Department of Justice Debt Collection Regulations, 43942-43947 [2016-15511]
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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
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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
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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:
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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
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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.
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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.
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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
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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:
■
■
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§ 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:
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§ 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
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§ 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
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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:
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Subpart D—Administrative Wage
Garnishment
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§ 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.
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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;
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(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
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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
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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
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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
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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
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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.
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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
https://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]
=======================================================================
-----------------------------------------------------------------------
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
