Debt Collection Authorities Under the Debt Collection Improvement Act of 1996, 50246-50250 [2022-17117]
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50246
Federal Register / Vol. 87, No. 157 / Tuesday, August 16, 2022 / Rules and Regulations
or contractor) who is personally and
directly preparing for a civil proceeding
before a State administrative body or
court in a matter involving the
enforcement of State laws regulating
organizations with respect to which
information can be disclosed under this
section, solely for use in such a
proceeding, but only if—
(i) The organization or a taxable
person is a party to the proceeding, or
the proceeding arose out of, or in
connection with, determining the civil
liability of the organization or a taxable
person, or collecting such civil liability,
under State laws governing
organizations with respect to which
information can be disclosed under this
subsection;
(ii) The treatment of an item reflected
on such a return is directly related to
the resolution of an issue in the
proceeding; or
(iii) The return or return information
directly relates to a transactional
relationship between the organization or
a taxable person and a person who is a
party to the proceeding that directly
affects the resolution of an issue in the
proceeding.
(h) Redisclosure limitation. Before
disclosing any return or return
information received under section
6104(c) in a proceeding described in
paragraph (g)(2) of this section, the ASO
must notify the IRS of the intention to
make such a disclosure. No State officer
or employee may make such a
disclosure except in accordance with
any conditions the IRS might impose in
response to the ASO’s notice of intent.
No such disclosure may be made if the
IRS determines that the disclosure
would seriously impair Federal tax
administration.
(i) Definitions. For purposes of section
6104(c) and this section—
(1) Appropriate State officer or ASO
means—
(i) The State attorney general;
(ii) The State tax officer;
(iii) With respect to a charitable
organization or applicant, any State
officer other than the attorney general or
tax officer charged with overseeing
charitable organizations, provided that
the officer shows the IRS that the officer
is an ASO by presenting a letter from
the State attorney general describing the
functions and authority of the officer
under State law, with sufficient facts for
the IRS to determine that the officer is
an ASO; and
(iv) With respect to a section 501(c)
organization that is not described in
section 501(c)(1) or (c)(3), the head of
the agency designated by the State
attorney general as having primary
responsibility for overseeing the
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solicitation of funds for charitable
purposes, provided that the officer
shows the IRS that the officer is an ASO
by presenting a letter from the State
attorney general describing the
functions and authority of the officer
under State law, with sufficient facts for
the IRS to determine that the officer is
an ASO.
(2) Return has the same meaning as in
section 6103(b)(1).
(3) Return information has the same
meaning as in section 6103(b)(2).
(4) Taxable person means any person
who is liable or potentially liable for
excise taxes under chapter 41 or 42 of
the Code. Such a person includes—
(i) A disqualified person described in
section 4946(a)(1), 4951(e)(4), or 4958(f);
(ii) A foundation manager described
in section 4946(b);
(iii) An organization manager
described in section 4955(f)(2) or
4958(f)(2);
(iv) A person described in section
4958(c)(3)(B);
(v) An entity manager described in
section 4965(d); and
(vi) A fund manager described in
section 4966(d)(3).
(j) Failure to comply. Upon a
determination that an ASO has failed to
comply with the requirements of section
6103(p)(4), the IRS may take the actions
it deems necessary to ensure
compliance, including the refusal to
disclose any further returns or return
information to the ASO until the IRS
determines that the requirements of
section 6103(p)(4) have been met. For
procedures for the administrative
review of a determination that an
authorized recipient has failed to
safeguard returns or return information,
see § 301.6103(p)(7)–1.
(k) Applicability date. The rules of
this section apply on and after August
16, 2022.
Douglas W. O’Donnell,
Deputy Commissioner for Services and
Enforcement.
Approved: June 7, 2022.
Lily Batchelder,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. 2022–17574 Filed 8–15–22; 8:45 am]
BILLING CODE 4830–01–P
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DEPARTMENT OF THE TREASURY
Fiscal Service
31 CFR Part 285
[Docket No. Fiscal-2021–0007]
RIN 1530–AA21
Debt Collection Authorities Under the
Debt Collection Improvement Act of
1996
Bureau of the Fiscal Service,
Fiscal Service, Treasury.
ACTION: Final rule.
AGENCY:
This final rule amends the
regulations of the Department of the
Treasury (‘‘Treasury’’), Bureau of the
Fiscal Service (‘‘Fiscal Service’’),
regarding the Treasury Offset Program
(‘‘TOP’’) and the Cross-Servicing
program. The primary reason for
amending the regulation is to inform the
public about how Fiscal Service will use
Social Security numbers in mailings, as
required by the Social Security Number
Fraud Prevention Act of 2017, which
requires Fiscal Service to have final
regulations in place by September 15,
2022.
SUMMARY:
This rule is effective September
15, 2022.
FOR FURTHER INFORMATION CONTACT:
Tawanna Edmonds, Director,
Receivables Management & Debt
Services Division, Debt Management
Services, Bureau of the Fiscal Service at
(202) 874–6810.
SUPPLEMENTARY INFORMATION:
DATES:
I. Background
Legal Authorities. The Debt Collection
Improvement Act of 1996 (‘‘DCIA’’),
Public Law 104–134, 110 Stat. 1321–358
et seq. (April 26, 1996), authorized
Federal agencies to refer Federal nontax
debt to Treasury for collection services,
among other things. See 31 U.S.C.
3711(g). The DCIA authorized Federal
disbursing officials to withhold eligible
Federal nontax payments to pay the
payee’s delinquent nontax debt owed to
the United States. See 31 U.S.C. 3716(c).
The DCIA also provided that Federal
nontax payments may be offset to
collect delinquent debt owed to States,
including past-due support, and that
payments made by States may be offset
to collect delinquent nontax debt owed
to the United States. See 31 U.S.C.
3716(h). Further, Federal tax refund
payments may be offset to collect
nontax debt owed to the United States
and debt owed to States, including pastdue support. See 26 U.S.C. 6402, 31
U.S.C. 3720A, and 42 U.S.C. 664.
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Cross-Servicing program. Fiscal
Service administers the Cross-Servicing
program, through which it provides
delinquent nontax debt collection
services to Federal agencies under 31
U.S.C. 3711(g).
Centralized Receivables Service.
Fiscal Service administers the
Centralized Receivables Service, or CRS,
through which it provides invoicing and
early delinquent debt collection services
to Federal agencies under 31 U.S.C.
3711(g).
Treasury Offset Program. Fiscal
Service administers a centralized offset
program, known as the Treasury Offset
Program, or TOP, through which it
offsets payments to collect debts.
Revision of Regulations. Fiscal
Service promulgated 31 CFR 285.12 to
implement 31 U.S.C. 3711(g). Among
other things, the regulation codified at
31 CFR 285.12 describes the procedures
and criteria for transferring delinquent
debt to Treasury. It also explains the
statutory exceptions to this requirement
and the standards under which the
Secretary of the Treasury (‘‘Secretary’’)
will determine whether to grant
exemptions to this requirement.
