Department of Justice Debt Collection Regulations, 43942-43947 [2016-15511]

Download as PDF 43942 Federal Register / Vol. 81, No. 129 / Wednesday, July 6, 2016 / Rules and Regulations Small Business Regulatory Enforcement Fairness Act This interim final rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. It will not result in the expenditure by state, local, or tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year. The rule will not result in a major increase in costs or prices for consumers, individual industries, federal, state, or local government agencies, or geographic regions. Nor will this rule have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of the U.S.-based enterprises to compete with foreign-based enterprises. Unfunded Mandates Reform Act This interim final rule does not impose an unfunded mandate of more than $100 million per year on state, local, or tribal governments or the private sector. The rule also does not have a significant or unique effect on state, local, or tribal governments or the private sector. Therefore, a statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq.) is not required. Takings Under the criteria in Executive Order 12630, this interim final rule does not affect individual property rights protected by the Fifth Amendment nor does it involve a compensable ‘‘taking.’’ Thus, a takings implication assessment is not required. Federalism Under the criteria in Executive Order 13132, this interim final rule has no substantial direct effect on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Commission has determined that consultations with Indian gaming tribes is not practicable, as Congress has mandated that the civil penalty adjustments in the Act be implemented no later than August 1, 2016. Paperwork Reduction Act This interim final rule does not affect any information collections under the Paperwork Reduction Act. National Environmental Policy Act This interim final rule does not constitute a major federal action significantly affecting the quality of the human environment. Information Quality Act ehiers on DSK5VPTVN1PROD with RULES 2. Amend the introductory text of § 575.4 by removing ‘‘$25,000’’ and adding in its place ‘‘$49,467’’. ■ Dated: June 28, 2016. Jonodev O. Chaudhuri, Chairman, Kathryn Isom-Clause, Vice Chairwoman, E. Sequoyah Simermeyer, Associate Commissioner. Effects on the Energy Supply Office of the Attorney General This interim final rule is not a significant energy action under the definition in Executive Order 13211. A Statement of Energy Effects is not required. Clarity of this Regulation The Commission is required by Executive Orders 12866 and 12988 and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule that the Commission publishes must: (a) Be logically organized; (b) use the active voice to address readers directly; (c) use clear language rather than jargon; (d) be divided into short sections and sentences; and (e) use lists and tables wherever possible. Required Determinations Under the Administrative Procedure Act Consultation with Indian Tribes In accordance with the President’s memorandum of April 29, 1994, Government-to-Government Relations with Native American Tribal Governments, Executive Order 13175 (59 FR 22951, November 6, 2000), the List of Subjects in 25 CFR Part 575 Jkt 238001 Authority: 25 U.S.C. 2705(a), 2706, 2713, 2715; and Sec. 701, Pub. L. 114–74, 129 Stat. 599. [FR Doc. 2016–16009 Filed 7–5–16; 8:45 am] The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 requires agencies to adjust penalties for the catch-up adjustment through an interim final rulemaking. Therefore, the Commission is not required to complete a notice and comment process prior to promulgation. 12:09 Jul 05, 2016 1. The authority citation for part 575 is revised to read as follows: ■ In developing this interim final rule, the Commission did not conduct or use a study, experiment, or survey requiring peer review under the Information Quality Act (Pub. L. 106–554). Civil Justice Reform This interim final rule complies with the requirements of Executive Order 12988. Specifically, this rule has been reviewed to eliminate errors and ambiguity and written to minimize litigation. It is written in clear language and contains clear legal standards. VerDate Sep<11>2014 PART 575—CIVIL FINES Administrative practice and procedure, Gaming, Indian lands, Penalties. For the reasons set forth in the preamble, the Commission amends 25 CFR part 575 as follows: PO 00000 Frm 00016 Fmt 4700 Sfmt 4700 BILLING CODE 7565–01–P DEPARTMENT OF JUSTICE 28 CFR Part 11 [JMD Docket No. 152; A.G. Order No. 3689– 2016] RIN 1105–AB44 Department of Justice Debt Collection Regulations Department of Justice. Final rule. AGENCY: ACTION: This rule amends the regulations that govern debt collection at the Department of Justice (Department) to bring the regulations into conformity with government-wide standards, to update or delete obsolete references, and to make other clarifying or technical changes. DATES: Effective August 5, 2016. FOR FURTHER INFORMATION CONTACT: Dennis Dauphin, Director, Debt Collection Management Staff, or Morton J. Posner, Assistant General Counsel, Justice Management Division, U.S. Department of Justice, Washington, DC 20530, (202) 514–5343 or (202) 514– 3452. SUMMARY: SUPPLEMENTARY INFORMATION: On February 18, 2015, the Department published a proposed rule to revise its existing debt collection regulations. See 80 FR 8580–01. Following a public comment period, the Department received two comments. One commenter generally endorsed the rulemaking proposal. Another commenter recommended editorial revisions to clarify the proposed rule without making substantive changes. After due consideration, the Department E:\FR\FM\06JYR1.SGM 06JYR1 Federal Register / Vol. 81, No. 129 / Wednesday, July 6, 2016 / Rules and Regulations adopts several of that commenter’s suggestions. The Department also makes other clarifying changes to the proposed rule. In § 11.11(a), the definition of ‘‘debt’’ will clarify that it is an amount determined to be owed to the United States by an appropriate official of the Federal Government ‘‘or by a court of competent jurisdiction,’’ and that it includes ‘‘any amounts owed to the United States for the benefit of a third party.’’ In § 11.11(e), the definition of ‘‘legally enforceable’’ will clarify that there has been a final agency ‘‘or court’’ determination that a debt is due and collectible by offset. Section 11.21(a) will refer to administrative wage garnishment as a tool to collect delinquent nontax debt owed to the United States ‘‘through operation of Department programs.’’ Similarly, the definition of ‘‘agency’’ in § 11.21(c) will refer specifically to the Department. The headings of § 11.21(f)(3) and (f)(4) are also revised for clarity. ehiers on DSK5VPTVN1PROD with RULES Regulatory Flexibility Act The Attorney General, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation and by approving it certifies that this regulation will not have a significant economic impact on a substantial number of small entities. The Department proposes to collect delinquent nontax debt owed it through an administrative wage garnishment (AWG) process. When an AWG order is issued, employers (including small businesses) that employ workers from whom the Department is collecting a delinquent debt will be required to certify the employee’s employment and earnings, garnish wages, and remit withheld wages to the Department. Such procedures are mandated by Department of the Treasury regulations issued to implement the Debt Collection Improvement Act. Employment and salary information is contained in an employer’s payroll records. Therefore, it will not take a significant amount of time or result in a significant cost for an employer to certify employment and earnings. Employers of delinquent debtors may be subject at any time to garnishment orders issued by a court to collect delinquent debts of their employees owed to governmental or private creditors. The addition of an AWG process will not significantly increase the burden to which employers are already subject to collect the delinquent debt of their employees. VerDate Sep<11>2014 12:09 Jul 05, 2016 Jkt 238001 43943 Executive Orders 12866 and 13563— Regulatory Review of the Unfunded Mandates Reform Act of 1995. This regulation has been drafted and reviewed in accordance with Executive Order 12866, ‘‘Regulatory Planning and Review,’’ section 1(b), Principles of Regulation, and in accordance with Executive Order 13563, ‘‘Improving Regulation and Regulatory Review,’’ section 1(b), General Principles of Regulation. The Department of Justice has determined that this rule is not a ‘‘significant regulatory action’’ under Executive Order 12866, section 3(f), Regulatory Planning and Review, and accordingly this rule has not been reviewed by the Office of Management and Budget. Further, both Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Department has assessed the costs and benefits of this regulation and believes that the regulatory approach selected maximizes net benefits. Small Business Regulatory Enforcement Fairness Act of 1996 Executive Order 12988—Civil Justice Reform PART 11—DEBT COLLECTION This regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988. Executive Order 13132—Federalism This regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. Unfunded Mandates 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 $100,000,000 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 PO 00000 Frm 00017 Fmt 4700 Sfmt 4700 This rule is not a major rule as defined by section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 804. This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreignbased enterprises in domestic and export markets. Paperwork Reduction Act This rule imposes no information collection or record keeping requirements. List of Subjects in 28 CFR Part 11 Administrative practice and