[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: 40CFR13.22]
[Page 204-207]
TITLE 40--PROTECTION OF ENVIRONMENT
CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY
PART 13_CLAIMS COLLECTION STANDARDS--Table of Contents
Subpart C_Administrative Offset
Sec. 13.22 Salary offset when EPA is the creditor agency.
(a) Entitlement to notice, hearing, written response and decision.
(1) Prior to initiating collection action through salary offset, EPA
will first provide the employee with the opportunity to pay in full the
amount owed, unless such notification will compromise the Government's
ultimate ability to collect the debt.
(2) Except as provided in paragraph (b) of this section, each
employee from whom the Agency proposes to collect a debt by salary
offset under this section is entitled to receive a written notice as
described in paragraph (c) of this section.
(3) Each employee owing a debt to the United States which will be
collected by salary offset is entitled to request a hearing on the debt.
This request must be filed as prescribed in paragraph (d) of this
section. The Agency will make appropriate hearing arrangements which are
consistent with law and regulations. Where a hearing is held, the
employee is entitled to a written decision on the following issues:
(i) The determination of the Agency concerning the existence or
amount of the debt; and
(ii) The repayment schedule, if it was not established by written
agreement between the employee and the Agency.
(b) Exceptions to entitlement to notice, hearing, written response
and final decision. The procedural requirements of paragraph (a) of this
section are not applicable to any adjustment of pay arising out of an
employee's election of coverage or a change in coverage under a Federal
benefits program (such as health insurance) requiring periodic
deductions from pay, if the amount to be recovered was accumulated over
four pay periods or less. However, if the amount to be recovered was
accumulated over more than four pay periods the full procedures
prescribed under paragraph (d) of this section will be extended to the
employee.
(c) Notification before deductions begin. Except as provided in
paragraph (b) of this section, deductions will not be made unless the
employee is first provided with a minimum of 30 calendar days written
notice. Notice will be sent by certified mail (return receipt
requested), and must include the following:
(1) The Agency's determination that a debt is owed, including the
origin, nature, and amount of the debt;
(2) The Agency's intention to collect the debt by means of
deductions from the employee's current disposable pay account;
(3) The amount, frequency, proposed beginning date and duration of
the intended deductions. (The proposed beginning date for salary offset
cannot be earlier than 30 days after the date of notice, unless this
would compromise the Government's ultimate ability to resolve the debt);
(4) An explanation of the requirements concerning interest, penalty
and administrative costs;
(5) The employee's right to inspect and copy all records relating to
the debt or to request and receive a copy of such records;
(6) If not previously provided, the employee's right to enter into a
written agreement for a repayment schedule differing from that proposed
by the Agency where the terms of the proposed repayment schedule are
acceptable to the Agency. (Such an agreement must be in writing and
signed by both the employee and the appropriate EPA official and will be
included in the employee's personnel file and documented in the EPA
payroll system);
(7) The right to a hearing conducted by a hearing official not under
the control of the Administrator, if a request is filed;
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(8) The method and time for requesting a hearing;
(9) That the filing of a request for hearing within 15 days of
receipt of the original notification will stay the assessment of
interest, penalty and administrative costs and the commencement of
collection proceedings;
(10) That a final decision on the hearing (if requested) will be
issued at the earliest practical date, but no later than 60 days after
the filing of the request, unless the employee requests and the hearing
official grants a delay in the proceedings;
(11) That knowingly false or frivolous statements, representations
or evidence may subject the employee to--
(i) Disciplinary procedures under 5 U.S.C. chapter 75 or any other
applicable statutes or regulations;
(ii) Criminal penalties under 18 U.S.C. 286, 287, 1001 and 1002 or
other applicable statutory authority; or
(iii) Penalties under the False Claims Act, 31 U.S.C. 3729-3731, or
any other applicable statutory authority;
(12) Any other rights and remedies available under statutes or
regulations governing the program for which the collection is being
made; and
(13) That amounts paid or deducted for the debt, except
administrative costs and penalty charges where the entire debt is not
waived or terminated, which are later waived or found not owed to the
United States will be promptly refunded to the employee.
