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23 February 2008
[Federal Register: February 22, 2008 (Volume 73, Number 36)]
[Proposed Rules]
[Page 9709-9714]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22fe08-15]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
[[Page 9709]]
PEACE CORPS
22 CFR Part 309
RIN 0420-AA22
Debt Collection
AGENCY: Peace Corps.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Peace Corps is revising its current regulations on debt
collection. The revisions will clarify and simplify Peace Corps' debt
collection procedures and practices. It eliminates the tax refund
offset provisions of the previous regulation, and consolidates the
administrative and tax refund offset provisions into one section.
DATES: Comments must be received by March 24, 2008.
ADDRESSES: Comments should be submitted to Tyler Posey, General
Counsel, Office of the General Counsel, 8th Floor, 1111 20th Street,
NW., Washington, DC 20526.
FOR FURTHER INFORMATION CONTACT: Suzanne B. Glasow, Associate General
Counsel, 202-692-2157.
SUPPLEMENTARY INFORMATION:
Section-by-Section Analysis
Subpart A--General Provisions
The subpart announces the general purpose and scope of the
regulation, provides definitions and terms used in this regulation, and
this regulation's interaction with other regulations and procedures.
Charges for interest, penalties and administrative expenses are
addressed. Procedures for installment payments are provided. Authority
to carry out the necessary duties for debt collection is delegated to
the Chief Financial Officer.
Subpart B--Collection Actions
The subpart provides for aggressive collection efforts by the Peace
Corps, and the timely turnover of past due collections to the
Department of the Treasury. Procedures for written demand of payment
and debtor review of the debt are provided. Methods of debt collection
are listed.
Subpart C--Salary Offset
The subpart provides for salary offset collection procedures.
Coordination of salary offset of another Federal Agency is addressed.
Notice requirements prior to salary offset are listed. Outside hearings
prior to salary offset is addressed.
Executive Order 12866
This regulation has been determined to be non-significant within
the meaning of Executive Order 12866.
Regulatory Flexibility Act
The Peace Corps Director, in accordance with the Regulatory
Flexibility Act, (5 U.S.C. 605) 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. This
regulation pertains to the administrative collection of individual
debts owed to the Peace Corps, and does not affect acquisition, inter-
Agency, or foreign claims.
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.
List of Subjects in 22 CFR Part 303
Claims.
For the reasons stated in the preamble, Peace Corps proposes to
revise 22 CFR part 303, as set forth below:
PART 309--DEBT COLLECTION
Section Contents
Subpart A--General Provisions
Sec.
309.1 General purpose.
309.2 Scope.
309.3 Definitions.
309.4 Other procedures or actions.
309.5 Interest, penalties, and administrative costs.
309.6 Collection in installments.
309.7 Designation.
Subpart B--Collection Actions
309.8 Application.
309.9 Notice--written demand for payment.
309.10 Review requirements.
309.11 Collection.
Subpart C--Salary Offset
309.12 Purpose.
309.13 Scope.
309.14 Coordinating offset with another Federal agency.
309.15 Notice requirements before offset.
309.16 Review.
309.17 Procedures for salary offset.
309.18 Voluntary repayment agreements as an alternative to salary
offset.
309.19 Waiver.
309.20 Compromise.
309.21 Suspension of collection.
309.22 Termination of collection.
309.23 Discharge.
309.24 Bankruptcy.
Authority: 31 U.S.C. 3701-3719; 5 U.S.C. 5514; 22 U.S.C.
2503(b); 31 U.S.C. 3720A; 31 CFR part 285; 5 CFR 550, subpart K.
Subpart A--General Provisions
Sec. 309.1 General purpose.
This part prescribes the procedures to be used by the United States
Peace Corps (Peace Corps) in the collection and/or disposal of non-tax
debts owed to Peace Corps and to the United States.
Sec. 309.2 Scope.
(a) Applicability of Federal Claims Collection Standards (FCCS).
Peace Corps hereby adopts the provisions of the Federal Claims
Collections Standards (31 CFR parts 900-904) and, except as set forth
in this part or otherwise provided by law, Peace Corps will conduct
administrative actions to collect claims (including offset, compromise,
suspension, termination, disclosure and referral) in accordance with
the FCCS.