Fiscal Service promulgated 31 CFR
part 285, subpart A to implement the
centralized offset of payments through
TOP, pursuant to the Debt Collection
Improvement Act of 1996.
On March 2, 2022, Fiscal Service
published a Notice of Proposed
Rulemaking (‘‘NPRM’’) at 87 FR 11660
to revise the regulations codified at 31
CFR part 285, subpart A, and 31 CFR
285.12 (the ‘‘existing regulations’’). The
primary reason for revising these
regulations is to inform the public about
how Fiscal Service will use Social
Security numbers in mailings, as
required by the Social Security Number
Fraud Prevention Act of 2017, which
requires Fiscal Service to have final
regulations in place by September 15,
2022. The revisions also add definitions
for previously undefined terms and
reword certain provisions for clarity,
consistent with the requirements of the
Plain Writing Act of 2010 and Executive
Order 12866 (Sept. 1993). This final rule
implements the revisions proposed by
the NPRM, without change, except to
correct a typographical error by moving
‘‘and’’ from the end of § 285.3(m)(2) to
the end of § 285.3(m)(3).
II. Analysis of Comments
Fiscal Service received comments
from two non-profit organizations in
response to the NPRM.
One comment addressed the
definition of ‘‘legally enforceable’’ and
suggested that debts should not be
referred to Fiscal Service for collection
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until administrative appeals and other
challenges are resolved. As stated in the
NPRM, the term ‘‘legally enforceable’’ is
used in the existing regulations, and the
description of the meaning of that term
in the existing regulations is in
§ 285.12(c)(3). The definition of this
term, as proposed by the NPRM, is
consistent with the existing meaning.
The proposed definition provides
agencies with necessary flexibility to
determine when it is appropriate to refer
debts to Fiscal Service’s Cross-Servicing
program. The Cross-Servicing program
collects a wide variety of debts (ranging
from defaulted loans and benefit
overpayments to complex audit
disallowances and enforcement
findings), and the appropriate level of
review before determining a debt to be
‘‘legally enforceable’’ can differ
significantly depending on the type of
debt. Each agency is best equipped to
determine the appropriate level of
review for its debts.
The comment also expressed concern
that ‘‘in the absence of some
independent prohibition, agencies will
be required to refer debts to’’ the CrossServicing program. Fiscal Service does
not agree that this is a necessary
consequence of the statement in the
NPRM that a pending appeal does not
preclude the agency from referring a
debt to the Cross-Servicing program.
Some agencies provide debtors with
dispute opportunities beyond what is
required by Fiscal Service’s rules. Only
after the agency provides at least the
level of due process required by Fiscal
Service’s rules may the agency refer the
debt to the Cross-Servicing program. An
agency would not be required to refer
the debt to the Cross-Servicing program
if it had not yet completed its required
reviews. Moreover, agencies may
suspend debt collection activity
(including referring debts to the CrossServicing program) if the debtor has
requested a waiver or review of the debt.
31 CFR 903.2. As such, Fiscal Service
does not believe any change is necessary
to the definition of ‘‘legally
enforceable.’’
One comment urged Fiscal Service to
preserve and expand all existing
provisions that allow for suspension of
collection. This comment is outside the
scope of this NPRM, as it addresses
possible changes to a separate
regulation, specifically 31 CFR 903.2.
Nevertheless, for clarity, Fiscal Service
notes that nothing proposed by the
NPRM is intended to narrow the
existing provisions that allow for the
suspension of collection under 31
U.S.C. 3711(a)(3) and the associated
regulations, including 31 CFR 903.2.
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One comment asserted that the NPRM
does not sufficiently address the current
debt collection system’s impact on
communities of color and recommended
that Fiscal Service suspend the
operation of TOP until ‘‘critical issues
are resolved.’’ This comment is outside
the scope of the targeted changes
proposed by the NPRM. Nevertheless,
Fiscal Service notes that it is conducting
an equity review in a separate forum.
See Treasury’s Equity Action Plan: One
Year Progress Report (April 2022),
available at https://home.treasury.gov/
system/files/136/Treasury-Equity
ActionPlan-OneYearProgress.pdf.
One comment recommended that
Fiscal Service consider limiting the
amounts that can be collected through
offset of benefit and tax refund
payments. This comment is outside the
scope of the targeted changes proposed
by the NPRM. This comment also made
various recommendations regarding the
collection of student loan debts owed to
the Department of Education. Fiscal
Service does not have regulatory
responsibilities over student loan debts
and would not be authorized or
empowered to implement some of the
recommended changes.
One comment stated that Fiscal
Service should exempt means-tested tax
credits from offset. This comment is
outside the scope of the targeted
changes proposed by the NPRM.
Moreover, Fiscal Service lacks the
statutory authority to exempt federal tax
payments from offset. The Secretary has
limited authority to exempt federal
nontax payments from offset under 31
U.S.C. 3716(c)(3)(B), including meanstested payments. The Secretary has no
such authority with regard to federal tax
payments.
One comment asserted that Fiscal
Service should increase the dollar
threshold for debts that agencies must
refer for collections. This comment is
outside the scope of the changes
contemplated by the NPRM.
Nevertheless, Treasury notes that a
change to the regulation to accomplish
this change is not required, as the
existing regulation set the threshold at
more than $25, ‘‘or such other amount
as Fiscal Service may determine.’’ 31
CFR 285.5(d)(3)(i)(C), 285.12(c)(4).
Fiscal Service can, at any time it deems
appropriate, increase this threshold
without the need for regulatory action,
through its regular guidance for or
communications with its creditor
agencies. Moreover, under 31 CFR
903.3(a)(3), agencies may terminate
collection when the costs of collection
are anticipated to exceed the amount
recoverable. Termination of collection
action would excuse the agencies from
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the general requirement to refer debts to
the Cross-Servicing program or the
Treasury Offset Program. Relatedly, 31
CFR 901.10 states that agencies should
periodically evaluate the costeffectiveness of collection techniques
and establish guideline with respect to
points at which costs of further
collection efforts are likely to exceed
recoveries. Collection costs in this
regard are likely to be a significant
factor for small dollar debts.
One comment urged Fiscal Service to
look at all its regulations impacting debt
collection to mitigate harm to debtors
and to advance racial equity including,
for example, its administrative wage
garnishment regulation. This comment
is out of scope and is not addressed
here.
III. Procedural Analyses
This rule is not a significant rule for
purposes of Executive Order 12866 and
has not been reviewed by the Office of
Management and Budget.
Pursuant to the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.), it is hereby
certified that the rule will not have a
significant economic impact on a
substantial number of small entities
because this rule only impacts persons
who receive payments from Federal
agencies or States and who are
delinquent on debts owed to Federal
agencies or States. Accordingly, a
regulatory flexibility analysis under the
Regulatory Flexibility Act is not
required.