procedure, Claims, Debt collection, Government contracts, Government employees, Income taxes, Lawyers, Wages. Accordingly, by virtue of the authority vested in me as Attorney General, including 5 U.S.C. 301 and 28 U.S.C. 509 and 510, part 11 of title 28 of the Code of Federal Regulations is amended as follows: 1. The authority citation for part 11 is revised to read as follows: ■ Authority: 5 U.S.C. 301, 5514; 28 U.S.C. 509, 510; 31 U.S.C. 3711, 3716, 3718, 3720A, 3720D. Subpart A—Retention of Private Counsel for Debt Collection § 11.1 [Amended] 2. Amend § 11.1 as follows: a. Remove the word ‘‘pilot’’ from the first sentence; and ■ b. Remove the word ‘‘Adminstration’’ and add in its place the word ‘‘Administration’’. ■ 3. Amend § 11.2 as follows: ■ a. Revise the section heading; ■ b. In the first two sentences, remove the word ‘‘pilot’’; ■ c. In the third sentence, remove the words ‘‘Contracting Officer’s Technical Representative (COTR)’’ and add in their place the words ‘‘Contracting Officer’s Representative (COR)’’; and ■ d. In the fourth sentence, remove the term ‘‘COTRs’’ and add in its place the term ‘‘CORs’’. The revision reads as follows: ■ ■ E:\FR\FM\06JYR1.SGM 06JYR1 43944 Federal Register / Vol. 81, No. 129 / Wednesday, July 6, 2016 / Rules and Regulations § 11.2 Private counsel debt collection program. * * § 11.3 * * in conjunction with the offset procedures of this subpart. ■ 8. Amend § 11.11 by revising paragraphs (a) and (b), and adding a paragraph (e) to read as follows: * [Amended] 4. Amend § 11.3 as follows: a. In the first sentence, remove the words ‘‘the Federal Property and Administrative Services Act of 1949, 41 U.S.C. 251 et seq.’’ and add in their place the words ‘‘41 U.S.C. 3307.’’ ■ b. In the second sentence, add the phrase ‘‘and law firms that are qualified HUBZone small business concerns’’ after the phrase ‘‘socially and economically disadvantaged individuals’’; ■ c. In the second and third sentences, remove the word ‘‘pilot’’ and add in its place the word ‘‘program’’; and ■ d. In the third sentence, remove the words ‘‘the Commerce Business Daily’’ and add in their place the term ‘‘FedBizOpps’’. ■ ■ Subpart B—Administration of Debt Collection § 11.4 [Amended] 5. Amend § 11.4 as follows: a. Remove the second sentence of paragraph (a); and ■ b. In paragraph (b)(3)(i), add the number ‘‘1’’ after the words ‘‘26 U.S.C.’’ ■ 6. Revise the heading of subpart C to read as follows: ■ ■ Subpart C—Collection of Debts by Administrative and Tax Refund Offset ■ 7. Revise § 11.10 to read as follows: ehiers on DSK5VPTVN1PROD with RULES § 11.10 [Amended] (a) The provisions of 31 U.S.C. 3716 allow the head of an agency to collect a debt through administrative offset. The provisions of 31 U.S.C. 3716 and 3720A authorize the Secretary of the Treasury, acting through the Bureau of the Fiscal Service (BFS) and other Federal disbursing officials, to offset certain payments to collect delinquent debts owed to the United States. This subpart authorizes the collection of debts owed to the United States by persons, organizations, and other entities by offsetting Federal and certain state payments due to the debtor. It allows for collection of debts that are past due and legally enforceable through offset, regardless of whether the debts have been reduced to judgment. (b) Nothing in this subpart precludes the Department from pursuing other debt collection procedures to collect a debt that has been submitted to the Department of the Treasury under this subpart. The Department may use such debt collection procedures separately or VerDate Sep<11>2014 12:09 Jul 05, 2016 Jkt 238001 § 11.11 Definitions. (a) Debt. Debt means any amount of funds or property that an appropriate official of the Federal Government or a court of competent jurisdiction determines is owed to the United States, including any amounts owed to the United States for the benefit of a third party, by a person, organization, or entity other than another Federal agency. For purposes of this section, the term debt does not include debts arising under the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.), the tariff laws of the United States, or the Social Security Act (42 U.S.C. 301 et seq.), except that ‘‘delinquent amounts’’ as defined in sections 204(f) and 1631(b)(4) of such Act (42 U.S.C. 404(f) and 1383(b)(4)(A), respectively) are included in the term debt, as are ‘‘administrative offset[s]’’ collectible pursuant to 31 U.S.C. 3716(c). Debts that have been referred to the Department of Justice by other agencies for collection are included in this definition. (b) Past due. A past due debt means a debt that has not been paid or otherwise resolved by the date specified in the initial demand for payment, or in an applicable agreement or other instrument (including a postdelinquency repayment agreement), unless other payment arrangements satisfactory to the Department have been made. Judgment debts remain past due until paid in full. * * * * * (e) Legally enforceable. Legally enforceable means that there has been a final agency or court determination that the debt, in the amount stated, is due, and there are no legal bars to collection by offset. ■ 9. Amend § 11.12 as follows: ■ a. Remove paragraph (b)(4); ■ b. In paragraph (d)(5), remove the number ‘‘65’’ and add in its place the number ‘‘60’’; ■ c. In paragraph (d)(6) and paragraph (e), remove the term ‘‘IRS’’ and add in its place the term ‘‘BFS’’; ■ d. In the second sentence of paragraph (d)(6), remove the word ‘‘of’’ the second time it occurs and add in its place the word ‘‘or’’; and ■ e. Revise the section heading and paragraphs (a), (b)(2), (b)(3), (c), and (f) to read as follows: § 11.12 Centralized offset. (a) The Department must refer any legally enforceable debt more than 120 PO 00000 Frm 00018 Fmt 4700 Sfmt 4700 days past-due to BFS for administrative offset under 31 U.S.C. 3716(c)(6). The Department must refer any past-due, legally enforceable debt to BFS for tax refund offset purposes pursuant to 31 U.S.C. 3720A(a) at least once a year. Before referring debts for offset, the Department must certify to BFS compliance with the provisions of 31 U.S.C. 3716(a) and 3720A(b). There is no time limit on when a debt can be collected by offset. (b) * * * (2) The Department intends to refer the debt to BFS for offset purposes; (3) Before the debt is referred to BFS for offset purposes, the debtor has 60 days from the date of notice to present evidence that all or part of the debt is not past due, that the amount is not the amount currently owed, that the outstanding debt has been satisfied, or, if the debt is a judgment debt, that the debt has been satisfied, or that collection action on the debt has been stayed. * * * * * (c) If the debtor neither pays the amount due nor presents evidence that the amount is not past due or is satisfied or that collection action is stayed, the Department will refer the debt to BFS for offset purposes. * * * * * (f) If more than one debt is owed, payments eligible for offset will be applied in the order in which the debts became past due. ■ 10. Add § 11.13 to read as follows: § 11.13 Non-centralized offset. (a) When offset under § 11.12 of this part is not available or appropriate, the Department may collect past-due, legally enforceable debts through noncentralized administrative offset. See 31 CFR 901.3(c). In these cases, the Department may offset a payment internally or make an offset request directly to a Federal payment agency. (b) At least 30 days before offsetting a payment internally or requesting a Federal payment agency to offset a payment, the Department will send notice to the debtor in accordance with the requirements of 31 U.S.C. 3716(a). When referring a debt for offset under this paragraph (b), the Department will certify, in writing, that the debt is valid, delinquent, legally enforceable, and that there are no legal bars to collection by offset. In addition, the Department will certify its compliance with these regulations concerning administrative offset. See 31 CFR 901.3(c)(2)(ii). ■ 11. Add subpart D to read as follows: E:\FR\FM\06JYR1.SGM 06JYR1 Federal Register / Vol. 81, No. 129 / Wednesday, July 6, 2016 / Rules and Regulations Subpart D—Administrative Wage Garnishment ehiers on DSK5VPTVN1PROD with RULES § 11.21 Administrative wage garnishment. (a) Purpose. In accordance with the Department of the Treasury governmentwide regulation at 31 CFR 285.11, this section provides procedures for the Department of Justice (Department) to collect money from a debtor’s disposable pay by means of administrative wage garnishment to satisfy delinquent nontax debt owed to the United States through operation of Department programs. (b) Scope. (1) This section shall apply notwithstanding any provision of State law. (2) Nothing in this section precludes the compromise of a debt or the suspension or termination of collection action in accordance with applicable law. See, for example, the Federal Claims Collection Standards (FCCS), 31 CFR parts 900–904. (3) The receipt of payments pursuant to this section does not preclude the Department from pursuing other debt collection remedies, including the offset of Federal payments to satisfy delinquent nontax debt owed to the United States. The Department may pursue such debt collection remedies separately or in conjunction with administrative wage garnishment. (4) This section does not apply to the collection of delinquent nontax debt owed to the United States from the wages of Federal employees from their Federal employment. Federal pay is subject to the Federal salary offset procedures set forth in 5 U.S.C. 5514 and other applicable laws. (5) Nothing in this section requires the Department to duplicate notices or administrative proceedings required by contract or other laws or regulations. (c) Definitions. As used in this section the following definitions shall apply: Agency means the Department of Justice. Business day means