(b) This part is not applicable to:
(1) Peace Corps claims against another Federal agency, any foreign
country or any political subdivision thereof, or any public
international organization.
(2) Debts arising out of acquisitions contracts subject to the
Federal Acquisition Regulation (FAR) shall be determined, collected,
compromised, terminated, or settled in accordance with those
regulations (see 49 CFR part 32).
(3) Claims where the Peace Corps Director (or designee) determines
that the achievement of the purposes of the Peace Corps Act, as
amended, 22 U.S.C. 2501 et seq., or any other provision of
[[Page 9710]]
law administered by the Peace Corps require a different course of
action.
Sec. 309.3 Definitions.
As used in this part (except where the context clearly indicates,
or where the term is otherwise defined elsewhere in this part) the
following definitions shall apply:
(a) Administrative offset means withholding funds payable by the
United States to, or held by the United States for, a person to satisfy
a debt owed by the person to the United States.
(b) Administrative wage garnishment means the process by which a
Federal agency orders a non-Federal employer to withhold amounts from
an employee's wages to satisfy a debt the employee owes to the United
States.
(c) Compromise means that the creditor agency accepts less than the
full amount of an outstanding debt in full satisfaction of the entire
amount of the debt.
(d) Debt or claim means an amount of money which has been
determined by an appropriate agency official to be owed to the United
States from any person. As used in this part, the terms debt and claim
are synonymous.
(e) Debtor means a person who owes the Federal Government money.
(f) Delinquent debt means any debt, which has not been paid by the
date specified in an agency's initial written notification or in an
applicable agreement, unless other satisfactory payment arrangements
have been made.
(g) Discharge means the release of a debtor from personal liability
for a debt. Further collection action is prohibited.
(h) Disposable pay has the same meaning as that term is defined in
5 CFR 550.1103.
(i) Employee means a current employee of the Peace Corps or other
Federal agency, including a member of the Armed Forces or Reserve of
the Armed Forces of the United States.
(j) FCCS means the Federal Claims Collection Standards jointly
published by the Department of the Treasury and the Department of
Justice at 31 CFR parts 900-904.
(k) Person means an individual, corporation, partnership,
association, organization, State or local government, or any other type
of entity other than a Federal agency, foreign government, or public
international organization.
(l) Salary offset means the withholding of amounts from the current
pay account of a Federal employee to satisfy a debt owed by that
employee to the United States.
(m) Suspension means the temporary cessation of an active debt
collection pending the occurrence of an anticipated event.
(n) Termination means the cessation of all active debt collection
action for the foreseeable future.
(o) Waiver means the decision to forgo collection of a debt owed to
the United States as permitted or required by law.
Sec. 309.4 Other procedures or actions.
(a) Nothing contained in this regulation is intended to require
Peace Corps to duplicate administrative proceedings required by
contract or other laws or regulations.
(b) Nothing in this regulation is intended to preclude utilization
of informal administrative actions or remedies which may be available.
(c) Nothing contained in this regulation is intended to deter Peace
Corps from demanding the return of specific property or from demanding
the return of the property or the payment of its value.
(d) The failure of Peace Corps to comply with any provision in this
regulation shall not serve as a defense to the debt.
Sec. 309.5 Interest, penalties, and administrative costs.
(a) Except as otherwise provided by statute, contract or excluded
in accordance with FCCS, Peace Corps will assess:
(b) Interest on unpaid debts in accordance with 31 CFR 901.9.
(c) Penalty charges at a rate of 6 percent a year or such other
rate as authorized by law on any portion of a claim that is delinquent
for more than 90 days.
(d) Administrative charges to cover the costs of processing and
handling delinquent debts.
(e) Late payment charges shall be computed from the date of mailing
or hand delivery of the notice of the claim and interest requirements.
(f) When a debt is paid in partial or installment payments, amounts
received shall be applied first to outstanding penalty and
administrative cost charges, second to accrued interest, and then to
outstanding principal.
(g) Waiver. Peace Corps will consider waiver of interest, penalties
and/or administrative costs in accordance with the FCCS, 31 CFR
901.9(g).
Sec. 309.6 Collection in installments.
