other than those subject to recoupment. Under proposed § 4903.2, PBGC would not be required to duplicate notices or administrative proceedings provided by contract, this proposed regulation, or other laws or regulations. PO 00000 Frm 00053 Fmt 4702 Sfmt 4702 42663 PBGC would not be 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. Proposed § 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 this proposed 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 would be 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 would be 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 would update 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 proposed regulation would revise PBGC’s regulations to comply with DCIA requirements for all types of offsets. This proposed regulation would also incorporate procedures for several E:\FR\FM\22JYP1.SGM 22JYP1 42664 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Proposed Rules collection remedies authorized by DCIA, such as administrative wage garnishment. Subpart C—4903.21 to 4903.22 Subpart C of this proposed 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 proposed 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 shall 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, in consultation with the Office of Management and Budget, 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 proposed regulation would not have a significant economic impact on a substantial number of small entities. 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). emcdonald on DSK2BSOYB1PROD with PROPOSALS 29 CFR Part 4903 Claims. For the reasons given above, PBGC proposes to amend 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: VerDate Mar<15>2010 16:13 Jul 21, 2010 Jkt 220001 Authority: 29 U.S.C. 1302(b)(3) § 4003.32 [Amended] 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’’. § 4003.32 [Amended] 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 to credit bureaus debts owed to PBGC? 4903.16 How will PBGC refer to private collection agencies debts owed to PBGC? 4903.17 When will PBGC refer to the Department of Justice debts owed 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 PO 00000 Frm 00054 Fmt 4702 Sfmt 4702 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 owed to PBGC? 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 part? What definitions apply to this 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. E:\FR\FM\22JYP1.SGM 22JYP1 emcdonald on DSK2BSOYB1PROD with PROPOSALS Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Proposed Rules 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 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 VerDate Mar<15>2010 16:13 Jul 21, 2010 Jkt 220001 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. PO 00000 Frm 00055 Fmt 4702 Sfmt 4702 42665 (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. E:\FR\FM\22JYP1.SGM 22JYP1 emcdonald on DSK2BSOYB1PROD with PROPOSALS 42666 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Proposed Rules 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); (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 VerDate Mar<15>2010 16:13 Jul 21, 2010 Jkt 220001 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 PO 00000 Frm 00056 Fmt 4702 Sfmt 4702 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 https:// 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 E:\FR\FM\22JYP1.SGM 22JYP1 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Proposed Rules 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. § 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? emcdonald on DSK2BSOYB1PROD with PROPOSALS 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 VerDate Mar<15>2010 16:13 Jul 21, 2010 Jkt 220001 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. PO 00000 Frm 00057 Fmt 4702 Sfmt 4702 42667 § 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 E:\FR\FM\22JYP1.SGM 22JYP1 42668 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Proposed Rules 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. emcdonald on DSK2BSOYB1PROD with PROPOSALS § 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 VerDate Mar<15>2010 16:13 Jul 21, 2010 Jkt 220001 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 PO 00000 Frm 00058 Fmt 4702 Sfmt 4702 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 E:\FR\FM\22JYP1.SGM 22JYP1 emcdonald on DSK2BSOYB1PROD with PROPOSALS Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Proposed Rules 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 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 VerDate Mar<15>2010 16:13 Jul 21, 2010 Jkt 220001 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 PO 00000 Frm 00059 Fmt 4702 Sfmt 4702 42669 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 E:\FR\FM\22JYP1.SGM 22JYP1 42670 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Proposed Rules 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 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. emcdonald on DSK2BSOYB1PROD with PROPOSALS § 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 VerDate Mar<15>2010 16:13 Jul 21, 2010 Jkt 220001 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 PO 00000 Frm 00060 Fmt 4702 Sfmt 4702 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 E:\FR\FM\22JYP1.SGM 22JYP1 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Proposed Rules 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). emcdonald on DSK2BSOYB1PROD with PROPOSALS § 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; (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. VerDate Mar<15>2010 16:13 Jul 21, 2010 Jkt 220001 § 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. PO 00000 Frm 00061 Fmt 4702 Sfmt 4702 42671 (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 E:\FR\FM\22JYP1.SGM 22JYP1 emcdonald on DSK2BSOYB1PROD with PROPOSALS 42672 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Proposed Rules 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 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 VerDate Mar<15>2010 16:13 Jul 21, 2010 Jkt 220001 a PBGC employee. See 5 CFR 550.1107(a). Issued in Washington, DC, July 19, 2010. Vincent K. Snowbarger, Acting Director, Pension Benefit Guaranty Corporation. [FR Doc. 2010–18008 Filed 7–21–10; 8:45 am] BILLING CODE 7709–01–P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA–R02–OAR–2010–0310, FRL–9178–6] Approval and Promulgation of Implementation Plans; New Jersey; 8hour Ozone Control Measures Environmental Protection Agency (EPA). ACTION: Proposed rule. AGENCY: The Environmental Protection Agency (EPA) is proposing to approve a request by New Jersey to revise the State Implementation Plan (SIP) for ozone involving the control of volatile organic compounds (VOCs). The proposed SIP revision consists of two new rules, ‘‘Subchapter 26, Prevention of Air Pollution From Adhesives, Sealants, Adhesive Primers and Sealant Primers,’’ and ‘‘Subchapter 34, TBAC Emissions Reporting,’’ (TBAC means tertiary butyl acetate or t-butyl acetate) and revisions to ‘‘Subchapter 23, Prevention of Air Pollution From Architectural Coatings,’’ ‘‘Subchapter 24, Prevention of Air Pollution From Consumer Products,’’ and ‘‘Subchapter 25, Control and Prohibition of Air Pollution by Vehicular Fuels,’’ of the New Jersey Administrative Codes. The intended effect of this action is to approve control strategies that will result in VOC emission reductions that will help achieve attainment of the national ambient air quality standard for ozone. DATES: Comments must be received on or before August 23, 2010. ADDRESSES: Submit your comments, identified by Docket ID number EPA– R02–OAR–2010–0310, by one of the following methods: • https://www.regulations.gov: Follow the on-line instructions for submitting comments. • E-mail: Werner.Raymond@epa.gov • Fax: 212–637–3901. • Mail: Raymond Werner, Chief, Air Programs Branch, Environmental Protection Agency, Region 2 Office, 290 Broadway, 25th Floor, New York, New York 10007–1866. • Hand Delivery: Raymond Werner, Chief, Air Programs Branch, SUMMARY: PO 00000 Frm 00062 Fmt 4702 Sfmt 4702 Environmental Protection Agency, Region 2 Office, 290 Broadway, 25th Floor, New York, New York 10007– 1866. Such deliveries are only accepted during the Regional Office’s normal hours of operation. The Regional Office’s official hours of business are Monday through Friday, 8:30 to 4:30 excluding Federal holidays. Instructions: Direct your comments to Docket ID No. EPA–R02–OAR–2010– 0310. EPA’s policy is that all comments received will be included in the public docket without change and may be made available online at https:// www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through https:// www.regulations.gov or e-mail. The https://www.regulations.gov Web site is an ‘‘anonymous access’’ system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through https:// www.regulations.gov your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD–ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA’s public docket visit the EPA Docket Center homepage at https:// www.epa.gov/epahome/dockets.htm. Docket: All documents in the docket are listed in the https:// www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in https:// www.regulations.gov or in hard copy at the Environmental Protection Agency, Region II Office, Air Programs Branch, 290 Broadway, 25th Floor, New York, E:\FR\FM\22JYP1.SGM 22JYP1