Monday through Friday. For purposes of computation, the last day of the period will be included unless it is a Federal legal holiday. Day means calendar day. For purposes of computation, the last day of the period will be included unless it is a Saturday, a Sunday, or a Federal legal holiday. Debt or claim means any amount of money, funds or property that an appropriate official of the Federal Government determines is owed to the United States by an individual, including debt administered by a third party as an agent for the Federal Government. VerDate Sep<11>2014 12:09 Jul 05, 2016 Jkt 238001 Debtor means an individual who owes a delinquent nontax debt to the United States. Delinquent nontax debt means any nontax debt that has not been paid by the date specified in the agency’s initial written demand for payment, or applicable agreement, unless other satisfactory payment arrangements have been made. For purposes of this section, the terms ‘‘debt’’ and ‘‘claim’’ are synonymous and refer to delinquent nontax debt. Disposable pay means that part of the debtor’s compensation (including, but not limited to, salary, bonuses, commissions, and vacation pay) from an employer remaining after the deduction of health insurance premiums and any amounts required by law to be withheld. For purposes of this section, ‘‘amounts required by law to be withheld’’ include amounts for deductions such as Social Security taxes and withholding taxes, but do not include any amount withheld pursuant to a court order. Employer means a person or entity that employs the services of others and that pays their wages or salaries. The term employer includes, but is not limited to, State and local Governments, but does not include an agency of the Federal Government. Evidence of service means information retained by the agency indicating the nature of the document to which it pertains, the date of mailing of the document, and to whom the document is being sent. Evidence of service may be retained electronically so long as the manner of retention is sufficient for evidentiary purposes. Garnishment means the process of withholding amounts from an employee’s disposable pay and the paying of those amounts to a creditor in satisfaction of a withholding order. Withholding order means any order for withholding or garnishment of pay issued by the agency, or judicial or administrative body. For purposes of this section, the terms ‘‘wage garnishment order’’ and ‘‘garnishment order’’ have the same meaning as ‘‘withholding order.’’ (d) General rule. Whenever the agency determines that a delinquent debt is owed by an individual, the agency may initiate proceedings administratively to garnish the wages of the delinquent debtor. (e) Notice requirements. (1) At least 30 days before initiating garnishment proceedings, the agency shall mail, by first class mail, to the debtor’s last known address, a written notice informing the debtor of: (i) The nature and amount of the debt; PO 00000 Frm 00019 Fmt 4700 Sfmt 4700 43945 (ii) The intention of the agency to initiate proceedings to collect the debt through deductions from pay until the debt and all accumulated interest, penalties, and administrative costs are paid in full; and (iii) An explanation of the debtor’s rights, including those set forth in paragraph (e)(2) of this section, and the time frame within which the debtor may exercise those rights. (2) The debtor shall be afforded the opportunity: (i) To inspect and copy agency records related to the debt; (ii) To enter into a written repayment agreement with the agency under terms agreeable to the agency; and (iii) For a hearing in accordance with paragraph (f) of this section concerning the existence or the amount of the debt or the terms of the proposed repayment schedule under the garnishment order. However, the debtor is not entitled to a hearing concerning the terms of the proposed repayment schedule if these terms have been established by written agreement under paragraph (e)(2)(ii) of this section. (3) The agency will retain evidence of service indicating the date of mailing of the notice. (f) Hearing—(1) Request for hearing. If the debtor submits a written request for a hearing concerning the existence or amount of the debt or the terms of the repayment schedule (for those repayment schedules not established by written agreement under paragraph (e)(2)(ii) of this section), the agency shall provide a hearing, which at the agency’s option may be oral or written. (2) Type of hearing or review. (i) For purposes of this section, whenever the agency is required to afford a debtor a hearing, the agency shall provide the debtor with a reasonable opportunity for an oral hearing when the agency determines that the issues in dispute cannot be resolved by review of the documentary evidence, as, for example, when the validity of the claim turns on the issue of credibility or veracity. (ii) If the agency determines that an oral hearing is appropriate, the time and location of the hearing shall be established by the agency. An oral hearing may, at the debtor’s option, be conducted either in person or by telephone conference. All travel expenses incurred by the debtor in connection with an in-person hearing will be borne by the debtor. All telephonic charges incurred during the hearing will be the responsibility of the agency. (iii) In those cases where an oral hearing is not provided under this section, the agency shall nevertheless E:\FR\FM\06JYR1.SGM 06JYR1 ehiers on DSK5VPTVN1PROD with RULES 43946 Federal Register / Vol. 81, No. 129 / Wednesday, July 6, 2016 / Rules and Regulations accord the debtor a ‘‘paper hearing,’’ that is, the agency will decide the issues in dispute based upon a review of the written record. The agency will establish a reasonable deadline for the submission of evidence. (3) Effect of agency receipt of hearing request within 15 business days of notice. Subject to paragraph (f)(12) of this section, if the debtor’s written request is received by the agency on or before the 15th business day following the mailing of the notice described in paragraph (e)(1) of this section, the agency shall not issue a withholding order under paragraph (g) of this section until the agency provides the debtor the requested hearing and renders a decision in accordance with paragraphs (f)(9) and (10) of this section. (4) Effect of agency receipt of hearing request after 15 business days of notice. If the debtor’s written request is received by the agency after the 15th business day following the mailing of the notice described in paragraph (e)(1) of this section, the agency shall provide a hearing to the debtor. However, the agency will not delay issuance of a withholding order unless the agency determines that the delay in filing the request was caused by factors over which the debtor had no control, or the agency receives information that the agency believes justifies a delay or cancellation of the withholding order. (5) Hearing official. A hearing official may be any qualified individual, as determined by the head of the agency, including an administrative law judge. (6) Procedure. After the debtor requests a hearing, the hearing official shall notify the debtor of: (i) The date and time of a telephonic hearing; (ii) The date, time, and location of an in-person oral hearing; or (iii) The deadline for the submission of evidence for a written hearing. (7) Burden of proof. (i) The agency will have the initial burden of proving, by a preponderance of the evidence, the existence or amount of the debt. (ii) If the agency satisfies its initial burden, and the debtor disputes the existence or amount of the debt, the debtor must prove, by a preponderance of the evidence, that no debt exists or that the amount of the debt is incorrect. In addition, the debtor may present evidence that the terms of the repayment schedule are unlawful or would cause a financial hardship to the debtor, or that collection of the debt may not be pursued due to operation of law. (8) Record. The hearing official must maintain a summary record of any hearing provided under this section. A VerDate Sep<11>2014 12:09 Jul 05, 2016 Jkt 238001 hearing is not required to be a formal evidentiary-type hearing. However, witnesses who testify in in-person or telephonic hearings will do so under oath or affirmation. (9) Date of decision. The hearing official shall issue a written opinion stating the decision as soon as practicable, but not later than 60 days after the date on which the request for such hearing was received by the agency. If an agency is unable to provide the debtor with a hearing and render a decision within 60 days after the receipt of the request for such hearing: (i) The agency may not issue a withholding order until the hearing is held and a decision rendered; or (ii) If the agency had previously issued a withholding order to the debtor’s employer, the agency must suspend the withholding order beginning on the 61st day after the receipt of the hearing request and continuing until a hearing is held and a decision is rendered. (10) Content of decision. The written decision shall include: (i) A summary of the facts presented; (ii) The hearing official’s findings, analysis, and conclusions; and (iii) The terms of any repayment schedules, if applicable. (11) Final agency action. The hearing official’s decision will be final agency action for purposes of judicial review under the Administrative Procedure Act (5 U.S.C. 701 et seq.). (12) Failure to appear. In the absence of good cause shown, a debtor who fails to appear at a hearing scheduled pursuant to paragraph (f)(3) of this section will be deemed as not having timely filed a request for a hearing. (g) Wage garnishment order. (1) Unless the agency receives information that the agency believes justifies a delay or cancellation of the withholding order, the agency will send, by first class mail, a withholding order to the debtor’s employer: (i) Within 