Whenever feasible, and except as required otherwise by law, debts
owed to the United States, together with interest, penalties, and
administrative costs as required by this regulation, should be
collected in one lump sum. This is true whether the debt is being
collected under administrative offset, including salary offset, or by
another method, including voluntary payment. However, if the debtor is
financially unable to pay the indebtedness in one lump sum, payment may
be accepted in regular installments. If Peace Corps agrees to accept
payment in installment, it may require a legally enforceable written
agreement from the debtor that specifies all of the terms of the
arrangement and which contains a provision accelerating the debt in the
event the debtor defaults. The size and frequency of the payments
should bear a reasonable relation to the size of the debt and ability
of the debtor to pay. If possible, the installment payments should be
sufficient in size and frequency to liquidate the Government's claim
within three years.
Sec. 309.7 Designation.
The Chief Financial Officer is delegated authority and designated
to perform all the duties for which the Director is responsible under
the forgoing statutes and joint regulations.
SUBPART B--COLLECTION ACTIONS
Sec. 309.8 Application.
(a) Peace Corps shall aggressively collect claims and debts in
accordance with these regulations and applicable law.
(b) Peace Corps will transfer to the Department of the Treasury,
Financial Management Service (FMS) any past due, legally enforceable
non-tax debt that has been delinquent for 180 days or more so that FMS
may take appropriate action to collect the debt or take other
appropriate action in accordance with applicable law and regulation.
(c) Peace Corps may transfer any past due, legally enforceable debt
that has been delinquent for fewer than 180 days to FMS for collection
in accordance with applicable law and regulation. (See 31 CFR part 285)
Sec. 309.9 Notice--written demand for payment.
(a) Upon determination that a debt is owed to Peace Corps or the
United States, Peace Corps shall promptly hand deliver or send by
first-class mail (to the debtor's most current address in the records
of Peace Corps) at least one written notice (e.g., Bill of Collection
or demand letter) informing the debtor of the consequences of failing
to pay or otherwise resolve a Peace Corps debt, subject to paragraph
(c) of this section. Written demand under this subpart may be preceded
by other appropriate actions under this part and or the FCCS, including
but not limited to actions taken under the procedures applicable to
administrative offset, including salary offset.
[[Page 9711]]
(b) The written notice shall inform the debtor of:
(1) The nature and amount of the debt, and the facts giving rise to
the debt;
(2) The date by which payment should be made to avoid the
imposition of interest, penalties, and administrative costs, and the
enforced collection actions described in section 309.5 of this part;
(3) The applicable standards for imposing interest, penalties and
administrative costs to delinquent debts;
(4) Peace Corps' willingness to discuss alternative payment
arrangements and how the debtor may enter into a written agreement to
repay the debt under terms acceptable to Peace Corps;
(5) The name, address, and telephone number of a contact person or
office within Peace Corps;
(6) Peace Corps' intention to enforce collection if the debtor
fails to pay or otherwise resolve the debt, by taking one or more of
the following actions:
(i) Offset from Federal payments otherwise due to the debtor,
including income tax refunds, salary, certain benefit payments,
retirement, vendor payments, travel reimbursement and advances, and
other Federal payments;
(ii) Referral to private collection agency;
(iii) Report to credit bureaus;
(iv) Administrative wage garnishment;
(v) Referral to Department of Justice for litigation action;
(vi) Referral to Financial Management Service of the Department of
the Treasury for collection;
(vii) Other actions as permitted by the FCCS and applicable law.
(7) How the debtor may inspect and copy records related to the
debt;
(8) The debtor's opportunity for an internal review of Peace Corps'
determination that the debtor owes a debt or the amount of the debt;
(9) The debtor's right, if any, to request waiver of collection of
certain debts, as applicable;
(10) Requirement that the debtor advise Peace Corps of any
bankruptcy proceeding of the debtor.
(c) Peace Corps may omit from a notice to a debtor one or more of
the provisions contained in paragraphs (b)(6) through (b)(10) of this
section if Peace Corps determines that any provision is not legally
required given the collection remedies to be applied to a particular
debt, or which have already been provided by prior notice, applicable
agreement, or contract.
Sec. 309.10 Review requirements.
(a) For purposes of this section, whenever Peace Corps is required
to afford a debtor a review within the agency, Peace Corps shall
provide the debtor with an opportunity for an internal review of the
existence or the amount of the debt. For offset of current Federal
salary under 5 U.S.C. 5514 for certain debts, debtors may also request
an outside hearing. See subpart C of this part.
