11402 Federal Register / Vol. 76, No. 41 / Wednesday, March 2, 2011 / Proposed Rules 

SOCIAL SECURITY ADMINISTRATION 

20 CFR Parts 404, 408, 416, and 422 

[Docket No. SSA–2010–0010] 

RIN 0960–AH19 

Recovery of Delinquent Debts— 

Treasury Offset Program 

Enhancements 

AGENCY: Social Security Administration. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: We propose to amend our Tax 

Refund Offset (TRO) and Administrative 

Offset regulations. We are conforming 

our regulations to those of the 

Department of the Treasury (Treasury) 

for the following reasons: (1) Treasury 

removed the 10-year limitation to 

collect delinquent debts owed the 

United States by reducing eligible 

Federal payments, and (2) more States 

are participating in reciprocal 

agreements with Treasury to offset State 

payments, including tax refunds to 

reduce or extinguish a federally owed 

debt. 

The potential exists to increase 

collection of Federal debts for two 

reasons: (1) We are authorized to collect 

debts indefinitely by offsetting eligible 

Federal payments through the Treasury 

Offset Program (TOP), and (2) States that 

have reciprocal agreements with 

Treasury are authorized to offset 

payments to reduce or extinguish debts 

owed to the Federal agencies. 

DATES: To ensure that your comments 

are considered, we must receive them 

no later than May 2, 2011. 

ADDRESSES: You may submit comments 

by any one of three methods—Internet, 

fax, or mail. Do not submit the same 

comments multiple times or by more 

than one method. Regardless of which 

method you choose, please state that 

your comments refer to Docket No. 

SSA–2010–0010 so that we may 

associate your comments with the 

correct regulation. 

Caution: You should be careful to 

include in your comments only 

information that you wish to make 

publicly available. We strongly urge you 

not to include in your comments any 

personal information, such as Social 

Security numbers or medical 

information. 

1. Internet: We strongly recommend 

that you submit your comments via the 

Internet. Please visit the Federal 

eRulemaking portal at http:// 

www.regulations.gov. Use the Search 

function to find docket number SSA– 

2010–0010. The system will issue a 

tracking number to confirm your 

submission. You will not be able to 

view your comment immediately 

because we must post each comment 

manually. It may take up to a week for 

your comment to be viewable. 

2. Fax: Fax comments to (410) 966– 

2830. 

3. Mail: Mail your comments to the 

Office of Regulations, Social Security 

Administration, 107 Altmeyer Building, 

6401 Security Boulevard, Baltimore, 

Maryland 21235–6401. 

Comments are available for public 

viewing on the Federal eRulemaking 

portal at http://www.regulations.gov or 

in person, during regular business 

hours, by arranging with the contact 

person identified below. 

FOR FURTHER INFORMATION CONTACT: 

Jennifer C. Pendleton, Office of Payment 

and Recovery Policy, Social Security 

Administration, 6401 Security 

Boulevard, Baltimore, MD 21235–6401, 

(410) 965–5652. For information on 

amendments to 20 CFR part 408, please 

contact: Benjamin Franco, Office of 

International Programs, Social Security 

Administration, 6401 Security 

Boulevard, Baltimore, MD 21235–6401, 

(410) 965–7342. For information on 

eligibility or filing for benefits, call our 

national toll-free number, 1–800–772– 

1213 or TTY 1–800–325–0778, or visit 

our Internet site, Social Security Online, 

at http://www.socialsecurity.gov. 

SUPPLEMENTARY INFORMATION: 

Electronic Version 

The electronic file of this document is 

available on the date of publication in 

the Federal Register at http:// 

www.gpoaccess.gov/fr/index.html. 

Background 

Due to increases in delinquent nontax debt owed the United States, the 

Debt Collection Improvement Act 

(DCIA) of 1996 was enacted. Public Law 

104–134, 110 Stat. 1321–358 et seq. 

(April 26, 1996). 