List of Subjects in 31 CFR Part 285
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Administrative practice and
procedure, Black lung benefits, Child
support, Child welfare, Claims, Credit,
Debts, Disability benefits, Federal
employees, Garnishment of wages,
Hearing and appeal procedures, Income
taxes, Loan programs, Payments,
Privacy, Railroad retirement, Railroad
unemployment insurance, Salaries,
Social Security benefits, Supplemental
Security Income, Taxes, Unemployment
compensation, Veteran’s benefits,
Wages.
For the reasons set forth in this
preamble, Fiscal Service amends 31 CFR
part 285 as follows:
PART 285—DEBT COLLECTION
AUTHORITIES UNDER THE DEBT
COLLECTION IMPROVEMENT ACT OF
1996
1. The authority citation for part 285
continues to read as follows:
■
Authority: 5 U.S.C. 5514; 26 U.S.C. 6402;
31 U.S.C. 321, 3701, 3711, 3716, 3719,
3720A, 3720B, 3720D; 42 U.S.C. 664; E.O.
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13019, 61 FR 51763, 3 CFR, 1996 Comp., p.
216.
2. In § 285.1, add paragraph (q) to read
as follows:
■
§ 285.1 Collection of past-due support by
administrative offset.
*
*
*
*
*
(q) Social Security numbers. Fiscal
Service will ensure that an individual’s
Social Security number will not be
visible on the outside of any package it
sends by mail. In addition, Fiscal
Service generally will redact or partially
redact Social Security numbers in
documents it sends by mail; however, to
administer administrative offset, Fiscal
Service (and other disbursing officials)
may include Social Security numbers in
mailed documents, including, for
example:
(1) In interoffice and interagency
communications;
(2) In notices, including notices to the
debtor or payee that an offset has or will
occur, when the Social Security number
is (or is embedded in) a creditor
agency’s account number, debt
identification number, or debtor
identification number;
(3) In response to a request of a debtor
or a debtor’s representative for records
of Fiscal Service’s offset activities; and
(4) When required by law.
■ 3. In § 285.3, add paragraph (m) to
read as follows:
§ 285.3 Offset of tax refund payments to
collect past-due support.
*
*
*
*
*
(m) Social Security numbers. Fiscal
Service will ensure that an individual’s
Social Security number will not be
visible on the outside of any package it
sends by mail. In addition, Fiscal
Service generally will redact or partially
redact Social Security numbers in
documents it sends by mail; however, to
administer the tax refund offset
program, Fiscal Service (and other
disbursing officials) may include Social
Security numbers in mailed documents,
including, for example:
(1) In interoffice and interagency
communications;
(2) In notices, including notices to the
debtor or payee that an offset has or will
occur, when the Social Security number
is (or is embedded in) a creditor
agency’s account number, debt
identification number, or debtor
identification number;
(3) In response to a request of a debtor
or a debtor’s representative for records
of Fiscal Service’s offset activities; and
(4) When required by law.
■ 4. In § 285.5, add paragraph (l) to read
as follows:
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§ 285.5 Centralized offset of Federal
payments to collect nontax debts owed to
the United States.
*
*
*
*
*
(l) Social Security numbers. Fiscal
Service will ensure that an individual’s
Social Security number will not be
visible on the outside of any package it
sends by mail. In addition, Fiscal
Service generally will redact or partially
redact Social Security numbers in
documents it sends by mail; however, to
administer the Treasury Offset Program,
Fiscal Service (and other disbursing
officials) may include Social Security
numbers in mailed documents,
including, for example:
(1) In interoffice and interagency
communications;
(2) In notices, including notices to the
debtor or payee that an offset has or will
occur, when the Social Security number
is (or is embedded in) a creditor
agency’s account number, debt
identification number, or debtor
identification number;
(3) In response to a request of a debtor
or a debtor’s representative for records
of Fiscal Service’s offset activities; and
(4) When required by law.
■ 5. In § 285.6, add paragraph (n) to read
as follows:
§ 285.6 Administrative offset under
reciprocal agreements with states.
*
*
*
*
*
(n) Social Security numbers. Fiscal
Service will ensure that an individual’s
Social Security number will not be
visible on the outside of any package it
sends by mail. In addition, Fiscal
Service generally will redact or partially
redact Social Security numbers in
documents it sends by mail; however, to
administer administrative offset, Fiscal
Service (and other disbursing officials)
may include Social Security numbers in
mailed documents, including, for
example:
(1) In interoffice and interagency
communications;
(2) In notices, including notices to the
debtor or payee that an offset has or will
occur, when the Social Security number
is (or is embedded in) a creditor
agency’s account number, debt
identification number, or debtor
identification number;
(3) In response to a request of a debtor
or a debtor’s representative for records
of Fiscal Service’s offset activities; and
(4) When required by law.
■ 6. In § 285.8, add paragraph (k) to read
as follows:
§ 285.8 Offset of tax refund payments to
collect certain debts owed to States.
*
*
*
*
*
(k) Social Security numbers. Fiscal
Service will ensure that an individual’s
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Social Security number will not be
visible on the outside of any package it
sends by mail. In addition, Fiscal
Service generally will redact or partially
redact Social Security numbers in
documents it sends by mail; however, to
administer the tax refund offset
program, Fiscal Service (and other
disbursing officials) may include Social
Security numbers in mailed documents,
including, for example:
(1) In interoffice and interagency
communications;
(2) In notices, including notices to the
debtor or payee that an offset has or will
occur, when the Social Security number
is (or is embedded in) a creditor
agency’s account number, debt
identification number, or debtor
identification number;
(3) In response to a request of a debtor
or a debtor’s representative for records
of Fiscal Service’s offset activities; and
(4) When required by law.
■ 7. Section 285.12(a) is amended by:
■ a. Removing the words ‘‘an agency’’
and ‘‘An agency’’ wherever they appear
and adding in their place the words ‘‘a
Federal agency’’ and ‘‘A Federal
agency’’, respectively;
■ b. Removing the words ‘‘the agency’’
and ‘‘the agency’s’’ wherever they
appear and adding in their place the
words ‘‘the Federal agency’’ and ‘‘the
Federal agency’s’’, respectively;
■ c. In paragraph (a):
■ i. Removing the definition for
‘‘Agency’’,
■ ii. Adding in alphabetical order
definitions for ‘‘Centralized Receivables
Service,’’ ‘‘Cross-Servicing program,’’
and ‘‘Days delinquent’’;
■ iii. Removing the words ‘‘Secretary of
the Treasury’’ and adding in their place
the words ‘‘Secretary’’ in the definition
for ‘‘Debt collection center’’;
■ iv. Adding in alphabetical order
definitions for ‘‘Debtor,’’ ‘‘Delinquent or
past-due,’’ ‘‘Federal agency,’’ and
‘‘Legally enforceable’’; and
■ v. Removing the words ‘‘a Federal
agency’’ and adding in their place the
words ‘‘the United States or a Federal
agency’’ in the definition for ‘‘Person’’;
■ d. Revising paragraphs (b), (c), and
(d)(1)(iii);
■ e. Removing the word ‘‘or’’ at the end
of paragraph (d)(1)(v);
■ f. Redesignating paragraph (d)(1)(vi)
as paragraph (d)(1)(vii);
■ g. Adding a new paragraph (d)(1)(vi);
■ h. Revising paragraphs (d)(4);
■ i. Adding (d)(5) introductory text;
■ j. Removing paragraph (d)(6);
■ k. Removing and reserving paragraph
(e);
■ l. In paragraph (i), removing the words
‘‘delegatee’’ and ‘‘agency’’ and adding in
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their place the words ‘‘delegate’’ and
‘‘the debt’’, respectively;
■ m. Revising paragraph (j); and
■ n. Adding paragraph (k).
