PART 19—COMMERCE DEBT COLLECTION Authority: 31 U.S.C. 3701, et seq. Source: 81 FR 12811, Mar. 11, 2016, unless otherwise noted. Subpart A—General Provisions § 19.1 What definitions apply to the regulations in this part? As used in this part: Administrative offset or offset Administrative wage garnishment Agency or Federal agency Bureau of the Fiscal Service Commerce debt Commerce Department Commerce entity Creditor Day Debt et seq. Debtor Delinquent debt Delinquent Commerce debt Disposable pay Employee or Federal employee FCCS Payment agency or Federal payment agency Person Salary offset Secretary Tax refund offset § 19.2 Why did the Commerce Department issue these regulations and what do they cover? (a) Scope. (b) Applicability. (2) This part does not apply to tax debts nor to any debt for which there is an indication of fraud or misrepresentation, as described in section 900.3 of the FCCS, unless the debt is returned by the Department of Justice to Commerce Department for handling. (3) Nothing in this part precludes collection or disposition of any debt under statutes and regulations other than those described in this part. See, See, (c) Additional policies and procedures. (d) Duplication not required. (e) Use of multiple collection remedies allowed. § 19.3 Do these regulations adopt the Federal Claims Collection Standards (FCCS)? This part adopts and incorporates all provisions of the FCCS (31 CFR Chapter IX parts 900-904). This part also supplements the FCCS by prescribing procedures consistent with the FCCS, as necessary and appropriate for Commerce Department operations. Subpart B—Procedures To Collect Commerce Debts § 19.4 What notice will Commerce entities send to a debtor when collecting a Commerce debt? (a) Notice requirements. (1) The nature and amount of the Commerce debt, and the facts giving rise to the Commerce debt; (2) How interest, penalties, and administrative costs are added to the Commerce debt, the date by which payment should be made to avoid such charges, and that such assessments must be made unless excused in accordance with 31 CFR 901.9 ( see (3) The date by which payment should be made to avoid the enforced collection actions described in paragraph (a)(6) of this section; (4) The Commerce entity's willingness to discuss alternative payment arrangements and how the debtor may enter into a written agreement to repay the Commerce debt under terms acceptable to the Commerce entity ( see (5) The name, address, and telephone number of a contact person or office within the Commerce entity; (6) The Commerce entity's intention to enforce collection by taking one or more of the following actions if the debtor fails to pay or otherwise resolve the Commerce debt: (i) Offset. see (ii) Private collection agency. see (iii) Credit bureau reporting. see (iv) Administrative wage garnishment. see (v) Litigation. see (vi) Treasury Department's Bureau of the Fiscal Service. see (7) That Commerce debts over 120 days delinquent must be referred to the Bureau of the Fiscal Service for the collection actions described in paragraph (a)(6) of this section ( see (8) How the debtor may inspect and copy non-privileged records related to the Commerce debt; (9) How the debtor may request a review of the Commerce entity's determination that the debtor owes a Commerce debt and present evidence that the Commerce debt is not delinquent or legally enforceable ( see (10) How a debtor who is an individual may request a hearing if the Commerce entity intends to garnish the debtor's private sector ( i.e., see (i) The method and time period for requesting a hearing; (ii) That a request for a hearing, timely filed on or before the 15th business day following the date of the mailing of the notice, will stay the commencement of administrative wage garnishment, but not other collection procedures; and (iii) The name and address of the office to which the request for a hearing should be sent. (11) How a debtor who is an individual and a Federal employee subject to Federal salary offset may request a hearing ( see (i) The method and time period for requesting a hearing; (ii) That a request for a hearing, timely filed on or before the 15th day following receipt of the notice, will stay the commencement of salary offset, but not other collection procedures; (iii) The name and address of the office to which the request for a hearing should be sent; (iv) That the Commerce entity will refer the Commerce debt to the debtor's employing agency or to the Bureau of the Fiscal Service to implement salary offset, unless the employee files a timely request for a hearing; (v) That a final decision on the hearing, if requested, will be issued at the earliest practical date, but not later than 60 days after the filing of the request for a hearing, unless the employee requests and the hearing official grants a delay in the proceedings; (vi) That any knowingly false or frivolous statements, representations, or evidence may subject the Federal employee to penalties under the False Claims Act (31 U.S.C. 3729-3731) or other applicable statutory authority, and criminal penalties under 18 U.S.C. 286, 287, 1001, and 1002, or other applicable statutory authority; (vii) That unless prohibited by contract or statute, amounts paid on or deducted for the Commerce debt which are later waived or