The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“AMENDMENTS” mentioning the Federal Reserve System was published in the House of Representatives section on pages H10726-H10748 on Oct. 24, 1995.
The publication is reproduced in full below:
AMENDMENTS
Under clause 6 of rule XXIII, proposed amendments were submitted as follows:
H.R. 2491
Offered By: Mr. Orton
(Amendment to the Amendment Numbered 7)
Amendment No. 8: At the end insert the following new title:
[[Page H 10727]]
TITLE XIV--BUDGET PROCESS PROVISIONS
CHAPTER 1--SHORT TITLE; PURPOSE
SEC. 14001. SHORT TITLE.
This title may be cited as the ``Balanced Budget Enforcement Act of 1995''.
SEC. 14002. PURPOSE.
The purpose of this title is to enforce a path toward a balanced budget by fiscal year 2002 and to make Federal budget process more honest and open.
CHAPTER 2--BUDGET ESTIMATES
SEC. 14051. BOARD OF ESTIMATES.
(a) Establishment.--There is established a Board of Estimates.
(b) Duties of the Board.--(1) On the dates specified in section 254, the Board shall issue a report to the President and the Congress which states whether it has chosen (with no modification)--
(A) the sequestration preview report for the budget year submitted by OMB under section 254(d) of the Balanced Budget and Emergency Deficit Control Act of 1985 or the report for that year submitted by CBO under that section; and
(B) the final sequestration report for the budget year submitted by OMB under section 254(g) of the Balanced Budget and Emergency Deficit Control Act of 1985 or the report for that year submitted by CBO under that section;
that shall be used for purposes of the Balanced Budget and Emergency Deficit Control Act of 1985, chapter 11 of title 31, United States Code, and section 403 of the Congressional Budget Act of 1974. In making its choice, the Board shall choose the report that, in its opinion, is the more accurate.
(2) At any time the Board may change the list of major estimating assumptions to be used by OMB and CBO in preparing their sequestration preview reports.
(c) Membership.--
(1) Number and appointment.--The Board shall be composed of 5 members, the chairman of the Board of Governors of the Federal Reserve System and 4 other members to be appointed by the President as follows:
(A) One from a list of at least 5 individuals nominated for such appointment by the Speaker of the House of Representatives.
(B) One from a list of at least 5 individuals nominated for such appointment by the majority leader of the Senate.
(C) One from a list of at least 5 individuals nominated for such appointment by the minority leader of the House of Representatives.
(D) One from a list of at least 5 individuals nominated for such appointment by the minority leader of the Senate.
No member appointed by the President may be an officer or employee of any government. A vacancy in the Board shall be filled in the manner in which the original appointment was made.
(2) Continuation of membership.--If any member of the Board appointed by the President becomes an officer or employee of a government, he may continue as a member of the Board for not longer than the 30-day period beginning on the date he becomes such an officer or employee.
(3) Terms.--(A) Members shall be appointed for terms of 4 years.
(B) Any member appointed to fill a vacancy occurring before the expiration of the term for which his predecessor was appointed shall be appointed only for the remainder of such term. A member may serve after the expiration of his term until his successor has taken office.
(4) Basic pay.--Members of the Board shall serve without pay.
(5) Quorum.--Three members of the Board shall constitute a quorum but a lesser number may hold hearings.
(6) Chairman.--The Chairman of the Board shall be chosen annually by its members.
(7) Meetings.--The Board shall meet at the call of the Chairman or a majority of its members.
(d) Director and Staff.--
(1) Appointment.--The Board shall have a Director who shall be appointed by the members of the Board. Subject to such rules as may be prescribed by the Board, the Director may appoint and fix the pay of such personnel as the Director considers appropriate.
(2) Applicability of certain civil service laws.--The Director and staff of the Board may be appointed without regard to the provisions of title 5, United States Code, governing appointments in the competitive service, and may be paid without regard to the provisions of chapter 51 and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates, except that no individual so appointed may receive pay in excess of the annual rate of basic pay payable for GS-18 of the General Schedule.
(3) Staff of federal agencies.--Upon request of the Board, the head of any Federal agency is authorized to detail, on a reimbursable basis, any of the personnel of such agency to the Board to assist the Board in carrying out its duties, notwithstanding section 202(a) of the Legislative Reorganization Act of 1946 (2 U.S.C. 72a(a)).
(e) Powers.--
(1) Hearings and sessions.--The Board may, for the purpose of carrying out its duties, hold such hearings, sit and act at such times and places, take such testimony, and receive such evidence, as it considers appropriate.
(2) Obtaining official data.--The Board may secure directly from any department or agency of the United States information necessary to enable it to carry out its duties. Upon request of the Chairman of the Board, the head of such department or agency shall furnish such information to the Board.
(3) Administrative support services.--The Administrator of General Services shall provide to the Board on a reimbursable basis such administrative support services as the Board may request.
(f) Definitions.--As used in this section:
(1) The term ``Board'' refers to the Board of Estimates established by subsection (a).
(2) The term ``CBO'' refers to the Director of the Congressional Budget Office.
(3) The term ``OMB'' refers to the Director of the Office of Management and Budget.
Subtitle B--Discretionary Spending Limits
SEC. 14101. DISCRETIONARY SPENDING LIMITS.
(a) Limits.--Section 601(a)(2) of the Congressional Budget Act of 1974 is amended by striking subparagraphs (A), (B),
(C), (D), and (F), by redesignating subparagraph (E) as subparagraph (A) and by striking ``and'' at the end of that subparagraph, and by inserting after subparagraph (A) the following new subparagraphs:
``(B) with respect to fiscal year 1996, $498,113,000,000 in new budget authority and $536,610,000,000 in outlays;
``(C) with respect to fiscal year 1997, $497,200,000,000 in new budget authority and $530,736,000,000 in outlays;
``(D) with respect to fiscal year 1998, $496,700,000,000 in new budget authority and $526,627,000,000 in outlays;
``(E) with respect to fiscal year 1999, $495,700,000,000 in new budget authority and $524,722,000,000 in outlays;
``(F) with respect to fiscal year 2000, $497,700,000,000 in new budget authority and $523,798,000,000 in outlays;
``(G) with respect to fiscal year 2001, $506,700,000,000 in new budget authority and $530,023,000,000 in outlays; and
``(H) with respect to fiscal year 2002, $509,700,000,000 in new budget authority and $530,023,000,000 in outlays.''.
(b) Committee Allocations and Enforcement.--Section 602 of the Congressional Budget Act of 1974 is amended--
(1) in subsection (c), by striking ``1995'' and inserting
``2002'' and by striking its last sentence; and
(2) in subsection (d), by striking ``1992 to 1995'' in the side heading and inserting ``1995 to 2002'' and by striking
``1992 through 1995'' and inserting ``1995 through 2002''.
(c) Five-Year Budget Resolutions.--Section 606 of the Congressional Budget Act of 1974 is amended--
(1) in subsection (a), by striking ``for fiscal year 1992, 1993, 1994, or 1995''; and
(2) in subsection (d)(1), by striking ``for fiscal years 1992, 1993, 1994, and 1995'' and by striking ``(i) and
(ii)''.
(d) Effective Date Repealer.--(1) Section 607 of the Congressional Budget Act of 1974 is repealed.
(2) The item relating to section 607 in the table of contents set forth in section 1(b) of the Congressional Budget and Impoundment Control Act of 1974 is repealed.
(e) Sequestration Regarding Crime Trust Fund.--(1) Section 251A(b)(1) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by striking subparagraphs (B),
(C), and (D) and its last sentence and inserting the following:
``(B) For fiscal year 1996, $2,227,000,000.
``(C) For fiscal year 1997, $3,846,000,000.
``(D) For fiscal year 1998, $4,901,000,000.
``(E) For fiscal year 1999, $5,639,000,000.
``(F) For fiscal year 2000, $6,225,000,000.
``The appropriate levels of new budget authority are as follows: for fiscal year 1996, $4,087,000,000; for fiscal year 1997, $5,000,000,000; for fiscal year 1998,
$5,500,000,000; for fiscal year 1999, $6,500,000,000; for fiscal year 2000, $6,500,000,000.''.
(2) The last two sentences of section 310002 of the Violent Crime Control and Law Enforcement Act of 1994 (42 U.S.C. 14212) are repealed.
SEC. 14102. TECHNICAL AND CONFORMING CHANGES.
(a) General Statement.--Section 250(b) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by striking the first sentence and inserting the following:
``This part provides for the enforcement of deficit reduction through discretionary spending limits and pay-as-you-go requirements for fiscal years 1995 through 2002.''.
(b) Definitions.--Section 250(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended--
(1) by striking paragraph (6) and inserting the following:
``(6) The term `budgetary resources' means new budget authority, unobligated balances, direct spending authority, and obligation limitations.'';
(2) in paragraph (9), by striking ``1992'' and inserting
``1996''; and
(3) in paragraph (14), by striking ``1995'' and inserting
``2002''.