(b) Any request for a review must be in writing to the contact
office by the payment due date stated in the initial notice sent under
Sec. 309.9(b) or other applicable provision. The debtor's request
shall state the basis for the dispute and include any relevant
documentation in support.
(1) Peace Corps will provide for an internal review of the debt by
an appropriate agency official. The review may include examination of
documents, internal discussions with relevant officials and discussion
by letter or orally with the debtor, at Peace Corps' discretion.
(2) An oral hearing is not required when, in Peace Corps'
determination, the matter can be decided on the documentary record.
Peace Corps will provide a ``paper hearing'', that is, a determination
based upon a review of the written record unless Peace Corps makes a
determination that a debt involves issues of credibility or veracity,
at which point an oral hearing may be required. Unless otherwise
required by law, such oral hearing shall not be a formal evidentiary
hearing.
Sec. 309.11 Collection.
Upon final determination of the existence and amount of a debt,
unless other acceptable payment arrangements have been made or
procedures under a specific statute apply, Peace Corps shall collect
the debt by one or more of the methods described in Sec.
309.9(b)(6)(i-vii) or as otherwise authorized by law and regulation.
(a) Administrative offset--
(1) Payments otherwise due the debtor from the United States shall
be offset from the debt in accordance with 31 CFR 901.3. These may be
funds under the control of Peace Corps or other Federal agencies.
Collection may be through centralized offset by the Financial
Management Service (FMS) of the Department of the Treasury.
(2) Such payments include but are not limited to vendor payments,
salary, retirement, lump sum payments due upon Federal employment
separation, travel reimbursements, tax refunds, loans or other
assistance. Offset of Federal salary payments will be in accordance
with 5 U.S.C. 5514.
(3) Before administrative offset is instituted by another Federal
agency or the FMS, Peace Corps shall certify in writing to that entity
that the debt is past due and legally enforceable and that Peace Corps
has complied with all applicable due process and other requirements as
described in this part and other Federal law and regulations.
(b) Any other method authorized by law or regulation.
SUBPART C--SALARY OFFSET
Sec. 309.12 Purpose.
This subpart provides Peace Corps' policies and procedures for the
collection by salary offset of a Federal employee's pay to satisfy
certain past due debts owed the United States Government.
Sec. 309.13 Scope.
(a) The provisions of this section apply to collection by salary
offset under 5 U.S.C. 5514 of debts owed to Peace Corps and debts owed
to other Federal agencies by Peace Corps' employees. Peace Corps will
make reasonable and lawful efforts to administratively collect amounts
owed by employees prior to initiating salary offset action. This
section does not apply to debts where collection by salary offset is
explicitly provided for or prohibited by another statute (e.g., travel
advances).
(b) References. The following statutes and regulations apply to
Peace Corps' recovery of debts due the United States by salary offset:
(1) 5 U.S.C. 5514, as amended, governing the installment collection
of debts;
(2) 31 U.S.C. 3716, governing the liquidation of debts by
administrative offset;
(3) 5 CFR part 550, subpart K, setting forth the minimum
requirements for executive agency regulations on salary offset; and
(4) 31 CFR parts 900 through 904, the Federal Claims Collection
Standards.
(c) Nothing in this subpart precludes the compromise, suspension,
or termination of collection actions where appropriate under the
standards implementing the Federal Claims Collection Standards.
Sec. 309.14 Coordinating offset with another Federal agency.
(a) When Peace Corps is owed a debt by an employee of another
agency, the other agency shall not initiate the requested offset until
Peace Corps provides the agency with a written certification that the
debtor owes Peace Corps a debt (including the amount and basis of the
debt and the due date of payment) and that Peace Corps has complied
with these regulations.
[[Page 9712]]
(b) When another agency is owed the debt, Peace Corps may use
salary offset against one of its employees who is indebted to another
agency, if requested to do so by that agency. Such request must be
accompanied by a certification that the person owes the debt (including
the amount and basis of the debt and the due date of payment) and that
the agency has complied with its regulations as required by 5 U.S.C.
5514 and 5 CFR part 550, subpart K.