The revisions and additions read as
follows:
§ 285.12 Transfer of debts to Treasury for
collection.
(a) * * *
Centralized Receivables Service
means the program through which
Fiscal Service provides servicing,
pursuant to 31 U.S.C. 3711(g), for
Federal nontax debt from the point at
which a creditor agency establishes a
debt until the debt is paid, otherwise
resolved, or referred to the CrossServicing program for further action.
*
*
*
*
*
Cross-Servicing program means the
program through which Fiscal Service
provides delinquent nontax debt
collection services pursuant to 31 U.S.C.
3711(g).
Days delinquent refers to the number
of days that a debt has been in a
delinquent status. For administrative
debts (e.g., debts arising from fines,
penalties, and overpayments), the first
day of delinquency generally is the date
of the creditor agency’s initial written
demand for payment. For debts that
arise from the extension of credit
through direct loans, loan guarantees, or
insurance, the date of delinquency
generally is the due date specified in the
applicable agreement or instrument.
*
*
*
*
*
Debtor means a person who owes a
debt.
Delinquent or past-due refers to the
status of a debt and means a debt has
not been paid by the date specified in
the creditor agency’s initial written
demand for payment, or other
applicable agreement or instrument,
unless other payment arrangements
satisfactory to the creditor agency have
been made.
Federal agency means a department,
agency, court, court administrative
office, or instrumentality in the
executive, judicial, or legislative branch
of the Federal Government, including
government corporations.
*
*
*
*
*
Legally enforceable refers to a
characteristic of a debt and means there
has been a final agency determination
that the debt, in the amount stated, is
due, and there are no legal bars to
collection. A debt would not be legally
enforceable, for example, if the debt is:
(1) The subject of a pending
administrative review required by a
statute or regulation that prohibits
collection action during the review
process; or
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(2) Governed by a statute that
precludes collection.
(b) In general. Fiscal Service and
other debt collection centers may take
debt collection action on behalf of one
or more Federal agencies or a unit or
subagency thereof. Fiscal Service
provides these services through its
Cross-Servicing program and its
Centralized Receivables Service.
*
*
*
*
*
(c) Mandatory transfer of debts to
Fiscal Service’s Cross-Servicing
program. (1) A debt is considered
eligible for transfer to the CrossServicing program only if it is past due
and is legally enforceable.
(2) Except as set forth in paragraphs
(c)(3) and (d) of this section, a creditor
agency must transfer any eligible debt
that is over $25 (or such other amount
as Fiscal Service may determine) to the
Cross-Servicing program by no later
than 120 days delinquent if the creditor
agency relies on the Cross-Servicing
program to submit the transferred debts
for centralized offset on the creditor
agency’s behalf or, otherwise, by no
more than 180 days delinquent.
(3) If a final agency determination
resulting from an administrative appeal
or review process is not made until after
the time specified in paragraph (c)(2) of
this section, the creditor agency must
transfer such debt to the Cross-Servicing
program within 30 days after the date of
the final decision.
(4) For accounting and reporting
purposes, the debt remains on the books
and records of the Federal agency,
which transferred the debt.
(5) On behalf of the creditor agency,
Fiscal Service will take appropriate
action to collect or compromise the
transferred debt, or to suspend or
terminate collection action thereon.
Appropriate action to collect a debt may
include referral to another debt
collection center, a private collection
contractor, or the Department of Justice
for litigation. The creditor agency must
advise Fiscal Service, in writing, of any
specific statutory or regulatory
requirements pertaining to its debt and
will agree, in writing, to a collection
strategy, which includes parameters for
entering into compromise and
repayments agreements with debtors.
*
*
*
*
*
(d) * * *
(1) * * *
(iii) Is at a private collection
contractor if the debt has been referred
to a private collection contractor for a
period of time determined by the
Secretary;
*
*
*
*
*
(vi) Is being serviced and/or collected
in accordance with applicable statutes
E:\FR\FM\16AUR1.SGM
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50250
Federal Register / Vol. 87, No. 157 / Tuesday, August 16, 2022 / Rules and Regulations
and/or regulations by third parties, such
as private lenders or guaranty agencies;
or
*
*
*
*
*
(4) A debt is being collected by
internal offset if a creditor agency
expects the debt to be collected in full
within three (3) years from the date of
delinquency through the withholding of
funds payable to the debtor by the
creditor agency, or if the creditor agency
has issued notice to the debtor of the
creditor agency’s intent to offset such
funds.
(5) The Secretary may exempt classes
of debt from mandatory referral.
*
*
*
*
*
(j) Fees. Fiscal Service and other debt
collection centers may charge Federal
agencies fees sufficient to cover the full
cost of providing debt collection
services authorized by this section.
Fiscal Service and other debt collection
centers may calculate fees in any
manner designed to cover up to the full
cost of providing these services,
including based on a percentage of
collections received on account of a
debt while it was being serviced under
this section or a flat fee based on actions
taken under this section by Fiscal
Service or another debt collection center
with regard to a debt or group of debts.
Such fees may be determined based on
overall program costs and need not be
based on costs related to the collection
of a specific debt. Fiscal Service and
debt collection centers are authorized to
retain fees from amounts collected and
may deposit and use such fees in
accordance with 31 U.S.C. 3711(g). Fees
charged by Fiscal Service and other debt
collection centers may be added to the
debt as an administrative cost if
authorized under 31 U.S.C. 3717(e).