SEC. 14103. ELIMINATION OF CERTAIN ADJUSTMENTS TO
DISCRETIONARY SPENDING LIMITS.
Section 251 of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended--
(1) in the side heading of subsection (a), by striking
``1991-1998'' and inserting ``1995-2002'';
(2) in the first sentence of subsection (b)(1), by striking
``1992, 1993, 1994, 1995, 1996, 1997 or 1998'' and inserting
``1995, 1996, 1997, 1998, 1999, 2000, 2001, or 2002'' and by striking ``through 1998'' and inserting
``through 2002'';
(3) in subsection (b)(1), by striking subparagraphs (B) and
(C) and by striking ``the following:'' and all that follows through ``The adjustments'' and inserting ``the following: the adjustments'';
(4) in subsection (b)(2), by striking ``1991, 1992, 1993, 1994, 1995, 1996, 1997, or 1998'' and inserting ``1995, 1996, 1997, 1998, 1999, 2000, 2001, or 2002'' and by striking
``through 1998'' and inserting ``through 2002''; and
(5) by repealing subsection (b)(2).
Subtitle C--Pay-As-You-Go Procedures
SEC. 14201. PERMANENT EXTENSION OF PAY-AS-YOU-GO PROCEDURES;
TEN-YEAR SCOREKEEPING.
(a) Ten-year Scorekeeping.--Section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended--
(1) in the side heading of subsection (a), by striking
``Fiscal Years1992-1998''; and
(2) in subsection (d), by striking ``each fiscal year through fiscal year 1998'' each place it appears and inserting ``each of the 10 succeeding fiscal years following enactment of any direct spending or receipts legislation''.
(b) Repeal of Emergencies.--Section 252(e) of the Balanced Budget and Emergency Deficit Control Act of 1985 is repealed.
(c) Pay-As-You--Go Scorecard.--Upon enactment of this Act, the Director of the Office of Management and Budget shall reduce the balances of direct spending and receipts legislation applicable to each fiscal year under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985 by an amount equal to the net deficit reduction achieved through the enactment of this Act of direct spending and receipts legislation for that year.
(d) Pay-As-You-Go Point of Order.--Section 311 of the Congressional Budget Act of 1974 is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection:
``(d) Pay-As-You-Go Point of Order.--It shall not be in order in the Houe of Representatives or the Senate to consider any bill, joint resolution, amendment, motion, or conference report that would increase the deficit above the maximum deficit amount set forth in section 253 for the budget year or any of the 9 succeeding fiscal years after the budget year, as measured by the sum of all applicable estimates of direct spending and receipts legislation applicable to that fiscal year.''.
SEC. 14202. ELIMINATION OF EMERGENCY EXCEPTION.
(a) Sequestration.--Section 252(b)(1) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by striking subparagraph (B), by striking the dash after
``from'', and by striking ``(A)''.
(b) Technical Change.--Section 252(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by inserting ``in the manner described in section 256.'' after ``accounts'' the first place it appears and by striking the remainder of the subsection.
Subtitle D--Miscellaneous
SEC. 14301. TECHNICAL CORRECTION.
Section 258 of the Balanced Budget and Emergency Deficit Control Act of 1985, entitled ``Modification of Presidential Order'', is repealed.
SEC. 14302. REPEAL OF EXPIRATION DATE.
(a) Expiration.--Section 275 of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by repealing subsection (b) and by redesignating subsection (c) as subsection (b).
(b) Expiration.--Section 14002(c)(3) of the Omnibus Budget Reconciliation Act of 1993 (2 U.S.C. 900 note; 2 U.S.C. 665 note) is repealed.
Subtitle E--Deficit Control
SEC. 14401. DEFICIT CONTROL.
(a) Deficit Control.--Part D of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended to read as follows:
``Part D--Deficit Control
``SEC. 261. ESTABLISHMENT OF DEFICIT TARGETS.
``The deficit targets are as follows:
------------------------------------------------------------------------
``Fiscal year Deficit (in billions of dollars)
------------------------------------------------------------------------
1996.............................. 179.853
1997.............................. 164.640
1998.............................. 133.279
1999.............................. 111.062
2000.............................. 86.221
2001.............................. 41.626
2002.............................. 0
------------------------------------------------------------------------
The deficit target for each fiscal year after 2002 shall be zero.
``SEC. 262. SPECIAL DEFICIT MESSAGE BY PRESIDENT.
``(a) Special Message.--If the OMB sequestration preview report submitted under section 254(d) indicates that deficit for the budget year or any outyear will exceed the applicable deficit target, or that the actual deficit target in the most recently completed fiscal year exceeded the applicable deficit target, the budget submitted under section 1105(a) of title 31, United States Code, shall include a special deficit message that includes proposed legislative changes to offset the net deficit impact of the excess identified by that OMB sequestration preview report for each such year through any combination of:
``(1) Reductions in outlays.
``(2) Increases in revenues.
``(3) Increases in the deficit targets, if the President submits a written determination that, because of economic or programmatic reasons, only some or none of the excess should be offset.
``(b) Introduction of President's Package.--Within 10 days after the President submitted a special deficit message, the text referred to in subsection (a) shall be introduced as a joint resolution in the House of Representatives by the chairman of its Committee on the Budget and in the Senate by the chairman of its Committee on the Budget. If the chairman fails to do so, after the 10th day the resolution may be introduced by any Member of the House of Representatives or the Senate, as the case may be. A joint resolution introduced under this subsection shall be referred to the Committee on the Budget of the House of Representatives or the Senate, as the case may be.
``SEC. 263. CONGRESSIONAL ACTION REQUIRED.
``(a) In General.--The requirements of this section shall be in effect for any year in which the OMB sequestration preview report submitted under section 254(d) indicates that the deficit for the budget year or any outyear will exceed the applicable deficit target.
``(b) Requirements for Special Budget Resolution in the House.--The Committee on the Budget in the House shall report not later than March 15 a joint resolution, either as a separate section of the joint resolution on the budget reported pursuant to section 301 of the Congressional Budget Act of 1974 or as a separate resolution, that includes reconciliation instructions instructing the appropriate committees of the House and Senate to report changes in laws within their jurisdiction to offset any excess in the deficit identified in the OMB sequestration preview report submitted under section 254(d) as follows:
``(1) Reductions in outlays.
``(2) Increases in revenues.
``(3) Increases in the deficit targets, except that any increase in those targets may not be greater than the increase included in the special reconciliation message submitted by the President.
``(c) Procedure If House Budget Committee Fails to Report Required Resolution.--
``(1) Automatic discharge of house budget committee.--In the event that the House Committee on the Budget fails to report a resolution meeting the requirements of subsection
(b), the committee shall be automatically discharged from further consideration of the joint resolution reflecting the President's recommendations introduced pursuant to section 5(b), and the joint resolution shall be placed on the appropriate calendar.
``(2) Consideration by house of discharged resolution.--Ten days after the House Committee on the Budget has been discharged under paragraph (1), any member may move that the House proceed to consider the resolution. Such motion shall be highly privileged and not debatable. It shall not be in order to consider any amendment to the resolution except amendments which are germane and which do not change the net deficit impact of the resolution. Consideration of such resolution shall be pursuant to the procedures set forth in section 305 of the Congressional Budget Act of 1974 and subsection (d).
``(d) Consideration by the House of Representatives.--(1) It shall not be in order in the House of Representatives to consider a joint resolution on the budget unless that joint resolution fully addresses the entirety of any excess of the deficit targets as identified in the OMB sequestration preview report submitted under section 254(d) through reconciliation instructions requiring spending reductions, or changes in the deficit targets.
``(2) If the joint resolution on the budget proposes to eliminate or offset less than the entire excess for budget year and any subsequent fiscal years, then the Committee on the Budget shall report a separate resolution increasing the deficit targets for each applicable year by the full amount of the excess not offset or eliminated. It shall not be in order to consider any joint resolution on the budget that does not offset the full amount of the excess until the House of Representatives has agreed to the resolution directing the increase in the deficit targets.
``(e) Transmittal to Senate.--If a joint resolution passes the House pursuant to subsection (d), the Clerk of the House of Representatives shall cause the resolution to be engrossed, certified, and transmitted to the Senate within one calendar day of the day on which the resolution is passed. The resolution shall be referred to the Senate Committee on the Budget.
``(f) Requirements for Special Budget Resolution in the Senate.--The Committee on the Budget in the Senate shall report not later than April 1 a joint resolution, either as a separate section of a budget resolution reported pursuant to section 301 of the Congressional Budget Act of 1974 or as a separate resolution, that shall include reconciliation instructions instructing the appropriate committees of the House and Senate to report changes in laws within their jurisdiction to offset any excess through any combination of:
``(1) Reductions in outlays.
``(2) Increases in revenues.