30 days after the debtor fails to make a timely request for a hearing (i.e., within 15 business days after the mailing of the notice described in paragraph (e)(1) of this section), or, (ii) If the debtor makes a timely request for a hearing, within 30 days after a final decision is made by the agency to proceed with garnishment, or (iii) As soon as reasonably possible thereafter. (2) The withholding order sent to the employer under paragraph (g)(1) of this section shall be in a form prescribed by the Secretary of the Treasury. The withholding order shall contain the signature of, or the image of the signature of, the head of the agency or PO 00000 Frm 00020 Fmt 4700 Sfmt 4700 that person’s delegatee. The order shall contain only the information necessary for the employer to comply with the withholding order. Such information includes the debtor’s name, address, and Social Security Number, as well as instructions for withholding and information as to where payments should be sent. (3) The agency will retain evidence of service indicating the date of mailing of the order. (h) Certification by employer. Along with the withholding order, the agency shall send to the employer a certification in a form prescribed by the Secretary of the Treasury. The employer shall complete and return the certification to the agency within the time frame prescribed in the instructions to the form. The certification will address matters such as information about the debtor’s employment status and disposable pay available for withholding. (i) Amounts withheld. (1) After receipt of the garnishment order issued under this section, the employer shall deduct from all disposable pay paid to the applicable debtor during each pay period the amount of garnishment described in paragraph (i)(2) of this section. (2)(i) Subject to the provisions of paragraphs (i)(3) and (4) of this section, the amount of garnishment shall be the lesser of: (A) The amount indicated on the garnishment order up to 15% of the debtor’s disposable pay; or (B) The amount set forth in 15 U.S.C. 1673(a)(2) (Restriction on Garnishment). That amount is the amount by which a debtor’s disposable pay exceeds an amount equivalent to thirty times the Federal minimum wage. See 29 CFR 870.10. (3) When a debtor’s pay is subject to withholding orders with priority the following shall apply: (i) Unless otherwise provided by Federal law, withholding orders issued under this section shall be paid in the amounts set forth under paragraph (i)(2) of this section and shall have priority over withholding orders that are served later in time. Notwithstanding the foregoing, withholding orders for family support shall have priority over withholding orders issued under this section. (ii) If amounts are being withheld from a debtor’s pay pursuant to a withholding order served on an employer before a withholding order issued pursuant to this section, or if a withholding order for family support is served on an employer at any time, the amounts withheld pursuant to the E:\FR\FM\06JYR1.SGM 06JYR1 ehiers on DSK5VPTVN1PROD with RULES Federal Register / Vol. 81, No. 129 / Wednesday, July 6, 2016 / Rules and Regulations withholding order issued under this section shall be the lesser of: (A) The amount calculated under paragraph (i)(2) of this section, or (B) An amount equal to 25% of the debtor’s disposable pay less the amount(s) withheld under the withholding order(s) with priority. (iii) If a debtor owes more than one debt to the agency, the agency may issue multiple withholding orders if the total amount garnished from the debtor’s pay for such orders does not exceed the amount set forth in paragraph (i)(2) of this section. (4) An amount greater than that set forth in paragraphs (i)(2) and (3) of this section may be withheld upon the written consent of the debtor. (5) The employer shall promptly pay to the agency all amounts withheld under the withholding order issued pursuant to this section. (6) An employer shall not be required to vary its normal pay and disbursement cycles in order to comply with the withholding order. (7) Any assignment or allotment by an employee of the employee’s earnings shall be void to the extent it interferes with or prohibits execution of the withholding order issued under this section, except for any assignment or allotment made pursuant to a family support judgment or order. (8) The employer shall withhold the appropriate amount from the debtor’s wages for each pay period until the employer receives notification from the agency to discontinue wage withholding. The garnishment order shall indicate a reasonable period of time within which the employer is required to commence wage withholding. (j) Exclusions from garnishment. The agency may not garnish the wages of a debtor who it knows has been involuntarily separated from employment until the debtor has been reemployed continuously for at least 12 months. To qualify for this exclusion, upon the request of the agency, the debtor must inform the agency of the circumstances surrounding an involuntary separation from employment. (k) Financial hardship. (1) A debtor whose wages are subject to a wage withholding order under this section, may, at any time, request a review by the agency of the amount garnished, based on materially changed circumstances such as disability, divorce, or catastrophic illness that result in financial hardship. (2) A debtor requesting a review under paragraph (k)(1) of this section shall submit the basis for claiming that VerDate Sep<11>2014 12:09 Jul 05, 2016 Jkt 238001 the current amount of garnishment results in a financial hardship to the debtor, along with supporting documentation. The agency shall consider any information submitted in accordance with procedures and standards established by the agency. (3) If the agency finds financial hardship, it shall downwardly adjust, by an amount and for a period of time agreeable to the agency, the amount garnished to reflect the debtor’s financial condition. The agency will notify the employer of any adjustments to the amounts to be withheld. (l) Ending garnishment. (1) Once the agency has fully recovered the amounts owed by the debtor, including interest, penalties, and administrative costs consistent with the FCCS, the agency shall send the debtor’s employer notification to discontinue wage withholding. (2) At least annually, an agency shall review its debtors’ accounts to ensure that accounts that have been paid in full are no longer subject to garnishment. (m) Actions prohibited by the employer. An employer may not discharge, refuse to employ, or take disciplinary action against the debtor due to the issuance of a withholding order under this section. (n) Refunds. (1) If a hearing official, at a hearing held pursuant to paragraph (f)(2) of this section, determines that a debt is not legally due and owing to the United States, the agency shall promptly refund any amount collected by means of administrative wage garnishment. (2) Unless required by Federal law or contract, refunds under this section shall not bear interest. (o) Right of action. The agency may sue any employer for any amount that the employer fails to withhold from wages owed and payable to an employee in accordance with paragraphs (g) and (i) of this section. However, a suit may not be filed before the termination of the collection action involving a particular debtor, unless earlier filing is necessary to avoid expiration of any applicable statute of limitations period. For purposes of this section, ‘‘termination of the collection action’’ occurs when the agency has terminated collection action in accordance with the FCCS or other applicable standards. In any event, termination of the collection action will be deemed to have occurred if the agency has not received any payments to satisfy the debt from the particular debtor whose wages were subject to garnishment, in whole or in part, for a period of 1 year. PO 00000 Frm 00021 Fmt 4700 Sfmt 4700 43947 Dated: June 24, 2016. Loretta E. Lynch, Attorney General. [FR Doc. 2016–15511 Filed 7–5–16; 8:45 am] BILLING CODE 4410–AR–P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Parts 100, 117, 147, and 165 [USCG–2016–0537] Quarterly Listings; Safety Zones, Security Zones, Special Local Regulations, Drawbridge Operation Regulations and Regulated Navigation Areas Coast Guard, DHS. Notice of expired temporary rules issued. AGENCY: ACTION: This document provides notice of substantive rules issued by the Coast Guard that were made temporarily effective but expired before they could be published in the Federal Register. This notice lists temporary safety zones, security zones, special local regulations, drawbridge operation regulations and regulated navigation areas, all of limited duration and for which timely publication in the Federal Register was not possible. DATES: This document lists temporary Coast Guard rules that became effective, primarily between July 2013 and December 2015, and were terminated before they could be published in the Federal Register. ADDRESSES: Temporary rules listed in this document may be viewed online, under their respective docket numbers, using the Federal eRulemaking Portal at http://www.regulations.gov. FOR FURTHER INFORMATION CONTACT: For questions on this notice contact Yeoman First Class Maria Fiorella Villanueva, Office of Regulations and Administrative Law, telephone (202) 372–3862. SUPPLEMENTARY INFORMATION: Coast Guard District Commanders and Captains of the Port (COTP) must be immediately responsive to the safety and security needs within their jurisdiction; therefore, District Commanders and COTPs have been delegated the authority to issue certain local regulations. Safety zones may be established for safety or environmental purposes. A safety zone may be stationary and described by fixed limits or it may be described as a zone around a vessel in motion. Security zones limit SUMMARY: E:\FR\FM\06JYR1.SGM 06JYR1