Agencies

[Federal Register Volume 75, Number 140 (Thursday, July 22, 2010)]
[Proposed Rules]
[Pages 42662-42672]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-18008]


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PENSION BENEFIT GUARANTY CORPORATION

29 CFR Parts 4003 and 4903


Debt Collection

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise the Pension Benefit Guaranty 
Corporation's 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. This proposed rule would 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.

DATES: Comments must be received by September 20, 2010.

ADDRESSES: Comments may be submitted by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the Web site instructions for submitting comments.
     E-mail: reg.comments@pbgc.gov.
     Fax: 202-326-4224.
     Mail or Hand Delivery: Legislative and Regulatory 
Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., 
Washington, DC 20005-4026.
    Comments received, including personal information provided, will be 
posted to https://www.pbgc.gov. Copies of comments may also be obtained 
by writing to Disclosure Division, Office of General Counsel, Pension 
Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005-
4026, or calling 202-326-4040 during normal business hours. (TTY and 
TDD users may call the Federal relay service toll-free at 1-800-877-
8339 and ask to be connected to 202-326-4040.)

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 proposed rule will revise and replace 
the PBGC'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

[[Page 42663]]

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).

Overview of Proposed Regulatory Changes

    This proposed regulation would revise the procedures for the 
collection of non-tax debts owed to PBGC through administrative offset 
and tax refund offset. It would adopt the FCCS and supplement it by 
prescribing procedures consistent with the FCCS, as necessary and 
appropriate for PBGC operations. The proposed regulation would also 
provide 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 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.
---------------------------------------------------------------------------

    \1\ PBGC has an internal directive which provides procedures to 
recover debts owed to PBGC from the current pay account of an 
employee, and to process requests received from another Federal 
agency from the current pay account of a PBGC employee to recover 
debts owed to the agency.
---------------------------------------------------------------------------

    As with the PBGC's current debt collection regulation, the proposed 
regulation would apply 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 proposed regulation would also 
apply to debts owed to the United States by current and former PBGC 
employees.
    The proposed regulation would 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 proposed regulation, benefits paid by PBGC generally 
would not be 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 proposed regulation would preclude the use of 
collection procedures not contained in the regulation. For example, 
PBGC would be able to 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. Whether, and to what extent, such requirements apply 
to the collection of a debt by PBGC, 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 would 
be able to use multiple collection methods at the same time to collect 
a debt, as permitted by law. Nothing in this 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 65 FR 25397 (May 1, 
2000).