``(3) Increases in the deficit targets, except that any increase in those targets may not be greater than the increase included in the special reconciliation message submitted by the President.
``(g) Procedure if Senate Budget Committee Fails to Report Required Resolution.--
``(1) Automatic discharge of senate budget committee.--In the event that the Senate Committee on the Budget fails to report a resolution meeting the requirements of subsection
(f), the committee shall be automatically discharged from further consideration of the joint resolution reflecting the President's recommendations introduced pursuant to section 5(b), and the joint resolution shall be placed on the appropriate calendar.
``(2) Consideration by senate of discharged resolution.--Ten days after the Senate Committee on the Budget has been discharged under paragraph (1), any member may move that the Senate proceed to consider the resolution. Such motion shall be privileged and not debatable. Consideration of such resolution shall be pursuant to the procedures set forth in section 305 of the Congressional Budget Act of 1974 and subsection (h).
``(h) Consideration by Senate.--(1) It shall not be in order in the Senate to consider a joint resolution on the budget unless that joint resolution fully addresses the entirety of any excess of the deficit targets as identified in the OMB sequestration report submitted under section 254(d) through reconciliation instructions requiring deficit reductions, or changes in the deficit targets.
``(2) If the joint resolution on the budget proposes to eliminate or offset less than the entire overage of a budget year, then the Committee on the Budget shall report a resolution increasing the deficit target by the full amount of the overage not eliminated. It shall not be in order to consider any joint resolution on the budget that does not offset the entire amount of the overage until the Senate has agreed to the resolution directing the increase in the deficit targets.
``(i) Conference Reports Must Fully Address Deficit Excess.--It shall not be in order in the House of Representatives or the Senate to consider a conference report on a joint resolution on the budget unless that conference report fully addresses the entirety of any excess identified by the OMB sequestration preview report submitted pursuant to section 254(d) through reconciliation instructions requiring deficit reductions, or changes in the deficit targets.
``SEC. 264. COMPREHENSIVE SEQUESTRATION.
``(a) Sequestration Based on Budget-Year Shortfall.--The amount to be sequestered for the budget year is the amount
(if any) by which deficit exceeds the cap for that year under section 261 or the amount that the actual deficit in the preceding fiscal year exceeded the applicable deficit target.
``(b) Sequestration.--Within 15 days after Congress adjourns to end a session and on May 15, there shall be a sequestration to reduce the amount of deficit in the current policy baseline and to repay any deficit excess in the most recently completed fiscal year by the amounts specified in subsection (b). The amount required to be sequestered shall be achieved by reducing each spending account (or activity within an account) by the uniform percentage necessary to achieve that amount.''.
(c) Conforming Changes.--(1) The table of sections set forth in section 200 of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by striking the items relating to part D and inserting the following:
``Sec. 261. Establishment of deficit targets.
``Sec. 262. Special deficit message by president.
``Sec. 263. Congressional action required.
``Sec. 264. Comprehensive sequestration.''.
(2) Section 250(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by inserting ``or in part D'' after ``As used in this part''.
SEC. 14402. SEQUESTRATION PROCESS.
(a) Estimating Assumptions, Reports, and Orders.--Sections 254, 255, and 256 of the Balanced Budget and Emergency Deficit Control Act of 1985 are amended to read as follows:
``SEC. 254. ESTIMATING ASSUMPTIONS, REPORTS, AND ORDERS.
``(a) Timetable.--The timetable with respect to this part for any budget year is as follows:
Action to be completed:
OMB and CBO sequestration preview reports submitted to Board...........
Board selects sequestration preview report.............................
OMB publishes sequestration preview report.............................
OMB and CBO sequestration reports submitted to Board...................
Board selected midsession sequestration report.........................
President issues sequestration order...................................
President's midsession review; notification regarding military ........
personnel.
OMB and CBO final budget year sequestration reports submitted to Board.
Board selects final sequestration report; President issues ............
sequestration order.
``(b) Submission and Availability of Reports.--Each report required by this section shall be submitted, in the case of CBO, to the House of Representatives, the Senate, OMB, and the Board and, in the case of OMB, to the House of Representatives, the Senate, the President, and the Board on the day it is issued. On the following day a notice of the report shall be printed in the Federal Register.
``(c) Exchange of Preliminary Current Policy Baselines.--On December 15 or 3 weeks after Congress adjourns to end a session, whichever is later, OMB and CBO shall exchange their preliminary current policy baselines for the budget-year session starting in January.
``(d) Sequestration Preview Reports.--
``(1) Reporting requirement.--On December 31 or 2 weeks after exchanging preliminary current policy baselines, whichever is later, OMB and CBO shall each submit a sequestration preview report.
``(2) Contents.--Each preview report shall set forth the following:
``(A) Major estimating assumptions.--The major estimating assumptions for the current year, the budget year, and the outyears, and an explanation of them.
``(B) Current policy baseline.--A detailed display of the current policy baseline for the current year, the budget year, and the outyears, with an explanation of changes in the baseline since it was last issued that includes the effect of policy decisions made during the intervening period and an explanation of the differences between OMB and CBO for each item set forth in the report.
``(C) Deficits.--Estimates for the most recently completed fiscal year, the budget year, and each subsequent year through fiscal year 2002 of the deficits or surpluses in the current policy baseline.
``(D) Discretionary spending limits.--Estimates for the current year and each subsequent year through 2002 of the applicable discretionary spending limits for each category and an explanation of any adjustments in such limits under section 251.
``(E) Sequestration of discretionary accounts.--Estimates of the uniform percentage and the amount of budgetary resources to be sequestered from discretionary programs given the baseline level of appropriations, and if the President chooses to exempt some or all military personnel from sequestration, the effect of that decision on the percentage and amounts.
``(F) Pay-as-you-go sequestration reports.--The preview reports shall set forth, for the current year and the budget year, estimates for each of the following:
``(i) The amount of net deficit increase or decrease, if any, calculated under section 252(b).
``(ii) A list identifying each law enacted and sequestration implemented after the date of enactment of this section included in the calculation of the amount of deficit increase or decrease and specifying the budgetary effect of each such law.
``(iii) The sequestration percentage or (if the required sequestration percentage is greater than the maximum allowable percentage for medicare) percentages necessary to eliminate a deficit increase under section 252(c).
``(G) Requirements for the deficit.--An estimate of the amount of deficit reduction, if any, to be achieved for the budget year and the current year necessary to comply with the deficit targets or to repay any deficit excess in the preceding fiscal year.
``(H) deficit sequestration.--Estimates of the uniform percentage and the amount of comprehensive sequestration of spending programs that will be necessary under section 264.
``(I) Amount of change in deficit projections.--Amounts that deficit projections for the current year and the budget year have changed as a result of changes in economic and technical assumptions occurring after the enactment of the Omnibus Budget Reconciliation Act of 1995.
``(e) Selection of Official Sequestration Preview Report.--On January 15 or 2 weeks after receiving the OMB and CBO sequestration preview reports, whichever is later, the Board shall choose either the OMB or CBO sequestration preview report as the official report for purposes of this Act. The Board shall add to the chosen report an analysis of which reports submitted in previous years have proven to be more accurate and recommendations about methods of improving the accuracy of future reports. That report shall be set forth, without change, in the budget submitted by the President under section 1105(a) of title 31, United States Code, for the budget year.
``(f) Agreeing on Earlier Dates.--The Chairman of the Board may set earlier dates for subsections (c), (d), and (e) if OMB and CBO concur.
``(g) Notification Regarding Military Personnel.--On or before August 29, the President shall notify the Congress of the manner in which he intends to exercise flexibility with respect to military personnel accounts under section 251(a)(3).
``(h) Final Sequestration Reports.--
``(1) Reporting requirement.--Not later than 10 days following the end of a budget-year session, OMB and CBO shall each submit a final sequestration report. On May 1 of each year, OMB and CBO shall each submit a midyear sequestration report for the current year.
``(2) Contents.--Each such report shall be based upon laws enacted through the date of the report and shall set forth all the information and estimates required of a sequestration preview report required by subsections (d)(2)(D) through (H). In addition, that report shall include--
``(A) for each account to be sequestered, the baseline level of sequestrable budgetary resources and the resulting reductions in new budget authority and outlays; and
``(B) the effects of sequestration on the level of outlays for each fiscal year through 2002.
``(i) Selection of Official Final Sequestration Report.--Not later than 5 days after receiving the final OMB and CBO sequestration reports, the Board shall choose either the OMB or CBO final sequestration report as the official report for purposes of this Act, and shall issue a report stating that decision and making any comments that the Board chooses.
``(j) Presidential Order.--(1) On the day that the Board chooses a final sequestration report, the President shall issue an order fully implementing without change all sequestrations required by--
``(A) the final sequestration report that requires the lesser amount of discretionary sequestration under section 250; and
``(B) the final sequestration report that requires the lesser total amount of deficit sequestration under section 264.
The order shall be effective on issuance and shall be issued only if sequestration is required.
