[Federal Register: August 31, 2004 (Volume 69, Number 168)]
[Rules and Regulations]
[Page 52995-52997]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31au04-3]

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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 143

RIN 3038-AC03


Collection of Claims Owed the United States Arising From
Activities Under the Commission's Jurisdiction

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of final rulemaking.

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SUMMARY: The Commodity Futures Trading Commission (Commission) is
amending its regulations which govern the collection of claims owed to
the United States arising from activities under the Commission's
jurisdiction. The amendment implements provisions of the Debt
Collection Improvement Act of 1996 (DCIA) that allow Federal agencies
to collect past-due debts through administrative wage garnishment. As
required by the DCIA, the wage garnishment procedures the Commission is
adopting are based on, and are consistent with, implementing
regulations that have been issued by the Department of Treasury.

DATES: The Commission's amendment of its part 143 regulations shall be
effective on August 31, 2004.

FOR FURTHER INFORMATION CONTACT: Stephen Mihans, Esq., Office of
General Counsel, Commodity Futures Trading Commission, at (202) 418-
5399 or smihans@cftc.gov. This document also is available at  href="http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov" shape="rect">http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov
.


SUPPLEMENTARY INFORMATION: On December 15, 2003, the Commission
published for public comment a proposed revision of part 143 of its
regulations, 17 CFR part 143, which would add administrative wage
garnishment to the available procedures for collecting debts owed to
the United States arising from activities subject to the Commission's
jurisdiction.\1\ At present, the part 143 rules, which apply to debts
owed by persons not employed by the Federal government, authorize

[[Page 52996]]

collection by (1) administrative offset against obligations owed to the
debtor by the United States; (2) compromise (if the debt owed is not
more than $100,000); or (3) referral to the Department of Justice for
litigation.\2\
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    \1\ See 68 FR 69634 (Dec. 15, 2003).
    \2\ The collection of debts owed to the Commission by its
current employees or by the employees of other Federal agencies, and
of debts owed to other Federal agencies by current Commission
employees, is separately governed by part 141 of the Commission's
regulations, 17 CFR part 141.
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    Under the Commission's proposal, Department of the Treasury
regulations implementing the administrative wage garnishment provisions
of the DCIA would govern wage garnishment proceedings initiated by the
Commission. Those regulations, promulgated by the Treasury Department's
Financial Management Service (FMS), have been codified at 31 CFR
285.11. As proposed by the Commission, when an individual owes the
United States a delinquent non-tax debt arising from activities under
the Commission's jurisdiction, the Commission, or another Federal
agency collecting the debt on the Commission's behalf,\3\ would be
authorized to initiate administrative proceedings to garnish the
debtor's disposable income in accordance with the requirements of 31
CFR 285.11.\4\ The debtor would have an opportunity to request a
hearing regarding the existence or amount of the debt or the terms of
repayment. If such a hearing were requested, the Commission's Executive
Director would designate a qualified and impartial employee of the
Commission to act as the hearing official.\5\
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    \3\ On August 27, 19994, the Commission entered into a cross-
servicing agreement with the FMS, which allows the FMS to undertake
debt-collection activities on behalf of the Commission. The
Commission's routine uses of information for purposes of the Privacy
Act, 5 U.S.C. 552a, permit the disclosure of information necessary
for the FMS to assist the Commission in collecting delinquent debts
through administrative wage garnishment. See 62 FR 44442 (Aug. 21,
1997).
    \4\ See Proposed Rule 143.9, which can be found at 68 FR 69637.
Under this proposed rule, the Commission's use of the other debt-
collection measures set forth in part 143 would not preclude it from
initiating an administrative wage garnishment proceeding against a
delinquent debtor.
    \5\ See Proposed Rule 143.10, which can be found at 68 FR 69637.
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    In addition to adding administrative wage garnishment to the
existing debt-collection measures in the part 143 rules, the
Commission's proposal included several technical corrections and
editorial changes of a non-substantive nature in the part 143 rules.
Finally, the Commission proposed that the current part 143 rules, as
revised, be grouped together in a new subpart A, while the new
administrative wage garnishment rules be placed in a new subpart B.
    The public comment period for the proposed revision of the
Commission's part 143 rules closed on January 14, 2004. No comments
were received. As a result, with the exception of certain non-
substantive changes to Proposed Rule 143.10, the Commission is revising
its part 143 rules as proposed.\6\
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    \6\ As adopted, Rule 143.10 clarifies that administrative wage
garnishment hearings held by the Commission will be governed by 31
CFR 285.11(f). It provides, however, that in addition to the
mandates of 31 CFR 285.11(f), several further requirements will
apply to the Commission's wage garnishment hearings, including
marking and retaining as exhibits all documents presented for
consideration by the hearing official, and taking all testimony
adduced at an oral hearing under oath or affirmation and on the
record. These additional requirements will ensure that an adequate
record is available for review in the event that an administrative
wage garnishment order issued by, or on behalf of, the Commission is
appealed to a Federal court with appropriate jurisdiction.
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Related Matters

