Federal Old-Age, Survivors, and Disability Insurance; Employer Identification Numbers for State and Local Government Employment

Federal RegisterDec 24, 1998

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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 422

[Regulations Nos. 4 and 22]

RIN 0960-AE84

Federal Old-Age, Survivors, and Disability Insurance; Employer

Identification Numbers for State and Local Government Employment

AGENCY: Social Security Administration (SSA).

ACTION: Proposed rules.

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SUMMARY: We propose to amend our current rules dealing with the special

identification numbers we issue to States that submit modifications to

their voluntary social security coverage group agreements. Under the

proposed revision, we would issue special identification numbers only

in cases where a modification extends coverage to periods prior to

1987. This revision will permit SSA to divert scarce SSA resources to

other priority workloads without adversely affecting State

recordkeeping operations.

DATES: To be sure that your comments are considered, we must receive

them no later than February 22, 1999.

ADDRESSES: Comments should be submitted in writing to the Commissioner

of Social Security, P.O. Box 1585, Baltimore, MD 21235, sent by telefax

to (410) 966-2830, sent by e-mail to [email protected], or delivered

to the Social Security Administration, 2109 West Low Rise Building,

6401 Security Boulevard, Baltimore, MD 21235, between 8:00 a.m. and

4:30 p.m. on regular business days. Comments may be inspected during

these hours by making arrangements with the contact person shown below.

The electronic file of this document is available on the Internet at

www.access.gpo.gov/nara at 6:00 a.m. on the date of publication in the

Federal Register.

FOR FURTHER INFORMATION CONTACT: Robert Augustine, Legal Assistant,

Office of Process and Innovation Management, 6401 Security Boulevard,

Baltimore, MD 21235, (410) 966-5121 or TTY (410) 966-5609 for

information about this rule. For information on eligibility or claiming

benefits, call our national toll-free number, 1-800-772-1213 or TTY 1-

800-325-0778.

SUPPLEMENTARY INFORMATION: Section 205(c)(2)(A) of the Social Security

Act (the Act) requires SSA to maintain a record of the wages and self-

employment income of each individual. The record is identified by the

individual's social security number. Wages posted to an individual's

record are based on wage reports submitted to SSA and the Internal

Revenue Service (IRS) by employers. IRS regulations at 26 CFR

31.6011(a)-l require an employer to file returns required under the

Federal Insurance Contributions Act (FICA) with IRS each year and IRS

regulations at 26 CFR 31.6051-2 and 31.6091-1(d) require an employer to

file wage reports with SSA each year. These requirements are also

explained on wage reporting forms and in related instructions issued by

SSA and IRS. To help account for these returns and reports, IRS assigns

an employer identification number (EIN) to most employers.

Additionally, SSA assigns a special identification number to each

political subdivision of a State which is included in a modification to

the State's coverage agreement under section 218 of the Act. These

special identification numbers must currently be issued to any State

that requests a modification of its coverage agreement, and to

interstate instrumentalities if pre-1987 coverage is obtained. However,

for SSA program purposes, such numbers are necessary only if the

modification covers wages for years prior to 1987. In cases where the

modification does not cover pre-1987 wages, the number is assigned

solely for State bookkeeping purposes.

Explanation of Proposed Changes

We propose to modify paragraph (a) of Sec. 404.1220 and paragraph

(b) of Sec. 422.112 of our regulations to indicate that we will issue a

special identification number to each political subdivision of a State

included in a modification to the State's voluntary coverage agreement

under section 218 of the Act only if the modification extends coverage

to periods prior to 1987. States will be free to assign their own

identification numbers to employers covered under modifications that do

not cover pre-1987 earnings, so that these proposed rules will have no

adverse impact on State recordkeeping operations. This proposal will

permit SSA to divert scarce resources to other priority workloads.

[[Page 71238]]

Regulatory Procedures

Executive Order 12866

We have consulted with the Office of Management and Budget (OMB)

and have determined that these proposed rules do not meet the criteria

for a significant regulatory action under Executive Order 12866. Thus,

they are not subject to OMB review.

Regulatory Flexibility Act

We certify that these proposed regulations will not have a

significant economic impact on a substantial number of small entities.

Thus, a regulatory flexibility analysis as provided in the Regulatory

Flexibility Act, as amended, is not required.

Paperwork Reduction Act

These proposed regulations will impose no additional reporting or

recordkeeping requirements requiring OMB clearance.

(Catalog of Federal Domestic Assistance Program Nos. 96.001 Social

Security Disability Insurance; 96.002 Social Security Retirement

Insurance; 96.004 Social Security Survivors Insurance.)

List of Subjects

20 CFR Part 404

Administrative practice and procedure, Blind, Disability benefits,

Old-Age, Survivors, and Disability Insurance, Reporting and

recordkeeping requirements, Social Security.

20 CFR Part 422

Administrative practice and procedure, Freedom of information,

Organization and functions (Government agencies), Social Security.

Dated: December 14, 1998.

Kenneth S. Apfel,

Commissioner of Social Security.

For the reasons set forth in the preamble, we propose to amend

subpart M of Part 404 and subpart B of Part 422 of Chapter III of the

Code of Federal Regulations as follows:

PART 404--FEDERAL OLD AGE, SURVIVORS AND DISABILITY INSURANCE

(1950-- )

Subpart M--[Amended]

1. The authority citation for subpart M of part 404 continues to

read as follows:

Authority: Secs. 205, 210, 218 and 702(a)(5) of the Social

Security Act (42 U.S.C. 405, 410, 418 and 902(a)(5)); sec. 12110,

Pub. L. 99-272, 100 Stat. 287 (42 U.S.C. 418 note); sec. 9002, Pub.

L. 99-509, 100 Stat. 1970.

2. Section 404.1220 is amended by revising paragraph (a) to read as

follows:

Sec. 404.1220 Identification numbers.

(a) State and local governments. When a State submits a

modification to its agreement under section 218 of the Act, which

extends coverage to periods prior to 1987, SSA will assign a special

identification number to each political subdivision included in that

modification. SSA will send the State a Form SSA-214-CD, ``Notice of

Identifying Number,'' to inform the State of the special identification

number(s). The special number will be used for reporting the pre-1987

wages to SSA. The special number will also be assigned to an interstate

instrumentality if pre-1987 coverage is obtained and SSA will send a

Form SSA-214-CD to the interstate instrumentality to notify it of the

number assigned.

* * * * *

PART 422--ORGANIZATION AND PROCEDURES

Subpart B--[Amended]

3. The authority citation for subpart B of part 422 continues to

read as follows:

Authority: Secs. 205, 232, 702(a)(5), 1131, and 1143 of the

Social Security Act (42 U.S.C. 405, 432, 902(a)(5), 1320b-1, and

1320b-13).

4. Section 422.112 is amended by revising paragraph (b) to read as

follows:

Sec. 422.112 Employer identification numbers.

* * * * *

(b) State and local governments. When a State submits a