81 FR 1318 - Debt Collection Authorities Under the Debt Collection Improvement Act of 1996

DEPARTMENT OF THE TREASURY
Fiscal Service

Federal Register Volume 81, Issue 7 (January 12, 2016)

The Department of the Treasury, Bureau of the Fiscal Service, is amending its regulations concerning the offset of Federal benefit payments to collect past-due, legally enforceable nontax debt, centralized offset of Federal payments to collect nontax debts owed to the United States, salary offset, and transfer of debts to Treasury for collection. The amendment adjusts the time period in which Federal agencies must notify the Secretary of the Treasury of past due, nontax debt for the purposes of administrative offset. A statutory change, enacted as part of the Digital Accountability and Transparency Act of 2014, shortened the period of delinquency within which Federal agencies are required to notify the Secretary of past due, nontax debt from 180 days to 120 days.

[Federal Register Volume 81, Number 7 (Tuesday, January 12, 2016)]
[Rules and Regulations]
[Pages 1318-1320]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-33044]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 285

RIN 1530-AA12


Debt Collection Authorities Under the Debt Collection Improvement 
Act of 1996

AGENCY: Bureau of the Fiscal Service, Treasury.

ACTION: Final rule.

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SUMMARY: The Department of the Treasury, Bureau of the Fiscal Service, 
is amending its regulations concerning the offset of Federal benefit 
payments to collect past-due, legally enforceable nontax debt, 
centralized offset of Federal payments to collect nontax debts owed to 
the United States, salary offset, and transfer of debts to Treasury for 
collection. The amendment adjusts the time period in which Federal 
agencies must notify the Secretary of the Treasury of past due, nontax 
debt for the purposes of administrative offset. A statutory change, 
enacted as part of the Digital Accountability and Transparency Act of 
2014, shortened the period of delinquency within which Federal agencies 
are required to notify the Secretary of past due, nontax debt from 180 
days to 120 days.

DATES: This rule is effective January 12, 2016.

[[Page 1319]]


ADDRESSES: Bureau of the Fiscal Service, 401 14th Street SW., 
Washington, DC 20227.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 5 of the Digital Accountability and Transparency Act of 
2014, Public Law 113-101, amended a provision of the Debt Collection 
Improvement Act of 1996, codified at 31 U.S.C. 3716(c)(6), to change 
the time by which Federal agencies must notify the Secretary of the 
Treasury of past due, nontax debts for the purposes of administrative 
offset. The amendment changes the notice requirement from 180 days 
delinquent to 120 days delinquent.
    The changes to this rule conform to the statutory language by 
removing references to 180 days in the sections relating to: Offset of 
Federal benefit payments to collect past-due, legally enforceable 
nontax debt; centralized offset of Federal payments to collect nontax 
debts owed to the United States; salary offset; and the transfer of 
debts to Treasury for collection. In each instance, ``180 days'' is 
replaced with ``120 days.'' In addition, the rule makes revisions to 
address agencies that transfer debts to Fiscal Service for debt 
collection services and on behalf of which Fiscal Service submits debt 
for administrative offset. Federal agencies that are owed debt must 
transfer any debt that is more than 180 days delinquent to Fiscal 
Service for debt collection services. Administrative offset is one of 
the collection tools used by Fiscal Service to collect debt. Therefore, 
agencies transferring debts to Fiscal Service for debt collection are 
able to satisfy the notification requirement for administrative offset 
and the requirement to transfer delinquent debts with a single 
referral. Because the notice requirement for administrative offset is 
now 120 days and not 180 days, agencies relying on Fiscal Service to 
submit debts for administrative offset on their behalf must transfer 
the debts no later than 120 days after they become delinquent in order 
to meet the notification requirement for administrative offset. 
Agencies that do not rely on Fiscal Service to submit their debts for 
administrative offset must still transfer their debts no later than 180 
days after they become delinquent.

II. Procedural Analyses

Administrative Procedures Act

    This rule is being issued without prior public notice and comment 
because the changes to the rule are being made to conform to statutory 
requirements. Under 5 U.S.C. 553(b) and (d)(3), good cause exists to 
determine that notice and comment rulemaking is unnecessary and 
contrary to the public interest. The amendments made by this rule 
merely mirror amendments already enacted into law. Further delay in 
making these amendments would create an inconsistency between the law 
and the regulations and would cause confusion.

