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Public Laws, Statutes,
Regulations & Guidance
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Supplemental Background and
Summary Information
Background
Within the Omnibus Consolidated Rescissions and Appropriations Act of 1996 (Public Law 104-134) is the Debt Collection Improvement Act of 1996. The legislation provides an excellent opportunity for the federal government to move toward its goal of increased electronic commerce and improved cash and debt collection management. It is our intent to expeditiously implement the law to fulfill the Congressional mandate.
The Act will enhance debt collection Governmentwide, as well as mandate the use of electronic funds transfer (EFT) for federal payments, allow Federal Reserve Bank Treasury Check Offset, and provide funding for the Check Forgery Insurance Fund.
This law provides that any non-tax debt or claim owed to the United States that has been delinquent for a period of 180 days shall be turned over to the Secretary of the Treasury for appropriate action to collect or terminate collection actions on the debt or claim. Debt that is in litigation or foreclosure, with a collection agency or designated federal debt collection center, or that will be disposed of under an asset sales program, is exempt from transfer to the Secretary.
The Debt Collection Improvement Act of 1996 has seven purposes:
- To maximize collections of delinquent debts owed to the government by ensuring quick action to enforce recovery of debts and the use of all appropriate collection tools.
- To minimize the costs of debt collection by consolidating related functions and activities and utilizing interagency teams.
- To reduce losses arising from debt management activities by requiring proper screening of potential borrowers, aggressive of all accounts, and sharing of information within and among federal agencies.
- To ensure that the public is fully informed of the federal government's debt collection policies and that debtors are cognizant of their obligations to repay amounts owed to the federal government.
- To ensure that debtors have all appropriate due process rights, including the ability to verify, challenge, and compromise claims, and access to administrative appeals procedures which are both reasonable and protect the interests of the United States.
- To encourage agencies, when appropriate, to sell delinquent debt, particularly debts with underlying collateral.
- To rely on the experience and expertise of private sector professionals to provide debt collection services to federal agencies.
Following are the key provisions of
the Act:
Laws, Regulations & Guidance Related to DMS Programs and Initiatives
Legislation
Executive Order 13019
Supporting
Families: Collecting Delinquent Child Support Obligations
SUMMARY: The Debt Collection Improvement Act of 1996 was enacted into law on April 26, 1996, it authorizes the Secretary of the Treasury to collect past-due child support by the administrative offset of federal payments. Executive Order 13019 of September 1996, requires the Secretary of the Treasury to promptly develop and implement procedures necessary for the collection of past-due child support debts by administrative offset.
Memorandum from the Attorney General:
Minimum Due Process Guidelines For Agencies
To Deny Federal Financial Assistance
31 CFR Part 212 Taxpayer Identifying Number Requirements
Agency Taxpayer Identifying Number Implementation Reports: Policy Statement
31 CFR Part 285 - Debt Collection
Authorities Under the Debt Collection Improvement Act of 1996 (DCIA)
Subpart A - Disbursing Official Offset
Section 285.1 - Collection of Past-Due Support by Administrative
Offset
SUMMARY: The Debt Collection Improvement Act of 1996 (DCIA), enacted on April 26, 1996, authorized the Secretary of the Treasury (Secretary) to collect past-due support by the administrative offset of federal payments. Executive Order 13019 of September 28, 1996 directed the Secretary to promptly develop and implement procedures necessary for the collection of past-due support debts by administrative offset. The Financial Management Service (FMS), a bureau of the Department of the Treasury, published an interim rule on July 7, 1997. This final rule adopts the interim rule with changes incorporating suggestions provided in comments on the interim rule.
Final Rule
Section 285.1(i) of this Final Rule references a list of payment types exempt from Administrative Offset. A complete list of payments exempt from the Administrative Offset program is now available. Updated March 3, 2003.
Payments Exempted From Centralized Offset
Interim Rule
Section 285.2 - Offset of Tax Refund Payments to Collect Past-Due,
Legally Enforceable non-tax Debt
SUMMARY: This final rule adopts the interim rule, published in the Federal Register on June 25, 1997, concerning the tax refund offset procedures applicable to the collection of delinquent non-tax debt owed to federal agencies.
Final Rule
Interim Rule
Section 285.3 - Offset of Tax Refund Payments to Collect Past-Due
Support
SUMMARY: Federal law authorizes the Federal tax refund of a taxpayer who owes past-due support to be reduced, or offset, by the amounts owed by the taxpayer. Past-due support includes delinquent child support or other obligations for the support of a child. The funds offset from a taxpayer's tax refund are forwarded to the State enforcing the collection of the past-due support. Effective January 1, 1999, the Department of the Treasury will conduct the tax refund offset program as part of the centralized offset program, known as the Treasury Offset Program, operated by the Financial Management Service (FMS), a bureau of the Department of the Treasury. This final rule establishes tax refund offset procedures that supersede the procedures governing the tax refund offset program established by the Internal Revenue Service (IRS) and applicable to the collection of past-due support (codified at 26 CFR 301.6402-5). Differences between this rule and the IRS rule reflect requirements necessitated by the inclusion of the tax refund offset program as a part of the Treasury Offset Program.
