5070 Federal Register / Vol. 76, No. 19 / Friday, January 28, 2011 / Rules and Regulations 

*******

T–288 Rapid City, SD to Wolback, NE [New] 

Rapid City, SD (RAP) .................................... VORTAC ........................................................ (Lat. 43°58′34′′ N., long. 103°00′44′′ W.) 

WNDED, SD ................................................... WP ................................................................. (Lat. 43°19′14′′ N., long. 101°32′19′′ W.) 

Valentine, NE (VTN) ..................................... NDB ............................................................... (Lat. 42°51′42′′ N., long. 100°32′59′′ W.) 

Ainsworth, NE (ANW) .................................. VOR/DME ...................................................... (Lat. 42°34′09′′ N., long. 99°59′23′′ W.) 

FESNT, NE .................................................... WP ................................................................. (Lat. 42°03′57′′ N., long. 99°17′18′′ W.) 

Wolbach, NE (OBH) ...................................... VORTAC ........................................................ (Lat. 41°22′33′′ N., long. 98°21′13′′ W.) 

Issued in Washington, DC, on January 20, 

2011. 

Edith V. Parish, 

Manager, Airspace, Regulations and ATC 

Procedures Group. 

[FR Doc. 2011–1800 Filed 1–27–11; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF THE TREASURY 

Fiscal Service 

31 CFR Part 285 

RIN 1510–AB29 

Offset of Tax Refund Payments To 

Collect Delinquent State 

Unemployment Compensation Debts 

AGENCY: Financial Management Service, 

Fiscal Service, Treasury. 

ACTION: Interim rule with request for 

comments. 

SUMMARY: This rule implements the 

authority added by the SSI Extension for 

Elderly and Disabled Refugees Act of 

2008 (‘‘2008 Act’’), as amended by the 

Claims Resolution Act of 2010 (2010 

Act’’) to offset overpayments of Federal 

taxes (referred to as ‘‘tax refund offset’’) 

to collect delinquent State 

unemployment compensation debts. 

The Department of the Treasury 

(Treasury) will incorporate the 

procedures necessary to collect State 

unemployment compensation debts as 

part of the Treasury Offset Program 

(TOP), a centralized offset program 

operated by the Financial Management 

Service (FMS), a Treasury bureau. FMS 

has promulgated a rule governing the 

offset of federal tax refunds to collect 

delinquent State income tax obligations. 

This rule amends FMS regulations to 

include unemployment compensation 

debts among the types of State debts 

that may be collected by tax refund 

offset. This rule does not affect any of 

the requirements or procedures for 

collecting delinquent State income tax 

obligations. 

DATES: This rule is effective January 28, 

2011. Comments must be received by 

March 29, 2011. 

ADDRESSES: Treasury participates in the 

U.S. government’s eRulemaking 

Initiative by publishing rulemaking 

information on http:// 

www.regulations.gov. Regulations.gov 

offers the public the ability to comment 

on, search, and view publicly available 

rulemaking materials, including 

comments received on rules. Comments 

on this rule should be submitted using 

only the following methods: 

Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions on the Web site for 

submitting comments. 

Mail: Thomas Dungan, Senior Policy 

Analyst, U.S. Department of the 

Treasury, Financial Management 

Service, 401 14th St., SW., Washington, 

DC 20227. 

All submissions received must 

include the agency name (‘‘Fiscal 

Service’’) and the title of this 

rulemaking. In general, comments 

received will be published on 

Regulations.gov without change, 

including any business or personal 

information provided. Comments 

received, including attachments and 

other supporting materials, are part of 

the public record and subject to public 

disclosure. Do not enclose any 

information in your comment or 

supporting materials that you consider 

confidential or inappropriate for public 

disclosure. 

FOR FURTHER INFORMATION CONTACT: 

Thomas Dungan, Senior Policy Analyst, 

at (202)874–6660, or Tricia Long, Senior 

Counsel, at (202) 874–6680. 

SUPPLEMENTARY INFORMATION: 

I. Background 

General. The Internal Revenue Code 

authorizes the Secretary of the Treasury 

to offset Federal tax refund payments to 

satisfy debts owed to the United States, 

past-due support collected by States, 

and income tax debts owed to States. 

