Debt Collection, 35282-35283 [2014-14505]

Agencies

• DEPARTMENT OF STATE

[Federal Register Volume 79, Number 119 (Friday, June 20, 2014)]
[Rules and Regulations]
[Pages 35282-35283]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-14505]


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DEPARTMENT OF STATE

22 CFR Part 34

[Public Notice 8771]
RIN 1400-AD60


Debt Collection

AGENCY: Department of State.

ACTION: Final rule.

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SUMMARY: The Department of State (hereinafter, ``State'' or ``the 
Department'') is amending its debt collection regulations to permit 
debt notices to be sent by electronic mail to certain debtors and to 
reflect a change in federal law, which authorizes the offset of Federal 
non-tax payments to collect delinquent federal debt without regard to 
the amount of time the debt has been delinquent.

DATES: This rule will become effective on June 20, 2014.

FOR FURTHER INFORMATION CONTACT: Elizabeth Amory, Office of the Legal 
Adviser, United States Department of State (843)746-0558, 
AmoryEA@state.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    This rule amends State's debt collection regulations found at 22 
CFR part 34 to permit debt notices to be sent by electronic mail and to 
reflect the 2008 amendment to 31 U.S.C. 3716(e), which authorizes the 
offset of Federal non-tax payments to collect delinquent federal debt 
without regard to the amount of time the debt has been delinquent.
    State's regulations at 22 CFR 34.8(a) and 34.13 currently require 
that debt collection notices be hand-delivered or sent by first class 
mail. In some situations, sending debt notices by email is a more 
effective and efficient means of ensuring actual receipt of the notice 
by the debtor in a timely manner. For example, for a debtor who is a 
current State employee and, therefore, has been assigned a State email 
account, the delivery of a notification via that email account will 
allow the debtor to receive the notice more quickly, reliably, and 
conveniently than if it were sent by first class mail. This is 
especially true for employees serving overseas for whom it takes longer 
to receive first class mail.
    With modernization of State's information systems, State is able to 
verify the delivery of notices sent to its own email addresses, rather 
than first class mail. Notice by email may also be a more effective and 
efficient means of notifying a debtor who is a State contractor or a 
vendor who uses email regularly to communicate with State (e.g., when 
submitting invoices). In these situations, it is in the interest of 
both parties for State to have the ability to utilize email for 
purposes of debt collection notification.
    22 CFR 34.10(7) currently refers to the ten-year limitation on the 
offset of Federal nontax debts in order to collect delinquent Federal 
debts, which was eliminated by Section 14219 of the Food, Conservation 
and Energy Act of 2008, Public Law 110-234. This statute amended 31 
U.S.C. 3716(e) to provide that no limitation on the period within which 
an offset may be initiated or taken, pursuant to that section, shall be 
effective. This proscription is mandatory; therefore, State must amend 
its regulations to remove the 10-year cutoff.

Regulatory Analysis

    Administrative Procedure Act: This rulemaking is exempt from the 
notice-and-comment provisions of the Administrative Procedure Act (APA) 
under the ``good cause'' exemption of 5 U.S.C. 553(b)(3)(B). The 
Department finds that, given the Congressional mandate to eliminate the 
limitation on the period within which an offset may be initiated or 
taken, notice and public comment on this rulemaking are unnecessary. 
Further, the rules affecting the method by which the Department 
provides debt collection notice to its employees relate solely to 
agency procedure and practice (5 U.S.C. 553(b)(3)(A)). This rule is 
effective upon publication, pursuant to 5 U.S.C. 553(d)(3).
    Regulatory Flexibility Act: The Department, in accordance with the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.), has reviewed this 
regulation and, by approving it, certifies that this final rule will 
not have a significant economic impact on a substantial number of small 
entities.
    Unfunded Mandated Reform Act of 1995: This rule will not result in 
the expenditure by State, local and tribal governments, in the 
aggregate, or by the private sector, of $100 million or more in any one 
year and it will not significantly or uniquely affect small 
governments. Therefore, no actions were deemed necessary under the 
provisions of the Unfunded Mandates Reform Act of 1995.
    Small Business Regulatory Enforcement Act of 1996: This rule is not 
a major rule as defined by the Small Business Regulatory Enforcement 
Act of 1996 in 5 U.S.C. 804.
    Executive Orders 12866 and 13563: The Department does not consider 
this rule to be a ``significant regulatory action'' under Executive 
Order 12866, section 3(f), Regulatory Planning and Review. In addition, 
the Department is exempt from Executive Order 12866 except to the 
extent that it is promulgating regulations in conjunction with or 
interrelated to a domestic agency that are significant regulatory 
actions. The Department has nevertheless reviewed the regulation to