``(2)(A) If both the CBO and OMB final sequestration reports require a sequestration of discretionary programs, and the Board chooses the report requiring the greater sequestration, then a positive amount equal to the difference between the CBO and OMB estimates of discretionary new budget authority for the budget year shall be subtracted from the budget-year column and added to the column for the first outyear of the discretionary scorecard under section 107 as though that amount had been enacted in the next session of Congress.
``(B) If one final sequestration report requires a sequestration of discretionary programs and the Board chooses that report, then an amount equal to the difference between that report's estimate of discretionary new budget authority for the budget year and the discretionary funding limit for that year shall be subtracted from the budget-year column and added to column for the first outyear of the discretionary scorecard under section 107 as though that amount had been enacted in the next session of Congress.
``(k) Use of Major Estimating Assumptions and Scorekeeping Conventions.--In the estimates, projections, and reports under subsections (c) and (d), CBO and OMB shall use the best and most recent estimating assumptions available. In all other reports required by this section and in all estimates or calculations required by this Act, CBO and OMB shall use--
``(1) current-year and budget-year discretionary funding limits chosen by the Board and the estimates chosen by the Board of the deficit reduction necessary to comply with the deficit targets in the budget year;
``(2) in estimating the effects of bills and discretionary regulations, the major estimating assumptions most recently chosen by the Board, except to the extent that they must be altered to reflect actual results occurring or measured after the Board's choice; and
``(3) scorekeeping conventions determined after consultation among the House and Senate Committees on the Budget, CBO, and OMB.
In applying the two previous sentences, the major estimating assumptions and other calculations required by this Act that are included in the statement of managers accompanying the conference report on this Act shall be considered, for all purposes of this Act, to be the report of the Board chosen under subsection (e) for fiscal year 1993.
``(l) Bill Cost Estimates.--Within 10 days after the enactment of any discretionary appropriations, direct spending, or receipts legislation, CBO and OMB shall transmit to each other, the Board, and to the Congress an estimate of the budgetary effects of that law, following the estimating requirements of this section. Those estimates may not change after the 10-day period except--
``(1) to the extent those estimates are subsumed within
(and implicitly changed by) the estimates made in preparation of a new baseline under subsections (c), (d), and (h);
``(2) to reflect a choice of the Board regarding an official set of estimates under subsections (l) and (n); and
``(3) to correct clerical errors or errors in the application of this Act.
``SEC. 255. EXEMPT PROGRAMS AND ACTIVITIES.
``The following budget accounts, activities within accounts, or income shall be exempt from sequestration--
``(1) net interest;
``(2) deposit insurance and pension benefit guarantees;
``(3) all payments to trust funds from excise taxes or other receipts or collections properly creditable to those trust funds;
``(4) offsetting receipts and collections;
``(5) all payments from one Federal direct spending budget account to another Federal budget account; all intragovernmental funds including those from which funding is derived primarily from other Government accounts;
``(6) expenses to the extent they result from private donations, bequests, or voluntary contributions to the Government;
``(7) nonbudgetary activities, including but not limited to--
``(A) credit liquidating and financing accounts;
``(B) the Pension Benefit Guarantee Corporation Trust Funds;
``(C) the Thrift Savings Fund;
``(D) the Federal Reserve System; and
``(E) appropriations for the District of Columbia to the extent they are appropriations of locally raised funds;
``(8) payments resulting from Government insurance, Government guarantees, or any other form of contingent liability, to the extent those payments result from contractual or other legally binding commitments of the Government at the time of any sequestration;
``(9) the following accounts, which largely fulfill requirements of the Constitution or otherwise make payments to which the Government is committed--
Administration of Territories, Northern Mariana Islands Covenant grants (14-0412-0-1-806);
Bureau of Indian Affairs, miscellaneous payments to Indians
(14-2303-0-1-452);
Bureau of Indian Affairs, miscellaneous trust funds, tribal trust funds (14-9973-0-7-999);
Claims, defense;
Claims, judgments, and relief act (20-1895-0-1-806);
Compact of Free Association, economic assistance pursuant to Public Law 99-658 (14-0415-0-1-806);
Compensation of the President (11-0001-0-1-802);
Customs Service, miscellaneous permanent appropriations
(20-9992-0-2-852);
Eastern Indian land claims settlement fund (14-2202-0-1-806)
Farm Credit System Financial Assistance Corporation, interest payments (20-1850-0-1-351);
Internal Revenue collections of Puerto Rico (20-5737-0-2-852);
Panama Canal Commission, operating expenses and capital outlay (95-5190-0-2-403);
Payments of Vietnam and USS Pueblo prisoner-of-war claims
(15-0104-0-1-153);
Payments to copyright owners (03-5175-0-2-376);
Payments to the United States territories, fiscal assistance (14-0418-0-1-801);
Salaries of Article III judges;
Soldier's and Airmen's Home, payment of claims (84-8930-0-7-705);
Washington Metropolitan Area Transit Authority, interest payments (46-0300-0-1-401).
``(10) the following noncredit special, revolving, or trust-revolving funds--
Coinage profit fund (20-5811-0-2-803);
Exchange Stabilization Fund (20-4444-0-3-155);
Foreign Military Sales trust fund (11-82232-0-7-155);
``(11)(A) any amount paid as regular unemployment compensation by a State from its account in the Unemployment Trust Fund (established by section 904(a) of the Social Security Act);
``(B) any advance made to a State from the Federal unemployment account (established by section 904(g) of such Act) under title XII of such Act and any advance appropriated to the Federal unemployment account pursuant to section 1203 of such Act;
``(C) any payment made from the Federal Employees Compensation Account (as established under section 909 of such Act) for the purpose of carrying out chapter 85 of title 5, United States Code, and funds appropriated or transferred to or otherwise deposited in such Account;
``(12) the earned income tax credit (payments to individuals pursuant to section 32 of the Internal Revenue Code of 1986);
``(13) the uranium enrichment program; and
``(14) benefits payable under the old-age, survivors, and disability insurance program established under title II of the Social Security Act.
``SEC. 256. GENERAL AND SPECIAL SEQUESTRATION RULES.
``(a) Permanent Sequestration of deficit.--
``(1) The purpose of any sequestration under this Act is to ensure deficit reduction in the budget year and all subsequent fiscal years, so that the budget-year cap in section 262 is not exceeded.
``(2) Obligations in sequestered spending accounts shall be reduced in the fiscal year in which a sequestration occurs and in all succeeding fiscal years. Notwithstanding any other provision of this section, after the first deficit sequestration, any later sequestration shall reduce spending outlays by an amount in addition to, rather than in lieu of, the reduction in spending outlays in place under the existing sequestration or sequestrations.
``(b) Uniform Percentages.--
``(1) In calculating the uniform percentage applicable to the sequestration of all spending programs or activities under section 266 the sequestrable base for spending programs and activities is the total budget-year level of outlays for those programs or activities in the current policy baseline minus--
``(A) those budget-year outlays resulting from obligations incurred in the current or prior fiscal years, and
``(B) those budget-year outlays resulting from exemptions under section 253.
``(2) For any direct spending program in which--
``(A) outlays pay for entitlement benefits,
``(B) a budget-year sequestration takes effect after the 1st day of the budget year, and
``(C) that delay reduces the amount of entitlement authority that is subject to sequestration in the budget year,
the uniform percentage otherwise applicable to the sequestration of that program in the budget year shall be increased as necessary to achieve the same budget-year outlay reduction in that program as would have been achieved had there been no delay.
``(3) If the uniform percentage otherwise applicable to the budget-year sequestration of a program or activity is increased under paragraph (2), then it shall revert to the uniform percentage calculated under paragraph (1) when the budget year is completed.
``(c) General Rules for Sequestration.--
``(1) Indefinite authority.--Except as otherwise provided, sequestration in accounts for which obligations are indefinite shall be taken in a manner to ensure that obligations in the fiscal year of a sequestration and succeeding fiscal years are reduced, from the level that would actually have occurred, by the applicable sequestration percentage or percentages.
``(2) Cancellation of budgetary resources.--Budgetary resources sequestered from any account other than an entitlement trust, special, or revolving fund account shall revert to the Treasury and be permanently canceled or repealed.
``(3) Indexed benefit payments.--If, under any entitlement program--
``(A) benefit payments are made to persons or governments more frequently than once a year, and
``(B) the amount of entitlement authority is periodically adjusted under existing law to reflect changes in a price index,
then for the first fiscal year to which a sequestration order applies, the benefit reductions in that program accomplished by the order shall take effect starting with the payment made at the beginning of January or 7 weeks after the order is issued, whichever is later. For the purposes of this subsection, Veterans Compensation shall be considered a program that meets the conditions of the preceding sentence.
