81 FR 43942 - Department of Justice Debt Collection Regulations

DEPARTMENT OF JUSTICE
Office of the Attorney General

Federal Register Volume 81, Issue 129 (July 6, 2016)

Page Range		43942-43947
FR Document		2016-15511
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.
Federal Register, Volume 81 Issue 129 (Wednesday, July 6, 2016)
[Federal Register Volume 81, Number 129 (Wednesday, July 6, 2016)]
[Rules and Regulations]
[Pages 43942-43947]
From the Federal Register Online  [www.thefederalregister.org]
[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
43942 Federal Register / Vol. 81, No. 129 / Wednesday, July 6, 2016 / Rules and Regulations

Small Business Regulatory Enforcement Commission has determined that PART 575—CIVIL FINES
Fairness Act consultations with Indian gaming tribes
is not practicable, as Congress has ■ 1. The authority citation for part 575
This interim final rule is not a major
mandated that the civil penalty is revised to read as follows:
rule under 5 U.S.C. 804(2), the Small
Business Regulatory Enforcement adjustments in the Act be implemented Authority: 25 U.S.C. 2705(a), 2706, 2713,
Fairness Act. It will not result in the no later than August 1, 2016. 2715; and Sec. 701, Pub. L. 114–74, 129 Stat.
expenditure by state, local, or tribal 599.
Paperwork Reduction Act
governments, in the aggregate, or by the ■ 2. Amend the introductory text of
private sector of $100 million or more This interim final rule does not affect § 575.4 by removing ‘‘$25,000’’ and
in any one year. The rule will not result any information collections under the adding in its place ‘‘$49,467’’.
in a major increase in costs or prices for Paperwork Reduction Act.
Dated: June 28, 2016.
consumers, individual industries, National Environmental Policy Act Jonodev O. Chaudhuri,
federal, state, or local government
This interim final rule does not Chairman,
agencies, or geographic regions. Nor will
this rule have significant adverse effects constitute a major federal action Kathryn Isom-Clause,
on competition, employment, significantly affecting the quality of the Vice Chairwoman,
investment, productivity, innovation, or human environment. E. Sequoyah Simermeyer,
the ability of the U.S.-based enterprises Information Quality Act Associate Commissioner.
to compete with foreign-based
[FR Doc. 2016–16009 Filed 7–5–16; 8:45 am]
enterprises. In developing this interim final rule,
BILLING CODE 7565–01–P
the Commission did not conduct or use
Unfunded Mandates Reform Act
a study, experiment, or survey requiring
This interim final rule does not peer review under the Information
impose an unfunded mandate of more Quality Act (Pub. L. 106–554). DEPARTMENT OF JUSTICE
than $100 million per year on state,
local, or tribal governments or the Effects on the Energy Supply Office of the Attorney General
private sector. The rule also does not This interim final rule is not a
have a significant or unique effect on 28 CFR Part 11
significant energy action under the
state, local, or tribal governments or the definition in Executive Order 13211. A [JMD Docket No. 152; A.G. Order No. 3689–
private sector. Therefore, a statement Statement of Energy Effects is not 2016]
containing the information required by required. RIN 1105–AB44
the Unfunded Mandates Reform Act (2
U.S.C. 1531 et seq.) is not required. Clarity of this Regulation
Department of Justice Debt Collection
Takings The Commission is required by Regulations
Executive Orders 12866 and 12988 and
Under the criteria in Executive Order AGENCY: Department of Justice.
by the Presidential Memorandum of
12630, this interim final rule does not June 1, 1998, to write all rules in plain ACTION: Final rule.
affect individual property rights language. This means that each rule that
protected by the Fifth Amendment nor SUMMARY: This rule amends the
the Commission publishes must: regulations that govern debt collection
does it involve a compensable ‘‘taking.’’
Thus, a takings implication assessment (a) Be logically organized; at the Department of Justice
is not required. (b) use the active voice to address (Department) to bring the regulations
readers directly; into conformity with government-wide
Federalism (c) use clear language rather than standards, to update or delete obsolete
Under the criteria in Executive Order jargon; references, and to make other clarifying
13132, this interim final rule has no (d) be divided into short sections and or technical changes.
substantial direct effect on the states, on sentences; and DATES: Effective August 5, 2016.
the relationship between the national (e) use lists and tables wherever FOR FURTHER INFORMATION CONTACT:
government and the states, or on the possible. Dennis Dauphin, Director, Debt
distribution of power and Collection Management Staff, or Morton
responsibilities among the various Required Determinations Under the J. Posner, Assistant General Counsel,
levels of government. Administrative Procedure Act Justice Management Division, U.S.
Civil Justice Reform The Federal Civil Penalties Inflation Department of Justice, Washington, DC
Adjustment Act Improvements Act of 20530, (202) 514–5343 or (202) 514–
This interim final rule complies with
2015 requires agencies to adjust 3452.
the requirements of Executive Order
12988. Specifically, this rule has been penalties for the catch-up adjustment SUPPLEMENTARY INFORMATION:
reviewed to eliminate errors and through an interim final rulemaking. On February 18, 2015, the Department
ambiguity and written to minimize Therefore, the Commission is not published a proposed rule to revise its
litigation. It is written in clear language required to complete a notice and existing debt collection regulations. See
and contains clear legal standards. comment process prior to promulgation. 80 FR 8580–01. Following a public
List of Subjects in 25 CFR Part 575 comment period, the Department
Consultation with Indian Tribes received two comments. One
ehiers on DSK5VPTVN1PROD with RULES