Sec. 309.15 Notice requirements before offset.
(a) Deductions under the authority of 5 U.S.C. 5514 shall not be
made unless the creditor agency first provides the employee with
written notice that he/she owes a debt to the Federal Government at
least 30 calendar days before salary offset is to be initiated. When
Peace Corps is the creditor agency this notice of intent to offset an
employee's salary shall be hand-delivered or sent by certified mail to
the most current address that is available. The written notice will
state:
(1) That Peace Corps has reviewed the records relating to the claim
and has determined that a debt is owed, its origin and nature, and the
amount of the debt;
(2) The intention of Peace Corps to collect the debt by means of
deduction from the employee's current disposable pay account until the
debt and all accumulated interest is paid in full;
(3) The amount, frequency, approximate beginning date, and duration
of the intended deductions;
(4) An explanation of the Peace Corps' policy concerning interest,
penalties and administrative costs, including a statement that such
assessments must be made unless excused in accordance with the FCCS
(See Sec. 309.5);
(5) The employee's right to inspect and copy all records of the
Peace Corps pertaining to the debt claimed or to receive copies of such
records if personal inspection is impractical;
(6) The right to a hearing conducted by a hearing official (an
administrative law judge, or alternatively, an individual not under the
supervision or control of the Peace Corps) with respect to the
existence and amount of the debt claimed, or the repayment schedule, so
long as a petition is filed by the employee as prescribed;
(7) If not previously provided, the opportunity (under terms
agreeable to the Peace Corps) to establish a schedule for the voluntary
repayment of the debt or to enter into a written agreement to establish
a schedule for repayment of the debt in lieu of offset. The agreement
must be in writing, signed by both the employee and the creditor
agency, and documented in the creditor agency's files;
(8) The name, address and telephone number of an officer or
employee of the Peace Corps who may be contacted concerning procedures
for requesting a hearing;
(9) The method and time period for requesting a hearing;
(10) That the timely filing of a petition for a hearing as
prescribed will stay the commencement of collection proceedings;
(11) The name and address of the office to which the petition
should be sent;
(12) That the Peace Corps will initiate certification procedures to
implement a salary offset, as appropriate, (which may not exceed 15
percent of the employee's disposable pay) not less than 30 calendar
days from the date of delivery of the notice of debt, unless the
employee files a timely petition for a hearing;
(13) That a final decision on the hearing (if one is requested)
will be issued at the earliest practical date, but not later than 60
calendar days after the filing of the petition requesting the hearing,
unless the employee requests and the hearing official grants a delay in
the proceedings;
(14) That any knowingly false or frivolous statements,
representations or evidence may subject the employee to:
(i) Disciplinary procedures appropriate under the Peace Corps Act
or the Foreign Service Act, Peace Corps regulations, or any other
applicable statutes or regulations;
(ii) Penalties under the False Claims Act, Sec. Sec. 3729-3731 of
title 31, United States Code, or any other applicable statutory
authority; and
(iii) Criminal penalties under 18 U.S.C. sections 286, 287, 1001,
and 1002 or any other applicable authority;
(15) Any other rights and remedies available to the employee under
statutes or regulations governing the program for which the collection
is being made;
(16) That unless there are applicable contractual or statutory
provisions to the contrary, amounts paid on or deducted for the debt
which are later waived or found not owed to the United States will be
promptly refunded to the employee; and
(17) That proceedings with respect to such debt are governed by 5
U.S.C. 5514.
(b) Peace Corps is not required to provide prior notice to an
employee when the following adjustments are made by Peace Corps to a
Peace Corps employee's pay:
(1) Any adjustment to pay arising out of an employee's election of
coverage or a change in coverage under a Federal benefits program
requiring periodic deductions from pay if the amount to be recovered
was accumulated over four pay periods or less;
(2) A routine adjustment of pay that is made to correct an
overpayment of pay attributable to clerical or administrative errors or
delays in processing pay documents, if the overpayment occurred within
the four pay periods preceding the adjustment, and, at the time of such
adjustment, or as soon thereafter as practical, the individual is
provided written notice of the nature and the amount of the adjustment
and point of contact for contesting the adjustment; or
(3) Any adjustment to collect a debt of $50 or less, if, at the
time of such adjustment, or as soon thereafter as practical, the
individual is provided written notice of the nature of the amount of
the adjustment and a point of contact for contesting the adjustment.
