
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 31USC3716]

 
                       TITLE 31--MONEY AND FINANCE
 
                   SUBTITLE III--FINANCIAL MANAGEMENT
 
                           CHAPTER 37--CLAIMS
 
          SUBCHAPTER II--CLAIMS OF THE UNITED STATES GOVERNMENT
 
Sec. 3716. Administrative offset

    (a) After trying to collect a claim from a person under section 
3711(a) of this title, the head of an executive, judicial, or 
legislative agency may collect the claim by administrative offset. The 
head of the agency may collect by administrative offset only after 
giving the debtor--
        (1) written notice of the type and amount of the claim, the 
    intention of the head of the agency to collect the claim by 
    administrative offset, and an explanation of the rights of the 
    debtor under this section;
        (2) an opportunity to inspect and copy the records of the agency 
    related to the claim;
        (3) an opportunity for a review within the agency of the 
    decision of the agency related to the claim; and
        (4) an opportunity to make a written agreement with the head of 
    the agency to repay the amount of the claim.

    (b) Before collecting a claim by administrative offset, the head of 
an executive, judicial, or legislative agency must either--
        (1) adopt, without change, regulations on collecting by 
    administrative offset promulgated by the Department of Justice, the 
    General Accounting Office, or the Department of the Treasury; or
        (2) prescribe regulations on collecting by administrative offset 
    consistent with the regulations referred to in paragraph (1).

    (c)(1)(A) Except as otherwise provided in this subsection, a 
disbursing official of the Department of the Treasury, the Department of 
Defense, the United States Postal Service, or any other government 
corporation, or any disbursing official of the United States designated 
by the Secretary of the Treasury, shall offset at least annually the 
amount of a payment which a payment certifying agency has certified to 
the disbursing official for disbursement, by an amount equal to the 
amount of a claim which a creditor agency has certified to the Secretary 
of the Treasury pursuant to this subsection.
    (B) An agency that designates disbursing officials pursuant to 
section 3321(c) of this title is not required to certify claims arising 
out of its operations to the Secretary of the Treasury before such 
agency's disbursing officials offset such claims.
    (C) Payments certified by the Department of Education under a 
program administered by the Secretary of Education under title IV of the 
Higher Education Act of 1965 shall not be subject to administrative 
offset under this subsection.
    (2) Neither the disbursing official nor the payment certifying 
agency shall be liable--
        (A) for the amount of the administrative offset on the basis 
    that the underlying obligation, represented by the payment before 
    the administrative offset was taken, was not satisfied; or
        (B) for failure to provide timely notice under paragraph (8).

    (3)(A)(i) Notwithstanding any other provision of law (including 
sections 207 and 1631(d)(1) of the Social Security Act (42 U.S.C. 407 
and 1383(d)(1)), section 413(b) of Public Law 91-173 (30 U.S.C. 923(b)), 
and section 14 of the Act of August 29, 1935 (45 U.S.C. 231m)), except 
as provided in clause (ii), all payments due to an individual under--
        (I) the Social Security Act,
        (II) part B of the Black Lung Benefits Act, or
        (III) any law administered by the Railroad Retirement Board 
    (other than payments that such Board determines to be tier 2 
    benefits),

shall be subject to offset under this section.
    (ii) An amount of $9,000 which a debtor may receive under Federal 
benefit programs cited under clause (i) within a 12-month period shall 
be exempt from offset under this subsection. In applying the $9,000 
exemption, the disbursing official shall--
        (I) reduce the $9,000 exemption amount for the 12-month period 
    by the amount of all Federal benefit payments made during such 12-
    month period which are not subject to offset under this subsection; 
    and
        (II) apply a prorated amount of the exemption to each periodic 
    benefit payment to be made to the debtor during the applicable 12-
    month period.