The DCIA requires Federal agencies to 

refer delinquent non-tax debts to the 

Treasury’s Financial Management 

Services (FMS) to collect non-tax 

payments. The DCIA authorizes Federal 

disbursing officials to withhold or 

reduce eligible Federal payments to a 

payee for a delinquent debt owed by 

that payee to the United States. This 

process is known as ‘‘administrative 

offset.’’ 

FMS uses the TOP process to collect 

these delinquent debts. TOP’s 

delinquent debt matching and payment 

offset system results in an 

administrative offset. Currently, to 

collect debts owed to us, TOP uses the 

following types of administrative offset: 

a. Tax Refund Offset (TRO). TOP 

reduces or withholds Federal income 

tax refunds to recover delinquent titles 

II, VIII, and XVI debts. 

b. Other administrative offset. TOP 

reduces or withholds payments other 

than tax refunds, such as Federal travel 

and expense reimbursements, to collect 

unrecoverable titles II and XVI debts. 

(The use of other administrative offset is 

covered under regulations separate from 

TRO.) 

TOP identifies debtors and matches 

them against recipients of Federal and 

State payments. These Federal and State 

payments are then used to reduce the 

delinquent debt. 

Existing Department of the Treasury 

Regulations 

The Treasury’s Fiscal Service 

published an interim rule with request 

for comments on January 11, 2007. 72 

FR 1283. In part, this interim rule 

describes the requirements that apply to 

offset of certain Federal non-tax 

payments to collect delinquent debts 

owed to the States based on reciprocal 

agreements between Treasury and 

participating States. Social Security, 

Special Veterans Benefits, and 

Supplemental Security Income benefits 

are excluded from offset to satisfy a 

State debt. 31 CFR 285.6(g)(1)(ii). The 

interim rule also provides for offset of 

State payments to collect certain 

delinquent Federal non-tax debts. 

Additionally, FMS launched a pilot 

program in Maryland and New Jersey. 

This pilot program evaluated if the 

benefits of the offset program 

outweighed its costs. FMS gathered 

information gained from this pilot 

program, as well as comments received 

on the interim rule, before issuing a 

final rule. On November 3, 2009, 

Treasury’s Fiscal Service published a 

final rule stating that it would proceed 

with the reciprocal offset program with 

the States. 74 FR 56719. It intends to 

expand this reciprocal program between 

Treasury and the States. This expansion 

started with New York on January 20, 

2010. 

On June 11, 2009, Treasury’s Fiscal 

Service simultaneously published an 

NPRM and an interim final rule to 

remove the 10-year limitation to collect 

outstanding non-tax debts by offset. 74 

FR 27730, 27707. This change allows for 

collection of these debts without regard 

to any time limitation. To avoid undue 

hardship, Treasury added a requirement 

that debtors with debts outstanding 

more than 10 years on or before June 11, 

2009 be notified of the intent to offset 

and of all applicable due process rights. 

This notification gives the debtor an 

opportunity to dispute the debt, enter 

into a repayment agreement, or possibly 

avoid offset. 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
Federal Register / Vol. 76, No. 41 / Wednesday, March 2, 2011 / Proposed Rules 11403 

On December 23, 2009, Treasury’s 

Fiscal Service published a final rule 

adopting the interim rule. No comments 

were received on the interim rule. 74 FR 

68149. On December 28, 2009, it also 

published a final rule based on the 

NPRM cited above. Two comments were 

received on the NPRM but no changes 

were made to that proposed rule, and it 

was also adopted. 74 FR 68537. 

Treasury’s Fiscal Service published 

an amendment to correct the date for 

offsetting tax refund payments to collect 

past-due non-tax debt as of December 

28, 2009. Non-tax debt, including 

delinquent debts of 10 years or longer 

prior to December 28, 2009 will be 

collected by tax refund offset. 

Changes to Our Regulations 

We propose to change our regulations 

to conform to the Treasury regulations. 