(d) Request for hearing. An employee may request a hearing by filing
a written request directly with the Director, Financial Management
Division (2734R) , U.S. Environmental Protection Agency, 1200
Pennsylvania Ave., NW., Washington, DC 20460. The request must state the
bases upon which the employee disputes the proposed collection of the
debt. The request must be signed by the employee and be received by EPA
within 15 days of the employee's receipt of the notification of proposed
deductions. The employee should submit in writing all facts, evidence
and witnesses which support his/her position to the Director, Financial
Management Division, within 15 days of the date of the request for a
hearing. The Director, Financial Management Division, will arrange for
the services of a hearing official not under the control of the
Administrator and will provide the hearing official with all documents
relating to the claim.
(e) Requests for hearing made after time expires. Late requests for
a hearing may be accepted if the employee can show that the delay in
filing the request for a hearing was due to circumstances beyond the
employee's control.
(f) Form of hearing, written response and final decision. (1)
Normally, a hearing will consist of the hearing official making a
decision based upon a review of the claims file and any materials
submitted by the debtor. However, in instances where the hearing
official determines that the validity of the debt turns on an issue of
veracity or credibility which cannot be resolved through review of
documentary evidence, the hearing official at his discretion may afford
the debtor an opportunity for an oral hearing. Such oral hearings will
consist of an informal conference before a hearing official in which the
employee and the Agency will be given the opportunity to present
evidence, witnesses and argument. If desired, the employee may be
represented by an individual of his/her choice. The Agency shall
maintain a summary record of oral hearings provided under these
procedures.
(2) Written decisions provided after a request for hearing will, at
a minimum, state the facts evidencing the nature and origin of the
alleged debt; and the hearing official's analysis, findings and
conclusions.
(3) The decision of the hearing official is final and binding on the
parties.
(g) Request for waiver. In certain instances, an employee may have a
statutory right to request a waiver of overpayment of pay or allowances,
e.g., 5 U.S.C. 5584 or 5 U.S.C. 5724(i). When an employee requests
waiver consideration under a right authorized by statute, further
collection on the debt will be suspended until a final administrative
decision is made on the waiver request. However, where it appears that
the Government's ability to recover the debt may be adversely affected
because of the employee's resignation, termination or other action,
suspension of recovery is not required. During
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the period of the suspension, interest, penalty charges and
administrative costs will not be assessed against the debt. The Agency
will not duplicate, for purposes of salary offset, any of the procedures
already provided the debtor under a request for waiver.
(h) Method and source of collection. A debt will be collected in a
lump-sum or by installment deductions at established pay intervals from
an employee's current pay account, unless the employee and the Agency
agree to alternative arrangements for payment. The alternative payment
schedule must be in writing, signed by both the employee and the
Administrator and will be documented in the Agency's files.
(i) Limitation on amount of deduction. The size and frequency of
installment deductions generally will bear a reasonable relation to the
size of the debt and the employee's ability to pay. However, the amount
deducted for any period may not exceed 15 percent of the disposable pay
from which the deduction is made, unless the employee has agreed in
writing to the deduction of a greater amount. If possible, the
installment payments will be in amounts sufficient to liquidate the debt
in three years or less. Installment payments of less than $25 normally
will be accepted only in the most unusual circumstances.
(j) Duration of deduction. If the employee is financially unable to
pay a debt in a lump-sum or the amount of the debt exceeds 15 percent of
disposable pay, collection will be made in installments. Installment
deductions will be made over the period of active duty or employment
except as provided in paragraph (a)(1) of this section.
(k) When deductions may begin. (1) Deductions to liquidate an
employee's debt will begin on the date stated in the Agency's notice of
intention to collect from the employee's current pay unless the debt has
been repaid or the employee has filed a timely request for hearing on
issues for which a hearing is appropriate.