In accordance with the President’s Administrative practice and commenter generally endorsed the
memorandum of April 29, 1994, procedure, Gaming, Indian lands, rulemaking proposal. Another
Government-to-Government Relations Penalties. commenter recommended editorial
with Native American Tribal For the reasons set forth in the revisions to clarify the proposed rule
Governments, Executive Order 13175 preamble, the Commission amends 25 without making substantive changes.
(59 FR 22951, November 6, 2000), the CFR part 575 as follows: After due consideration, the Department

VerDate Sep<11>2014 12:09 Jul 05, 2016 Jkt 238001 PO 00000 Frm 00016 Fmt 4700 Sfmt 4700 E:\FR\FM\06JYR1.SGM 06JYR1
Federal Register / Vol. 81, No. 129 / Wednesday, July 6, 2016 / Rules and Regulations 43943

adopts several of that commenter’s Executive Orders 12866 and 13563— of the Unfunded Mandates Reform Act
suggestions. Regulatory Review of 1995.
The Department also makes other This regulation has been drafted and Small Business Regulatory Enforcement
clarifying changes to the proposed rule. reviewed in accordance with Executive Fairness Act of 1996
In § 11.11(a), the definition of ‘‘debt’’ Order 12866, ‘‘Regulatory Planning and
This rule is not a major rule as
will clarify that it is an amount Review,’’ section 1(b), Principles of
defined by section 251 of the Small
determined to be owed to the United Regulation, and in accordance with
Business Regulatory Enforcement
States by an appropriate official of the Executive Order 13563, ‘‘Improving
Fairness Act of 1996, 5 U.S.C. 804. This
Federal Government ‘‘or by a court of Regulation and Regulatory Review,’’
rule will not result in an annual effect
competent jurisdiction,’’ and that it section 1(b), General Principles of
on the economy of $100,000,000 or
includes ‘‘any amounts owed to the Regulation.
more; a major increase in costs or prices;
United States for the benefit of a third The Department of Justice has
or significant adverse effects on
party.’’ In § 11.11(e), the definition of determined that this rule is not a
competition, employment, investment,
‘‘legally enforceable’’ will clarify that ‘‘significant regulatory action’’ under
productivity, innovation, or on the
there has been a final agency ‘‘or court’’ Executive Order 12866, section 3(f),
ability of United States-based
determination that a debt is due and Regulatory Planning and Review, and
enterprises to compete with foreign-
accordingly this rule has not been
collectible by offset. Section 11.21(a) based enterprises in domestic and
reviewed by the Office of Management
will refer to administrative wage export markets.
and Budget.
garnishment as a tool to collect Paperwork Reduction Act
Further, both Executive Orders 12866
delinquent nontax debt owed to the and 13563 direct agencies to assess all
United States ‘‘through operation of This rule imposes no information
costs and benefits of available regulatory collection or record keeping
Department programs.’’ Similarly, the alternatives and, if regulation is
definition of ‘‘agency’’ in § 11.21(c) will requirements.
necessary, to select regulatory
refer specifically to the Department. The approaches that maximize net benefits List of Subjects in 28 CFR Part 11
headings of § 11.21(f)(3) and (f)(4) are (including potential economic, Administrative practice and
also revised for clarity. environmental, public health and safety procedure, Claims, Debt collection,
Regulatory Flexibility Act effects, distributive impacts, and Government contracts, Government
equity). Executive Order 13563 employees, Income taxes, Lawyers,
The Attorney General, in accordance emphasizes the importance of Wages.
with the Regulatory Flexibility Act (5 quantifying both costs and benefits, of Accordingly, by virtue of the
U.S.C. 605(b)), has reviewed this reducing costs, of harmonizing rules, authority vested in me as Attorney
regulation and by approving it certifies and of promoting flexibility. The General, including 5 U.S.C. 301 and 28
that this regulation will not have a Department has assessed the costs and U.S.C. 509 and 510, part 11 of title 28
significant economic impact on a benefits of this regulation and believes of the Code of Federal Regulations is
substantial number of small entities. that the regulatory approach selected amended as follows:
The Department proposes to collect maximizes net benefits.
delinquent nontax debt owed it through PART 11—DEBT COLLECTION
Executive Order 12988—Civil Justice
an administrative wage garnishment Reform ■ 1. The authority citation for part 11 is
(AWG) process. When an AWG order is This regulation meets the applicable revised to read as follows:
issued, employers (including small standards set forth in sections 3(a) and Authority: 5 U.S.C. 301, 5514; 28 U.S.C.
businesses) that employ workers from 3(b)(2) of Executive Order 12988. 509, 510; 31 U.S.C. 3711, 3716, 3718, 3720A,
whom the Department is collecting a 3720D.
delinquent debt will be required to Executive Order 13132—Federalism
certify the employee’s employment and This regulation will not have Subpart A—Retention of Private
earnings, garnish wages, and remit substantial direct effects on the States, Counsel for Debt Collection
withheld wages to the Department. Such on the relationship between the national
§ 11.1 [Amended]
procedures are mandated by Department government and the States, or on the
of the Treasury regulations issued to distribution of power and ■ 2. Amend § 11.1 as follows:
implement the Debt Collection responsibilities among the various ■ a. Remove the word ‘‘pilot’’ from the
Improvement Act. Employment and levels of government. Therefore, in first sentence; and
salary information is contained in an accordance with Executive Order 13132, ■ b. Remove the word ‘‘Adminstration’’
employer’s payroll records. Therefore, it it is determined that this rule does not and add in its place the word
will not take a significant amount of have sufficient federalism implications ‘‘Administration’’.
to warrant the preparation of a ■ 3. Amend § 11.2 as follows:
time or result in a significant cost for an
Federalism Assessment. ■ a. Revise the section heading;
employer to certify employment and
■ b. In the first two sentences, remove
earnings. Employers of delinquent Unfunded Mandates Reform Act of the word ‘‘pilot’’;
debtors may be subject at any time to 1995 ■ c. In the third sentence, remove the
garnishment orders issued by a court to
This rule will not result in the words ‘‘Contracting Officer’s Technical
collect delinquent debts of their expenditure by State, local and tribal Representative (COTR)’’ and add in
ehiers on DSK5VPTVN1PROD with RULES