For purposes of the preceding sentence, the amount of a periodic benefit 
payment shall be the amount after any reduction or deduction required 
under the laws authorizing the program under which such payment is 
authorized to be made (including any reduction or deduction to recover 
any overpayment under such program).
    (B) The Secretary of the Treasury shall exempt from administrative 
offset under this subsection payments under means-tested programs when 
requested by the head of the respective agency. The Secretary may exempt 
other payments from administrative offset under this subsection upon the 
written request of the head of a payment certifying agency. A written 
request for exemption of other payments must provide justification for 
the exemption under standards prescribed by the Secretary. Such 
standards shall give due consideration to whether administrative offset 
would tend to interfere substantially with or defeat the purposes of the 
payment certifying agency's program. The Secretary shall report to the 
Congress annually on exemptions granted under this section.
    (C) The provisions of sections 205(b)(1), 809(a)(1), and 1631(c)(1) 
of the Social Security Act shall not apply to any administrative offset 
executed pursuant to this section against benefits authorized by title 
II, VIII, or title XVI of the Social Security Act, respectively.
    (4) The Secretary of the Treasury may charge a fee sufficient to 
cover the full cost of implementing this subsection. The fee may be 
collected either by the retention of a portion of amounts collected 
pursuant to this subsection, or by billing the agency referring or 
transferring a claim for those amounts. Fees charged to the agencies 
shall be based on actual administrative offsets completed. Amounts 
received by the United States as fees under this subsection shall be 
deposited into the account of the Department of the Treasury under 
section 3711(g)(7) of this title, and shall be collected and accounted 
for in accordance with the provisions of that section.
    (5) The Secretary of the Treasury in consultation with the 
Commissioner of Social Security and the Director of the Office of 
Management and Budget, may prescribe such rules, regulations, and 
procedures as the Secretary of the Treasury considers necessary to carry 
out this subsection. The Secretary shall consult with the heads of 
affected agencies in the development of such rules, regulations, and 
procedures.
    (6) Any Federal agency that is owed by a person a past due, legally 
enforceable nontax debt that is over 180 days delinquent, including 
nontax debt administered by a third party acting as an agent for the 
Federal Government, shall notify the Secretary of the Treasury of all 
such nontax debts for purposes of administrative offset under this 
subsection.
    (7)(A) The disbursing official conducting an administrative offset 
with respect to a payment to a payee shall notify the payee in writing 
of--
        (i) the occurrence of the administrative offset to satisfy a 
    past due legally enforceable debt, including a description of the 
    type and amount of the payment otherwise payable to the payee 
    against which the offset was executed;
        (ii) the identity of the creditor agency requesting the offset; 
    and
        (iii) a contact point within the creditor agency that will 
    handle concerns regarding the offset.

    (B) If the payment to be offset is a periodic benefit payment, the 
disbursing official shall take reasonable steps, as determined by the 
Secretary of the Treasury, to provide the notice to the payee not later 
than the date on which the payee is otherwise scheduled to receive the 
payment, or as soon as practical thereafter, but no later than the date 
of the administrative offset. Notwithstanding the preceding sentence, 
the failure of the debtor to receive such notice shall not impair the 
legality of such administrative offset.
    (8) A levy pursuant to the Internal Revenue Code of 1986 shall take 
precedence over requests for administrative offset pursuant to other 
laws.
    (d) Nothing in this section is intended to prohibit the use of any 
other administrative offset authority existing under statute or common 
law.
    (e) This section does not apply--
        (1) to a claim under this subchapter that has been outstanding 
    for more than 10 years; or
        (2) when a statute explicitly prohibits using administrative 
    offset or setoff to collect the claim or type of claim involved.

    (f) The Secretary may waive the requirements of sections 552a(o) and 
(p) of title 5 for administrative offset or claims collection upon 
written certification by the head of a State or an executive, judicial, 
or legislative agency seeking to collect the claim that the requirements 
of subsection (a) of this section have been met.
    (g) The Data Integrity Board of the Department of the Treasury 
established under 552a(u) of title 5 shall review and include in reports 
under paragraph (3)(D) of that section a description of any matching 
activities conducted under this section. If the Secretary has granted a 
waiver under subsection (f) of this section, no other Data Integrity 
Board is required to take any action under section 552a(u) of title 5.
    (h)(1) The Secretary may, in the discretion of the Secretary, apply 
subsection (a) with respect to any past-due, legally-enforceable debt 
owed to a State if--
        (A) the appropriate State disbursing official requests that an 
    offset be performed; and
        (B) a reciprocal agreement with the State is in effect which 
    contains, at a minimum--
            (i) requirements substantially equivalent to subsection (b) 
        of this section; and
            (ii) any other requirements which the Secretary considers 
        appropriate to facilitate the offset and prevent duplicative 
        efforts.

    (2) This subsection does not apply to--
        (A) the collection of a debt or claim on which the 
    administrative costs associated with the collection of the debt or 
    claim exceed the amount of the debt or claim;
        (B) any collection of any other type, class, or amount of claim, 
    as the Secretary considers necessary to protect the interest of the 
    United States; or
        (C) the disbursement of any class or type of payment exempted by 
    the Secretary of the Treasury at the request of a Federal agency.