Final Rule
Notice of
Proposed Rulemaking
Section 285.4 - Offset of Federal Benefit Payments to Collect
Past-Due, Legally Enforceable non-tax Debt
SUMMARY: The Debt Collection Improvement Act of 1996 requires the federal government to withhold or reduce certain federal payments for the purpose of collecting delinquent non-tax debts owed to the United States by the payee. This process is known as "administrative offset" or "offset." This final rule governs the offset of Federal benefit payments issued under the Social Security Act (other than Supplemental Security Income), part B of the Black Lung Benefits Act, and any law administered by the Railroad Retirement Board (other than tier 2 benefit payments). A notice of proposed rulemaking was published in the Federal Register on August 21, 1998, by cross-reference to an interim rule published in the Federal Register on the same day. This final rule adopts the interim rule without change. The effective date of this rule is January 22, 1999.
Final Rule
Interim
rule
Notice of
Proposed Rulemaking
Section 285.5 - Centralized Offset of Federal Payments to Collect Non-Tax Debts Owed to the United States
SUMMARY: This interim rule describes the general rules and procedures applicable to the centralized offset of federal payments to collect delinquent, nontax debts owed to federal agencies. The Department of the Treasury’s Financial Management Service has established the Treasury Offset Program (TOP) in order to centralize the process by which federal payments are withheld or reduced (in other words, offset) to collect delinquent debts. This interim rule specifically applies to the centralized offset of all types of federal payments by Federal disbursing officials to collect delinquent, nontax debts owed to the United States. Therefore, this interim rule affects persons who owe delinquent, nontax debts to the United States and who receive federal payments. It also affects federal agencies that are owed delinquent debts and that disburse and certify federal payments. This rule does not apply to collection of child support debts and other debts owed to States. This rule is effective December 26, 2002.
Interim rule
SUMMARY: This final rule describes the general rules and procedures applicable to the collection, through the Treasury Offset Program (TOP), of delinquent, nontax debts owed to Federal agencies. TOP is a program administered by the Financial Management Service (FMS), a bureau of the Treasury Department.
Final
Rule
Section 285.6 - Administrative Offset Under Reciprocal Agreements with States
SUMMARY: This interim rule describes the general rules applicable to the offset of Federal nontax payments to collect delinquent debts owed to States pursuant to reciprocal agreements between the Secretary of Treasury and the States. In addition to providing for the offset of Federal nontax payments, the reciprocal agreements will provide for the offset of State payments to collect delinquent nontax Federal debts. Therefore, this interim rule affects persons who owe delinquent debts to a State of the United States and who receive Federal payments. It also affects persons who owe delinquent nontax Federal debts and who receive payments from States. This rule does not apply to collection of past due support debts (see 31 CFR 285.1), the offset of Federal tax refund payments, the offset of Federal salary payments, or the offset of other Federal payments excluded from offset by law. This rule is effective January 11, 2007. Comments must be received by March 12, 2007.
Interim Rule
Section 285.7 - Salary Offset
SUMMARY: The Debt Collection Improvement Act of 1996 (DCIA) requires the federal government to withhold or reduce certain federal payments to satisfy the delinquent non-tax debts owed to the United States by the payee. This process is known as "administrative offset." In addition, the DCIA requires federal agencies, using a process known as centralized salary offset computer matching, to identify Federal employees who owe delinquent non-tax debt to the United States. This interim rule establishes centralized computer matching procedures for comparing delinquent debt information with federal salary payment information for the purpose of offsetting the salary payments of those employees who owe debt to the United States once they are identified. This interim rule also establishes the rules governing the administrative offset of federal salary payments through a centralized offset process operated by the Financial Management Service of the U.S. Department of the Treasury. This rule is effective April 28, 1998.
Interim Rule
5 CFR Part 550 Pay Administration (General); Collection
by Offset From Indebted Government Employees (Final Rule)
5 CFR
Part 550 Pay Administration (General); Collection by Offset from Indebted Government
Employees (Notice of Proposed Rulemaking)
Final Rule
Section 285.8 - Offset of Tax Refund Payments to Collect State Income Tax Obligations
SUMMARY: The U.S. Department of the Treasury has simultaneously published a Notice of Proposed Rulemaking and an Interim Rule With Request for Comments: 31 CFR Part 285: Offset of Tax Refund Payments to Collect State Income Tax Obligations in the Federal Register for public comment. Comments were to have been received by January 19, 2000, 30 days after publication of the Notice of Proposed Rulemaking in the Federal Register.
Interim Rule
Notice of Proposed Rulemaking
SUMMARY: The Final Rule adopts the Interim Rule without change.
Final
Rule
Subpart B - Authorities Other than Offset
Section 285.11 - Administrative Wage Garnishment
This final rule implements the administrative wage garnishment provisions contained in the Debt Collection Improvement Act of 1996 (DCIA). Wage garnishment is a process whereby an employer withholds amounts from an employee's wages and pays those amounts to the employee's creditor in satisfaction of a withholding order. The DCIA authorizes federal agencies administratively to garnish the disposable pay of an individual to collect delinquent non-tax debts owed to the United States in accordance with regulations issued by the Secretary of the Treasury.