The 2008 Act amended section 6402 of 

the Internal Revenue Code to authorize 

tax refund offset to collect an additional 

type of debt unemployment 

compensation debts owed to the States 

which were incurred as a result of fraud, 

and which were not outstanding for 

more than ten years. The 2010 Act 

expanded that authority to include all 

unemployment compensation debts 

incurred as a result of the debtor’s 

failure to report earnings, whether or 

not the failure constituted fraud. The 

2010 Act also eliminated the ten-year 

time limitation on collection, the 

requirement that the debtor reside in the 

State seeking to collect the debt, and the 

requirement to use certified mail with 

return receipt for pre-offset notices. 

This rule governs the offset of one 

type of payment (i.e., Federal tax 

refunds) to pay one type of delinquent 

debt (i.e., past-due, legally enforceable 

State unemployment debts). FMS has 

promulgated separate rules and 

procedures governing other types of 

offset, such as tax refund offset to 

collect nontax debt owed to the United 

States (see section 285.2 of this title). 

The Treasury Offset Program. FMS 

operates TOP to carry out offsets under 

the Internal Revenue Code and other 

laws. TOP is a centralized offset 

program by which FMS offsets 

payments to collect delinquent debts 

owed to Federal agencies and States. 

TOP currently works as follows. FMS 

maintains a database containing 

information about delinquent debts 

submitted and updated by Federal and 

State agencies. Before Federal payments, 

including Federal tax refund payments, 

are disbursed to a payee, FMS compares 

the payee information with debt 

information in the TOP delinquent debt 

database. If the name and taxpayer 

identifying number (TIN) associated 

with a payment match the name (or 

derivative of the name) and TIN 

associated with a debt, the payment is 

offset in whole or part to satisfy the 

debt. FMS transmits amounts collected 

to the appropriate agencies or States 

owed the delinquent debts after 

deducting a fee charged to cover the cost 

of the offset program. Information about 

a delinquent debt or past-due, legally 

enforceable debt will remain in the 

debtor database for offset as long as the 

debt remains past due and legally 

collectible by offset. 

Offset of Tax Refund Payments To 

Collect Debts Owed to States Through 

the Treasury Offset Program. TOP will 

be expanded to include the collection of 

past-due, legally enforceable State 

unemployment compensation debts. As 

is done by States for State income tax 

debts, before submitting a debt to the 

database, States will certify to FMS that 

the debt is past due, legally enforceable 

WReier-Aviles on DSKGBLS3C1PROD with RULES

Federal Register / Vol. 76, No. 19 / Friday, January 28, 2011 / Rules and Regulations 5071 

and that all due process prerequisites 

have been met. 

This rule establishes procedures for 

such collection, and amends section 

285.8, which governs tax refund offset 

to collect State income tax obligations, 

because the two types of offset are 

similar. 

II. Procedural Analyses 

Administrative Procedure Act 

FMS is promulgating this interim rule 

without opportunity for prior public 

comment pursuant to the 

Administrative Procedure Act, 5 U.S.C. 

553 (the ‘‘APA’’), because FMS has 

determined, for the following reasons, 

that a comment period would be 

unnecessary and contrary to the public 

interest. The authority to offset tax 

refund payments to collect delinquent 

State unemployment debt incurred as a 

result of fraud was effective on 

September 30, 2008, and the authority 

to collect unemployment compensation 

debts not resulting from fraud was 

effective December 8, 2010. A comment 

period is unnecessary because this 

interim rule is not required in order to 

exercise this authority and does not 

change the ongoing TOP offset process. 

It only provides guidance for State 

agencies and Federal disbursing officials 

to facilitate the addition of State 

unemployment debts into TOP. Under 

this interim rule, State agencies are 

required to provide to the debtor the 

same pre offset notice, opportunities, 

and rights to dispute the debt and seek 

waiver as currently required by 26 

U.S.C. 6402. Since this interim rule 

provides important guidance ensuring 

that debtors receive appropriate notices 

and opportunities from States that elect 

to participate, FMS believes that it is in 

the public interest to issue this interim 

rule without delaying the effective date 

to wait for prior public comment. 