Sec. 309.16 Review.
(a) Request for outside hearing. Except as provided in paragraph
(b) of this section, an employee who desires an outside hearing
concerning the existence or amount of the debt or the proposed offset
schedule must send a request to the office designated in the notice of
intent. See Sec. 309.15(a)(8). The request must be received by the
designated office not later than 20 calendar days after the date of
delivery of the notice as provided in Sec. 309.15(a). The request must
be signed by the employee and should identify and explain with
reasonable specificity and brevity the facts, evidence and witnesses
which the employee believes support his or her position. If the
employee objects to the percentage of disposable pay to be deducted
from each check, the request should state the objection and the reasons
for it. The employee must also specify whether an oral hearing or a
review of the documentary evidence is requested. If an oral hearing is
desired, the request should explain why the matter cannot be resolved
by review of the documentary evidence alone.
(b) Failure to submit timely.
(1) If the employee files a petition for a review after the
expiration of the 20 calendar day period provided for in paragraph (a)
of this section, the designated office may accept the request if the
employee can show that the delay was the result of circumstances beyond
his or her control, or because of a failure to receive the notice of
the filing
[[Page 9713]]
deadline (unless the employee has actual knowledge of the filing
deadline).
(2) An employee waives the right to a review, and will have his or
her disposable pay offset in accordance with Peace Corps' offset
schedule, if the employee fails to file a request for a hearing unless
such failure is excused as provided in paragraph (b)(1) of this
section.
(3) If the employee fails to appear at an oral hearing of which he
or she was notified, unless the hearing official determines failure to
appear was due to circumstances beyond the employee's control, his or
her appeal will be decided on the basis of the documents then available
to the hearing official.
(c) Representation at the hearing. The creditor agency may be
represented by a representative of its choice. The employee may
represent himself or herself or may be represented by an individual of
his or her choice and at his or her expense.
(d) Review of Peace Corps records related to the debt.
(1) An employee who intends to inspect or copy creditor agency
records related to the debt in accordance with Sec. 309.15(a)(5) must
send a letter to the official designated in the notice of intent to
offset stating his or her intention. The letter must be sent within 20
calendar days after receipt of the notice.
(2) In response to a timely request submitted by the debtor, the
designated official will notify the employee of the location and time
when the employee may inspect and copy records related to the debt.
(3) If personal inspection is impractical, copies of such records
shall be sent to the employee.
(e) Oral Hearing.
(1) If an employee timely files a request for an oral hearing under
Sec. 309.16(a), the matter will be conducted by a hearing official not
under the supervision or control of Peace Corps.
(2) Procedure.
(i) After the employee requests a hearing, the hearing official
shall notify the employee of the form of the hearing to be provided. If
the hearing will be oral, notice shall set forth the date, time and
location of the hearing. If the hearing will be paper, the employee
shall be notified that he or she should submit arguments in writing to
the hearing official by a specified date after which the record shall
be closed. This date shall give the employee reasonable time to submit
documentation.
(ii) An employee who requests an oral hearing shall be provided an
oral hearing if the hearing official determines that the matter cannot
be resolved by review of documentary evidence alone (e.g. when an issue
of credibility or veracity is involved). The hearing is not an
adversarial adjudication, and need not take the form of an evidentiary
hearing.
(iii) If the hearing official determines that an oral hearing is
not necessary, he or she will make a decision based upon a review of
the available written record.
(iv) The hearing official must maintain a summary record of any
hearing provided by this subpart. Witnesses who provide testimony will
do so under oath or affirmation.
(3) Decision. The written decision shall include:
(i) A statement of the facts presented to support the origin,
nature, and amount of the debt;
(ii) The hearing official's findings, analysis, and conclusions;
and
(iii) The terms of any repayment schedules, or the date salary
offset will commence, if applicable.
(4) Failure to appear. In the absence of good cause shown (e.g.
excused illness), an employee who fails to appear at a hearing shall be
deemed, for the purpose of this subpart, to admit the existence and
amount of the debt as described in the notice of intent. The hearing
official shall schedule a new hearing upon the request of the creditor
agency representative when good cause is shown.