employees owed to governmental or governments, in the aggregate, or by the their place the words ‘‘Contracting
private creditors. The addition of an private sector, of $100,000,000 or more Officer’s Representative (COR)’’; and
AWG process will not significantly in any one year, and it will not ■ d. In the fourth sentence, remove the
increase the burden to which employers significantly or uniquely affect small term ‘‘COTRs’’ and add in its place the
are already subject to collect the governments. Therefore, no actions were term ‘‘CORs’’.
delinquent debt of their employees. deemed necessary under the provisions The revision reads as follows:

VerDate Sep<11>2014 12:09 Jul 05, 2016 Jkt 238001 PO 00000 Frm 00017 Fmt 4700 Sfmt 4700 E:\FR\FM\06JYR1.SGM 06JYR1
Federal Register / Vol. 81, No. 129 / Wednesday, July 6, 2016 / Rules and Regulations 43947

withholding order issued under this the current amount of garnishment Dated: June 24, 2016.
section shall be the lesser of: results in a financial hardship to the Loretta E. Lynch,
(A) The amount calculated under debtor, along with supporting Attorney General.
paragraph (i)(2) of this section, or documentation. The agency shall [FR Doc. 2016–15511 Filed 7–5–16; 8:45 am]
(B) An amount equal to 25% of the consider any information submitted in BILLING CODE 4410–AR–P
debtor’s disposable pay less the accordance with procedures and
amount(s) withheld under the standards established by the agency.
withholding order(s) with priority.
(iii) If a debtor owes more than one (3) If the agency finds financial DEPARTMENT OF HOMELAND
debt to the agency, the agency may issue hardship, it shall downwardly adjust, by SECURITY
multiple withholding orders if the total an amount and for a period of time
agreeable to the agency, the amount Coast Guard
amount garnished from the debtor’s pay
for such orders does not exceed the garnished to reflect the debtor’s
financial condition. The agency will 33 CFR Parts 100, 117, 147, and 165
amount set forth in paragraph (i)(2) of
this section. notify the employer of any adjustments [USCG–2016–0537]
(4) An amount greater than that set to the amounts to be withheld.
forth in paragraphs (i)(2) and (3) of this (l) Ending garnishment. (1) Once the Quarterly Listings; Safety Zones,
section may be withheld upon the agency has fully recovered the amounts Security Zones, Special Local
written consent of the debtor. owed by the debtor, including interest, Regulations, Drawbridge Operation
(5) The employer shall promptly pay penalties, and administrative costs Regulations and Regulated Navigation
to the agency all amounts withheld consistent with the FCCS, the agency Areas
under the withholding order issued shall send the debtor’s employer AGENCY: Coast Guard, DHS.
pursuant to this section. notification to discontinue wage ACTION: Notice of expired temporary
(6) An employer shall not be required withholding. rules issued.
to vary its normal pay and disbursement (2) At least annually, an agency shall
cycles in order to comply with the review its debtors’ accounts to ensure SUMMARY: This document provides
withholding order. that accounts that have been paid in full notice of substantive rules issued by the
(7) Any assignment or allotment by an Coast Guard that were made temporarily
are no longer subject to garnishment.
employee of the employee’s earnings effective but expired before they could
shall be void to the extent it interferes (m) Actions prohibited by the
be published in the Federal Register.
with or prohibits execution of the employer. An employer may not
This notice lists temporary safety zones,
withholding order issued under this discharge, refuse to employ, or take
security zones, special local regulations,
section, except for any assignment or disciplinary action against the debtor
drawbridge operation regulations and
allotment made pursuant to a family due to the issuance of a withholding
regulated navigation areas, all of limited
support judgment or order. order under this section.
duration and for which timely
(8) The employer shall withhold the (n) Refunds. (1) If a hearing official, at publication in the Federal Register was