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-611, requires
that in adopting final rules, agencies consider the impact of those
rules on small businesses. As noted in the preamble to the proposed
rule amendments, the revisions to the part 143 rules are not subject to
the provisions of the RFA because they relate solely to agency
organization, procedure, and practice. Nevertheless, the Acting
Chairman certifies, on behalf of the Commission, that these rules will
not have a significant economic impact on a substantial number of small
businesses. Although an employer of a delinquent debtor will have to
certify certain information about the debtor, such as the debtor's
employment status and current earnings, this information is already
contained in the employer's payroll records. In addition, under 31 CFR
281.55, an employer will not be required to vary its normal payroll
cycle to accommodate an administrative wage garnishment order.

B. Paperwork Reduction Act

    The Commission's administrative wage garnishment rules will not
require the collection of information from the general public, but only
from specifically identified individuals or entities. For that reason,
the rules do not impose a burden within the meaning and intent of the
Paperwork Reduction Act of 1980, 5 U.S.C., et seq., and do not
necessitate review by the Office of Management and Budget.

C. Cost-Benefit Analysis

    Section 15(a) of the Commodity Exchange Act, 7 U.S.C. 19(a),
requires the Commission to consider the costs and benefits of its
action before issuing a new regulation. The Commission understands
that, by its terms, section 15(a) does not require the Commission to
quantify the costs and benefits of a new regulation or to determine
whether the benefits of the proposed regulation outweigh its costs. Nor
does it require that each rule be analyzed in isolation when that rule
is a component of a larger package of rules or rule revisions. Rather,
section 15(a) simply requires the Commission to ``consider the costs
and benefits'' of its action.
    Section 15(a) further specifies that costs and benefits shall be
evaluated in light of five broad areas of market and public concern--
namely, protection of market participants and the public; efficiency,
competitiveness, and financial integrity of futures markets; price
discovery; sound risk management practices; and other public interest
considerations. As a result, the Commission can, in its discretion,
give greater weight to any one of the five enumerated areas of concern
and can, in its discretion, determine that notwithstanding its costs, a
particular rule is necessary or appropriate to protect the public
interest or to effectuate any of the provisions, or accomplish any of
the purposes, of the Commodity Exchange Act.
    The administrative wage garnishment rules being adopted by the
Commission are not related to the marketplace and, therefore, should
not affect the protection of market participants; the efficiency,
competitiveness, and financial integrity of futures markets; price
discovery; or sound risk management practices. These rules do address
other public interest considerations, namely, the collection of debts
owed to the United States arising from activities under the
Commission's jurisdiction. The costs associated with implementing
administrative wage garnishment, which are mandated by the DCIA and 31
CFR 285.11, will be small. On the other hand, the benefits include
providing an additional means to prevent persons who have been found
liable for violating the Commodity Exchange Act or the Commission's
regulations or orders from avoiding payment of monetary sanctions
lawfully imposed on them.

List of Subjects in 17 CFR Part 143

    Civil monetary penalty, Claims.


0
In consideration of the foregoing, the Commission amends chapter 1 of
title 17

[[Page 52997]]

of the Code of Federal Regulations as follows:

PART 143--COLLECTION OF CLAIMS OWED THE UNITED STATES ARISING FROM
ACTIVITIES UNDER THE COMMISSION'S JURISDICTION

0
1. The authority citation for part 143 is revised to read as follows:

    Authority: 7 U.S.C. 9 and 15, 9a, 12a(5), 13a, 13a-1(d), and
13(a); 31 U.S.C. 3701-3720E; 28 U.S.C. 2461 note.