(k) Social Security numbers. When
conducting activities for or related to its
Centralized Receivables Service or
Cross-Servicing program, Fiscal Service
will ensure that an individual’s Social
Security number will not be visible on
the outside of any package it sends by
physical mail or in the subject line of an
email. In addition, Fiscal Service
generally will redact or partially redact
Social Security numbers in documents
it sends by mail; however, to administer
these programs, Fiscal Service may
include Social Security numbers in
mailed documents, including, for
example:
(1) In interoffice and interagency
communications;
(2) In communications with private
collection contractor and agents that
assist Fiscal Service in its debt
collection activities;
VerDate Sep<11>2014
16:02 Aug 15, 2022
Jkt 256001
(3) In notices and letters, including
demand letters and notices to employers
regarding wage garnishment, when the
Social Security number is (or is
embedded in) a creditor agency’s
account number, debt identification
number, or debtor identification
number;
(4) In notices to employers regarding
wage garnishment;
(5) In response to a request of a debtor
or a debtor’s representative for records
of Fiscal Service’s collection activities;
and
(6) When required by law.
David A. Lebryk,
Fiscal Assistant Secretary.
[FR Doc. 2022–17117 Filed 8–15–22; 8:45 am]
BILLING CODE 4810–AS–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 100
[Docket Number USCG–2022–0614]
RIN 1625–AA08
Special Local Regulation; Ohio River,
Cincinnati, OH
Coast Guard, DHS.
Temporary final rule.
AGENCY:
ACTION:
The Coast Guard is proposing
to establish a temporary special local
regulation for all navigable waters of the
Ohio River, extending the entire width
of the river, between mile marker (MM)
464.0–473.0 and the Licking River
between MM 0.0–0.3. In the event the
Ohio River Gauge is at or above the 45
foot level, the special local regulation
will extend west to MM 476.0. This
action is necessary to provide for the
safety of life on these navigable waters
near Cincinnati, OH during Riverfest
2022 on September 4, 2022 through
September 5, 2022. This rulemaking
prohibits persons and vessels from
operating above no wake speeds in the
area unless authorized by the Captain of
the Port Sector Ohio Valley or a
designated representative.
DATES: This rule is effective from 12
p.m. on September 4, 2022 through 3
a.m. on September 5, 2022.
ADDRESSES: To view documents
mentioned in this preamble as being
available in the docket, go to https://
www.regulations.gov, type USCG–2022–
0614 in the search box and click
‘‘Search.’’ Next, in the Document Type
column, select ‘‘Supporting & Related
Material.’’
SUMMARY:
PO 00000
Frm 00016
Fmt 4700
Sfmt 4700
If
you have questions on this rule, call or
email Petty Officer Thomas Harp,
Marine Safety Detachment Cincinnati,
U.S. Coast Guard; telephone 513–921–
9033, email Thomas.L.Harp@uscg.mil.
SUPPLEMENTARY INFORMATION:
FOR FURTHER INFORMATION CONTACT:
I. Table of Abbreviations
CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
MM Mile marker
NPRM Notice of proposed rulemaking
§ Section
U.S.C. United States Code
II. Background Information and
Regulatory History
The Coast Guard is issuing this
temporary rule without prior notice and
opportunity to comment pursuant to
authority under section 4(a) of the
Administrative Procedure Act (APA) (5
U.S.C. 553(b)). This provision
authorizes an agency to issue a rule
without prior notice and opportunity to
comment when the agency for good
cause finds that those procedures are
‘‘impracticable, unnecessary, or contrary
to the public interest.’’ Under 5 U.S.C.
553(b)(B), the Coast Guard finds that
good cause exists for not publishing a
notice of proposed rulemaking (NPRM)
with respect to this rule because it is
impracticable. We must establish this
regulation by September 4, 2022 and
lack sufficient time to provide a
reasonable comment period and then
consider those comments before issuing
this rule.
Under 5 U.S.C. 553(d)(3), the Coast
Guard finds that good cause exists for
making this rule effective less than 30
days after publication in the Federal
Register. Delaying the effective date of
this rule would be impractable and
contrary to the public interest because
immediate action is necessary to protect
persons and property from the dangers
associated with the event.
III. Legal Authority and Need for Rule
The Coast Guard is issuing this rule
under authority in 46 U.S.C. 70034
(previously 33 U.S.C. 1231). The
Captain of the Port Ohio Valley (COTP)
has determined that potential hazards
with the firework display, occurring at
12 p.m. on September 4 until 3 a.m. on
September 5, 2022, will be a safety
concern for all navigable waters on the
Ohio River between MM 464–473 and
the Licking River between MM 0.0–0.3.
In the event the Ohio River Gauge is at
or above the 45 foot level, this
regulation will extend west to MM 476.0
on the Ohio River before, during, and
after the scheduled event.
E:\FR\FM\16AUR1.SGM
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]]>Agencies
[Federal Register Volume 87, Number 157 (Tuesday, August 16, 2022)]
[Rules and Regulations]
[Pages 50246-50250]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-17117]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Fiscal Service
31 CFR Part 285
[Docket No. Fiscal-2021-0007]
RIN 1530-AA21
Debt Collection Authorities Under the Debt Collection Improvement
Act of 1996
AGENCY: Bureau of the Fiscal Service, Fiscal Service, Treasury.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule amends the regulations of the Department of
the Treasury (``Treasury''), Bureau of the Fiscal Service (``Fiscal
Service''), regarding the Treasury Offset Program (``TOP'') and the
Cross-Servicing program. The primary reason for amending the regulation
is to inform the public about how Fiscal Service will use Social
Security numbers in mailings, as required by the Social Security Number
Fraud Prevention Act of 2017, which requires Fiscal Service to have
final regulations in place by September 15, 2022.
DATES: This rule is effective September 15, 2022.
FOR FURTHER INFORMATION CONTACT: Tawanna Edmonds, Director, Receivables
Management & Debt Services Division, Debt Management Services, Bureau
of the Fiscal Service at (202) 874-6810.
SUPPLEMENTARY INFORMATION:
I. Background
Legal Authorities. The Debt Collection Improvement Act of 1996
(``DCIA''), Public Law 104-134, 110 Stat. 1321-358 et seq. (April 26,
1996), authorized Federal agencies to refer Federal nontax debt to
Treasury for collection services, among other things. See 31 U.S.C.
3711(g). The DCIA authorized Federal disbursing officials to withhold
eligible Federal nontax payments to pay the payee's delinquent nontax
debt owed to the United States. See 31 U.S.C. 3716(c). The DCIA also
provided that Federal nontax payments may be offset to collect
delinquent debt owed to States, including past-due support, and that
payments made by States may be offset to collect delinquent nontax debt
owed to the United States. See 31 U.S.C. 3716(h). Further, Federal tax
refund payments may be offset to collect nontax debt owed to the United
States and debt owed to States, including past-due support. See 26
U.S.C. 6402, 31 U.S.C. 3720A, and 42 U.S.C. 664.
[[Page 50247]]
Cross-Servicing program. Fiscal Service administers the Cross-
Servicing program, through which it provides delinquent nontax debt
collection services to Federal agencies under 31 U.S.C. 3711(g).
Centralized Receivables Service. Fiscal Service administers the
Centralized Receivables Service, or CRS, through which it provides
invoicing and early delinquent debt collection services to Federal
agencies under 31 U.S.C. 3711(g).
