[Federal Register Volume 68, Number 119 (Friday, June 20, 2003)]
[Rules and Regulations]
[Pages 36914-36915]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-15573]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 78

RIN 0790-AG93


Voluntary State Tax Withholding From Retired Pay

AGENCY: Department of Defense, Office of the Under Secretary of Defense 
(Comptroller).

ACTION: Final rule; amendment.

-----------------------------------------------------------------------

SUMMARY: This rule amends 32 CFR part 78, Voluntary State Tax 
Withholding From Retired Pay, to comply with the Treasury Financial 
Manual, Volume 1, Section 5060f.

EFFECTIVE DATE: This rule is effective June 20, 2003.

FOR FURTHER INFORMATION CONTACT: Office of the Under Secretary of 
Defense (Comptroller), 703-604-6350.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    It has been determined that this rule is not a significant 
regulatory action. The rule does not:
    (1) Have an annual effect to the economy of $100 million or more or 
adversely affect in a material way the economy; a section of the 
economy; productivity; competition; jobs; the environment; public 
health or safety; or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another Agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs, or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive Order.

Unfunded Mandates Reform Act (Sec. 202, Pub. L. 104-4)

    It has been certified that this rule does not contain a Federal 
mandate that may result in the expenditure by State, local and tribal 
governments, in aggregate, or by the private sector, of $100 million or 
more in any one year.

Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)

    It has been certified that this rule is not subject to the 
Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if 
promulgated, have a significant economic impact on a substantial number 
of small entities. The amendments are required to update tax 
withholding procedures to comply with the Treasury Financial Manual, 
Volume 1, Section 506f and to update the Uniformed Services retired pay 
addresses.

Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter 35)

    It has been certified that this rule does not impose reporting or 
recordkeeping requirements under the Paperwork Reduction Act of 1995.

Federalism (Executive Order 13132)

    It has been certified that this rule does not have federalism 
implications, as set forth in Executive Order 13132. This rule does not 
have substantial direct effects on:
    (1) The States;
    (2) The relationship between the National Government and the 
States; or
    (3) The distribution of power and responsibilities among the 
various levels of government.

List of Subjects in 32 CFR Part 78

    Income Taxes, Intergovernmental relations, Military personnel, 
Pensions.

0
Accordingly, 32 CFR part 78 is amended as follows:

PART 78--VOLUNTARY STATE TAX WITHHOLDING FROM RETIRED PAY

0
1. The authority citation for 32 CFR part 78 continues to read as 
follows:

    Authority: 10 U.S.C. 1045.


0
2. Section 78.5(a) is revised to read as follows:


Sec.  78.5  Procedures.

    (a) The Uniformed Services shall comply with the payment 
requirements of the state, city, or county tax laws. Therefore, the 
payment requirements (biweekly, monthly, or quarterly) of the state, 
city, or county tax laws currently in effect will be observed by the 
Uniformed Services. However, payment will not be made more frequently 
than required by the state, city, or county, or more frequently than 
the payroll is paid by the Uniformed Services. Payment procedures shall 
conform, to the extent practicable, to the usual fiscal practices of 
the Uniformed Services.
* * * * *

0
3. Section 78.5(g) is amended by removing paragraphs (g)(1) through 
(g)(7)

[[Page 36915]]

and adding new paragraphs (g)(1) through (g)(4) to read as follows:


Sec.  78.5  Procedures.

* * * * *
    (g) * * *
    (1) Defense Finance and Accounting Service, Attn: DFAS/PRR/CL, 1240 
East Ninth Street, Cleveland, OH 44199-2055.
    (2) Coast Guard: Commanding Officer (RPB), U.S. Coast Guard Human 
Resources Service and Information Center, 444 S. E. Quincy Street, 
Topeka, KS 66683-3591.
    (3) U.S. Public Health Service Compensation Branch, 5600 Fishers 
Lane, Room 4-50, Rockville, MD 20857.
    (4) National Oceanic and Atmospheric Administration, Commanding 
Officer (RPB), U.S. Coast Guard Human Resources Service and Information 
Center, 444 S. E. Quincy Street, Topeka, KS 66683-3591.
* * * * *

0
4. Section 78.5(i) is amended by removing the third sentence and adding 
``The letter shall be addressed to the Director, Defense Finance and 
Accounting Service, 1931 Jefferson Davis Highway, Arlington, VA 
22240.'' in its place.

0
5. Section 78.5(j) is revised to read as follows:


Sec.  78.5  Procedures.

* * * * *
    (j) Within 120 days of the receipt of a letter from a State, the 
Director, Defense Finance and Accounting Service, or designee, will 
notify the State, in writing, that DoD has either entered into the 
Standard Agreement or that an agreement cannot be entered into with the 
State and the reasons for that determination.
* * * * *

0
6. Section 78.7, Article IV--Reporting, is revised to read as follows:


Sec.  78.7  Standard Agreement.

* * * * *

Article IV--Reporting

    Copies of Internal Revenue Service Form 1099R, ``Distribution From 
Pensions, Annuities, Retirement, or Profit Sharing Plan, IRAs, 
Insurance Contracts, etc.'' may be used for reporting withheld taxes to 
the State. The media for reporting (paper copy, magnetic tape, 
electronic file transfer, etc.) will comply with the state reporting 
standards that apply to employers in general.
* * * * *

    Dated: June 6, 2003.
Patricia L. Toppings,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 03-15573 Filed 6-19-03; 8:45 am]
BILLING CODE 5001-08-M