Subpart A--4903.1 to 4903.4

    Subpart A of this proposed regulation addresses the general 
provisions applicable to the collection of non-tax debts owed to PBGC. 
Proposed Sec.  4903.5 includes procedures for the collection of debts 
owed to PBGC, other than those subject to recoupment.
    Under proposed Sec.  4903.2, PBGC would not be required to 
duplicate notices or administrative proceedings provided by contract, 
this proposed regulation, or other laws or regulations. PBGC would not 
be 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.
    Proposed Sec.  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 this proposed 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 would be 
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 would be 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 would update 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 proposed 
regulation would revise PBGC's regulations to comply with DCIA 
requirements for all types of offsets. This proposed regulation would 
also incorporate procedures for several

[[Page 42664]]

collection remedies authorized by DCIA, such as administrative wage 
garnishment.

Subpart C--4903.21 to 4903.22

    Subpart C of this proposed 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 
proposed 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 shall 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, in consultation with the Office of Management 
and Budget, 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 proposed 
regulation would not have a significant economic impact on a 
substantial number of small entities. 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 proposes to amend 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)


Sec.  4003.32  [Amended]

    2. Amend Sec.  4003.32 by removing ``Sec.  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''.


Sec.  4003.32  [Amended]

    3. Amend Sec.  4003.52 by removing ``Sec.  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 to credit bureaus debts owed to PBGC?
4903.16 How will PBGC refer to private collection agencies debts 
owed to PBGC?
4903.17 When will PBGC refer to the Department of Justice debts owed 
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 owed to PBGC?
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


Sec.  4903.1  What definitions apply to this part?

    The following terms are defined in Sec.  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.

[[Page 42665]]

    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 post-delinquency 
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 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.


Sec.  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 Sec.  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.


Sec.  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.


Sec.  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 Sec.  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


Sec.  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.

[[Page 42666]]

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 Sec. Sec.  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 Sec.  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 Sec.  4903.7 of this part);
    (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 
Sec. Sec.  4903.11 through 4903.13 of this part);
    (ii) Private collection agency. Refer the debt to a private 
collection agency (see Sec.  4903.16 of this part);
    (iii) Credit bureau reporting. Report the debt to a credit bureau 
(see Sec.  4903.15 of this part);
    (iv) Administrative wage garnishment. Garnish the debtor's wages 
through administrative wage garnishment (see Sec.  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 Sec.  4903.17 
of this part);
    (vi) Treasury Department's Financial Management Service. Refer the 
debt to the Financial Management Service for collection (see Sec.  
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 Sec.  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 Sec. Sec.  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 Sec.  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 Sec.  
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, Sec.  4903.6 and Sec.  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 https://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 Sec.  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.


Sec.  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

[[Page 42667]]

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.


Sec.  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.


Sec.  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.


Sec.  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.


Sec.  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 Sec.  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.


Sec.  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 Sec.  4903.10(c) of this part. If not already 
transferred to the Financial Management Service under Sec.  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 Sec.  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 Sec.  
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 Sec.  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

[[Page 42668]]

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 Sec.  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.


Sec.  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 Sec.  
4903.10(c) of this part. If not already transferred to the Financial 
Management Service under Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  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.


Sec.  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 Sec. Sec.  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 Sec.  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 Sec.  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 Sec.  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 Sec.  4903.5. See 
Sec.  4903.5(a)(11). The request must be received by the

[[Page 42669]]

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 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 Sec.  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

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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 
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 Sec.  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.


Sec.  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 Sec.  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 Sec.  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 Sec.  4903.5 of this 
part, including the requirements of Sec.  4903.5(a)(10) of this part. 
For debts referred to the Financial Management Service under Sec.  
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 Sec.  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 Sec.  4903.13 of this part).


Sec.  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 Sec.  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 Sec.  4903.10 of this part.


Sec.  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 Sec.  4903.10 of this part.


Sec.  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 Sec. Sec.  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 Sec.  4903.10 of this part.


Sec.  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

[[Page 42671]]

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).


Sec.  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;
    (5) Expenses for food, housing, clothing, and transportation;
    (6) Medical expen
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