appropriate amount from the debtor’s a hearing held pursuant to paragraph not possible.
wages for each pay period until the (f)(2) of this section, determines that a DATES: This document lists temporary
employer receives notification from the debt is not legally due and owing to the Coast Guard rules that became effective,
agency to discontinue wage United States, the agency shall promptly primarily between July 2013 and
withholding. The garnishment order refund any amount collected by means December 2015, and were terminated
shall indicate a reasonable period of of administrative wage garnishment. before they could be published in the
time within which the employer is Federal Register.
(2) Unless required by Federal law or
required to commence wage
contract, refunds under this section ADDRESSES: Temporary rules listed in
withholding.
shall not bear interest. this document may be viewed online,
(j) Exclusions from garnishment. The
agency may not garnish the wages of a (o) Right of action. The agency may under their respective docket numbers,
debtor who it knows has been sue any employer for any amount that using the Federal eRulemaking Portal at
involuntarily separated from the employer fails to withhold from http://www.regulations.gov.
employment until the debtor has been wages owed and payable to an employee FOR FURTHER INFORMATION CONTACT: For
reemployed continuously for at least 12 in accordance with paragraphs (g) and questions on this notice contact Yeoman
months. To qualify for this exclusion, (i) of this section. However, a suit may First Class Maria Fiorella Villanueva,
upon the request of the agency, the not be filed before the termination of the Office of Regulations and
debtor must inform the agency of the collection action involving a particular Administrative Law, telephone (202)
circumstances surrounding an debtor, unless earlier filing is necessary 372–3862.
involuntary separation from to avoid expiration of any applicable SUPPLEMENTARY INFORMATION: Coast
employment. statute of limitations period. For Guard District Commanders and
(k) Financial hardship. (1) A debtor purposes of this section, ‘‘termination of Captains of the Port (COTP) must be
whose wages are subject to a wage the collection action’’ occurs when the immediately responsive to the safety
withholding order under this section, agency has terminated collection action and security needs within their
may, at any time, request a review by in accordance with the FCCS or other jurisdiction; therefore, District
the agency of the amount garnished, applicable standards. In any event, Commanders and COTPs have been
based on materially changed termination of the collection action will delegated the authority to issue certain
ehiers on DSK5VPTVN1PROD with RULES

circumstances such as disability, be deemed to have occurred if the local regulations. Safety zones may be
divorce, or catastrophic illness that agency has not received any payments established for safety or environmental
result in financial hardship. to satisfy the debt from the particular purposes. A safety zone may be
(2) A debtor requesting a review debtor whose wages were subject to stationary and described by fixed limits
under paragraph (k)(1) of this section garnishment, in whole or in part, for a or it may be described as a zone around
shall submit the basis for claiming that period of 1 year. a vessel in motion. Security zones limit

VerDate Sep<11>2014 12:09 Jul 05, 2016 Jkt 238001 PO 00000 Frm 00021 Fmt 4700 Sfmt 4700 E:\FR\FM\06JYR1.SGM 06JYR1
Document Created: 2016-07-06 07:56:08
Document Modified: 2016-07-06 07:56:08
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		Effective August 5, 2016.
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.
FR Citation		81 FR 43942
RIN Number		1105-AB44
CFR Associated		Administrative Practice and Procedure; Claims; Debt Collection; Government Contracts; Government Employees; Income Taxes; Lawyers and Wages
81 FR 43942 - Department of Justice Debt Collection Regulations

DEPARTMENT OF JUSTICEOffice of the Attorney General

Federal Register Volume 81, Issue 129 (July 6, 2016)

DEPARTMENT OF JUSTICE
Office of the Attorney General