Agencies

[Federal Register Volume 81, Number 129 (Wednesday, July 6, 2016)]
[Rules and Regulations]
[Pages 43942-43947]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15511]


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DEPARTMENT OF JUSTICE

Office of the Attorney General

28 CFR Part 11

[JMD Docket No. 152; A.G. Order No. 3689-2016]
RIN 1105-AB44


Department of Justice Debt Collection Regulations

AGENCY: Department of Justice.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule amends the regulations that govern debt collection 
at the Department of Justice (Department) to bring the regulations into 
conformity with government-wide standards, to update or delete obsolete 
references, and to make other clarifying or technical changes.

DATES: Effective August 5, 2016.

FOR FURTHER INFORMATION CONTACT: Dennis Dauphin, Director, Debt 
Collection Management Staff, or Morton J. Posner, Assistant General 
Counsel, Justice Management Division, U.S. Department of Justice, 
Washington, DC 20530, (202) 514-5343 or (202) 514-3452.

SUPPLEMENTARY INFORMATION: 
    On February 18, 2015, the Department published a proposed rule to 
revise its existing debt collection regulations. See 80 FR 8580-01. 
Following a public comment period, the Department received two 
comments. One commenter generally endorsed the rulemaking proposal. 
Another commenter recommended editorial revisions to clarify the 
proposed rule without making substantive changes. After due 
consideration, the Department

[[Page 43943]]

adopts several of that commenter's suggestions.
    The Department also makes other clarifying changes to the proposed 
rule. In Sec.  11.11(a), the definition of ``debt'' will clarify that 
it is an amount determined to be owed to the United States by an 
appropriate official of the Federal Government ``or by a court of 
competent jurisdiction,'' and that it includes ``any amounts owed to 
the United States for the benefit of a third party.'' In Sec.  
11.11(e), the definition of ``legally enforceable'' will clarify that 
there has been a final agency ``or court'' determination that a debt is 
due and collectible by offset. Section 11.21(a) will refer to 
administrative wage garnishment as a tool to collect delinquent nontax 
debt owed to the United States ``through operation of Department 
programs.'' Similarly, the definition of ``agency'' in Sec.  11.21(c) 
will refer specifically to the Department. The headings of Sec.  
11.21(f)(3) and (f)(4) are also revised for clarity.

Regulatory Flexibility Act

    The Attorney General, in accordance with the Regulatory Flexibility 
Act (5 U.S.C. 605(b)), has reviewed this regulation and by approving it 
certifies that this regulation will not have a significant economic 
impact on a substantial number of small entities. The Department 
proposes to collect delinquent nontax debt owed it through an 
administrative wage garnishment (AWG) process. When an AWG order is 
issued, employers (including small businesses) that employ workers from 
whom the Department is collecting a delinquent debt will be required to 
certify the employee's employment and earnings, garnish wages, and 
remit withheld wages to the Department. Such procedures are mandated by 
Department of the Treasury regulations issued to implement the Debt 
Collection Improvement Act. Employment and salary information is 
contained in an employer's payroll records. Therefore, it will not take 
a significant amount of time or result in a significant cost for an 
employer to certify employment and earnings. Employers of delinquent 
debtors may be subject at any time to garnishment orders issued by a 
court to collect delinquent debts of their employees owed to 
governmental or private creditors. The addition of an AWG process will 
not significantly increase the burden to which employers are already 
subject to collect the delinquent debt of their employees.

Executive Orders 12866 and 13563--Regulatory Review

    This regulation has been drafted and reviewed in accordance with 
Executive Order 12866, ``Regulatory Planning and Review,'' section 
1(b), Principles of Regulation, and in accordance with Executive Order 
13563, ``Improving Regulation and Regulatory Review,'' section 1(b), 
General Principles of Regulation.
    The Department of Justice has determined that this rule is not a 
``significant regulatory action'' under Executive Order 12866, section 
3(f), Regulatory Planning and Review, and accordingly this rule has not 
been reviewed by the Office of Management and Budget.
    Further, both Executive Orders 12866 and 13563 direct agencies to 
assess all costs and benefits of available regulatory alternatives and, 
if regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety effects, distributive impacts, and equity). 
Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, of reducing costs, of harmonizing rules, and of 
promoting flexibility. The Department has assessed the costs and 
benefits of this regulation and believes that the regulatory approach 
selected maximizes net benefits.

Executive Order 12988--Civil Justice Reform

    This regulation meets the applicable standards set forth in 
sections 3(a) and 3(b)(2) of Executive Order 12988.

Executive Order 13132--Federalism

    This regulation will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 13132, it is determined that this rule does not have sufficient 
federalism implications to warrant the preparation of a Federalism 
Assessment.

Unfunded Mandates 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 
$100,000,000 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 Fairness Act of 1996

    This rule is not a major rule as defined by section 251 of the 
Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 
804. This rule will not result in an annual effect on the economy of 
$100,000,000 or more; a major increase in costs or prices; or 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of United States-based 
enterprises to compete with foreign-based enterprises in domestic and 
export markets.

Paperwork Reduction Act

    This rule imposes no information collection or record keeping 
requirements.

List of Subjects in 28 CFR Part 11

    Administrative practice and procedure, Claims, Debt collection, 
Government contracts, Government employees, Income taxes, Lawyers, 
Wages.
    Accordingly, by virtue of the authority vested in me as Attorney 
General, including 5 U.S.C. 301 and 28 U.S.C. 509 and 510, part 11 of 
title 28 of the Code of Federal Regulations is amended as follows:

PART 11--DEBT COLLECTION

0
1. The authority citation for part 11 is revised to read as follows:

    Authority:  5 U.S.C. 301, 5514; 28 U.S.C. 509, 510; 31 U.S.C. 
3711, 3716, 3718, 3720A, 3720D.