``(4) Programs, projects, or activities.--Except as otherwise provided, the same percentage sequestration shall apply to all programs, projects, and activities within a budget account (with programs, projects, and activities as delineated in the appropriation Act or accompanying report for the relevant fiscal year covering that account, or for accounts not included in appropriation Acts, as delineated in the most recently submitted President's budget).
``(5) Implementing regulations.--Administrative regulations or similar actions implementing the sequestration of a program or activity shall be made within 120 days of the effective date of the sequestration of that program or activity.
``(6) Distribution formulas.--To the extent that distribution or allocation formulas differ at different levels of budgetary resources within an account, program, project, or activity, a sequestration shall be interpreted as producing a lower total appropriation, with that lower appropriation being obligated as though it had been the pre-sequestration appropriation and no sequestration had occurred.
``(7) Contingent fees.--In any account for which fees charged to the public are legally determined by the level of appropriations, fees shall be charged on the basis of the presequestration level of appropriations.
``(d) Non-JOBS Portion of AFDC.--Any sequestration order shall accomplish the full amount of any required reduction in payments for the non-jobs portion of the aid to families with dependant children program under the Social Security Act by reducing the Federal reimbursement percentage (for the fiscal year involved) by multiplying that reimbursement percentage, on a State-by-State basis, by the uniform percentage applicable to the sequestration of nonexempt direct spending programs or activities.
``(e) JOBS Portion of AFDC.--
``(1) Full amount of sequestration required.--Any sequestration order shall accomplish the full amount of any required reduction of the job opportunities and basic skills training program under section 402(a)(19), and part F of title VI, of the Social Security Act, in the manner specified in this subsection. Such an order may not reduce any Federal matching rate pursuant to section 403(l) of the Social Security Act.
``(2) New allotment formula.--
``(A) General rule.--Notwithstanding section 403(k) of the Social Security Act, each State's percentage share of the amount available after sequestration for direct spending pursuant to section 403(l) of such Act shall be equal to that percentage of the total amount paid to the States pursuant to such section 403(l) for the prior fiscal year that is represented by the amount paid to such State pursuant to such section 403(l) for the prior fiscal year, except that a State may not be allotted an amount under this subparagraph that exceeds the amount that would have been allotted to such State pursuant to such section 403(k) had the sequestration not been in effect.
``(B) Reallotment of amounts remaining unallotted after application of general rule.--Any amount made available after sequestration for direct spending pursuant to section 403(l) of the Social Security Act that remains unallotted as a result of subparagraph (A) of this paragraph shall be allotted among the States in proportion to the absolute difference between the amount allotted, respectively, to each State as a result of such subparagraph and the amount that would have been allotted to such State pursuant to section 403(k) of such Act had the sequestration not been in effect, except that a State may not be allotted an amount under this subparagraph that results in a total allotment to the State under this paragraph of more than the amount that would have been allotted to such State pursuant to such section 403(k) had the sequestration not been in effect.
``(f) Child Support Enforcement Program.--Any sequestration order shall accomplish the full amount of any required reduction in payments under sections 455 and 458 of the Social Security Act by reducing the Federal matching rate for State administrative costs under the program, as specified
(for the fiscal year involved) in section 455(a) of such Act, to the extent necessary to reduce such expenditures by that amount.
``(g) Commodity Credit Corporation.--
``(1) Effective date.--For the Commodity Credit Corporation, the date on which a sequestration order takes effect in a fiscal year shall vary for each crop of a commodity. In general, the sequestration order shall take effect when issued, but for each crop of a commodity for which 1-year contracts are issued as an entitlement, the sequestration order shall take effect with the start of the sign-up period for that crop that begins after the sequestration order is issued. Payments for each contract in such a crop shall be reduced under the same terms and conditions.
``(2) Dairy program.--(A) As the sole means of achieving any reduction in outlays under the milk price-support program, the Secretary of Agriculture shall provide for a reduction to be made in the price received by producers for all milk produced in the United States and marketed by producers for commercial use. That price reduction (measured in cents per hundredweight of milk marketed) shall occur under subparagraph (A) of section 201(d)(2) of the Agricultural Act of 1949 (7 U.S.C. 1446(d)(2)(A)), shall begin on the day any sequestration order is issued, and shall not exceed the aggregate amount of the reduction in outlays under the milk price-support program, that otherwise would have been achieved by reducing payments made for the purchase of milk or the products of milk under this subsection during that fiscal year.
``(3) Effect of delay.--For purposes of subsection (b)(1), the sequestrable base for the Commodity Credit Corporation is the budget-year level of gross outlays resulting from new budget authority that is subject to reduction under paragraphs (1) and (2), and subsection (b)(2) shall not apply.
``(4) Certain authority not to be limited.--Nothing in this Act shall restrict the Corporation in the discharge of its authority and responsibility as a corporation to buy and sell commodities in world trade, or limit or reduce in any way any appropriation that provides the Corporation with funds to cover its net realized losses.
``(h) Extended Unemployment Compensation.--(1) A State may reduce each weekly benefit payment made under the Federal-State Extended Unemployment Compensation Act of 1970 for any week of unemployment occurring during any period with respect to which payments are reduced under any sequestration order by a percentage not to exceed the percentage by which the Federal payment to the State under section 204 of such Act is to be reduced for such week as a result of such order.
``(2) A reduction by a State in accordance with subparagraph (A) shall not be considered as a failure to fulfill the requirements of section 3304(a)(11) of the Internal Revenue Code of 1986.
``(i) Federal Employees Health Benefits Fund.--For the Federal Employees Health Benefits Fund, a sequestration order shall take effect with the next open season. The sequestration shall be accomplished by annual payments from that Fund to the General Fund of the Treasury. Those annual payments shall be financed solely by charging higher premiums. For purposes of subsection (b)(1), the sequestrable base for the Fund is the budget-year level of gross outlays resulting from claims paid after the sequestration order takes effect, and subsection (b)(2) shall not apply.
``(j) Federal Housing Finance Board.--Any sequestration of the Federal Housing Finance Board shall be accomplished by annual payments (by the end of each fiscal year) from that Board to the general fund of the Treasury, in amounts equal to the uniform sequestration percentage for that year times the gross obligations of the Board in that year.
``(k) Federal Pay.--
``(1) In general.--Except as provided in section 10(b)(3), new budget authority to pay Federal personnel from direct spending accounts shall be reduced by the uniform percentage calculated under section 264, as applicable, but no sequestration order may reduce or have the effect of reducing the rate of pay to which any individual is entitled under any statutory pay system (as increased by any amount payable under section 5304 of title 5, United States Code, or section 302 of the Federal Employees Pay Comparability Act of 1990) or the rate of any element of military pay to which any individual is entitled under title 37, United States Code, or any increase in rates of pay which is scheduled to take effect under section 5303 of title 5, United States Code, section 1009 of title 37, United States Code, or any other provision of law.
``(2) Definitions.--For purposes of this subsection:
``(A) The term `statutory pay system' shall have the meaning given that term in section 5302(1) of title 5, United States Code.
``(B) The term `elements of military pay' means--
``(i) the elements of compensation of members of the uniformed services specified in section 1009 of title 37, United States Code,
``(ii) allowances provided members of the uniformed services under sections 403a and 405 of such title, and
``(iii) cadet pay and midshipman pay under section 203(c) of such title.
``(C) The term `uniformed services' shall have the meaning given that term in section 101(3) of title 37, United States Code.
``(l) Guaranteed Student Loans.--(A) For all student loans under part B of title IV of the Higher Education Act of 1965 made on or after the date of a sequestration, the origination fees shall be increased by a uniform percentage sufficient to produce the dollar savings in student loan programs for the fiscal year of the sequestration required by section 264, and all subsequent origination fees shall be increased by the same percentage, notwithstanding any other provision of law.
``(B) The origination fees to which paragraph (A) applies are those specified in sections 428H(f)(1) and 438(c) of that Act.
``(m) Insurance Programs.--Any sequestration in a Federal program that sells insurance contracts to the public
(including the Federal Crop Insurance Fund, the National Insurance Development Fund, the National Flood Insurance Fund, insurance activities of the Overseas Private Insurance Corporation, and Veterans' life insurance programs) shall be accomplished by annual payments from the insurance fund or account to the general fund of the Treasury. The amount of each annual payment by each such fund or account shall be the amount received by the fund or account by increasing premiums on contracts entered into after the date a sequestration order takes effect by the uniform sequestration percentage, and premiums shall be increased accordingly.
``(n) Medicaid.--The November 15th estimate of medicaid spending by States shall be the base estimate from which the uniform percentage reduction under any sequestration, applied across-the-board by State, shall be made. Succeeding Federal payments to States shall reflect that reduction. The Health Care Financing Administration shall reconcile actual medicaid spending for each fiscal year with the base estimate as reduced by the uniform percentage, and adjust each State's grants as soon as practicable, but no later than 100 days after the end of the fiscal year to which the base estimate applied, to comply with the sequestration order.