    (3) In applying this section with respect to any debt owed to a 
State, subsection (c)(3)(A) shall not apply.

(Added Pub. L. 97-452, Sec. 1(16)(A), Jan. 12, 1983, 96 Stat. 2471; 
amended Pub. L. 104-134, title III, Sec. 31001(c)(1), (d)(2), (e), (f), 
Apr. 26, 1996, 110 Stat. 1321-359, 1321-362; Pub. L. 106-169, title II, 
Sec. 251(b)(10), Dec. 14, 1999, 113 Stat. 1856.)

                                          Historical and Revision Notes
-------------------------------------------------------------------------------
---------------------------------
           Revised Section                   Source (U.S. Code)                
Source (Statutes at Large)
-------------------------------------------------------------------------------
---------------------------------
3716(a)..............................  31 App.:954(a) (words before    July 19,
 1966, Pub. L. 89-508, 80 Stat.
                                        last comma), (c).               308, Se
c.  5(a)-(d); added Oct. 25,
                                                                        1982, P
ub. L. 97-365, Sec.  10(2), 96
                                                                        Stat. 1
754.
3716(b)..............................  31 App.:954(b).
3716(c)(1)...........................  31 App.:954(a) (words after
                                        last comma).
3716(c)(2)...........................  31 App.:954(d).
-------------------------------------------------------------------------------
---------------------------------

    In the subchapter, the words ``or his designee'' are omitted as 
unnecessary.
    In subsection (a)(1), the words ``head of the'' are added for 
consistency in the revised title and with other titles of the United 
States Code.
    In subsection (b)(1), the word ``Government'' is added for 
consistency in the revised title and with other titles of the Code.
    In subsection (b)(3), the word ``civil'' is added for consistency in 
the revised title and with other titles of the Code.
    In subsection (c)(2), the word ``either'' is omitted as surplus.

                       References in Text

    The Higher Education Act of 1965, referred to in subsec. (c)(1)(C), 
is Pub. L. 89-329, Nov. 8, 1965, 79 Stat. 1219, as amended. Title IV of 
the Act is classified generally to subchapter IV (Sec. 1070 et seq.) of 
chapter 28 of Title 20, Education, and part C (Sec. 2751 et seq.) of 
subchapter I of chapter 34 of Title 42, The Public Health and Welfare. 
For complete classification of this Act to the Code, see Short Title 
note set out under section 1001 of Title 20 and Tables.
    The Social Security Act, referred to in subsec. (c)(3)(A)(i)(I), 
(C), is act Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended, which is 
classified generally to chapter 7 (Sec. 301 et seq.) of Title 42, The 
Public Health and Welfare. Titles II, VIII, and XVI of the Act are 
classified generally to subchapters II (Sec. 401 et seq.), VIII 
(Sec. 1001 et seq.), and XVI (Sec. 1381 et seq.), respectively, of 
chapter 7 of Title 42. Sections 205(b)(1), 809(a)(1), and 1631(c)(1) of 
the Act are classified to sections 405(b)(1), 1009(a)(1), and 
1383(c)(1), respectively, of Title 42. For complete classification of 
this Act to the Code, see section 1305 of Title 42 and Tables.
    The Black Lung Benefits Act, referred to in subsec. 
(c)(3)(A)(i)(II), is title IV of Pub. L. 91-173, Dec. 30, 1969, 83 Stat. 
792, as amended. Part B of the Act is classified generally to part B 
(Sec. 921 et seq.) of subchapter IV of chapter 22 of Title 30, Mineral 
Lands and Mining. For complete classification of this Act to the Code, 
see section 901(b) of Title 30 and Tables.
    The Internal Revenue Code of 1986, referred to in subsec. (c)(8), is 
classified to Title 26, Internal Revenue Code.