Treasury Offset Program. Fiscal Service administers a centralized
offset program, known as the Treasury Offset Program, or TOP, through
which it offsets payments to collect debts.
Revision of Regulations. Fiscal Service promulgated 31 CFR 285.12
to implement 31 U.S.C. 3711(g). Among other things, the regulation
codified at 31 CFR 285.12 describes the procedures and criteria for
transferring delinquent debt to Treasury. It also explains the
statutory exceptions to this requirement and the standards under which
the Secretary of the Treasury (``Secretary'') will determine whether to
grant exemptions to this requirement.
Fiscal Service promulgated 31 CFR part 285, subpart A to implement
the centralized offset of payments through TOP, pursuant to the Debt
Collection Improvement Act of 1996.
On March 2, 2022, Fiscal Service published a Notice of Proposed
Rulemaking (``NPRM'') at 87 FR 11660 to revise the regulations codified
at 31 CFR part 285, subpart A, and 31 CFR 285.12 (the ``existing
regulations''). The primary reason for revising these regulations is to
inform the public about how Fiscal Service will use Social Security
numbers in mailings, as required by the Social Security Number Fraud
Prevention Act of 2017, which requires Fiscal Service to have final
regulations in place by September 15, 2022. The revisions also add
definitions for previously undefined terms and reword certain
provisions for clarity, consistent with the requirements of the Plain
Writing Act of 2010 and Executive Order 12866 (Sept. 1993). This final
rule implements the revisions proposed by the NPRM, without change,
except to correct a typographical error by moving ``and'' from the end
of Sec. 285.3(m)(2) to the end of Sec. 285.3(m)(3).
II. Analysis of Comments
Fiscal Service received comments from two non-profit organizations
in response to the NPRM.
One comment addressed the definition of ``legally enforceable'' and
suggested that debts should not be referred to Fiscal Service for
collection until administrative appeals and other challenges are
resolved. As stated in the NPRM, the term ``legally enforceable'' is
used in the existing regulations, and the description of the meaning of
that term in the existing regulations is in Sec. 285.12(c)(3). The
definition of this term, as proposed by the NPRM, is consistent with
the existing meaning. The proposed definition provides agencies with
necessary flexibility to determine when it is appropriate to refer
debts to Fiscal Service's Cross-Servicing program. The Cross-Servicing
program collects a wide variety of debts (ranging from defaulted loans
and benefit overpayments to complex audit disallowances and enforcement
findings), and the appropriate level of review before determining a
debt to be ``legally enforceable'' can differ significantly depending
on the type of debt. Each agency is best equipped to determine the
appropriate level of review for its debts.
The comment also expressed concern that ``in the absence of some
independent prohibition, agencies will be required to refer debts to''
the Cross-Servicing program. Fiscal Service does not agree that this is
a necessary consequence of the statement in the NPRM that a pending
appeal does not preclude the agency from referring a debt to the Cross-
Servicing program. Some agencies provide debtors with dispute
opportunities beyond what is required by Fiscal Service's rules. Only
after the agency provides at least the level of due process required by
Fiscal Service's rules may the agency refer the debt to the Cross-
Servicing program. An agency would not be required to refer the debt to
the Cross-Servicing program if it had not yet completed its required
reviews. Moreover, agencies may suspend debt collection activity
(including referring debts to the Cross-Servicing program) if the
debtor has requested a waiver or review of the debt. 31 CFR 903.2. As
such, Fiscal Service does not believe any change is necessary to the
definition of ``legally enforceable.''
One comment urged Fiscal Service to preserve and expand all
existing provisions that allow for suspension of collection. This
comment is outside the scope of this NPRM, as it addresses possible
changes to a separate regulation, specifically 31 CFR 903.2.
Nevertheless, for clarity, Fiscal Service notes that nothing proposed
by the NPRM is intended to narrow the existing provisions that allow
for the suspension of collection under 31 U.S.C. 3711(a)(3) and the
associated regulations, including 31 CFR 903.2.
One comment asserted that the NPRM does not sufficiently address
the current debt collection system's impact on communities of color and
recommended that Fiscal Service suspend the operation of TOP until
``critical issues are resolved.'' This comment is outside the scope of
the targeted changes proposed by the NPRM. Nevertheless, Fiscal Service
notes that it is conducting an equity review in a separate forum. See
Treasury's Equity Action Plan: One Year Progress Report (April 2022),
available at https://home.treasury.gov/system/files/136/Treasury-EquityActionPlan-OneYearProgress.pdf.
One comment recommended that Fiscal Service consider limiting the
amounts that can be collected through offset of benefit and tax refund
payments. This comment is outside the scope of the targeted changes
proposed by the NPRM. This comment also made various recommendations
regarding the collection of student loan debts owed to the Department
of Education. Fiscal Service does not have regulatory responsibilities
over student loan debts and would not be authorized or empowered to
implement some of the recommended changes.
One comment stated that Fiscal Service should exempt means-tested
tax credits from offset. This comment is outside the scope of the
targeted changes proposed by the NPRM. Moreover, Fiscal Service lacks
the statutory authority to exempt federal tax payments from offset. The
Secretary has limited authority to exempt federal nontax payments from
offset under 31 U.S.C. 3716(c)(3)(B), including means-tested payments.
The Secretary has no such authority with regard to federal tax
payments.
One comment asserted that Fiscal Service should increase the dollar
threshold for debts that agencies must refer for collections. This
comment is outside the scope of the changes contemplated by the NPRM.
Nevertheless, Treasury notes that a change to the regulation to
accomplish this change is not required, as the existing regulation set
the threshold at more than $25, ``or such other amount as Fiscal
Service may determine.'' 31 CFR 285.5(d)(3)(i)(C), 285.12(c)(4). Fiscal
Service can, at any time it deems appropriate, increase this threshold
without the need for regulatory action, through its regular guidance
for or communications with its creditor agencies. Moreover, under 31
CFR 903.3(a)(3), agencies may terminate collection when the costs of
collection are anticipated to exceed the amount recoverable.
Termination of collection action would excuse the agencies from
[[Page 50248]]
the general requirement to refer debts to the Cross-Servicing program
or the Treasury Offset Program. Relatedly, 31 CFR 901.10 states that
agencies should periodically evaluate the cost-effectiveness of
collection techniques and establish guideline with respect to points at
which costs of further collection efforts are likely to exceed
recoveries. Collection costs in this regard are likely to be a
significant factor for small dollar debts.
One comment urged Fiscal Service to look at all its regulations
impacting debt collection to mitigate harm to debtors and to advance
racial equity including, for example, its administrative wage
garnishment regulation. This comment is out of scope and is not
addressed here.
III. Procedural Analyses
This rule is not a significant rule for purposes of Executive Order
12866 and has not been reviewed by the Office of Management and Budget.
Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq.),
it is hereby certified that the rule will not have a significant
economic impact on a substantial number of small entities because this
rule only impacts persons who receive payments from Federal agencies or
States and who are delinquent on debts owed to Federal agencies or
States. Accordingly, a regulatory flexibility analysis under the
Regulatory Flexibility Act is not required.
List of Subjects in 31 CFR Part 285
Administrative practice and procedure, Black lung benefits, Child
support, Child welfare, Claims, Credit, Debts, Disability benefits,
Federal employees, Garnishment of wages, Hearing and appeal procedures,
Income taxes, Loan programs, Payments, Privacy, Railroad retirement,
Railroad unemployment insurance, Salaries, Social Security benefits,
Supplemental Security Income, Taxes, Unemployment compensation,
Veteran's benefits, Wages.
For the reasons set forth in this preamble, Fiscal Service amends
31 CFR part 285 as follows:
PART 285--DEBT COLLECTION AUTHORITIES UNDER THE DEBT COLLECTION
IMPROVEMENT ACT OF 1996
0
1. The authority citation for part 285 continues to read as follows:
Authority: 5 U.S.C. 5514; 26 U.S.C. 6402; 31 U.S.C. 321, 3701,
3711, 3716, 3719, 3720A, 3720B, 3720D; 42 U.S.C. 664; E.O. 13019, 61
FR 51763, 3 CFR, 1996 Comp., p. 216.
0
2. In Sec. 285.1, add paragraph (q) to read as follows:
Sec. 285.1 Collection of past-due support by administrative offset.
* * * * *
(q) Social Security numbers. Fiscal Service will ensure that an
individual's Social Security number will not be visible on the outside
of any package it sends by mail. In addition, Fiscal Service generally
will redact or partially redact Social Security numbers in documents it
sends by mail; however, to administer administrative offset, Fiscal
Service (and other disbursing officials) may include Social Security
numbers in mailed documents, including, for example:
(1) In interoffice and interagency communications;
(2) In notices, including notices to the debtor or payee that an
offset has or will occur, when the Social Security number is (or is
embedded in) a creditor agency's account number, debt identification
number, or debtor identification number;
(3) In response to a request of a debtor or a debtor's
representative for records of Fiscal Service's offset activities; and
(4) When required by law.
0
3. In Sec. 285.3, add paragraph (m) to read as follows:
Sec. 285.3 Offset of tax refund payments to collect past-due support.
* * * * *
(m) Social Security numbers. Fiscal Service will ensure that an
individual's Social Security number will not be visible on the outside
of any package it sends by mail. In addition, Fiscal Service generally
will redact or partially redact Social Security numbers in documents it
sends by mail; however, to administer the tax refund offset program,
Fiscal Service (and other disbursing officials) may include Social
Security numbers in mailed documents, including, for example:
(1) In interoffice and interagency communications;
(2) In notices, including notices to the debtor or payee that an
offset has or will occur, when the Social Security number is (or is
embedded in) a creditor agency's account number, debt identification
number, or debtor identification number;
(3) In response to a request of a debtor or a debtor's
representative for records of Fiscal Service's offset activities; and
(4) When required by law.
0
4. In Sec. 285.5, add paragraph (l) to read as follows:
Sec. 285.5 Centralized offset of Federal payments to collect nontax
debts owed to the United States.
* * * * *
(l) Social Security numbers. Fiscal Service will ensure that an
individual's Social Security number will not be visible on the outside
of any package it sends by mail. In addition, Fiscal Service generally
will redact or partially redact Social Security numbers in documents it
sends by mail; however, to administer the Treasury Offset Program,
Fiscal Service (and other disbursing officials) may include Social
Security numbers in mailed documents, including, for example:
(1) In interoffice and interagency communications;
(2) In notices, including notices to the debtor or payee that an
offset has or will occur, when the Social Security number is (or is
embedded in) a creditor agency's account number, debt identification
number, or debtor identification number;
(3) In response to a request of a debtor or a debtor's
representative for records of Fiscal Service's offset activities; and
(4) When required by law.
0
5. In Sec. 285.6, add paragraph (n) to read as follows:
Sec. 285.6 Administrative offset under reciprocal agreements with
states.
* * * * *
(n) Social Security numbers. Fiscal Service will ensure that an
individual's Social Security number will not be visible on the outside
of any package it sends by mail. In addition, Fiscal Service generally
will redact or partially redact Social Security numbers in documents it
sends by mail; however, to administer administrative offset, Fiscal
Service (and other disbursing officials) may include Social Security
numbers in mailed documents, including, for example:
(1) In interoffice and interagency communications;
(2) In notices, including notices to the debtor or payee that an
offset has or will occur, when the Social Security number is (or is
embedded in) a creditor agency's account number, debt identification
number, or debtor identification number;
(3) In response to a request of a debtor or a debtor's
representative for records of Fiscal Service's offset activities; and
(4) When required by law.
0
6. In Sec. 285.8, add paragraph (k) to read as follows:
Sec. 285.8 Offset of tax refund payments to collect certain debts
owed to States.
* * * * *
(k) Social Security numbers. Fiscal Service will ensure that an
individual's
[[Page 50249]]
Social Security number will not be visible on the outside of any
package it sends by mail. In addition, Fiscal Service generally will
redact or partially redact Social Security numbers in documents it
sends by mail; however, to administer the tax refund offset program,
Fiscal Service (and other disbursing officials) may include Social
Security numbers in mailed documents, including, for example:
(1) In interoffice and interagency communications;
(2) In notices, including notices to the debtor or payee that an
offset has or will occur, when the Social Security number is (or is
embedded in) a creditor agency's account number, debt identification
number, or debtor identification number;
(3) In response to a request of a debtor or a debtor's
representative for records of Fiscal Service's offset activities; and
(4) When required by law.
0
7. Section 285.12(a) is amended by:
0
a. Removing the words ``an agency'' and ``An agency'' wherever they
appear and adding in their place the words ``a Federal agency'' and ``A
Federal agency'', respectively;
0
b. Removing the words ``the agency'' and ``the agency's'' wherever they
appear and adding in their place the words ``the Federal agency'' and
``the Federal agency's'', respectively;
0
c. In paragraph (a):
0
i. Removing the definition for ``Agency'',
0
ii. Adding in alphabetical order definitions for ``Centralized
Receivables Service,'' ``Cross-Servicing program,'' and ``Days
delinquent'';
0
iii. Removing the words ``Secretary of the Treasury'' and adding in
their place the words ``Secretary'' in the definition for ``Debt
collection center'';
0
iv. Adding in alphabetical order definitions for ``Debtor,''
``Delinquent or past-due,'' ``Federal agency,'' and ``Legally
enforceable''; and
0
v. Removing the words ``a Federal agency'' and adding in their place
the words ``the United States or a Federal agency'' in the definition
for ``Person'';
0
d. Revising paragraphs (b), (c), and (d)(1)(iii);
0
e. Removing the word ``or'' at the end of paragraph (d)(1)(v);
0
f. Redesignating paragraph (d)(1)(vi) as paragraph (d)(1)(vii);
0
g. Adding a new paragraph (d)(1)(vi);
0
h. Revising paragraphs (d)(4);
0
i. Adding (d)(5) introductory text;
0
j. Removing paragraph (d)(6);
0
k. Removing and reserving paragraph (e);
0
l. In paragraph (i), removing the words ``delegatee'' and ``agency''
and adding in their place the words ``delegate'' and ``the debt'',
respectively;
0
m. Revising paragraph (j); and
0
n. Adding paragraph (k).