(2) If the employee has filed a timely request for hearing with the
Agency, deductions will begin after the hearing official has provided
the employee with a final written decision indicating the amount owed
the Government. Following the decision by the hearing official, the
employee will be given 30 days to repay the amount owed prior to
collection through salary offset, unless otherwise provided by the
hearing official.
(l) Liquidation from final check. If the employee retires, resigns,
or the period of employment ends before collection of the debt is
completed, the remainder of the debt will be offset from subsequent
payments of any nature due the employee (e.g., final salary payment,
lump-sum leave, etc.).
(m) Recovery from other payments due a separated employee. If the
debt cannot be liquidated by offset from any final payment due the
employee on the date of separation, EPA will liquidate the debt, where
appropriate, by administrative offset from later payments of any kind
due the former employee (e.g., retirement pay). Such administrative
offset will be taken in accordance with the procedures set forth in
Sec. 13.20.
(n) Employees who transfer to another Federal agency. If an EPA
employee transfers to another Federal agency prior to repaying a debt
owed to EPA, the following action will be taken:
(1) The appropriate debt-claim form specified by the Office of
Personnel Management (OPM) will be completed and certified to the new
paying office by EPA. EPA will certify: That the employee owes a debt;
the amount and the basis for the debt; the date on which payment is due;
the date the Government's rights to collect the debt first accrued; and
that EPA's regulations implementing 5 U.S.C. 5514 have been approved by
OPM.
(2) The new paying agency will be advised of the amount which has
already been collected, the number of installments and the commencement
date for the first installment, if other than the next officially
established pay period. EPA will also identify to the new paying agency
the actions it has taken and the dates of such actions.
(3) EPA will place or will arrange to have placed in the employee's
official personnel file the information required by paragraphs (n) (1)
and (2) of this section.
[[Page 207]]
(4) Upon receipt of the official personnel file from EPA, the new
paying agency will resume collection from the employee's current pay
account and will notify both the employee and EPA of the resumption.
(o) Interest, penalty and administrative cost. EPA will assess
interest and administrative costs on debts collected under these
procedures. The following guidelines apply to the assessment of these
costs on debts collected by salary offset:
(1) A processing and handling charge will be assessed on debts
collected through salary offset under this section. Where offset begun
prior to the employee's receipt of the 30-day written notice of the
proposed offset, processing and handling costs will only be assessed
after the expiration of the 30-day notice period and after the
completion of any hearing requested under paragraph (d) of this section
or waiver consideration under paragraph (g) of this section.
(2) Interest will be assessed on all debts not collected within 30
days of either the date of the notice where the employee has not
requested a hearing within the allotted time, completion of a hearing
pursuant to paragraph (d) of this section, or completion of waiver
consideration under paragraph (g) of this section, whichever is later.
Interest will continue to accrue during the period of the recovery.
(3) Deductions by salary offset normally begin prior to the time for
assessment of a penalty. Therefore, a penalty charge will not be
assessed unless deductions occur more than 120 days from the date of
notice to the debtor and penalty assessments have not been suspended
because of waiver consideration by EPA.
(p) Non-waiver of right by payment. An employee's payment under
protest of all or any portion of a debt does not waive any rights which
the employee may have under either these procedures or any other
provision of law.
(q) Refunds. EPA will promptly refund to the employee amounts paid
or deducted pursuant to this section, the recovery of which is
subsequently waived or otherwise found not owing to the United States.
Refunds do not bear interest unless specifically authorized by law.
(r) Time limit for commencing recovery by salary setoff. EPA will
not initiate salary offset to collect a debt more than 10 years after
the Government's right to collect the debt first accrued, unless facts
material to the right to collect the debt were not known and could not
have been known through the exercise of reasonable care by the
Government official responsible for discovering and collecting such
debts.