``(o) Medicare.--
``(1) Timing of application of reductions.--
``(A) In general.--Except as provided in subparagraph (B), if a reduction is made in payment amounts pursuant to a sequestration order, the reduction shall be applied to payment for services furnished after the effective date of the order. For purposes of the previous sentence, in the case of inpatient services furnished for an individual, the services shall be considered to be furnished on the date of the individual's discharge from the inpatient facility.
``(B) Payment on the basis of cost reporting periods.--In the case in which payment for services of a provider of services is made under title XVIII of the Social Security Act on a basis relating to the reasonable cost incurred for the services during a cost reporting period of the provider, if a reduction is made in payment amounts pursuant to a sequestration order, the reduction shall be applied to payment for costs for such services incurred at any time during each cost reporting period of the provider any part of which occurs after the effective date of the order, but only
(for each such cost reporting period) in the same proportion as the fraction of the cost reporting period that occurs after the effective date of the order.
``(2) No increase in beneficiary charges in assignment-related cases.--If a reduction in payment amounts is made pursuant to a sequestration order for services for which payment under part B of title XVIII of the Social Security Act is made on the basis of an assignment described in section 1842(b)(3)(B)(ii), in accordance with section 1842(b)(6)(B), or under the procedure described in section 1870(f)(1) of such Act, the person furnishing the services shall be considered to have accepted payment of the reasonable charge for the services, less any reduction in payment amount made pursuant to a sequestration order, as payment in full.
``(p) Postal Service Fund.--Any sequestration of the Postal Service Fund shall be accomplished by annual payments from that Fund to the General Fund of the Treasury, and the Postmaster General of the United States shall have the duty to make those payments during the fiscal year to which the sequestration order applies and each succeeding fiscal year. The amount of each annual payment shall be--
``(1) the uniform sequestration percentage, times
``(2) the estimated gross obligations of the Postal Service Fund in that year other than those obligations financed with an appropriation for revenue foregone for that year.
Any such payment for a fiscal year shall be made as soon as possible during the fiscal year, except that it may be made in installments within that year if the payment schedule is approved by the Secretary of the Treasury. Within 30 days after the sequestration order is issued, the Postmaster General shall submit to the Postal Rate Commission a plan for financing the annual payment for that fiscal year and publish that plan in the Federal Register. The plan may assume efficiencies in the operation of the Postal Service, reductions in capital expenditures, increases in the prices of services, or any combination, but may not assume a lower Fund surplus or higher Fund deficit and must follow the requirements of existing law governing the Postal Service in all other respects. Within 30 days of the receipt of that plan, the Postal Rate Commission shall approve the plan or modify it in the manner that modifications are allowed under current law. If the Postal Rate Commission does not respond to the plan within 30 days, the plan submitted by the Postmaster General shall go into effect. Any plan may be later revised by the submission of a new plan to the Postal Rate Commission, which may approve or modify it.
``(q) Power Marketing Administrations and T.V.A.--Any sequestration of the Department of Energy power marketing administration funds or the Tennessee Valley Authority fund shall be accomplished by annual payments from those funds to the General Fund of the Treasury, and the administrators of those funds shall have the duty to make those payments during the fiscal year to which the sequestration order applies and each succeeding fiscal year. The amount of each annual payment by a fund shall be--
``(1) the uniform sequestration percentage, times
``(2) the estimated gross obligations of the fund in that year.
Any such payment for a fiscal year shall be made as soon as possible during the fiscal year, except that it may be made in installments within that year if the payment schedule is approved by the Secretary of the Treasury. Annual payments by a fund may be financed by reductions in costs required to produce the presequester amount of power (but those reductions shall not include reductions in the amount of power supplied by the fund), by reductions in capital expenditures, by increases in rates, or by any combination, but may not be financed by a lower fund surplus or a higher fund deficit and must follow the requirements of existing law governing the fund in all other respects. The administrator of a fund or the TVA Board is authorized to take the actions specified above in order to make the annual payments to the Treasury.
``(r) Veterans' Housing Loans.--(1) For all housing loans guaranteed, insured, or made under chapter 37 of title 38, United States Code, on or after the date of a sequestration, the origination fees shall be increased by a uniform percentage sufficient to produce the dollar savings in veterans' housing programs for the fiscal year of the sequestration required by section 264, and all subsequent origination fees shall be increased by the same percentage, notwithstanding any other provision of law.
``(2) The origination fees to which paragraph (1) applies are those referred to in section 3729 of title 38, United States Code.''.
(b) Conforming Changes.--(1) The item relating to section 254 in the table of sections set forth in section 200 of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended to read as follows:
``Sec. 254. Estimating assumptions, reports, and orders.''.
(2) The item relating to section 256 in the table of sections set forth in section 200 of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended to read as follows:
``Sec. 256. General and special sequestration rules.''.
(c) Within 30 days after the date of enactment of this Act, the Director of the Office of Management and Budget and the Director of the Congressional Budget Office shall each issue a report that includes projections of Federal spending, revenues, and deficits as a result of enactment of this Act and setting forth the economic and technical assumptions used to make those projections.
Subtitle F--Line Item Veto
SEC. 14501. LINE ITEM VETO AUTHORITY.
(a) In General.--Notwithstanding the provisions of part B of title X of the Congressional Budget and Impoundment Control Act of 1974, and subject to the provisions of this section, the President may rescind all or part of the dollar amount of any discretionary budget authority specified in an appropriation Act for fiscal year 1996 or conference report or joint explanatory statement accompanying a conference report on the Act, or veto any targeted tax benefit provision in this reconciliation Act, if the President--
(1) determines that--
(A) such rescission or veto would help reduce the Federal budget deficit;
(B) such rescission or veto will not impair any essential Government functions; and
(C) such rescission or veto will not harm the national interest; and
(2) notifies the Congress of such rescission or veto by a special message not later than 10 calendar days (not including Sundays) after the date of the enactment of an appropriation Act providing such budget authority, or of this reconciliation Act in the case of a targeted tax benefit.
(b) Deficit Reduction.--In each special message, the President may also propose to reduce the appropriate discretionary spending limit set forth in section 601(a)(2) of the Congressional Budget Act of 1974 by an amount that does not exceed the total amount of discretionary budget authority rescinded by that message.
(c) Separate Messages.--The President shall submit a separate special message under this section for each appropriation Act and for this reconciliation Act.
(d) Limitation.--No special message submitted by the President under this section may change any prohibition or limitation of discretionary budget authority set forth in any appropriation Act.
(e) Special Rule for Previously Enacted Appropriation Acts.--Notwithstanding subsection (a)(2), in the case of any unobligated discretionary budget authority provided by any appropriation Act for fiscal year 1996 that is enacted before the date of the enactment of this Act, the President may rescind all or part of that discretionary budget authority under the terms of this subtitle if the President notifies the Congress of such rescission by a special message not later than 10 calendar days (not including Sundays) after the date of the enactment of this Act.
SEC. 14502. LINE ITEM VETO EFFECTIVE UNLESS DISAPPROVED.
(a) In General.--
(1) Any amount of budget authority rescinded under this subtitle as set forth in a special message by the President shall be deemed canceled unless, during the period described in subsection (b), a rescission/receipts disapproval bill making available all of the amount rescinded is enacted into law.
(2) Any provision of law vetoed under this subtitle as set forth in a special message by the President shall be deemed repealed unless, during the period described in subsection
(b), a rescission/receipts disapproval bill restoring that provision is enacted into law.
(b) Congressional Review Period.--The period referred to in subsection (a) is--
(1) a congressional review period of 20 calendar days of session, beginning on the first calendar day of session after the date of submission of the special message, during which Congress must complete action on the rescission/receipts disapproval bill and present such bill to the President for approval or disapproval;
(2) after the period provided in paragraph (1), an additional 10 days (not including Sundays) during which the President may exercise his authority to sign or veto the rescission/receipts disapproval bill; and
(3) if the President vetoes the rescission/receipts disapproval bill during the period provided in paragraph (2), an additional 5 calendar days of session after the date of the veto.
(c) Special Rule.--If a special message is transmitted by the President under this subtitle and the last session of the Congress adjourns sine die before the expiration of the period described in subsection (b), the rescission or veto, as the case may be, shall not take effect. The message shall be deemed to have been retransmitted on the first Monday in February of the succeeding Congress and the review period referred to in subsection (b) (with respect to such message) shall run beginning after such first day.
SEC. 14503. DEFINITIONS.
As used in this subtitle:
(1) The term ``rescission/receipts disapproval bill'' means a bill which only disapproves, in whole, rescissions of discretionary budget authority or only disapproves vetoes of targeted tax benefits in a special message transmitted by the President under this subtitle and--
(A)(i) in the case of a special message regarding rescissions, the matter after the enacting clause of which is as follows: ``That Congress disapproves each rescission of discretionary budget authority of the President as submitted by the President in a special message on ________.'', the blank space being filled in with the appropriate date and the public law to which the message relates; and
(ii) in the case of a special message regarding vetoes of targeted tax benefits, the matter after the enacting clause of which is as follows: ``That Congress disapproves each veto of targeted tax benefits of the President as submitted by the President in a special message on ________.'', the blank space being filled in with the appropriate date and the public law to which the message relates; and
(B) the title of which is as follows: ``A bill to disapprove the recommendations submitted by the President on ________.'', the blank space being filled in with the date of submission of the relevant special message and the public law to which the message relates.