For the same reasons, FMS has 

determined that good cause exists to 

make this interim rule effective upon 

publication without providing the 

30-day period between publication and 

the effective date contemplated by 5 

U.S.C. 553(d)(3). The public is invited to 

submit comments on the interim rule, 

which will be taken into account before 

a final rule is issued. 

Request for Comment on Plain Language 

Executive Order 12866 requires each 

agency in the executive branch to write 

regulations that are simple and easy to 

understand. We invite comment on how 

to make the proposed rule clearer. For 

example, you may wish to discuss: (1) 

Whether we have organized the material 

to suit your needs; (2) whether the 

requirements of the rule are clear; or (3) 

whether there is something else we 

could do to make this rule easier to 

understand. 

Regulatory Analysis Planning and 

Review 

This interim rule is not a significant 

regulatory action as defined in 

Executive Order 12866. Because no 

notice of proposed rulemaking is 

required for this rule, the provisions of 

the Regulatory Flexibility Act (5 U.S.C. 

601 et seq.) do not apply. 

Federalism 

This rule has been reviewed under 

Executive Order 13132, Federalism. 

This rule will not have substantial 

direct effects on States, on the 

relationship between the national 

government and the States, or on 

distribution of power and 

responsibilities among the various 

levels of government. Participation in 

the program governed by this rule is 

voluntary for the States; this rule only 

sets forth the general procedures for 

State participation. States already 

participate in offset of tax refunds to 

collect delinquent State income tax 

obligations pursuant to 31 CFR 285.8. 

This rule merely updates the regulations 

to reflect the statutory change 

authorizing States to submit additional 

debts to TOP for collection by tax 

refund offset. Therefore, in accordance 

with Executive Order 13132, it is 

determined that this rule does not have 

sufficient federalism implications to 

warrant the preparation of a federalism 

summary impact statement. 

List of Subjects in 31 CFR Part 285 

Administrative practice and 

procedure, Black lung benefits, Child 

support, Claims, Credit, Debts, 

Disability benefits, Federal employees, 

Garnishment of wages, Hearing and 

appeal procedures, Loan programs, 

Privacy, Railroad retirement, Railroad 

unemployment insurance, Salaries, 

Social Security benefits, Supplemental 

Security Income (SSI), Taxes, 

Unemployment compensation, 

Veterans’ benefits, Wages. 

For the reasons set forth in the 

preamble, 31 CFR Part 285 is amended 

as follows: 

PART 285—DEBT COLLECTION 

AUTHORITIES UNDER THE DEBT 

COLLECTION IMPROVEMENT ACT OF 

1996 

■ 1. The authority citation for part 285 

continues to read as follows: 

Authority: 5 U.S.C. 5514; 26 U.S.C. 6402; 

31 U.S.C. 321, 3701, 3711, 3716, 3719, 

3720A, 37203, 3720D; 42 U.S.C. 664; E.O. 

13019, 61 FR 51763, 3 CFR, 1996 Comp., P. 

216. 

■ 2. Amend § 285.8 as follows: 

■ a. Revise the section heading. 

■ b. In paragraph (a), revise the 

definition of ‘‘Debt’’, revise the 

definition of ‘‘Debtor’’, and add a 

definition of ‘‘Unemployment 

compensation debt’’ in alphabetical 

order. 

■ c. Revise paragraph (b). 

■ d. In paragraph (c), revise the heading, 

paragraphs (c)(1), (c)(3)(i), and (c)(3)(ii). 

■ e. In paragraph (d)(2), remove the 

words ‘‘6402(a), (c), (d) and (e)’’ 

wherever they appear, and add, in their 

place, ‘‘6402(a), (c), (d), (e) and (f)’’. 

■ f. In paragraph (i), revise the first 

sentence. 

■ g. In paragraph (j), remove the word 

‘‘6402(e)’’ and add, in its place, ‘‘6402(e) 

or (f)’’ wherever it occurs. 

■ h. Remove paragraph (k). 