In addition to collecting non-tax debts 

beyond the original 10-year statute of 

limitations, we will now collect 

delinquent titles II, VIII, and XVI 

overpayments by offset of various State 

payments, including State tax refunds. 

DCIA of 1996, 31 U.S.C. 3716; 31 CFR 

285.6. 

Therefore, we propose changes to 

§§ 404.520, 404.521, 408.940, 408.941, 

416.580, 416.581, and 422.310. Under 

these sections, we notify the overpaid 

person and refer overpayments to 

Treasury for tax refund and 

administrative offset. 

Clarity of These Rules 

Executive Order 12866 as 

supplemented by Executive Order 

13563 requires us to write all rules in 

plain language. In addition to your 

substantive comments on this proposed 

rule, we invite your comments on how 

to make rules easier to understand. 

For example: 

• Would more, but shorter, sections 

be better? 

• Are the requirements in the rule 

clearly stated? 

• Have we organized the material to 

suit your needs? 

• Could we improve clarity by adding 

tables, lists, or diagrams? 

• What else could we do to make the 

rule easier to understand? 

• Does the rule contain technical 

language or jargon that is not clear? 

• Would a different format make the 

rule easier to understand, e.g. grouping 

and order of sections, use of headings, 

paragraphing? 

When will we start to use this rule? 

We will not use this rule until we 

evaluate public comments and publish 

a final rule in the Federal Register. Any 

final rule we issue includes an effective 

date. We will continue to use our 

current rule until that date. If we 

publish a final rule, we will include a 

summary of those relevant comments 

we received along with responses and 

an explanation of how we will apply the 

new rule. 

Regulatory Procedures 

Executive Order 12866 as 

Supplemented by Executive Order 

13563 

We consulted with the Office of 

Management and Budget (OMB) and 

determined that this proposed rule 

meets the criteria for a significant 

regulatory action under Executive Order 

12866 as supplemented by Executive 

Order 13563. Thus, OMB reviewed the 

proposed rule. 

Regulatory Flexibility Act 

We certify that this proposed rule will 

not have a significant economic impact 

on a substantial number of small entities 

because it applies to individuals only. 

Thus, a regulatory flexibility analysis is 

not required under the Regulatory 

Flexibility Act, as amended. 

Paperwork Reduction Act 

This rule does not create any new or 

affect any existing collections and does 

not require Office of Management and 

Budget approval under the Paperwork 

Reduction Act. 

List of Subjects 

20 CFR Part 404 

Administrative practice and 

procedure, Blind, Disability benefits, 

Income taxes, Old-Age, Survivors, and 

Disability Insurance, Reporting and 

recordkeeping requirements, Social 

Security. 

20 CFR Part 408 

Administrative practice and 

procedure; Aged; Reporting and 

recordkeeping requirements; Social 

Security; Supplemental Security Income 

(SSI); Veterans. 

20 CFR Part 416 

Administrative practice and 

procedure, Reporting and recordkeeping 

requirements, Supplemental Security 

Income (SSI). 

20 CFR Part 422 

Administrative practice and 

procedure, Organization and functions 

(Government agencies), Reporting and 

recordkeeping requirements, Social 

Security. 

Michael J. Astrue, 

Commissioner of Social Security. 

For the reasons set out in the 

preamble, we propose to amend 20 CFR 

chapter III, parts 404, 408, 416, and 422 

as set forth below: 

PART 404—FEDERAL OLD-AGE, 

SURVIVORS AND DISABILITY 

INSURANCE (1950– ) 

Subpart F—[Amended] 

1. The authority citation for subpart F 

of part 404 is revised to read as follows: 

Authority: Secs. 204, 205(a), 702(a)(5), and 

1147 of the Social Security Act (42 U.S.C. 

404, 405(a), 902(a)(5), and 1320b–17); 31 

U.S.C. 3716; 31 U.S.C. 3720A. 

