(4) The repayment schedule (including percentage), if applicable.

(b) The Administrative Law Judge's decision does not preclude an employee from requesting a waiver of a salary payment under 5 U.S.C. 5584, 10 U.S.C. 2774, or 32 U.S.C. 716, or in any way questioning the amount or validity of a debt by submitting a subsequent claim to GAO in accordance with procedures prescribed by GAO.

§ 1017.8 Exception to entitlement to notice, hearing, written responses and final decisions.

The Board shall except from the provisions of §1017.4 through §1017.7 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.

§ 1017.9 Coordinating offset with another Federal agency.

(a) The Board as creditor agency. When the Chief, Budget and Fiscal Office, determines that an employee of another Federal agency owes a delinquent debt to the Board, he/she shall:

(1) Arrange for a hearing upon proper petitioning by the employee;

(2) Certify in writing to the other Federal agency that the employee owes the debt, the amount and basis of the debt, the date on which payment is due, the date the Government's right to collect the debt accrued, that the Board's regulations for administrative offset have been approved by the Office of Personnel Management, and that the provisions of 4 CFR 102.3(f) have been fully complied with;

(3) If collection must be made in installments, advise the paying agency of the amount or percentage of disposable pay to be collected in each installment;

(4) Advise the paying agency of any action taken under 5 U.S.C. 5514(a);

(5) If the employee is in the process of separating, the Board must submit its debt claim to the paying agency as provided in this part. The paying agency must certify any amounts already collected, notify the employee, and send a copy of the certification and notice of the employee's separation to the

creditor agency-if the paying agency is aware that the employee is entitled to money from the Civil Service Retirement and Disability Fund, it must certify to the Office of Personnel Management (OPM) that:

(i) The debtor owes the U.S. a debt, including the amount of that debt;

(ii) The Board has complied with the applicable statutes, regulations, and procedures of OPM; and

(iii) The Board has complied with the requirements of 4 CFR 102.3, including any hearing or review; and

(6) If the employee has already separated and all payments due from the paying agency have been paid, the Chief, Budget and Fiscal Office, may request from OPM, unless otherwise prohibited, that money payable to the employee from the Civil Service Retirement and Disability Fund or other similar funds be collected by administrative offset and provide the certification described in paragraph (a)(5) of this section.

(b) The Board as paying agency. (1) Upon receipt of a properly certified debt claim from another agency, deductions will be scheduled to begin at the next established pay interval. The employee must receive written notice that the Board has received a certified debt claim from the creditor agency, the amount of the debt, the date administrative offset will begin, and the amount of the deduction(s). The Board shall not review the merits of the creditor agency's determination of the validity or the amount of the certified claim.

(2) When the Board receives an incomplete debt from another (creditor) agency, the Board must return the debt claim with a notice that procedures under 5 U.S.C. 5514 and 5 CFR 1108 must be provided and a properly certified debt claim received before action will be taken to collect from the employee's current pay account.

(3) If the employee transfers to another agency after the creditor agency has submitted its debt claim to the Board and before the debt is fully collected, the Board must certify the total amount collected to the creditor agency, along with notice of the transfer, and furnish a copy of same to the employee.

§ 1017.10 Procedures for administrative offset.

(a) Debts will be collected in one lump sum where possible. If the employee is financially unable to pay in one lump sum, collection shall be made in installments.

(b) Debts shall be collected by deduction at officially established pay intervals from an employee's current pay account, unless alternative arrangements for repayment are made.

(c) Installment deductions will be made over a period not greater than the anticipated period of employment. The size of installment deductions must bear a reasonable relationship to the size of the debt and the employee's ability to pay. The deduction for the pay intervals for any period shall not exceed 15 percent of disposable pay, unless the employee has agreed in writing to a deduction of a greater amount.

(d) Unliquidated debts may be offset against any financial payment due to a separated employee (including, but not limited to, final salary payment or lump-sum payment for leave).

§ 1017.11 Refunds.

(a) The Board shall promptly refund any amounts deducted to satisfy debts owed to it when the debt is waived, found not owed to the Board, or when directed by an administrative or judicial order.

(b) A creditor agency will promptly return any amounts deducted by the Board to satisfy debts owed to a creditor agency when the debt is waived, found not owed, or when directed by an administrative or judicial order.

(c) Unless required by law, refunds under this subsection shall not bear interest.

§ 1017.12 Statute of limitations.

If a debt has been outstanding for more than 10 years after the agency's right to collect the debt first accrued, the agency may not collect by salary offset unless facts material to the Government's right to collect were not known and could not reasonably have been known by the official or officials who were charged with the responsibility for discovery and collection of such debts.

§ 1017.13 Nonwaiver of rights.