Subpart A--Retention of Private Counsel for Debt Collection


Sec.  11.1  [Amended]

0
2. Amend Sec.  11.1 as follows:
0
a. Remove the word ``pilot'' from the first sentence; and
0
b. Remove the word ``Adminstration'' and add in its place the word 
``Administration''.
0
3. Amend Sec.  11.2 as follows:
0
a. Revise the section heading;
0
b. In the first two sentences, remove the word ``pilot'';
0
c. In the third sentence, remove the words ``Contracting Officer's 
Technical Representative (COTR)'' and add in their place the words 
``Contracting Officer's Representative (COR)''; and
0
d. In the fourth sentence, remove the term ``COTRs'' and add in its 
place the term ``CORs''.
    The revision reads as follows:

[[Page 43944]]

Sec.  11.2  Private counsel debt collection program.

* * * * *


Sec.  11.3  [Amended]

0
4. Amend Sec.  11.3 as follows:
0
a. In the first sentence, remove the words ``the Federal Property and 
Administrative Services Act of 1949, 41 U.S.C. 251 et seq.'' and add in 
their place the words ``41 U.S.C. 3307.''
0
b. In the second sentence, add the phrase ``and law firms that are 
qualified HUBZone small business concerns'' after the phrase ``socially 
and economically disadvantaged individuals'';
0
c. In the second and third sentences, remove the word ``pilot'' and add 
in its place the word ``program''; and
0
d. In the third sentence, remove the words ``the Commerce Business 
Daily'' and add in their place the term ``FedBizOpps''.

Subpart B--Administration of Debt Collection


Sec.  11.4  [Amended]

0
5. Amend Sec.  11.4 as follows:
0
a. Remove the second sentence of paragraph (a); and
0
b. In paragraph (b)(3)(i), add the number ``1'' after the words ``26 
U.S.C.''

0
6. Revise the heading of subpart C to read as follows:

Subpart C--Collection of Debts by Administrative and Tax Refund 
Offset

0
7. Revise Sec.  11.10 to read as follows:


Sec.  11.10  [Amended]

    (a) The provisions of 31 U.S.C. 3716 allow the head of an agency to 
collect a debt through administrative offset. The provisions of 31 
U.S.C. 3716 and 3720A authorize the Secretary of the Treasury, acting 
through the Bureau of the Fiscal Service (BFS) and other Federal 
disbursing officials, to offset certain payments to collect delinquent 
debts owed to the United States. This subpart authorizes the collection 
of debts owed to the United States by persons, organizations, and other 
entities by offsetting Federal and certain state payments due to the 
debtor. It allows for collection of debts that are past due and legally 
enforceable through offset, regardless of whether the debts have been 
reduced to judgment.
    (b) Nothing in this subpart precludes the Department from pursuing 
other debt collection procedures to collect a debt that has been 
submitted to the Department of the Treasury under this subpart. The 
Department may use such debt collection procedures separately or in 
conjunction with the offset procedures of this subpart.

0
8. Amend Sec.  11.11 by revising paragraphs (a) and (b), and adding a 
paragraph (e) to read as follows:


Sec.  11.11  Definitions.

    (a) Debt. Debt means any amount of funds or property that an 
appropriate official of the Federal Government or a court of competent 
jurisdiction determines is owed to the United States, including any 
amounts owed to the United States for the benefit of a third party, by 
a person, organization, or entity other than another Federal agency. 
For purposes of this section, the term debt does not include debts 
arising under the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.), 
the tariff laws of the United States, or the Social Security Act (42 
U.S.C. 301 et seq.), except that ``delinquent amounts'' as defined in 
sections 204(f) and 1631(b)(4) of such Act (42 U.S.C. 404(f) and 
1383(b)(4)(A), respectively) are included in the term debt, as are 
``administrative offset[s]'' collectible pursuant to 31 U.S.C. 3716(c). 
Debts that have been referred to the Department of Justice by other 
agencies for collection are included in this definition.
    (b) Past due. A past due debt means a debt that has not been paid 
or otherwise resolved by the date specified in the initial demand for 
payment, or in an applicable agreement or other instrument (including a 
post-delinquency repayment agreement), unless other payment 
arrangements satisfactory to the Department have been made. Judgment 
debts remain past due until paid in full.
* * * * *
    (e) Legally enforceable. Legally enforceable means that there has 
been a final agency or court determination that the debt, in the amount 
stated, is due, and there are no legal bars to collection by offset.

0
9. Amend Sec.  11.12 as follows:
0
a. Remove paragraph (b)(4);
0
b. In paragraph (d)(5), remove the number ``65'' and add in its place 
the number ``60'';
0
c. In paragraph (d)(6) and paragraph (e), remove the term ``IRS'' and 
add in its place the term ``BFS'';
0
d. In the second sentence of paragraph (d)(6), remove the word ``of'' 
the second time it occurs and add in its place the word ``or''; and
0
e. Revise the section heading and paragraphs (a), (b)(2), (b)(3), (c), 
and (f) to read as follows:


Sec.  11.12  Centralized offset.

    (a) The Department must refer any legally enforceable debt more 
than 120 days past-due to BFS for administrative offset under 31 U.S.C. 
3716(c)(6). The Department must refer any past-due, legally enforceable 
debt to BFS for tax refund offset purposes pursuant to 31 U.S.C. 
3720A(a) at least once a year. Before referring debts for offset, the 
Department must certify to BFS compliance with the provisions of 31 
U.S.C. 3716(a) and 3720A(b). There is no time limit on when a debt can 
be collected by offset.
    (b) * * *
    (2) The Department intends to refer the debt to BFS for offset 
purposes;
    (3) Before the debt is referred to BFS for offset purposes, the 
debtor has 60 days from the date of notice to present evidence that all 
or part of the debt is not past due, that the amount is not the amount 
currently owed, that the outstanding debt has been satisfied, or, if 
the debt is a judgment debt, that the debt has been satisfied, or that 
collection action on the debt has been stayed.
* * * * *
    (c) If the debtor neither pays the amount due nor presents evidence 
that the amount is not past due or is satisfied or that collection 
action is stayed, the Department will refer the debt to BFS for offset 
purposes.
* * * * *
    (f) If more than one debt is owed, payments eligible for offset 
will be applied in the order in which the debts became past due.

0
10. Add Sec.  11.13 to read as follows:


Sec.  11.13  Non-centralized offset.

    (a) When offset under Sec.  11.12 of this part is not available or 
appropriate, the Department may collect past-due, legally enforceable 
debts through non-centralized administrative offset. See 31 CFR 
901.3(c). In these cases, the Department may offset a payment 
internally or make an offset request directly to a Federal payment 
agency.
    (b) At least 30 days before offsetting a payment internally or 
requesting a Federal payment agency to offset a payment, the Department 
will send notice to the debtor in accordance with the requirements of 
31 U.S.C. 3716(a). When referring a debt for offset under this 
paragraph (b), the Department will certify, in writing, that the debt 
is valid, delinquent, legally enforceable, and that there are no legal 
bars to collection by offset. In addition, the Department will certify 
its compliance with these regulations concerning administrative offset. 
See 31 CFR 901.3(c)(2)(ii).

0
11. Add subpart D to read as follows:

[[Page 43945]]

Subpart D--Administrative Wage Garnishment


Sec.  11.21  Administrative wage garnishment.