(5) A hearing official's decision is considered to be an official
certification regarding the existence and amount of the debt for
purposes of executing salary offset under 5 U.S.C. 5514 only. It does
not supersede the finding by Peace Corps that a debt is owed and does
not affect the Government's ability to recoup the debt through
alternative collection methods under other appropriate methods.
Sec. 309.17 Procedures for salary offset.
Unless otherwise provided by statute or contract, the following
procedures apply to salary offset:
(a) Method. Salary offset will be made by deduction at one or more
officially established pay intervals from the current pay account of
the employee without his or her consent.
(b) Source. The source of salary offset is current disposable pay.
(c) Types of collection.
(1) Lump sum payment. Ordinarily debts will be collected by salary
offset in one lump sum if possible. However, if the amount of the debt
exceeds 15 percent of disposable pay for an officially established pay
interval, the collection by salary offset must be made in installment
deductions.
(2) Installment deductions.
(i) The size of installment deductions must bear a reasonable
relation to the size of the debt and the employee's ability to pay. If
possible, the size of the deduction will be that necessary to liquidate
the debt in no more than 1 year. However, the amount deducted for any
period must not exceed 15 percent of the disposable pay from which the
deduction is made, except as provided by other regulations or unless
the employee has agreed in writing to greater amount.
(ii) Installment payments of less than $25 per pay period will be
accepted only in the most unusual circumstances.
(iii) Installment deductions will be made over a period of not
greater than the anticipated period of employment.
Sec. 309.18 Voluntary repayment agreements as an alternative to
salary offset.
(a) In response to a notice of intent, an employee may propose a
written agreement to repay the debt as an alternative to salary offset.
Any employee who wishes to repay a debt without salary offset shall
submit in writing a proposed agreement to repay the debt. The proposal
shall admit the existence of the debt and set forth a proposed
repayment schedule. Any proposal under this paragraph must be received
by the official designated in that notice within 20 calendar days after
receipt of the notice of intent.
(b) When the Peace Corps is the creditor agency, in response to a
timely proposal by the debtor the agency will notify the employee
whether the employee's proposed written agreement for repayment is
acceptable. It is within the agency's discretion to accept a repayment
agreement instead of proceeding by offset.
(c) If the Peace Corps decides that the proposed repayment
agreement is unacceptable, the employee will have 15 calendar days from
the date he or she received notice of the decision to file a petition
for a review.
(d) If the Peace Corps decides that the proposed repayment
agreement is acceptable, the alternative arrangement must be in writing
and signed by both the employee and a designated agency official.
Sec. 309.19 Waiver.
(a) Under certain circumstances, employees may have a statutory
right to request a waiver of indebtedness. When an employee makes a
request under a statutory right, further collection will be stayed
pending an administrative determination on the request.
(b) Waiver of indebtedness is an equitable remedy and as such must
be based on an assessment of the facts
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involved in the individual case under consideration. The burden is on
the employee to demonstrate that the applicable waiver standard has
been met.
Sec. 309.20 Compromise.
Peace Corps may attempt to effect compromise in accordance with the
standards set forth in the FCCS (31 CFR part 902).
Sec. 309.21 Suspension of collection.
Suspension of collection action shall be made in accordance with
the standards set forth in the FCCS (31 CFR 903.1-903.2).
Sec. 309.22 Termination of collection.
Termination of collection action shall be made in accordance with
the standards set forth in the FCCS (31 CFR 903.1 and 903.3-903.4).
Sec. 309.23 Discharge.
Once a debt has been closed out for accounting purposes and
collection has been terminated, the debt is discharged. Peace Corps
will report discharged debt as income to the debtor to the Internal
Revenue Service per 26 U.S.C. 6050P and 26 CFR 1.6050P-1.
Sec. 309.24 Bankruptcy.
Peace Corps generally terminates collection activity on debts that
have been discharged in bankruptcy unless otherwise provided for by
bankruptcy law. The CFO will seek legal advice by the General Counsel's
office if there is the belief that any claims or offset may have
survived the discharge of a debtor.
Dated: February 15, 2008.
Tyler S. Posey,
General Counsel.
[FR Doc. E8-3268 Filed 2-21-08; 8:45 am]
BILLING CODE 6015-01-P