An employee's involuntary payment of all or any part of a debt collected under these regulations will not be construed as a waiver of any rights that employee may have under 5 U.S.C. 5514 or any other provision of law.

§ 1017.14 Interest, penalties, and ad

ministrative costs.

(a) The rate of interest assessed shall be the rate of the current value of funds to the U.S. Treasury (i.e., the Treasury tax and loan account rate), as prescribed and published by the Secretary of the Treasury in the FEDERAL REGISTER and the Treasury Financial Manual Bulletins. A higher rate of interest can be assessed if the Board can reasonably determine that a higher rate is necessary to protect the interests of the United States. The rate of interest, as initially assessed, shall remain fixed for the duration of the indebtedness, except where a debtor has defaulted on a repayment agreement and seeks to enter into a new agreement. The Board may set a new interest rate which reflects the current value of funds to the Treasury at the time the new agreement is executed. The Board shall waive the collection of interest on the debt or any portion of the debt which is paid within 30 days after the date on which interest began to accrue.

(b) The Board shall assess a penalty charge not to exceed 6 percent a year on any portion of a debt that is delinquent as defined in 4 CFR 101.2(b) for more than 90 days. This charge need not be calculated until the 91st day of delinquency, but shall accrue from the date that the debt became delinquent.

(c) The Board shall assess against a debtor charges to cover administrative costs incurred as a result of a delinquent debt-that is, the additional costs incurred in processing and handling the debt because it became delinquent as defined in 4 CFR 101.2(b).

(d) When a debt is paid in partial or installment payments, amounts received by the agency shall be applied first to outstanding penalty and administrative cost charges, second to accrued interest, and third to outstanding principal.

Subpart F-Internal Revenue Service Procedure

1018.80 Reporting discharged debts to the Internal Revenue Service.

Subpart G-Tax Refund Offset

1018.90 Purpose.

1018.91 Applicability and scope.

1018.92 Administrative charges.

1018.93 Notice requirement before offset. 1018.94 Review within the Board.

1018.95 Board determination.

1018.96 Stay of offset.

AUTHORITY: 31 U.S.C. 3701, 31 U.S.C. 3711 et seq., 49 U.S.C. 721, 4 CFR parts 101-105.

SOURCE: 58 FR 7749, Feb. 9, 1993, unless otherwise noted.

Subpart A-Application and
Coverage

§ 1018.1 Application.

(a) This part applies to claims for the payment of debts owed to the United States Government in the form of money or property and unless a different procedure is specified in a statute, regulation, or a contractual agreement with the Board, prescribes procedures by which the Board:

(1) Collects, compromises, suspends, and terminates collection actions for claims;

(2) Determines and collects interest and other charges on these claims; and

(3) Refers unpaid claims to the General Accounting Office (GAO) and the Department of Justice (DOJ) for litigation.

(b) The following are examples of the kinds of debts to which special statutory and administrative procedures apply:

(1) A claim against an employee for erroneous payment of pay and allowances subject to waiver under 5 U.S.C. 5584 and other claims against employees which are handled under 49 CFR part 1017.

(2) A claim involving the payment of civil penalties or forfeitures which may arise under provisions of the Interstate Commerce Act or legislation supplemental thereto. Those claims are handled under procedures set forth in 49 CFR part 1021.

(3) A claim involved in a case pending before any Federal Contract Appeals

Board or Grant Appeals Board. However, nothing in this part prevents negotiation and settlement of a claim pending before a Board.

§ 1018.2 Definitions.

(a) Administrative offset means withholding money payable by the United States to, or held by the Government for, a person to satisfy a debt the person owes the Government.

(b) Claim and debt are used synonymously and interchangeably for purposes of this part. These terms refer to an amount of money or property which has been determined by an appropriate agency official to be owed to the United States by any person, organization, or entity except another Federal agency.

(c) Delinquent. A debt is considered delinquent if it has not been paid by the date specified in the initial written demand for payment or applicable contractual agreement with the Board, unless other satisfactory payment arrangements have been made by that date. If the debtor fails to satisfy an obligation under a payment agreement with the Board after other payment arrangements have been made, the debt becomes a delinquent debt.

(d) Payment in full means payment of the total debt due the United States, including any interest, penalty, and administrative costs of collection assessed against the debtor.

§ 1018.3 Communications.

Unless otherwise specified, all communications concerning the regulations in this part should be addressed to Chief, Budget and Fiscal Office, Surface Transportation Board, room 1330, Washington, DC 20423.

§ 1018.4 Claims that are covered.

(a) These procedures generally apply to any claim for payment of a debt which:

(1) Results from activities of the Board including fees imposed under 49 CFR part 1002; or

(2) Is referred to the Board for collection.