The revisions and additions read as follows:
Sec. 285.12 Transfer of debts to Treasury for collection.
(a) * * *
Centralized Receivables Service means the program through which
Fiscal Service provides servicing, pursuant to 31 U.S.C. 3711(g), for
Federal nontax debt from the point at which a creditor agency
establishes a debt until the debt is paid, otherwise resolved, or
referred to the Cross-Servicing program for further action.
* * * * *
Cross-Servicing program means the program through which Fiscal
Service provides delinquent nontax debt collection services pursuant to
31 U.S.C. 3711(g).
Days delinquent refers to the number of days that a debt has been
in a delinquent status. For administrative debts (e.g., debts arising
from fines, penalties, and overpayments), the first day of delinquency
generally is the date of the creditor agency's initial written demand
for payment. For debts that arise from the extension of credit through
direct loans, loan guarantees, or insurance, the date of delinquency
generally is the due date specified in the applicable agreement or
instrument.
* * * * *
Debtor means a person who owes a debt.
Delinquent or past-due refers to the status of a debt and means a
debt has not been paid by the date specified in the creditor agency's
initial written demand for payment, or other applicable agreement or
instrument, unless other payment arrangements satisfactory to the
creditor agency have been made.
Federal agency means a department, agency, court, court
administrative office, or instrumentality in the executive, judicial,
or legislative branch of the Federal Government, including government
corporations.
* * * * *
Legally enforceable refers to a characteristic of a debt and means
there has been a final agency determination that the debt, in the
amount stated, is due, and there are no legal bars to collection. A
debt would not be legally enforceable, for example, if the debt is:
(1) The subject of a pending administrative review required by a
statute or regulation that prohibits collection action during the
review process; or
(2) Governed by a statute that precludes collection.
(b) In general. Fiscal Service and other debt collection centers
may take debt collection action on behalf of one or more Federal
agencies or a unit or subagency thereof. Fiscal Service provides these
services through its Cross-Servicing program and its Centralized
Receivables Service.
* * * * *
(c) Mandatory transfer of debts to Fiscal Service's Cross-Servicing
program. (1) A debt is considered eligible for transfer to the Cross-
Servicing program only if it is past due and is legally enforceable.
(2) Except as set forth in paragraphs (c)(3) and (d) of this
section, a creditor agency must transfer any eligible debt that is over
$25 (or such other amount as Fiscal Service may determine) to the
Cross-Servicing program by no later than 120 days delinquent if the
creditor agency relies on the Cross-Servicing program to submit the
transferred debts for centralized offset on the creditor agency's
behalf or, otherwise, by no more than 180 days delinquent.
(3) If a final agency determination resulting from an
administrative appeal or review process is not made until after the
time specified in paragraph (c)(2) of this section, the creditor agency
must transfer such debt to the Cross-Servicing program within 30 days
after the date of the final decision.
(4) For accounting and reporting purposes, the debt remains on the
books and records of the Federal agency, which transferred the debt.
(5) On behalf of the creditor agency, Fiscal Service will take
appropriate action to collect or compromise the transferred debt, or to
suspend or terminate collection action thereon. Appropriate action to
collect a debt may include referral to another debt collection center,
a private collection contractor, or the Department of Justice for
litigation. The creditor agency must advise Fiscal Service, in writing,
of any specific statutory or regulatory requirements pertaining to its
debt and will agree, in writing, to a collection strategy, which
includes parameters for entering into compromise and repayments
agreements with debtors.
* * * * *
(d) * * *
(1) * * *
(iii) Is at a private collection contractor if the debt has been
referred to a private collection contractor for a period of time
determined by the Secretary;
* * * * *
(vi) Is being serviced and/or collected in accordance with
applicable statutes
[[Page 50250]]
and/or regulations by third parties, such as private lenders or
guaranty agencies; or
* * * * *
(4) A debt is being collected by internal offset if a creditor
agency expects the debt to be collected in full within three (3) years
from the date of delinquency through the withholding of funds payable
to the debtor by the creditor agency, or if the creditor agency has
issued notice to the debtor of the creditor agency's intent to offset
such funds.
(5) The Secretary may exempt classes of debt from mandatory
referral.
* * * * *
(j) Fees. Fiscal Service and other debt collection centers may
charge Federal agencies fees sufficient to cover the full cost of
providing debt collection services authorized by this section. Fiscal
Service and other debt collection centers may calculate fees in any
manner designed to cover up to the full cost of providing these
services, including based on a percentage of collections received on
account of a debt while it was being serviced under this section or a
flat fee based on actions taken under this section by Fiscal Service or
another debt collection center with regard to a debt or group of debts.
Such fees may be determined based on overall program costs and need not
be based on costs related to the collection of a specific debt. Fiscal
Service and debt collection centers are authorized to retain fees from
amounts collected and may deposit and use such fees in accordance with
31 U.S.C. 3711(g). Fees charged by Fiscal Service and other debt
collection centers may be added to the debt as an administrative cost
if authorized under 31 U.S.C. 3717(e).
(k) Social Security numbers. When conducting activities for or
related to its Centralized Receivables Service or Cross-Servicing
program, Fiscal Service will ensure that an individual's Social
Security number will not be visible on the outside of any package it
sends by physical mail or in the subject line of an email. In addition,
Fiscal Service generally will redact or partially redact Social
Security numbers in documents it sends by mail; however, to administer
these programs, Fiscal Service may include Social Security numbers in
mailed documents, including, for example:
(1) In interoffice and interagency communications;
(2) In communications with private collection contractor and agents
that assist Fiscal Service in its debt collection activities;
(3) In notices and letters, including demand letters and notices to
employers regarding wage garnishment, when the Social Security number
is (or is embedded in) a creditor agency's account number, debt
identification number, or debtor identification number;
(4) In notices to employers regarding wage garnishment;
(5) In response to a request of a debtor or a debtor's
representative for records of Fiscal Service's collection activities;
and
(6) When required by law.
David A. Lebryk,
Fiscal Assistant Secretary.
[FR Doc. 2022-17117 Filed 8-15-22; 8:45 am]
BILLING CODE 4810-AS-P