(2) The term ``calendar days of session'' shall mean only those days on which both Houses of Congress are in session.
(3) The term ``targeted tax benefit'' means any provision of this reconciliation Act determined by the President to provide a Federal tax deduction, credit, exclusion, preference, or other concession to 100 or fewer beneficiaries. Any partnership, limited partnership, trust, or S corporation, and any subsidiary or affiliate of the same parent corporation, shall be deemed and counted as a single beneficiary regardless of the number of partners, limited partners, beneficiaries, shareholders, or affiliated corporate entities.
(4) The term ``appropriation Act'' means any general or special appropriation Act for fiscal year 1996, and any Act or joint resolution making supplemental, deficiency, or continuing appropriations for fiscal year 1996.
SEC. 14504. CONGRESSIONAL CONSIDERATION OF LINE ITEM VETOES.
(a) Presidential Special Message.--Whenever the President rescinds any budget authority as provided in this subtitle or vetoes any provision of law as provided in this subtitle, the President shall transmit to both Houses of Congress a special message specifying--
(1) the amount of budget authority rescinded or the provision vetoed;
(2) any account, department, or establishment of the Government to which such budget authority is available for obligation, and the specific project or governmental functions involved;
(3) the reasons and justifications for the determination to rescind budget authority or veto any provision pursuant to this subtitle;
(4) to the maximum extent practicable, the estimated fiscal, economic, and budgetary effect of the rescission or veto; and
(5) all actions, circumstances, and considerations relating to or bearing upon the rescission or veto and the decision to effect the rescission or veto, and to the maximum extent practicable, the estimated effect of the rescission upon the objects, purposes, and programs for which the budget authority is provided.
(b) Transmission of Messages to House and Senate.--
(1) Each special message transmitted under this subtitle shall be transmitted to the House of Representatives and the Senate on the same day, and shall be delivered to the Clerk of the House of Representatives if the House is not in session, and to the Secretary of the Senate if the Senate is not in session. Each special message so transmitted shall be referred to the appropriate committees of the House of Representatives and the Senate. Each such message shall be printed as a document of each House.
(2) Any special message transmitted under this subtitle shall be printed in the first issue of the Federal Register published after such transmittal.
(c) Introduction of Rescission/Receipts Disapproval Bills.--The procedures set forth in subsection (d) shall apply to any rescission/receipts disapproval bill introduced in the House of Representatives not later than the third calendar day of session beginning on the day after the date of submission of a special message by the President under this subtitle.
(d) Consideration in the House of Representatives.--
(1) The committee of the House of Representatives to which a rescission/receipts disapproval bill is referred shall report it without amendment, and with or without recommendation, not later than the eighth calendar day of session after the date of its introduction. If the committee fails to report the bill within that period, it is in order to move that the House discharge the committee from further consideration of the bill. A motion to discharge may be made only by an individual favoring the bill (but only after the legislative day on which a Member announces to the House the Member's intention to do so). The motion is highly privileged. Debate thereon shall be limited to not more than one hour, the time to be divided in the House equally between a proponent and an opponent. The previous question shall be considered as ordered on the motion to its adoption without intervening motion. A motion to reconsider the vote by which the motion is agreed to or disagreed to shall not be in order.
(2) After a rescission/receipts disapproval bill is reported or the committee has been discharged from further consideration, it is in order to move that the House resolve into the Committee of the Whole House on the State of the Union for consideration of the bill. All points of order against the bill and against consideration of the bill are waived. The motion is highly privileged. The previous question shall be considered as ordered on that motion to its adoption without intervening motion. A motion to reconsider the vote by which the motion is agreed to or disagreed to shall not be in order. During consideration of the bill in the Committee of the Whole, the first reading of the bill shall be dispensed with. General debate shall proceed without intervening motion, shall be confined to the bill, and shall not exceed two hours equally divided and controlled by a proponent and an opponent of the bill. No amendment to the bill is in order, except any Member may move to strike the disapproval of any rescission or rescissions of budget authority or any proposed repeal of a targeted tax benefit, as applicable, if supported by 49 other Members. At the conclusion of the consideration of the bill for amendment, the Committee shall rise and report the bill to the House. The previous question shall be considered as ordered on the bill and amendments thereto to final passage without intervening motion. A motion to reconsider the vote on passage of the bill shall not be in order.
(3) Appeals from the decisions of the Chair relating to the application of the rules of the House of Representatives to the procedure relating to a bill described in subsection (a) shall be decided without debate.
(4) It shall not be in order to consider more than one bill described in subsection (c) or more than one motion to discharge described in paragraph (1) with respect to a particular special message.
(5) Consideration of any rescission/receipts disapproval bill under this subsection is governed by the rules of the House of Representatives except to the extent specifically provided by the provisions of this subtitle.
(e) Consideration in the Senate.--
(1) Any rescission/receipts disapproval bill received in the Senate from the House shall be considered in the Senate pursuant to the provisions of this subtitle.
(2) Debate in the Senate on any rescission/receipts disapproval bill and debatable motions and appeals in connection therewith, shall be limited to not more than ten hours. The time shall be equally divided between, and controlled by, the majority leader and the minority leader or their designees.
(3) Debate in the Senate on any debatable motions or appeal in connection with such bill shall be limited to one hour, to be equally divided between, and controlled by the mover and the manager of the bill, except that in the event the manager of the bill is in favor of any such motion or appeal, the time in opposition thereto shall be controlled by the minority leader or his designee. Such leaders, or either of them, may, from the time under their control on the passage of the bill, allot additional time to any Senator during the consideration of any debatable motion or appeal.
(4) A motion to further limit debate is not debatable. A motion to recommit (except a motion to recommit with instructions to report back within a specified number of days not to exceed one, not counting any day on which the Senate is not in session) is not in order.
(f) Points of Order.--
(1) It shall not be in order in the Senate to consider any rescission/receipts disapproval bill that relates to any matter other than the rescission of budget authority or veto of the provision of law transmitted by the President under this subtitle.
(2) It shall not be in order in the Senate to consider any amendment to a rescission/receipts disapproval bill.
(3) Paragraphs (1) and (2) may be waived or suspended in the Senate only by a vote of three-fifths of the members duly chosen and sworn.
SEC. 14505. REPORT OF THE GENERAL ACCOUNTING OFFICE.
On January 6, 1997, the Comptroller General shall submit a report to each House of Congress which provides the following information:
(1) A list of each proposed Presidential rescission of discretionary budget authority and veto of a targeted tax benefit submitted through special messages for fiscal year 1996, together with their dollar value, and an indication of whether each rescission of discretionary budget authority or veto of a targeted tax benefit was accepted or rejected by Congress.
(2) The total number of proposed Presidential rescissions of discretionary budget authority and vetoes of a targeted tax benefit submitted through special messages for fiscal year 1996, together with their total dollar value.
(3) The total number of Presidential rescissions of discretionary budget authority or vetoes of a targeted tax benefit submitted through special messages for fiscal year 1996 and approved by Congress, together with their total dollar value.
(4) A list of rescissions of discretionary budget authority initiated by Congress for fiscal year 1996, together with their dollar value, and an indication of whether each such rescission was accepted or rejected by Congress.
(5) The total number of rescissions of discretionary budget authority initiated and accepted by Congress for fiscal year 1996, together with their total dollar value.
SEC. 14506. JUDICIAL REVIEW.
(a) Expedited Review.--
(1) Any Member of Congress may bring an action, in the United States District Court for the District of Columbia, for declaratory judgment and injunctive relief on the ground that any provision of this subtitle violates the Constitution.
(2) A copy of any complaint in an action brought under paragraph (1) shall be promptly delivered to the Secretary of the Senate and the Clerk of the House of Representatives, and each House of Congress shall have the right to intervene in such action.
(3) Any action brought under paragraph (1) shall be heard and determined by a three-judge court in accordance with section 2284 of title 28, United States Code.
(4) Nothing in this section or in any other law shall infringe upon the right of the House of Representatives to intervene in an action brought under paragraph (1) without the necessity of adopting a resolution to authorize such intervention.
(b) Appeal to Supreme Court.--Notwithstanding any other provision of law, any order of the United States District Court for the District of Columbia which is issued pursuant to an action brought under paragraph (1) of subsection (a) shall be reviewable by appeal directly to the Supreme Court of the United States. Any such appeal shall be taken by a notice of appeal filed within 10 days after such order is entered; and the jurisdictional statement shall be filed within 30 days after such order is entered. No stay of an order issued pursuant to an action brought under paragraph
(1) of subsection (a) shall be issued by a single Justice of the Supreme Court.