                               Amendments

    1999--Subsec. (c)(3)(C). Pub. L. 106-169 substituted ``sections 
205(b)(1), 809(a)(1),'' for ``sections 205(b)(1)'' and ``title II, 
VIII,'' for ``either title II''.
    1996--Subsec. (a). Pub. L. 104-134, Sec. 31001(c)(1), substituted 
``the head of an executive, judicial, or legislative agency'' for ``the 
head of an executive or legislative agency'' in introductory provisions.
    Subsec. (b). Pub. L. 104-134, Sec. 31001(d)(2)(A), amended subsec. 
(b) generally. Prior to amendment, subsec. (b) read as follows: ``Before 
collecting a claim by administrative offset under subsection (a) of this 
section, the head of an executive or legislative agency must prescribe 
regulations on collecting by administrative offset based on--
        ``(1) the best interests of the United States Government;
        ``(2) the likelihood of collecting a claim by administrative 
    offset; and
        ``(3) for collecting a claim by administrative offset after the 
    6-year period for bringing a civil action on a claim under section 
    2415 of title 28 has expired, the cost effectiveness of leaving a 
    claim unresolved for more than 6 years.''
    Pub. L. 104-134, Sec. 31001(c)(1), substituted ``the head of an 
executive, judicial, or legislative agency'' for ``the head of an 
executive or legislative agency'' in introductory provisions.
    Subsec. (c). Pub. L. 104-134, Sec. 31001(d)(2)(D), added subsec. 
(c). Former subsec. (c) redesignated (e).
    Subsec. (c)(2). Pub. L. 104-134, Sec. 31001(d)(2)(B), amended par. 
(2) generally. Prior to amendment, par. (2) read as follows: ``when a 
statute explicitly provides for or prohibits using administrative offset 
to collect the claim or type of claim involved.''
    Subsec. (d). Pub. L. 104-134, Sec. 31001(d)(2)(D), added subsec. 
(d).
    Subsec. (e). Pub. L. 104-134, Sec. 31001(d)(2)(C), redesignated 
subsec. (c) as (e).
    Subsecs. (f) to (h). Pub. L. 104-134, Sec. 31001(e), (f), added 
subsecs. (f) to (h).


                  Offsets From Social Security Payments

    Section 31001(a)(2)(B) of Pub. L. 104-134 provided that: 
``Subparagraph (A) of section 3716(c)(3) of title 31, United States Code 
(as added by subsection (d)(2) of this section), shall apply only to 
payments made after the date which is 4 months after the date of the 
enactment of this Act [Apr. 26, 1996].''

  Ex. Ord. No. 13019. Supporting Families: Collecting Delinquent Child 
                           Support Obligations