■ i. In paragraphs (c)(4), (e)(1)(i), and (f), 

remove the words ‘‘State income tax 

obligation’’ and add, in their place, 

‘‘State income tax obligation or 

unemployment compensation debt’’ 

wherever they occur. 

■ j. In paragraphs (e)(3), (e)(4), and (h), 

remove the words ‘‘State income tax 

obligations’’ and add, in their place, 

‘‘State income tax obligations or 

unemployment compensation debts’’ 

wherever they occur. 

The revision and additions read as 

follows: 

§ 285.8 Offset of tax refund payments to 

collect certain debts owed to States. 

(a) * * * 

Debt means past-due, legally 

enforceable State income tax obligation 

or unemployment compensation debt 

unless otherwise indicated. 

Debtor means a person who owes a 

debt. 

* * * * * 

Unemployment compensation debt 

has the same meaning as the term 

‘‘covered unemployment debt’’ as 

defined in 26 U.S.C. 6402(f)(4), and 

means 

(1) A past-due debt for erroneous 

payment of unemployment 

compensation due to fraud or the 

person’s failure to report earnings which 

has become final under the law of a 

State certified by the Secretary of Labor 

pursuant to 26 U.S.C. 3304 and which 

remains uncollected; 

(2) Contributions due to the 

unemployment fund of a State for which 

the State has determined the person to 

be liable and which remain uncollected; 

and 

(3) Any penalties and interest 

assessed on such debt. 

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5072 Federal Register / Vol. 76, No. 19 / Friday, January 28, 2011 / Rules and Regulations 

(b) General rule. (1) FMS will offset 

tax refunds to collect debt under this 

section in accordance with 26 U.S.C. 

6402(e) and (f) and this section. 

(2) FMS will compare tax refund 

payment records, as certified by the IRS, 

with records of debts submitted to FMS. 

A match will occur when the taxpayer 

identifying number (as that term is used 

in 26 U.S.C. 6109) and name on a 

payment certification record are the 

same as the taxpayer identifying number 

and name (or derivative of the name) on 

a delinquent debt record. When a match 

occurs and all other requirements for tax 

refund offset have been met, FMS will 

reduce the amount of any tax refund 

payment payable to a debtor by the 

amount of any past-due, legally 

enforceable State income tax obligation 

or unemployment compensation debt 

owed by the debtor. Any amounts not 

offset will be paid to the payee(s) listed 

in the payment certification record. 

(3) FMS will only offset a tax refund 

payment for a State income tax 

obligation if the address shown on the 

Federal tax return for the taxable year of 

the overpayment is an address within 

the State seeking the offset. 

(c) Notification of past-due, legally 

enforceable State income tax obligations 

or unemployment compensation debts. 

(1) Notification. States shall notify FMS 

of debts in the manner and format 

prescribed by FMS. The notification of 

liability must be accompanied by a 

certification that the debt is past due 

and legally enforceable and that the 

State has complied with the 

requirements contained in paragraph 

(c)(3) of this section and with all Federal 

or State requirements applicable to the 

collection of debts under this section. 

With respect to State income tax 

obligations only, the certification must 

specifically state that none of the debts 

submitted for collection by offset are 

debts owed by an individual who has 

claimed immunity from State taxation 

by reason of being an enrolled member 

of an Indian tribe who lives on a 

reservation and derives all of his or her 

income from that reservation unless 

such claim has been adjudicated de 

novo on its merits in accordance with 

paragraph (c)(3). FMS may reject a 

notification that does not comply with 

the requirements of this section. Upon 

notification of the rejection and the 

reason for rejection, the State may 

resubmit a corrected notification. 

* * * * * 

(3)(i) Advance notification to the 

debtor of the State’s intent to collect by 

Federal tax refund offset. The State is 

required to provide a written 

notification to the debtor informing the 

debtor that the State intends to refer the 

debt for collection by tax refund offset. 

The notice must give the debtor at least 

60 days to present evidence, in 

accordance with procedures established 

by the State, that all or part of the debt 

is not past due or not legally 

enforceable, or, in the case of a covered 

unemployment compensation debt, the 

debt is not due to fraud or the debtor’s 

failure to report earnings. In the case of 

a State income tax obligation, the notice 

must be sent certified mail, return 

receipt requested. 