    (a) Purpose. In accordance with the Department of the Treasury 
government-wide regulation at 31 CFR 285.11, this section provides 
procedures for the Department of Justice (Department) to collect money 
from a debtor's disposable pay by means of administrative wage 
garnishment to satisfy delinquent nontax debt owed to the United States 
through operation of Department programs.
    (b) Scope. (1) This section shall apply notwithstanding any 
provision of State law.
    (2) Nothing in this section precludes the compromise of a debt or 
the suspension or termination of collection action in accordance with 
applicable law. See, for example, the Federal Claims Collection 
Standards (FCCS), 31 CFR parts 900-904.
    (3) The receipt of payments pursuant to this section does not 
preclude the Department from pursuing other debt collection remedies, 
including the offset of Federal payments to satisfy delinquent nontax 
debt owed to the United States. The Department may pursue such debt 
collection remedies separately or in conjunction with administrative 
wage garnishment.
    (4) This section does not apply to the collection of delinquent 
nontax debt owed to the United States from the wages of Federal 
employees from their Federal employment. Federal pay is subject to the 
Federal salary offset procedures set forth in 5 U.S.C. 5514 and other 
applicable laws.
    (5) Nothing in this section requires the Department to duplicate 
notices or administrative proceedings required by contract or other 
laws or regulations.
    (c) Definitions. As used in this section the following definitions 
shall apply:
    Agency means the Department of Justice.
    Business day means Monday through Friday. For purposes of 
computation, the last day of the period will be included unless it is a 
Federal legal holiday.
    Day means calendar day. For purposes of computation, the last day 
of the period will be included unless it is a Saturday, a Sunday, or a 
Federal legal holiday.
    Debt or claim means any amount of money, funds or property that an 
appropriate official of the Federal Government determines is owed to 
the United States by an individual, including debt administered by a 
third party as an agent for the Federal Government.
    Debtor means an individual who owes a delinquent nontax debt to the 
United States.
    Delinquent nontax debt means any nontax debt that has not been paid 
by the date specified in the agency's initial written demand for 
payment, or applicable agreement, unless other satisfactory payment 
arrangements have been made. For purposes of this section, the terms 
``debt'' and ``claim'' are synonymous and refer to delinquent nontax 
debt.
    Disposable pay means that part of the debtor's compensation 
(including, but not limited to, salary, bonuses, commissions, and 
vacation pay) from an employer remaining after the deduction of health 
insurance premiums and any amounts required by law to be withheld. For 
purposes of this section, ``amounts required by law to be withheld'' 
include amounts for deductions such as Social Security taxes and 
withholding taxes, but do not include any amount withheld pursuant to a 
court order.
    Employer means a person or entity that employs the services of 
others and that pays their wages or salaries. The term employer 
includes, but is not limited to, State and local Governments, but does 
not include an agency of the Federal Government.
    Evidence of service means information retained by the agency 
indicating the nature of the document to which it pertains, the date of 
mailing of the document, and to whom the document is being sent. 
Evidence of service may be retained electronically so long as the 
manner of retention is sufficient for evidentiary purposes.
    Garnishment means the process of withholding amounts from an 
employee's disposable pay and the paying of those amounts to a creditor 
in satisfaction of a withholding order.
    Withholding order means any order for withholding or garnishment of 
pay issued by the agency, or judicial or administrative body. For 
purposes of this section, the terms ``wage garnishment order'' and 
``garnishment order'' have the same meaning as ``withholding order.''
    (d) General rule. Whenever the agency determines that a delinquent 
debt is owed by an individual, the agency may initiate proceedings 
administratively to garnish the wages of the delinquent debtor.
    (e) Notice requirements. (1) At least 30 days before initiating 
garnishment proceedings, the agency shall mail, by first class mail, to 
the debtor's last known address, a written notice informing the debtor 
of:
    (i) The nature and amount of the debt;
    (ii) The intention of the agency to initiate proceedings to collect 
the debt through deductions from pay until the debt and all accumulated 
interest, penalties, and administrative costs are paid in full; and
    (iii) An explanation of the debtor's rights, including those set 
forth in paragraph (e)(2) of this section, and the time frame within 
which the debtor may exercise those rights.
    (2) The debtor shall be afforded the opportunity:
    (i) To inspect and copy agency records related to the debt;
    (ii) To enter into a written repayment agreement with the agency 
under terms agreeable to the agency; and
    (iii) For a hearing in accordance with paragraph (f) of this 
section concerning the existence or the amount of the debt or the terms 
of the proposed repayment schedule under the garnishment order. 
However, the debtor is not entitled to a hearing concerning the terms 
of the proposed repayment schedule if these terms have been established 
by written agreement under paragraph (e)(2)(ii) of this section.
    (3) The agency will retain evidence of service indicating the date 
of mailing of the notice.
    (f) Hearing--(1) Request for hearing. If the debtor submits a 
written request for a hearing concerning the existence or amount of the 
debt or the terms of the repayment schedule (for those repayment 
schedules not established by written agreement under paragraph 
(e)(2)(ii) of this section), the agency shall provide a hearing, which 
at the agency's option may be oral or written.
    (2) Type of hearing or review. (i) For purposes of this section, 
whenever the agency is required to afford a debtor a hearing, the 
agency shall provide the debtor with a reasonable opportunity for an 
oral hearing when the agency determines that the issues in dispute 
cannot be resolved by review of the documentary evidence, as, for 
example, when the validity of the claim turns on the issue of 
credibility or veracity.
    (ii) If the agency determines that an oral hearing is appropriate, 
the time and location of the hearing shall be established by the 
agency. An oral hearing may, at the debtor's option, be conducted 
either in person or by telephone conference. All travel expenses 
incurred by the debtor in connection with an in-person hearing will be 
borne by the debtor. All telephonic charges incurred during the hearing 
will be the responsibility of the agency.
    (iii) In those cases where an oral hearing is not provided under 
this section, the agency shall nevertheless

[[Page 43946]]