0
2. Section 143.1 is revised to read as follows:


Sec.  143.1  Purpose.

    This part provides procedures that the Commission will use to
collect debts owed the United States arising from activities under the
Commission's jurisdiction. As applicable, these procedures are based
upon, and conform to, the Federal Claims Collection Act, as amended, 31
U.S.C. 3701-3720E; the Federal Claims Collection Standards, 31 CFR
Parts 900-905, issued by the Department of the Treasury and the
Department of Justice; administrative wage garnishment regulations
issued by the Department of the Treasury, 31 CFR 285.11; and other laws
applicable to the collection of non-tax debts owed to the United States
arising from activities under the Commission's jurisdiction. Subpart A
describes procedures for collection by offset against obligations of
the United States to the debtor, by compromise, and by referral to the
Department of Justice for litigation. It also sets forth the
Commission's policy on collecting interest on unpaid claims, the method
used in calculating such interest, and the maximum inflation-adjusted
civil monetary penalties that may be assessed and enforced for each
violation of the Commodity Exchange Act or regulations or orders of the
Commission promulgated thereunder. Subpart B describes procedures for
collection by administrative garnishment of the debtor's wages.

0
3. Sections 143.2 through 143.8 are designated as subpart A of part
143, and a new heading, ``Subpart A--General Provisions,'' is added
above Sec.  143.2 to read as follows:

Subpart A--General Provisions

0
4. Section 143.2 is amended by revising paragraph (c) to read as
follows:


Sec.  143.2  Notice of claim.

* * * * *
    (c) If no response or an unsatisfactory response is received by the
date indicated in the notice, the Commission may take further action as
appropriate under the Commodity Exchange Act or regulations thereunder,
or under 31 CFR parts 900-905 or the Federal Claims Collection Act as
amended, 31 U.S.C. 3701-3720E.

0
5. Section 143.7 is amended by revising paragraph (a) to read as
follows:


Sec.  143.7  Delegation of authority to the Executive Director.

    (a) The Commission hereby delegates, until such time as the
Commission orders otherwise, to the Executive Director or to any
Commission employee under the Executive Director's supervision as he or
she may designate, authority to take action to carry out subpart A and
subpart B of this part and the requirements of 31 CFR parts 900-905 and
31 CFR 285.11.
* * * * *

0
6. A new subpart B is added to part 143, to read as follows:

Subpart B--Administrative Wage Garnishment


Sec.  143.9  Administrative wage garnishment orders.

    Whenever an individual owes the United States a delinquent non-tax
debt arising from activities under the Commission's jurisdiction, the
Commission, or another federal agency collecting the debt on behalf of
the Commission, may initiate administrative proceedings to garnish the
disposable income of the delinquent debtor in accordance with the
requirements of, and the procedures set forth in, 31 CFR 285.11. The
Commission's use of other debt-collection measures set forth in subpart
A of this part does not preclude the initiation of an administrative
wage garnishment proceeding against a delinquent debtor.


Sec.  143.10  Garnishment hearings.

    Any oral or written hearing required to establish the Commission's
right to collect a delinquent debt through administrative wage
garnishment shall be presided over by a hearing official designated by
the Executive Director, with the concurrence of the General Counsel or
the General Counsel's designee. Any qualified and impartial employee of
the Commission designated by the Executive Director may serve as a
hearing official. Except as otherwise provided in this section, the
hearing shall be conducted in accordance with the requirements of, and
the procedures set forth in, 31 CFR 285.11(f). All documents presented
to the hearing official for his or her consideration shall be marked as
exhibits and retained in the record. All testimony given at an oral
hearing, either in person or by telephone, shall be under oath or
affirmation; a transcript of the hearing shall be prepared and made
part of the record. When a debtor requests a hearing, the designated
hearing official shall hold the hearing and issue his or her written
decision within 60 days of the Commission's receipt of the request,
unless otherwise approved, in writing, by the Executive Director.

    Issued in Washington, DC, on August 24, 2004 by the Commission.
Jean A. Webb,
Secretary of the Commission.
[FR Doc. 04-19755 Filed 8-30-04; 8:45 am]
BILLING CODE 6351-01-M