2. Amend § 404.520(b) by removing 

the word ‘‘individuals’’ and adding in its 

place the word ‘‘persons’’ in the second 

sentence, and by revising the third 

sentence to read as follows: 

§ 404.520 Referral of overpayments to the 

Department of the Treasury for tax refund 

offset—General. 

* * * * * 

(b) * * * We refer overpayments to 

the Department of the Treasury for offset 

against Federal tax refunds regardless of 

the amount of time the debts have been 

outstanding. 

3. Amend § 404.521 by revising the 

section heading, introductory text, and 

paragraphs (a) and (b) to read as follows: 

§ 404.521 Notice to overpaid persons. 

Before we request that an 

overpayment be collected by reduction 

of Federal and State income tax refunds, 

we will send a written notice of our 

action to the overpaid person. In our 

notice of intent to collect an 

overpayment through tax refund offset, 

we will state: 

(a) The amount of the overpayment; 

and 

(b) That we will collect the 

overpayment by requesting that the 

Department of the Treasury reduce any 

amounts payable to the overpaid person 

as refunds of Federal and State income 

taxes by an amount equal to the amount 

of the overpayment unless, within 60 

calendar days from the date of our 

notice, the overpaid person: 

(1) Repays the overpayment in full; 

(2) Sends evidence to us at the 

address given in our notice that 

(i) The overpayment is not past due; 

or 

(ii) The overpayment is not legally 

enforceable; or 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
11404 Federal Register / Vol. 76, No. 41 / Wednesday, March 2, 2011 / Proposed Rules 

(3) Asks us to waive collection of the 

overpayment under section 204(b) of the 

Act. 

* * * * * 

PART 408—SPECIAL BENEFITS FOR 

CERTAIN WORLD WAR II VETERANS 

Subpart I—[Amended] 

4. The authority citation for subpart I 

of part 408 is revised to read as follows: 

Authority: Secs. 702(a)(5), 808, and 1147 

of the Social Security Act (42 U.S.C. 

902(a)(5), 1008, and 1320b–17); 31 U.S.C. 

3716, 3720A. 

5. Amend § 408.940(b) by revising the 

third sentence to read as follows: 

§ 408.940 When will we refer an SVB 

overpayment to the Department of the 

Treasury for tax refund offset? 

* * * * * 

(b) * * * We refer overpayments to 

the Department of the Treasury for offset 

against Federal tax refunds regardless of 

the amount of time the debts have been 

outstanding. 

6. Amend § 408.941 by revising the 

introductory text, and paragraphs (a) 

and (b) to read as follows: 

§ 408.941 Will we notify you before we 

refer an SVB overpayment for tax refund 

offset? 

Before we request that an 

overpayment be collected by reduction 

of Federal and State income tax refunds, 

we will send a written notice of our 

action to the overpaid person. In our 

notice of intent to collect an 

overpayment through tax refund offset, 

we will state: 

(a) The amount of the overpayment; 

and 

(b) That we will collect the 

overpayment by requesting that the 

Department of the Treasury reduce any 

amounts payable to the overpaid person 

as refunds of Federal and State income 

taxes by an amount equal to the amount 

of the overpayment unless, within 60 

calendar days from the date of our 

notice, the overpaid person: 

(1) Repays the overpayment in full; 

(2) Sends evidence to us at the 

address given in our notice that 

(i) The overpayment is not past due; 

or 

(ii) The overpayment is not legally 

enforceable, or 

(3) Asks us to waive collection of the 

overpayment under section 204(b) of the 

Act. 

* * * * * 

PART 416—SUPPLEMENTAL 

SECURITY INCOME FOR THE AGED, 

BLIND, AND DISABLED 

Subpart E—[Amended] 

7. The authority citation for subpart E 

of part 416 is continues to read as 

follows: 

Authority: Secs. 702(a)(5), 1147, 1601, 

1602, 1611(c) and (e), and 1631(a)–(d) and (g) 

of the Social Security Act (42 U.S.C. 