    Ex. Ord. No. 13019, Sept. 28, 1996, 61 F.R. 51763, provided that:
    The Debt Collection Improvement Act of 1996, Public Law 104-134 
[Sec. 31001] (110 Stat. 1321-358 et seq.) [see Short Title of 1996 
Amendment note set out under section 3701 of this title], was enacted 
into law on April 26, 1996, as part of the Omnibus Consolidated 
Rescissions and Appropriations Act of 1996. While the primary purpose of 
the Debt Collection Improvement Act is to increase the collection of 
nontax debts owed to the Federal Government, the Act also contains 
important provisions that can be used to assist families in collecting 
past-due child support obligations.
    The failure of some parents to meet their child support obligations 
threatens the health, education, and well-being of their children. 
Compounding this problem, States have experienced difficulties enforcing 
child support obligations once a parent has moved to another State. With 
this Executive order, my Administration takes additional steps to 
support our children and strengthen American families by facilitating 
the collection of delinquent child support obligations from persons who 
may be entitled or eligible to receive certain Federal payments or 
Federal assistance.
    Accordingly, by the authority vested in me as President by the 
Constitution and the laws of the United States of America, it is hereby 
ordered as follows:
    Section 1. Administrative Offsets. (a)(1) The Secretary of the 
Treasury (``the Secretary''), in accordance with the provisions of the 
Debt Collection Improvement Act of 1996 and to the extent permitted by 
law, and in consultation with the Secretary of Health and Human Services 
and other affected agencies, shall promptly develop and implement 
procedures necessary for the Secretary to collect past-due child support 
debts by administrative offset, and shall issue such rules, regulations, 
and procedures as the Secretary, in consultation with the heads of 
affected agencies, deems appropriate to govern administrative offsets by 
the Department of the Treasury and other executive departments and 
agencies that disburse Federal payments.
    (2) The Secretary may enter into reciprocal agreements with States 
concerning the collection by the Secretary of delinquent child support 
debts through administrative offsets.
    (b) The Secretary of Health and Human Services shall, within 120 
days of the date of this order, implement procedures necessary to report 
to the Secretary of the Treasury information on past-due child support 
claims referred by States (including claims enforced by States pursuant 
to cooperative agreements with or by Indian tribal governments) to the 
Department of Health and Human Services.
    (c) The head of each executive department and agency that certifies 
payments to the Secretary or to another disbursing official shall review 
each class of payments that the department or agency certifies to 
determine if any such class should be exempt from offset and, if any 
class is so identified, submit to the Secretary a request for such an 
exemption together with the reasons therefor. With respect to classes of 
payments under means-tested programs existing on the date of this order, 
such submission shall be made within 30 days of the date of this order. 
With respect to classes of payments other than payments under means-
tested programs existing on the date of this order, such submissions 
shall be made within 30 days of the date the Secretary establishes 
standards pursuant to section 3716(c)(3) of title 31, United States 
Code. With respect to a class of payments established after the date of 
this order, such submissions shall be made not later than 30 days after 
such class is established.
    (d) The head of each executive department and agency that certifies 
payments to the Secretary shall promptly implement any rule, regulation, 
or procedure issued by the Secretary pursuant to this section.
    (e) The head of each executive department and agency that is 
authorized by law to disburse payments shall promptly implement any 
rule, regulation, or procedure issued by the Secretary pursuant to this 
section and shall:
    (1) match, consistent with computer privacy matching laws, the 
payment certification records of such department or agency with records 
of persons delinquent in child support payments as directed by the 
Secretary; and
    (2) conduct administrative offsets to collect delinquent child 
support payments.
    (f) The Secretary shall, to the extent permitted by law, share with 
the Secretary of Health and Human Services any information contained in 
payment certification records of persons who are delinquent in child 
support obligations that would assist in the collection of such debts, 
whether or not an administrative offset is conducted.
    Sec. 2. Denial of Federal Assistance. (a) The Secretary shall, to 
the extent permitted by law, ensure that information concerning 
individuals whose payments are subject to administrative offset because 
of delinquent child support obligations is made available to the head of 
each executive department and agency that provides Federal financial 
assistance to individuals.
    (b) In conformance with section 2(e) of this order, the head of each 
executive department and agency shall, with respect to any individuals 
whose payments are subject to administrative offset because of a 
delinquent child support obligation, promptly implement procedures to 
deny Federal financial assistance to such individuals.
    (c) The Attorney General, in consultation with the Secretary of 
Health and Human Services and other affected agencies, shall promptly 
issue guidelines for departments and agencies concerning minimum due-
process standards to be included in the procedures required by 
subsection (b) of this section.
    (d) For purposes of this section, Federal financial assistance means 
any Federal loan (other than a disaster loan), loan guarantee, or loan 
insurance.
    (e)(1) A class of Federal financial assistance shall not be subject 
to denial if the head of the concerned department or agency determines:
    (A) in consultation with the Attorney General and the Secretary of 
Health and Human Services, that such action:
    (i) is not permitted by law; or
    (ii) would likely result in valid legal claims for damages against 
the United States;
    (B) that such action would be inconsistent with the best interests 
of the child or children with respect to whom a child support obligation 
is owed; or
    (C) that such action should be waived.
    (2) The head of each executive department and agency shall provide 
written notification to the Secretary upon determining that the denial 
of a class of Federal financial assistance is not permitted by law or 
should be waived.
    (f) The head of each executive department and agency shall:
    (1) review all laws under the jurisdiction of the department or 
agency that do not permit the denial of Federal financial assistance to 
individuals and whose payments are subject to administrative offset 
because of a delinquent child support obligation and, where appropriate, 
transmit to the Director of the Office of Management and Budget 
recommendations for statutory changes; and
    (2) to the extent practicable, review all rules, regulations, and 
procedures implementing laws under the jurisdiction of the department or 
agency governing the provision of any Federal financial assistance to 
individuals and, where appropriate, conform such rules, regulations, and 
procedures to the provisions of this order and the rules, regulations, 
and procedures issued by the Secretary pursuant to section 1 of this 
order.
    Sec. 3. Reports. (a) The head of each executive department and 
agency shall provide to the Secretary such information as the Secretary 
may request concerning the implementation of this order, the provisions 
of the Debt Collection Improvement Act of 1996 applicable to delinquent 
child support obligations, and the rules, regulations, and procedures 
issued by the Secretary pursuant to section 1 of this order.
    (b) The Secretary shall report annually to the President concerning 
the implementation by departments and agencies of this order and the 
provisions of the Debt Collection Improvement Act of 1996 applicable to 
delinquent child support obligations.
    Sec. 4. Judicial Review. This order does not create any right or 
benefit, substantive or procedural, enforceable at law by a party 
against the United States, its agencies, its officers, or any person.
                                                     William J. Clinton.

                  Section Referred to in Other Sections

    This section is referred to in sections 3322, 3325, 3701, 3712, 3807 
of this title; title 5 section 5514; title 10 sections 2636, 2739; title 
28 section 2415; title 30 section 1724; title 38 section 5301; title 42 
sections 404, 1008, 1383.
