[Code of Federal Regulations]
[Title 40, Volume 1]
[Revised as of July 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 40CFR13.20]

[Page 202-203]
 
                   TITLE 40--PROTECTION OF ENVIRONMENT
 
               CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY
 
PART 13_CLAIMS COLLECTION STANDARDS--Table of Contents
 
                     Subpart C_Administrative Offset
 
Sec. 13.20  Administrative offset of general debts.


    This subpart provides for EPA's collection of debts by 
administrative offset under section 5 of the Debt Collection Act of 1982 
(31 U.S.C. 3716), other statutory authorities and the common law. It 
does not apply to offsets against employee salaries covered by 
Sec. Sec. 13.21, 13.22 and 13.23 of this subpart. EPA will collect 
debts by administrative offsets where it determines that such 
collections are feasible and are not otherwise prohibited by statute or 
contract.
    EPA will decide, on a case-by-case basis, whether collection by 
administrative offset is feasible and that its use furthers and protects 
the interest of the United States.
    (a) Standards. (1) The Administrator collects debts by 
administrative offset if--
    (i) The debt is certain in amount;
    (ii) Efforts to obtain direct payment from the debtor have been, or 
would most likely be, unsuccessful or the Administrator and the debtor 
agree to the offset;
    (iii) Offset is not expressly or implicitly prohibited by statute, 
regulation or contract;
    (iv) Offset is cost-effective or has significant deterrent value;
    (v) Offset does not substantially impair or defeat program 
objectives; and
    (vi) Offset is best suited to further and protect the Government's 
interest.
    (2) The Administrator may, in determining the method and amount of 
the offset, consider the financial impact on the debtor.
    (b) Interagency offset. The Administrator may offset a debt owed to 
another Federal agency from amounts due or payable by EPA to the debtor, 
or may request another Federal agency to offset a debt owed to EPA. The 
Administrator may request the Internal Revenue Service to offset an 
overdue debt from a Federal income tax refund due a debtor where 
reasonable attempts to obtain payment have failed. Interagency offsets 
from employee salaries will be made in accordance with the procedures 
contained in Sec. Sec. 13.22 and 13.23.
    (c) Multiple debts. Where moneys are available for offset against 
multiple debts of a debtor, it will be applied in accordance with the 
best interest of the Government as determined by the Administrator on a 
case-by-case basis.
    (d) Statutory bar to offset. Administrative offset will not be made 
more than 10 years after the Government's right to collect the debt 
first accrued, unless facts material to the Government's right to 
collect the debt were not known and could not have been known through 
the exercise of reasonable care by the officer responsible for 
discovering or collecting the debt. For purposes of offset, the right to 
collect a debt accrues when the appropriate EPA official determines that 
a debt exists (e.g., contracting officer, grant award official, etc.), 
when it is affirmed by an

[[Page 203]]

administrative appeal or a court having jurisdiction, or when a debtor 
defaults on a payment agreement, whichever is latest. An offset occurs 
when money payable to the debtor is first withheld or when EPA requests 
offset from money held by another agency.
    (e) Pre-offset notice. Before initiating offset, the Administrator 
sends the debtor written notice of:
    (1) The basis for and the amount of the debt as well as the Agency's 
intention to collect the debt by offset if payment or satisfactory 
response has not been received within 30 days of the notice;
    (2) The debtor's right to submit an alternative repayment schedule, 
to inspect and copy agency records pertaining to the debt, to request 
review of the determination of indebtedness or to apply for waiver under 
any available statute or regulation; and
    (3) Applicable interest, penalty charges and administrative costs.
    (f) Alternative repayment. The Administrator may, at the 
Administrator's discretion, enter into a repayment agreement with the 
debtor in lieu of offset. In deciding whether to accept payment of the 
debt by an alternative repayment agreement, the Administrator may 
consider such factors as the amount of the debt, the length of the 
proposed repayment period, whether the debtor is willing to sign a 
confess-judgment note, past Agency dealings with the debtor, 
documentation submitted by the debtor indicating that an offset will 
cause undue financial hardship, and the debtor's financial ability to 
adhere to the terms of a repayment agreement. The Administrator may 
require financial documentation from the debtor before considering the 
repayment arrangement.
    (g) Review of administrative determination. (1) A debt will not be 
offset while a debtor is seeking either formal or informal review of the 
validity of the debt under this section or under another statute, 
regulation or contract. However, interest, penalty and administrative 
costs will continue to accrue during this period, unless otherwise 
waived by the Administrator. The Administrator may initiate offset as 
soon as practical after completion of review or after a debtor waives 
the opportunity to request review.
    (2) The Administrator may administratively offset a debt prior to 
the completion of a formal or informal review where the determines that:
    (i) Failure to take the offset would substantially prejudice EPA's 
ability to collect the debt; and
    (ii) The time before the first offset is to be made does not 
reasonably permit the completion of the review procedures. (Offsets 
taken prior to completion of the review process will be followed 
promptly by the completion of the process. Amounts recovered by offset 
but later found not to be owed will be refunded promptly.)
    (3) The debtor must provide a written request for review of the 
decision to offset the debt no later than 15 days after the date of the 
notice of the offset unless a different time is specifically prescribed. 
The debtor's request must state the basis for the request for review.
    (4) The Administrator may grant an extension of time for filing a 
request for review if the debtor shows good cause for the late filing. A 
debtor who fails timely to file or to request an extension waives the 
right to review.
    (5) The Administrator will issue, no later than 60 days after the 
filing of the request, a written final decision based on the evidence, 
record and applicable law.