accord the debtor a ``paper hearing,'' that is, the agency will decide 
the issues in dispute based upon a review of the written record. The 
agency will establish a reasonable deadline for the submission of 
evidence.
    (3) Effect of agency receipt of hearing request within 15 business 
days of notice. Subject to paragraph (f)(12) of this section, if the 
debtor's written request is received by the agency on or before the 
15th business day following the mailing of the notice described in 
paragraph (e)(1) of this section, the agency shall not issue a 
withholding order under paragraph (g) of this section until the agency 
provides the debtor the requested hearing and renders a decision in 
accordance with paragraphs (f)(9) and (10) of this section.
    (4) Effect of agency receipt of hearing request after 15 business 
days of notice. If the debtor's written request is received by the 
agency after the 15th business day following the mailing of the notice 
described in paragraph (e)(1) of this section, the agency shall provide 
a hearing to the debtor. However, the agency will not delay issuance of 
a withholding order unless the agency determines that the delay in 
filing the request was caused by factors over which the debtor had no 
control, or the agency receives information that the agency believes 
justifies a delay or cancellation of the withholding order.
    (5) Hearing official. A hearing official may be any qualified 
individual, as determined by the head of the agency, including an 
administrative law judge.
    (6) Procedure. After the debtor requests a hearing, the hearing 
official shall notify the debtor of:
    (i) The date and time of a telephonic hearing;
    (ii) The date, time, and location of an in-person oral hearing; or
    (iii) The deadline for the submission of evidence for a written 
hearing.
    (7) Burden of proof. (i) The agency will have the initial burden of 
proving, by a preponderance of the evidence, the existence or amount of 
the debt.
    (ii) If the agency satisfies its initial burden, and the debtor 
disputes the existence or amount of the debt, the debtor must prove, by 
a preponderance of the evidence, that no debt exists or that the amount 
of the debt is incorrect. In addition, the debtor may present evidence 
that the terms of the repayment schedule are unlawful or would cause a 
financial hardship to the debtor, or that collection of the debt may 
not be pursued due to operation of law.
    (8) Record. The hearing official must maintain a summary record of 
any hearing provided under this section. A hearing is not required to 
be a formal evidentiary-type hearing. However, witnesses who testify in 
in-person or telephonic hearings will do so under oath or affirmation.
    (9) Date of decision. The hearing official shall issue a written 
opinion stating the decision as soon as practicable, but not later than 
60 days after the date on which the request for such hearing was 
received by the agency. If an agency is unable to provide the debtor 
with a hearing and render a decision within 60 days after the receipt 
of the request for such hearing:
    (i) The agency may not issue a withholding order until the hearing 
is held and a decision rendered; or
    (ii) If the agency had previously issued a withholding order to the 
debtor's employer, the agency must suspend the withholding order 
beginning on the 61st day after the receipt of the hearing request and 
continuing until a hearing is held and a decision is rendered.
    (10) Content of decision. The written decision shall include:
    (i) A summary of the facts presented;
    (ii) The hearing official's findings, analysis, and conclusions; 
and
    (iii) The terms of any repayment schedules, if applicable.
    (11) Final agency action. The hearing official's decision will be 
final agency action for purposes of judicial review under the 
Administrative Procedure Act (5 U.S.C. 701 et seq.).
    (12) Failure to appear. In the absence of good cause shown, a 
debtor who fails to appear at a hearing scheduled pursuant to paragraph 
(f)(3) of this section will be deemed as not having timely filed a 
request for a hearing.
    (g) Wage garnishment order. (1) Unless the agency receives 
information that the agency believes justifies a delay or cancellation 
of the withholding order, the agency will send, by first class mail, a 
withholding order to the debtor's employer:
    (i) Within 30 days after the debtor fails to make a timely request 
for a hearing (i.e., within 15 business days after the mailing of the 
notice described in paragraph (e)(1) of this section), or,
    (ii) If the debtor makes a timely request for a hearing, within 30 
days after a final decision is made by the agency to proceed with 
garnishment, or
    (iii) As soon as reasonably possible thereafter.
    (2) The withholding order sent to the employer under paragraph 
(g)(1) of this section shall be in a form prescribed by the Secretary 
of the Treasury. The withholding order shall contain the signature of, 
or the image of the signature of, the head of the agency or that 
person's delegatee. The order shall contain only the information 
necessary for the employer to comply with the withholding order. Such 
information includes the debtor's name, address, and Social Security 
Number, as well as instructions for withholding and information as to 
where payments should be sent.
    (3) The agency will retain evidence of service indicating the date 
of mailing of the order.
    (h) Certification by employer. Along with the withholding order, 
the agency shall send to the employer a certification in a form 
prescribed by the Secretary of the Treasury. The employer shall 
complete and return the certification to the agency within the time 
frame prescribed in the instructions to the form. The certification 
will address matters such as information about the debtor's employment 
status and disposable pay available for withholding.
    (i) Amounts withheld. (1) After receipt of the garnishment order 
issued under this section, the employer shall deduct from all 
disposable pay paid to the applicable debtor during each pay period the 
amount of garnishment described in paragraph (i)(2) of this section.
    (2)(i) Subject to the provisions of paragraphs (i)(3) and (4) of 
this section, the amount of garnishment shall be the lesser of:
    (A) The amount indicated on the garnishment order up to 15% of the 
debtor's disposable pay; or
    (B) The amount set forth in 15 U.S.C. 1673(a)(2) (Restriction on 
Garnishment). That amount is the amount by which a debtor's disposable 
pay exceeds an amount equivalent to thirty times the Federal minimum 
wage. See 29 CFR 870.10.
    (3) When a debtor's pay is subject to withholding orders with 
priority the following shall apply:
    (i) Unless otherwise provided by Federal law, withholding orders 
issued under this section shall be paid in the amounts set forth under 
paragraph (i)(2) of this section and shall have priority over 
withholding orders that are served later in time. Notwithstanding the 
foregoing, withholding orders for family support shall have priority 
over withholding orders issued under this section.
    (ii) If amounts are being withheld from a debtor's pay pursuant to 
a withholding order served on an employer before a withholding order 
issued pursuant to this section, or if a withholding order for family 
support is served on an employer at any time, the amounts withheld 
pursuant to the

[[Page 43947]]

withholding order issued under this section shall be the lesser of:
    (A) The amount calculated under paragraph (i)(2) of this section, 
or
    (B) An amount equal to 25% of the debtor's disposable pay less the 
amount(s) withheld under the withholding order(s) with priority.
    (iii) If a debtor owes more than one debt to the agency, the agency 
may issue multiple withholding orders if the total amount garnished 
from the debtor's pay for such orders does not exceed the amount set 
forth in paragraph (i)(2) of this section.
    (4) An amount greater than that set forth in paragraphs (i)(2) and 
(3) of this section may be withheld upon the written consent of the 
debtor.
    (5) The employer shall promptly pay to the agency all amounts 
withheld under the withholding order issued pursuant to this section.
    (6) An employer shall not be required to vary its normal pay and 
disbursement cycles in order to comply with the withholding order.
    (7) Any assignment or allotment by an employee of the employee's 
earnings shall be void to the extent it interferes with or prohibits 
execution of the withholding order issued under this section, except 
for any assignment or allotment made pursuant to a family support 
judgment or order.
    (8) The employer shall withhold the appropriate amount from the 
debtor's wages for each pay period until the employer receives 
notification from the agency to discontinue wage withholding. The 
garnishment order shall indicate a reasonable period of time within 
which the employer is required to commence wage withholding.
    (j) Exclusions from garnishment. The agency may not garnish the 
wages of a debtor who it knows has been involuntarily separated from 
employment until the debtor has been reemployed continuously for at 
least 12 months. To qualify for this exclusion, upon the request of the 
agency, the debtor must inform the agency of the circumstances 
surrounding an involuntary separation from employment.
    (k) Financial hardship. (1) A debtor whose wages are subject to a 
wage withholding order under this section, may, at any time, request a 
review by the agency of the amount garnished, based on materially 
changed circumstances such as disability, divorce, or catastrophic 
illness that result in financial hardship.
    (2) A debtor requesting a review under paragraph (k)(1) of this 
section shall submit the basis for claiming that the current amount of 
garnishment results in a financial hardship to the debtor, along with 
supporting documentation. The agency shall consider any information 
submitted in accordance with procedures and standards established by 
the agency.
    (3) If the agency finds financial hardship, it shall downwardly 
adjust, by an amount and for a period of time agreeable to the agency, 
the amount garnished to reflect the debtor's financial condition. The 
agency will notify the employer of any adjustments to the amounts to be 
withheld.
    (l) Ending garnishment. (1) Once the agency has fully recovered the 
amounts owed by the debtor, including interest, penalties, and 
administrative costs consistent with the FCCS, the agency shall send 
the debtor's employer notification to discontinue wage withholding.
    (2) At least annually, an agency shall review its debtors' accounts 
to ensure that accounts that have been paid in full are no longer 
subject to garnishment.
    (m) Actions prohibited by the employer. An employer may not 
discharge, refuse to employ, or take disciplinary action against the 
debtor due to the issuance of a withholding order under this section.
    (n) Refunds. (1) If a hearing official, at a hearing held pursuant 
to paragraph (f)(2) of this section, determines that a debt is not 
legally due and owing to the United States, the agency shall promptly 
refund any amount collected by means of administrative wage 
garnishment.
    (2) Unless required by Federal law or contract, refunds under this 
section shall not bear interest.
    (o) Right of action. The agency may sue any employer for any amount 
that the employer fails to withhold from wages owed and payable to an 
employee in accordance with paragraphs (g) and (i) of this section. 
However, a suit may not be filed before the termination of the 
collection action involving a particular debtor, unless earlier filing 
is necessary to avoid expiration of any applicable statute of 
limitations period. For purposes of this section, ``termination of the 
collection action'' occurs when the agency has terminated collection 
action in accordance with the FCCS or other applicable standards. In 
any event, termination of the collection action will be deemed to have 
occurred if the agency has not received any payments to satisfy the 
debt from the particular debtor whose wages were subject to 
garnishment, in whole or in part, for a period of 1 year.

    Dated: June 24, 2016.
Loretta E. Lynch,
Attorney General.
[FR Doc. 2016-15511 Filed 7-5-16; 8:45 am]
 BILLING CODE 4410-AR-P