[[Page 35283]]

ensure its consistency with the regulatory philosophy and principles 
set forth in Executive Order 12866. This rulemaking updating the 
provisions of 22 CFR part 34 is part of the Department of State's 
retrospective review, mandated by EO 13563. The benefit of the 
rulemaking is that in certain instances email notification of debt 
provides a more effective and efficient delivery mechanism than first 
class mail. This is particularly the case for the Department's global 
and mobile workforce. Postage costs are also eliminated by leveraging 
the Department's messaging system in lieu of first class mail delivery.
    Executive Order 12988: The Department has reviewed this regulation 
in light of sections 3(a) and 3(b)(2) of Executive Order 12988, Civil 
Justice Reform, to eliminate ambiguity, minimize litigation, establish 
clear legal standards, and reduce burden.
    Executive Orders 13132 and 12372: This regulation will not have 
substantial direct effects on the States, the relationship between the 
National Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Therefore, the 
Department determines that this rule does not have sufficient 
federalism implications to require consultations or warrant the 
preparation of a federalism summary impact statement. The regulations 
implementing Executive Order 12372 regarding intergovernmental 
consultation on federal programs and activities do not apply to this 
regulation.
    Executive Order 13175: The Department has determined that this 
rulemaking will not have tribal implications, will not impose 
substantial direct compliance costs on Indian tribal governments, and 
will not pre-empt tribal law. Accordingly, the requirements of 
Executive Order 13175 do not apply to this rulemaking.
    Paperwork Reduction Act: This rule does not impose any new or 
revised reporting or recordkeeping requirements subject to the 
Paperwork Reduction Act, 44 U.S.C. chapter 35.

List of Subjects in 22 CFR Part 34

    Administrative practice and procedure, Claims, Debts, Garnishment 
of wages, Government employee, Hearing and appeal procedures, Pay 
administration, Salaries, Wages.

    Accordingly, for the reasons stated in the preamble, 22 CFR part 34 
is amended as follows:

PART 34--DEBT COLLECTION

0
1. The authority citation for part 34 is revised to read as follows:

    Authority:  31 U.S.C. 3701-3719; 5 U.S.C. 5514; 31 CFR part 285; 
31 CFR parts 900-904; 5 CFR part 550, subpart K.


0
2. Revise paragraph (a) of Sec.  34.8 to read as follows:


Sec.  34.8  Notice and demand for payment.

    (a) STATE shall promptly hand deliver, send by first class mail to 
the debtor's most current address in the records of STATE, or, in 
appropriate circumstances, send by electronic mail to the debtor's most 
current address in the records of STATE, at least one written notice. 
Written demand under this subpart may be preceded by other appropriate 
actions under this part and or the FCCS, including but not limited to 
actions taken under the procedures applicable to administrative offset, 
including salary offset.
* * * * *


Sec.  34.7  [Amended]

0
3. Remove paragraph (a)(7) from Sec.  34.7.

0
4. Revise the introductory text of Sec.  34.13 to read as follows:


Sec.  34.13  Notice requirements before offset.

    Except as provided in Sec.  34.16, salary offset deductions will 
not be made unless STATE first provides the employee with a written 
notice that he/she owes a debt to the Federal Government at least 30 
calendar days before salary offset is to be initiated. When STATE is 
the creditor agency, this notice of intent to offset an employee's 
salary shall be hand-delivered or sent by electronic mail to the 
employee's STATE issued electronic mail address and will state:
* * * * *

    Dated: May 30, 2014.
Patrick F. Kennedy,
Under Secretary of State for Management.
[FR Doc. 2014-14505 Filed 6-19-14; 8:45 am]
BILLING CODE 4710-37-P