found not owed to the United States will be promptly refunded to the employee; and (viii) That proceedings with respect to such Commerce debt are governed by 5 U.S.C. 5514 and 31 U.S.C. 3716. (12) How the debtor may request a waiver of the Commerce debt, if applicable. See, (13) How the debtor's spouse may claim his or her share of a joint income tax refund by filing Form 8379 with the Internal Revenue Service ( see http://www.irs.gov (14) How the debtor may exercise other rights and remedies, if any, available to the debtor under programmatic statutory or regulatory authority under which the Commerce debt arose. (15) That certain debtors and, if applicable, persons controlled by or controlling such debtors, may be ineligible for Federal Government loans, guaranties and insurance, grants, cooperative agreements or other sources of Federal funds ( see (16) If applicable, the Commerce entity's intention to deny, suspend or revoke licenses, permits or privileges (see § 19.17(b) of this part); and (17) That the debtor should advise the Commerce entity of a bankruptcy proceeding of the debtor or another person liable for the Commerce debt being collected. (b) Exceptions to notice requirements. (c) Respond to debtors; comply with FCCS. See § 19.5 How will Commerce entities add interest, penalty charges, and administrative costs to a Commerce debt? (a) Assessment and notice. (b) Waiver of interest, penalties, and administrative costs. See See http://www.osec.doc.gov/ofm/credit/cover.html.) (c) Accrual during suspension of debt collection. See http://www.osec.doc.gov/ofm/credit.cover.html. § 19.6 When will Commerce entities allow a debtor to pay a Commerce debt in installments instead of one lump sum? If a debtor is financially unable to pay the Commerce debt in one lump sum, a Commerce entity may accept payment of a Commerce debt in regular installments, in accordance with the provisions of 31 CFR 901.8 and the Commerce entity's policies and procedures. § 19.7 When will Commerce entities compromise a Commerce debt? If a Commerce entity cannot collect the full amount of a Commerce debt, the Commerce entity may, with legal counsel approval, compromise the Commerce debt in accordance with the provisions of 31 CFR part 902 and the Commerce entity's policies and procedures. ( See http://www.osec.doc.gov/ofm/credit.cover.html. § 19.8 When will Commerce entities suspend or terminate debt collection on a Commerce debt? If, after pursuing all appropriate means of collection, a Commerce entity determines that a Commerce debt is uncollectible, the Commerce entity may, with legal counsel approval, suspend or terminate debt collection activity in accordance with the provisions of 31 CFR part 903 and the Commerce entity's policies and procedures. Termination of debt collection activity by a Commerce entity does not discharge the indebtedness. ( See http://www.osec.doc.gov/ofm/credit/cover.html. § 19.9 When will Commerce entities transfer a Commerce debt to the Treasury Department's Bureau of the Fiscal Service for collection? (a) Commerce entities will transfer any Commerce debt that is more than 120 days delinquent to the Bureau of the Fiscal Service for debt collection services, a process known as “cross-servicing.” See See (b) At least sixty (60) days prior to transferring a Commerce debt to the Bureau of the Fiscal Service, Commerce entities will send notice to the debtor as required by § 19.4 of this part. Commerce entities will certify to the Bureau of the Fiscal Service, in writing, that the Commerce debt is valid, delinquent, legally enforceable, and that there are no legal bars to collection. In addition, Commerce entities will certify their compliance with all applicable due process and other requirements as described in this part and other Federal laws. See (c) As part of its debt collection process, the Bureau of the Fiscal Service uses the Treasury Offset Program to collect Commerce debts by administrative and tax refund offset. See § 19.10 How will Commerce entities use administrative offset (offset of non-tax Federal payments) to collect a Commerce debt? (a) Centralized administrative offset through the Treasury Offset Program. See See (2) At least sixty (60) days prior to referring a Commerce debt to the Treasury Offset Program, in accordance with paragraph (a)(1) of this section, Commerce entities will send notice to the debtor in accordance with the requirements of § 19.4 of this part. Commerce entities will certify to the Bureau of the Fiscal Service, in writing, that the Commerce debt is valid, delinquent, legally enforceable, and that there are no legal bars to collection by offset. In addition, Commerce entities will certify their compliance with the requirements described in this part. (b) Non-centralized administrative offset for Commerce debts. See (2) At least thirty (30) days prior to offsetting a payment internally or requesting a Federal payment agency to offset a payment, Commerce entities will send notice to the debtor in accordance with the requirements of § 19.4 of this part. When referring a Commerce debt for offset under this paragraph (b), Commerce entities making the request will certify, in writing, that the Commerce debt is valid, delinquent, legally enforceable, and that there are no legal bars to collection by offset. In