Technical Amendments to Administrative Wage Garnishment Final Rule
Final Rule
Notice of Proposed Rulemaking
Section 285.12 - Transfer of Debts to Treasury for Collection
SUMMARY: The Debt Collection Improvement Act of 1996 (DCIA) requires federal agencies to transfer any non-tax debt which is over 180 days delinquent to the Department of the Treasury for debt collection action; this is known as "Cross-Servicing." This rule establishes the procedures and criteria for transferring delinquent debt to the Department of the Treasury, explains the statutory exceptions to this requirement, and establishes standards under which the Secretary of the Treasury will make a determination whether or not to grant exemptions. This rule also mandates that agencies refer debts to private collection contractors and to debt collection centers in accordance with procedures established by the Financial Management Service. This rule is effective May 28, 1999.
Final
Rule
Interim Rule
Section 285.13 - Barring Delinquent Debtors From Obtaining Federal
Loans or Loan Insurance or Guarantees
SUMMARY: The Debt Collection Improvement Act of 1996 (DCIA) mandated a new eligibility requirement for persons seeking Federal financial assistance, namely that delinquent federal debtors are ineligible for Federal direct and indirect loan assistance (other than disaster loans). On April 22, 1998, the Financial Management Service issued a notice of proposed rulemaking proposing rules to define when a debt is in delinquent status and when a delinquency is resolved for purposes of determining whether the DCIA bars a person from receiving financial assistance. The notice of proposed rulemaking also proposed rules governing when the Secretary of the Treasury may exempt a class of delinquent debts from affecting a debtor's loan eligibility, and proposed factors for authorized agency officials to consider when deciding whether to waive the DCIA eligibility requirement. This final rule finalizes the proposed rule, with changes, and addresses issues raised in comments received on the notice of proposed rulemaking. The effective date of this rule is January 7, 1999.
Final Rule
Notice of
Proposed Rulemaking
31 CFR Parts 900-904 Federal Claims Collection Standards
SUMMARY: The final rule revises the Federal Claims Collection Standards issued by the Department of Justice and the General Accounting Office on March 9, 1984. The revised Federal Claims Collection Standards clarify and simplify federal debt collection procedures and reflect changes under the Debt Collection Improvement Act of 1996 and the General Accounting Office Act of 1996.
Federal Claims Collection Standards;
Federal Claims Collection Standards, Removal of Obsolete Chapter; Final Rules
FMS and the Department of Justice have compiled a comparison of the obsolete FCCS to the proposed and final rule, which summarizes the changes. Readers, however, should review the actual text of the proposed and final rules for a complete understanding of the changes.
Comparison of Obsolete, Proposed and Final FCCS
SUMMARY: This document proposes to revise the Federal Claims Collection Standards issued by the Department of Justice and the General Accounting Office on March 9, 1984. The proposed revisions clarify and simplify federal debt collection standards contained in the Federal Claims Collection Standards and reflect changes to federal debt collection procedures under the Debt Collection Improvement Act of 1996 and the General Accounting Office Act of 1996. Comments were due by March 2, 1998.
Notice of
Proposed Rulemaking
5 CFR Part 550 Pay Administration (General); Collection by Offset From Indebted
Government Employees
SUMMARY: The Office of Personnel Management is issuing a final rule to make changes in the salary offset regulations to comply with the Debt Collection Improvement Act of 1996. The principal changes relate to the roles played by disbursing officials and debt collection centers with respect to salary offset. Also included are new expedited salary offset procedures for certain types of recent or small-amount debts. The effective date is February 1, 1999.
Final Rule
Notice
of Proposed Rulemaking
HEHS-95-24 Child Support Enforcement: Families Could Benefit From Stronger Enforcement Program (December
1994)
GAO/HEHS-97-4
Child-Support Enforcement: Early Results on Comparability of Privatized and Public Offices (December 1996)
HEHS-97-11 Child Support Enforcement: States' Experience With Private Agencies' Collection of Support Payments (October 1996)
HEHS/GGD-97-14
Child-Support Enforcement: Reorienting Management Toward Achieving Better Program Results (October 1996)
GAO/AIMD-97-48
Debt Collection: Improved Reporting Needed on Billions of Dollars in Delinquent Debt and Agency Collection Performance (June 1997)
AIMD-97-72 Child Support Enforcement: Strong Leadership Required to Maximize Benefits of Automated Systems
(June 1997)
AIMD-98-195 Debt Collection Improvement Act: Significant Challenges Remain to Effectively Implement Treasury's Administrative Offset Program (June 1998)
Other GAO reports can be accessed through the GAO Archives.
SUMMARY: This Circular updates policies and procedures for justifying, designing, and managing Federal credit programs and for collecting non-tax receivables. November 29, 2000.
Issuance of Transmittal Memorandum Amending OMB Circular No. A-129, "Policies for Federal Credit Programs and Non-Tax Receivables"
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