(ii) Determination. The State must, in 

accordance with procedures established 

by the State, consider any evidence 

presented by a debtor in response to the 

notice described in paragraph (c)(3)(i) of 

this section and determine whether an 

amount of such debt is past due and 

legally enforceable and, in the case of a 

covered unemployment compensation 

debt, the debt is due to fraud or the 

debtor’s failure to report earnings. With 

respect to State income tax obligations 

only, where the debtor claims that he or 

she is immune from State taxation by 

reason of being an enrolled member of 

an Indian tribe who lives on a 

reservation and derives all of his or her 

income from that reservation, State 

procedures shall include de novo 

review on the merits, unless such claims 

have been previously adjudicated by a 

court of competent jurisdiction. States 

shall, upon request from the Secretary of 

the Treasury, make such procedures 

available to the Secretary of the 

Treasury for review. 

* * * * * 

(i) * * * In accordance with 26 U.S.C. 

6402(g), any reduction of a taxpayer’s 

refund made pursuant to 26 U.S.C. 

6402(e) or (f) shall not be subject to 

review by any court of the United States 

or by the Secretary of the Treasury, FMS 

or IRS in an administrative proceeding. 

* * * 

Dated: January 20, 2011. 

Richard L. Gregg, 

Fiscal Assistant Secretary. 

[FR Doc. 2011–1697 Filed 1–27–11; 8:45 am] 

BILLING CODE 4810–35–M 

DEPARTMENT OF THE TREASURY 

Office of Foreign Assets Control 

31 CFR Part 515 

Cuban Assets Control Regulations 

AGENCY: Office of Foreign Assets 

Control, Treasury. 

ACTION: Final rule. 

SUMMARY: The Department of the 

Treasury’s Office of Foreign Assets 

Control (‘‘OFAC’’) is amending the 

Cuban Assets Control Regulations to 

continue efforts to reach out to the 

Cuban people in support of their desire 

to freely determine their country’s 

future. These amendments implement 

policy changes announced by the 

President on January 14, 2011, designed 

to increase people-to-people contact, 

support civil society in Cuba, enhance 

the free flow of information to, from, 

and among the Cuban people, and help 

promote their independence from 

Cuban authorities. To implement these 

policy changes, OFAC is taking steps 

that build upon the President’s April 

2009 initiative to, among other things, 

allow for greater licensing of travel to 

Cuba for educational, cultural, religious, 

and journalistic activities and expand 

licensing of remittances to Cuba. These 

amendments also modify regulations 

regarding authorization of transactions 

with Cuban national individuals who 

have taken up permanent residence 

outside of Cuba, as well as implement 

certain technical and conforming 

changes. 

DATES: Effective Date: January 28, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Assistant Director for Compliance, 

Outreach & Implementation, tel.: 202– 

622–2490, Assistant Director for 

Licensing, tel.: 202–622–2480; Assistant 

Director for Policy, tel.: 202–622–4855, 

or Chief Counsel (Foreign Assets 

Control), tel.: 202–622–2410 (not toll 

free numbers). 

SUPPLEMENTARY INFORMATION: 

Electronic and Facsimile Availability 

This document and additional 

information concerning OFAC are 

available from OFAC’s Web site 

(http://www.treasury.gov/ofac). Certain 

general information pertaining to 

OFAC’s sanctions programs also is 

available via facsimile through a 24- 

hour fax-on-demand service, tel.: 202/ 

622–0077. 

Background 

The U.S. Government issued the 

Cuban Assets Control Regulations, 31 

CFR part 515 (the ‘‘Regulations’’), on 

July 8, 1963, under the Trading With the 

Enemy Act (50 U.S.C. App. 5 et seq.). 

On September 3, 2009, OFAC amended 

the Regulations to implement measures 

announced by the President in April 

2009 to promote democracy and human 

rights in Cuba by easing travel 

restrictions to facilitate greater contact 

between separated family members in 

the United States and Cuba and by 

WReier-Aviles on DSKGBLS3C1PROD with RULES