addition, Commerce entities will certify their compliance with these regulations concerning administrative offset. See (c) Administrative review. (d) Procedures for expedited offset. See http://www.osec.doc.gov/ofm/credit.cover.html. § 19.11 How will Commerce entities use tax refund offset to collect a Commerce debt? (a) Tax refund offset. See See (b) Notice. See (c) Administrative review. § 19.12 How will Commerce entities offset a Federal employee's salary to collect a Commerce debt? (a) Federal salary offset. see (2) Nothing in this part requires a Commerce entity to collect a Commerce debt in accordance with the provisions of this section if Federal law allows otherwise. See, (3) Commerce entities may use the administrative wage garnishment procedure described in § 19.13 of this part to collect a Commerce debt from an individual's non-Federal wages. (b) Centralized salary offset through the Treasury Offset Program. See (c) Non-centralized salary offset for Commerce debts. See See (d) When prior notice not required. (1) Any adjustment to pay arising out of any 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 intra-agency 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 such adjustment; or (3) Any adjustment to collect a Commerce debt amounting to $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 and the amount of the adjustment and a point of contact for contesting such adjustment. (e) Hearing procedures Request for a hearing. See See (2) Failure to submit timely request for hearing. (3) Hearing official. (4) Notice of hearing. (5) Oral hearing. (i) Informal conferences with the hearing official, in which the employee and agency representative will be given full opportunity to present evidence, witnesses and argument; (ii) Informal meetings with an interview of the employee by the hearing official; or (iii) Formal written submissions, with an opportunity for oral presentation. (6) Paper hearing. See (7) Failure to appear or submit documentary evidence. (8) Burden of proof. (9) Record. See (10) Date of decision. (11) Content of decision. (i) A statement of the facts presented to support the origin, nature, and amount of the Commerce debt; (ii) The hearing official's findings, analysis, and conclusions; and (iii) The terms of any repayment schedules, if applicable. (12) Final agency action. (f) Waiver not precluded. See http://www.osec.doc.gov/ofm/credit/cover.html. (g) Salary offset process Determination of disposable pay. (2) When salary offset begins. (3) Amount of salary offset. (i) If the amount of the Commerce debt is equal to or less than 15 percent of the disposable pay, such Commerce debt generally will be collected in one lump sum payment; (ii) Installment deductions will be made over a period of no greater than the anticipated period of employment. An installment deduction will 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 or the creditor agency has determined that smaller deductions are appropriate based on the employee's ability to pay. (4) Final salary payment. (h) Payment agency's responsibilities. (2) If the employee is already separated from employment and all payments due from his or her former payment agency have been made, Commerce entities may request that money due and payable to the employee from the Civil Service Retirement Fund and Disability Fund, the Federal Employee Retirement System, or other similar funds, be administratively offset to collect the Commerce debt. Generally, Commerce entities will collect such monies through the Treasury Offset Program as described in § 19.9(c) of this part. (3) When an employee transfers to another agency, Commerce entities should resume collection with the employee's new payment agency in order to continue salary offset. § 19.13 How will Commerce entities use administrative wage garnishment to collect a Commerce debt from a debtor's wages? (a) Commerce entities are authorized to collect Commerce debts from an individual debtor's wages by means of administrative wage garnishment in accordance with the requirements of 31 U.S.C. 3720D and 31 CFR 285.11. This part adopts and incorporates all of the provisions of 31 CFR 285.11 concerning administrative wage garnishment, including the hearing procedures described in 31 CFR 285.11(f). Commerce entities may use administrative wage garnishment to collect a delinquent Commerce debt unless the debtor is making timely payments under an agreement to pay the Commerce debt in installments ( see See (b) This section does not apply to Federal salary offset, the process by which Commerce entities collect Commerce debts from the salaries of Federal employees ( see § 19.14 How will Commerce entities report Commerce debts to credit bureaus? Commerce entities shall report delinquent Commerce debts to credit bureaus in accordance with the provisions of 31 U.S.C. 3711(e), 31 CFR 901.4, and the Office of Management and Budget Circular A-129, “Policies for Federal Credit Programs and Non-tax Receivables.” For additional information, see https://www.fiscal.treasury.gov/fsreports/fs_reference.htm. § 19.15 How will Commerce entities refer Commerce debts to private collection agencies? Commerce entities will transfer delinquent Commerce debts to the Bureau of the Fiscal Service to obtain debt collection services provided by private collection