(b) These procedures do not apply to: (1) A claim based on a civil monetary penalty for violation of a requirement of the Interstate Commerce Act or an

order or regulation of the Board unless 49 CFR part 1021 provides otherwise;

(2) A claim as to which there is an indication of fraud, the presentation of a false claim, or misrepresentation on the part of the debtor, or any other party having an interest in the claim; (3) A claim between Federal agencies; and

(4) A claim once it becomes subject to salary offset which is governed by 5 U.S.C. 5514.

§ 1018.5 Monetary limitation on Board authority.

The Board's authority to compromise a claim or to terminate or suspend collection action on a claim covered by these procedures is limited by 31 U.S.C. 3711(a) to claims that:

(a) Have not been referred to another Federal agency, including the GAO, for further collection action; and

(b) Do not exceed $100,000, exclusive of interest, penalties, and administrative costs (the monetary limitation).

§ 1018.6 Omissions not a defense.

(a) The failure of the Board to include in this part any provision of the Federal Claims Collection Standards, 4 CFR parts 101 through 105, does not prevent the Board from applying these provisions.

(b) A debtor may not use the failure of the Board to comply with any provision of this part or the Federal Claims Collection Standards as a defense to the debt.

§ 1018.7 Conversion claims.

These procedures are directed primarily to the recovery of money on behalf of the Government. The Board may demand:

(a) The return of specific property; or (b) Either the return of property or the payment of its value.

§ 1018.8 Subdivision of claims.

The Board shall consider a debtor's liability arising from a particular transaction or contract as a single claim in determining whether the claim is less than the monetary limitation for the purpose of compromising

or suspending or terminating collection action. A claim may not be subdivided to avoid the monetary limitation established by 31 U.S.C. 3711(a)(2) and § 1018.5 of this part.

Subpart B-Administrative Collection of Claims

§ 1018.20 Written demand for payment.

(a) The Board shall make appropriate written demand upon the debtor for payment of money in terms which specify:

(1) The basis for the indebtedness and the right of the debtor to request review within the Board;

(2) The amount claimed;

(3) The date by which payment is to be made, which normally should not be more than 30 days from the date that the initial demand letter statement was mailed, unless otherwise specified by contractual agreement, established by Federal statute or regulation, or agreed to under a payment agreement;

(4) The applicable standards for assessing interest, penalties, and administrative costs (4 CFR 102.13 and 49 CFR 1018.30); and

(5) The applicable policy for reporting the delinquent debt to consumer reporting agencies.

(b) The Board normally shall send three progressively stronger written demands at not more than 30-day intervals, unless circumstances indicate that alternative remedies better protect the Government's interest, that the debtor has explicitly refused to pay, or that sending a further demand is futile. Depending upon the circumstances of the particular case, the second and third demands may:

(1) Offer or seek to confer with the debtor;

(2) State the amount of the interest and penalties that will be added on a daily basis, as well as the administrative costs that will be added to the debt until the debt is paid; and

(3) State that the authorized collection procedures include any procedure authorized in this part including:

(i) Contacts with the debtor's employer when the debtor is employed by the Federal Government or is a member of the military establishment or the Coast Guard;

(ii) Possible referral of the debt to a private agency for collection;

(iii) Possible reporting of the delinquent debt to consumer reporting agencies in accordance with the guidelines and standards contained in 4 CFR 102.5 and the Board's procedures set forth in §1018.23 of this part;

(iv) The suspension or revocation of a license or other remedy under §1018.25 of this part;

(v) Installment payments possibly requiring security; and

(vi) The right to refer claims to GAO or DOJ for litigation.

(c) The failure to state in a letter of demand a matter described in §1018.20 is not a defense for a debtor and does not prevent the Board from proceeding with respect to that matter.

[58 FR 7749, Feb. 9, 1993; 58 FR 11099, Feb. 23, 1993]

§ 1018.21 Telephone inquiries and investigations.

(a) If a debtor has not responded to one or more written demands, the Board shall make reasonable efforts by telephone to determine the debtor's intentions. If the debtor cannot be reached by telephone at the debtor's place of employment, the Board may telephone the debtor at his or her residence between 8 a.m. and 9 p.m.

(b) The Board may undertake an investigation to locate a debtor, if the whereabouts of a debtor is a problem, or if a debtor cannot be contacted by telephone. The Board may also send a representative to a debtor's place of employment if the debtor cannot be contacted by phone or the debtor does not respond to written demands by the Board for payment of claims.

(c) The Board under 15 U.S.C. 1681(f) may obtain consumer credit information from private firms, including name, address, former address, place of employment, and former place of employment of a debtor.

§ 1018.22 Personal interviews.

(a) The Board may seek an interview with the debtor at the offices of the Board when:

(1) A matter involved in the claim needs clarification;

(2) Information is needed concerning the debtor's circumstances; or