902(a)(5), 1320b–17, 1381, 1381a, 1382(c) 

and (e), and 1383(a)–(d) and (g)); 31 U.S.C. 

3716; 31 U.S.C. 3720A. 

8. Amend § 416.580(b) by removing 

the word ‘‘individuals’’ in the second 

sentence and adding in its place 

‘‘persons’’ and by revising the last 

sentence to read as follows: 

§ 416.580 Referral of overpayments to the 

Department of the Treasury for tax refund 

offset—General. 

* * * * * 

(b) * * * We refer overpayments to 

the Department of the Treasury for offset 

against Federal tax refunds regardless of 

the amount of time the debts have been 

outstanding. 

9. Amend § 416.581 by revising the 

section heading, the introductory text, 

and paragraphs (a) and (b), and in 

paragraph (e) by removing the word 

‘‘individual’’ in two places and adding in 

its place ‘‘person’’. 

§ 416.581 Notice to overpaid person. 

We will make a request for collection 

by reduction of Federal and State 

income tax refunds only after we 

determine that a person owes an 

overpayment that is past due and 

provide the overpaid person with 

written notice. Our notice of intent to 

collect an overpayment through tax 

refund offset will state: 

(a) The amount of the overpayment; 

and 

(b) That we will seek collection of the 

overpayment by requesting that the 

Department of the Treasury reduce any 

amounts payable to the overpaid person 

as refunds of Federal and State income 

taxes by an amount equal to the amount 

of the overpayment unless, within 60 

calendar days from the date of our 

notice, the overpaid person: 

(1) Repays the overpayment in full; 

(2) Sends evidence to us at the 

address given in our notice that 

(i) The overpayment is not past due; 

or 

(ii) The overpayment is not legally 

enforceable; or 

(3) Asks us to waive collection of the 

overpayment under section 204(b) of the 

Act. 

* * * * * 

PART 422—ORGANIZATION AND 

PROCEDURES 

Subpart D—[Amended] 

10. The authority citation for subpart 

D of part 422 continues to read as 

follows: 

Authority: Secs. 204(f), 205(a), 702(a)(5), 

and 1631(b) of the Social Security Act (42 

U.S.C. 404(f), 405(a), 902(a)(5), and 1383(b)); 

5 U.S.C. 5514; 31 U.S.C. 3711(e); 31 U.S.C. 

3716. 

11. Amend § 422.310 by revising 

paragraphs (a)(1) and (b) to read as 

follows: 

§ 422.310 Collection of overdue debts by 

administrative offset. 

(a) Referral to the Department of the 

Treasury for offset. (1) We recover 

overdue debts by offsetting Federal and 

State payments due the debtor through 

the Treasury Offset Program (TOP). TOP 

is a Government-wide delinquent debt 

matching and payment offset process 

operated by the Department of the 

Treasury, whereby debts owed to the 

Federal Government are collected by 

offsetting them against Federal and State 

payments owed the debtor. Federal 

payments owed the debtor include 

current ‘‘disposable pay,’’ defined in 5 

CFR 550.1103, owed by the Federal 

Government to a debtor who is an 

employee of the Federal Government. 

Deducting from such disposable pay to 

collect an overdue debt owed by the 

employee is called ‘‘Federal salary 

offset’’ in this subpart. 

* * * * * 

(b) Debts we refer. We refer for 

administrative offset all qualifying debts 

that meet or exceed the threshold 

amounts used by the Department of the 

Treasury for collection from State and 

Federal payments, including Federal 

salaries. 

* * * * * 

[FR Doc. 2011–4586 Filed 3–1–11; 8:45 am] 

BILLING CODE 4191–02–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 281 

[EPA–R10–UST–2011–0097; FRL–9274–8] 

Oregon: Tentative Approval of State 

Underground Storage Tank Program 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: The State of Oregon has 

applied for final approval of its 

Underground Storage Tank (UST) 


emcdonald on DSK2BSOYB1PROD with PROPOSALS