agencies. See § 19.16 When will Commerce entities refer Commerce debts to the Department of Justice? (a) Compromise or suspension or termination of collection activity. See (b) Litigation. See § 19.17 Will a debtor who owes a Commerce or other Federal agency debt, and persons controlled by or controlling such debtors, be ineligible for Federal loan assistance, grants, cooperative agreements, or other sources of Federal funds or for Federal licenses, permits, or privileges? (a) Delinquent debtors are ineligible for and barred from obtaining Federal loans or loan insurance or guaranties. As required by 31 U.S.C. 3720B and 31 CFR 901.6, Commerce entities will not extend financial assistance in the form of a loan, loan guarantee, or loan insurance to any person delinquent on a debt owed to a Federal agency. Commerce Department may issue standards under which Commerce Department may determine that persons controlled by or controlling such delinquent debtors are similarly ineligible in accordance with 31 CFR 285.13(c)(2). This prohibition does not apply to disaster loans. Commerce entities may extend credit after the delinquency has been resolved. See (b) A debtor who has a judgment lien against the debtor's property for a debt to the United States is not eligible to receive grants, loans or funds directly or indirectly from the United States until the judgment is paid in full or otherwise satisfied. This prohibition does not apply to funds to which the debtor is entitled as beneficiary. Commerce Department may promulgate regulations to allow for waivers of this ineligibility. See (c) Suspension or revocation of eligibility for licenses, permits, or privileges. Unless prohibited by law, Commerce entities with the authority to do so under the circumstances should deny, suspend or revoke licenses, permits, or other privileges for any inexcusable or willful failure of a debtor to pay a debt. The Commerce entity responsible for distributing the licenses, permits, or other privileges will establish policies and procedures governing suspension and revocation for delinquent debtors. If applicable, Commerce entities will advise the debtor in the notice required by § 19.4 of this part of the Commerce entities' ability to deny, suspend or revoke licenses, permits or privileges. See (d) To the extent that a person delinquent on a Commerce debt is not otherwise barred under § 19.17(a) and § 19.17 (c) of this part from becoming or remaining a recipient of a Commerce Department grant or cooperative agreement, it is Commerce Department policy that no award of Federal funds shall be made to a Commerce Department grant or cooperative agreement applicant who has an outstanding delinquent Commerce debt until: (1) The delinquent Commerce debt is paid in full, (2) A negotiated repayment schedule acceptable to Commerce Department is established and at least one payment is received, or (3) Other arrangements satisfactory to Commerce Department are made. § 19.18 How does a debtor request a special review based on a change in circumstances such as catastrophic illness, divorce, death, or disability? (a) Material change in circumstances. (b) Inability to pay. (1) Income from all sources; (2) Assets; (3) Liabilities; (4) Number of dependents; (5) Expenses for food, housing, clothing, and transportation; (6) Medical expenses; (7) Exceptional expenses, if any; and (8) Any additional materials and information that the Commerce entity may request relating to ability or inability to pay the amount(s) currently required. (c) Alternative payment arrangement. § 19.19 Will Commerce entities issue a refund if money is erroneously collected on a Commerce debt? Commerce entities shall promptly refund to a debtor any amount collected on a Commerce debt when the Commerce debt is waived or otherwise found not to be owed to the United States, or as otherwise required by law. Refunds under this part shall not bear interest unless required by law. Subpart C—Procedures for Offset of Commerce Department Payments To Collect Debts Owed to Other Federal Agencies § 19.20 How do other Federal agencies use the offset process to collect debts from payments issued by a Commerce entity? (a) Offset of Commerce entity payments to collect debts owed to other Federal agencies. (2) This subpart C does not apply to Commerce debts. See (3) This subpart C does not apply to the collection of non-Commerce debts through tax refund offset. See (b) Administrative offset (including salary offset); certification. (c) Where a creditor agency makes requests for offset. (d) Incomplete certification. (e) Review. (f) When Commerce entities will not comply with offset request. (g) Multiple debts. (h) Priority of debts owed to Commerce entity. § 19.21 What does a Commerce entity do upon receipt of a request to offset the salary of a Commerce entity employee to collect a debt owed by the employee to another Federal agency? (a) Notice to the Commerce employee. (b) Amount of deductions from Commerce employee's salary. See (c) When the debtor is no longer employed by the Commerce entity Offset of final and subsequent payments. See (2) Notice to the creditor agency. (3) Notice to the debtor. (d) When the debtor transfers to another Federal agency Notice to the creditor agency. (2) Notice to the debtor. (e) Request for hearing official. See