Regulatory Planning and Review

    The final rule does not meet the criteria for a ``significant 
regulatory action'' as defined in Executive Order 12866. Therefore, the 
regulatory review procedures contained therein do not apply.

Regulatory Flexibility Act Analysis

    Because no notice of rulemaking is required, the provisions of the 
Regulatory Flexibility Act (5 U.S.C. et seq.) do not apply.

List of Subjects in 31 CFR Part 285

    Administrative practice and procedure, Child support, Child 
welfare, Claims, Credits, Debts, Disability benefits, Federal 
employees, Garnishment of wages, Hearing and appeal procedures, Loan 
programs, Privacy, Railroad retirement, Railroad unemployment 
insurance, Salaries, Social Security benefits, Supplemental Security 
Income (SSI), Taxes, Veterans' benefits, Wages.

    For the reasons set forth in the preamble, we are amending 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.

Sec.  285.4  [Amended]

0
2. In Sec.  285.4, in paragraph (d), remove ``180'' and add in its 
place ``120'' each place it appears.


Sec.  285.5  [Amended]

0
3. In Sec.  285.5, in paragraphs (d)(1) and (2) and two occurences in 
paragraph (d)(3)(iv), remove ``180'' and add in its place ``120''.


Sec.  285.7  [Amended]

0
4. In Sec.  285.7, in paragraph (d)(1), remove ``180'' and add in its 
place ``120''.

0
5. In Sec.  285.12, revise paragraphs (c)(1), (c)(3)(i), and (g) to 
read as follows:


Sec.  285.12  Governing transfer of debts to Treasury for collection.

* * * * *
    (c) * * *
    (1) Except as set forth in paragraph (d) of this section, a 
creditor agency shall transfer any debt that is more than 180 days 
delinquent to Fiscal Service for debt collection services. Agencies 
that transfer delinquent debts to Fiscal Service for the purposes of 
debt collection and that rely on Fiscal Service to submit the 
transferred debts for administrative offset on the agency's behalf must 
transfer the debts to Fiscal Service no later than 120 days after the 
debts become delinquent in order to satisfy the 120-day notice 
requirement for purposes of administrative offset. For accounting and 
reporting purposes, the debt remains on the books and records of the 
agency which transferred the debt.
* * * * *
    (3)(i) A debt is considered delinquent for purposes of this section 
if it is past due and is legally enforceable. A debt is past-due if it 
has not been paid by the date specified in the agency's initial written 
demand for payment or applicable agreement or instrument (including a 
post-delinquency payment agreement) unless other satisfactory payment 
arrangements have been made. A debt is legally enforceable if there has 
been a final agency determination that the debt, in the amount stated, 
is due and there are no legal bars to collection action. Where, for 
example, a debt is the subject of a pending administrative review 
process required by statute or regulation and collection action during 
the review process is prohibited, the debt is not considered legally 
enforceable for purposes of mandatory transfer to Fiscal Service and is 
not to be transferred even if the debt is more than 180 days past-due.
* * * * *
    (g) Administrative offset. As described in paragraph (c) of this 
section, under the DCIA, agencies are required to transfer all debts 
over 180 days delinquent to Fiscal Service for purposes of debt 
collection (i.e., cross-servicing). Agencies are also required, under 
the DCIA, to notify the Secretary of all debts over 120 days delinquent 
for purposes of administrative offset. Administrative offset is one 
type of collection tool used by Fiscal Service

[[Page 1320]]

and Treasury-designated debt collection centers to collect debts 
transferred under this section. Thus, by transferring debt to Fiscal 
Service or to a Treasury-designated debt collection center under this 
section, Federal agencies will satisfy the requirement to notify the 
Secretary of debts for purposes of administrative offset and duplicate 
referrals are not required. Agencies relying on Fiscal Service to 
submit debts for administrative offset on the agency's behalf must 
transfer the debts to Fiscal Service no later than 120 days after the 
debts become delinquent in order to satisfy the 120-day notice 
requirement for purposes of administrative offset. A debt which is not 
transferred to Fiscal Service for purposes of debt collection, however, 
such as a debt which falls within one of the exempt categories listed 
in paragraph (d) of this section, nevertheless may be subject to the 
DCIA requirement of notification to the Secretary for purposes of 
administrative offset.
* * * * *

David A. Lebryk,
Fiscal Assistant Secretary.
[FR Doc. 2015-33044 Filed 1-11-16; 8:45 am]
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