(c) Expedited Consideration.--It shall be the duty of the District Court for the District of Columbia and the Supreme Court of the United States to advance on the docket and to expedite to the greatest possible extent the disposition of any matter brought under subsection (a).
Subtitle G--Enforcing Points of Order
SEC. 14601. POINTS OF ORDER IN THE SENATE.
(a) Waiver.--The second sentence of section 904(c) of the Congressional Budget Act of 1974 is amended by inserting
``303(a),'' after ``302(f),'', by inserting ``311(c),'' after
``311(a),'', by inserting ``606(b),'' after ``601(b),'', and by inserting ``253(d), 253(h), 253(i),'' before
``258(a)(4)(C)''.
(b) Appeals.--The third sentence of section 904(c) of the Congressional Budget Act of 1974 is amended by inserting
``303(a),'' after ``302(f),'', by inserting ``311(c),'' after
``311(a),'', by inserting ``606(b),'' after ``601(b),'', and by inserting ``253(d), 253(h), 253(i),'' before
``258(a)(4)(C)''.
SEC. 14602. POINTS OF ORDER IN THE HOUSE OF REPRESENTATIVES.
Section 904 of the Congressional Budget Act of 1974 is amended by redesignating subsection (d) as subsection (e) and by inserting after subsection (c) the following new subsection:
``(d) In the House of Representatives, a separate vote shall be required on that part of any resolution or order that makes in order the waiver of any points of order referred to in subsection (c).''.
Subtitle H--Deficit Reduction Lock-box
SEC. 14701. DEFICIT REDUCTION LOCK-BOX PROVISIONS OF
APPROPRIATION MEASURES.
(a) Deficit Reduction Lock-box Provisions.--Title III of the Congressional Budget Act of 1974 is amended by adding at the end the following new section:
``deficit reduction lock-box provisions of appropriation bills
``Sec. 314. (a) Any appropriation bill that is being marked up by the Committee on Appropriations (or a subcommittee thereof) of either House shall contain a line item entitled
`Deficit Reduction Lock-box'.
``(b) Whenever the Committee on Appropriations of either House reports an appropriation bill, that bill shall contain a line item entitled `Deficit Reduction Account' comprised of the following:
``(1) Only in the case of any general appropriation bill containing the appropriations for Treasury and Postal Service
(or resolution making continuing appropriations (if applicable)), an amount equal to the amounts by which the discretionary spending limit for new budget authority and outlays set forth in the most recent OMB sequestration preview report pursuant to section 601(a)(2) exceed the section 602(a) allocation for the fiscal year covered by that bill.
``(2) Only in the case of any general appropriation bill
(or resolution making continuing appropriations (if applicable)), an amount not to exceed the amount by which the appropriate section 602(b) allocation of new budget authority exceeds the amount of new budget authority provided by that bill (as reported by that committee), but not less than the sum of reductions in budget authority resulting from adoption of amendments in the committee which were designated for deficit reduction.
``(3) Only in the case of any bill making supplemental appropriations following enactment of all general appropriation bills for the same fiscal year, an amount not to exceed the amount by which the section 602(a) allocation of new budget authority exceeds the sum of all new budget authority provided by appropriation bills enacted for that fiscal year plus that supplemental appropriation bill (as reported by that committee).
``(c) It shall not be in order for the Committee on Rules of the House of Representatives to report a resolution that restricts the offering of amendments to any appropriation bill adjusting the level of budget authority contained in a Deficit Reduction Account.
``(d) Whenever a Member of either House of Congress offers an amendment (whether in subcommittee, committee, or on the floor) to an appropriation bill to reduce spending, that reduction shall be placed in the deficit reduction lock-box unless that Member indicates that it is to be utilized for another program, project, or activity covered by that bill. If the amendment is agreed to and the reduction was placed in the deficit reduction lock-box, then the line item entitled
`Deficit Reduction Lock-box' shall be increased by the amount of that reduction. Any amendment pursuant to this subsection shall be in order even if amendment portions of the bill are not read for amendment with respect to the Deficit Reduction Lock-box.
``(e) It shall not be in order in the House of Representatives or the Senate to consider a conference report or amendment of the Senate that modifies any Deficit Reduction Lock-box provision that is beyond the scope of that provision as so committed to the conference committee.
``(f) It shall not be in order to offer an amendment increasing the Deficit Reduction Lock-box Account unless the amendment increases rescissions or reduces appropriations by an equivalent or larger amount, except that it shall be in order to offer an amendment increasing the amount in the Deficit Reduction Lock-box by the amount that the appropriate 602(b) allocation of new budget authority exceeds the amount of new budget authority provided by that bill.
``(g) It shall not be in order for the Committee on Rules of the House of Representatives to report a resolution which waives subsection (c).''.
(b) Conforming Amendment.--The table of contents set forth in section 1(b) of the Congressional Budget and Impoundment Control Act of 1974 is amended by inserting after the item relating to section 313 the following new item:
``Sec. 314. Deficit reduction lock-box provisions of appropriation measures.''.
SEC. 14702. DOWNWARD ADJUSTMENTS.
(a) Downward Adjustments.--The discretionary spending limit for new budget authority for any fiscal year set forth in section 601(a)(2) of the Congressional Budget Act of 1974, as adjusted in strict conformance with section 251 of the Balanced Budget and Emergency Deficit Control Act of 1985, shall be reduced by the amount of budget authority transferred to the Deficit Reduction Lockbox for that fiscal year under section 314 of the Budget Control and Impoundment Act of 1974. The adjusted discretionary spending limit for outlays for that fiscal year and each outyear as set forth in such section 601(a)(2) shall be reduced as a result of the reduction of such budget authority, as calculated by the Director of the Office of Management and Budget based upon such programmatic and other assumptions set forth in the joint explanatory statement of managers accompanying the conference report on that bill. All such reductions shall occur within ten days of enactment of any appropriations bill.
(b) Definition.--As used in this section, the term
``appropriation bill'' means any general or special appropriation bill, and any bill or joint resolution making supplemental, deficiency, or continuing appropriations.
(c) Rescission.--Funds in the Deficit Reduction Lockbox shall be rescinded upon reductions in discretionary limits pursuant to subsection (a).
SEC. 14703. CBO TRACKING.
Section 202 of the Congressional Budget Act of 1974 is amended by adding at the end the following new subsection:
``(i) Scorekeeping.--To facilitate compliance by the Committee on Appropriations with section 314, the Office shall score all general appropriation measures (including conference reports) as passed by the House of Representatives, as passed the Senate and as enacted into law. The scorecard shall include amounts contained in the Deficit Reduction Lock-Box. The chairman of the Committee on Appropriations of the House of Representatives or the Senate, as the case may be, shall have such scorecard published in the Congressional Record.''.
Subtitle I--Emergency Spending; Baseline Reform; Continuing Resolutions
Reform
CHAPTER 1--EMERGENCY SPENDING
SEC. 14801. ESTABLISHMENT OF BUDGET RESERVE ACCOUNT.
(a) Establishment.--A budget reserve account (hereinafter in this section referred to as the ``account'') shall be established for the purpose of setting aside adequate funding for natural disasters and national security emergencies.
(b) Prior Appropriation Required.--The account shall consist of such sums as may be provided in advance in appropriation Acts for a particular fiscal year.
(c) Restriction on Use of Funds.--(1) Notwithstanding any other provision of law, the amounts in the account shall not be available for other than emergency funding requirements for particular natural disasters or national security emergencies so designated by Acts of Congress.
(2) Funds in the account that are not obligated during the fiscal year for which they are appropriated may only be used for deficit reduction purposes.
(d) New Point of Order.--(1) Title IV of the Congressional Budget Act of 1974 is amended by adding at the end the following new section:
``point of order regarding emergencies
``Sec. 408. It shall not be in order in the House of Representatives or the Senate to consider any bill or joint resolution, or amendment thereto or conference report thereon, containing an emergency designation for purposes of section 251(b)(2)(D) or 252(e) of the Balanced Budget and Emergency Deficit Control Act of 1985 if it also provides an appropriation or direct spending for any other item or contains any other matter, but that bill or joint resolution, amendment, or conference report may contain rescissions of budget authority or reductions of direct spending, or that amendment may reduce amounts for that emergency.''.
(2) The table of contents set forth in section 1(b) of the Congressional Budget and Impoundment Control Act of 1974 is amended by inserting after the item relating to section 407 the following new item:
``Sec. 408. Point of order regarding emergencies.''.
SEC. 14802. CONGRESSIONAL BUDGET PROCESS CHANGES.
(a) Contents of joint Resolutions on the Budget.--Section 301(a) of the Congressional Budget Act of 1974 is amended by redesignating paragraphs (6) and (7) as paragraphs (7) and
(8), respectively, and by inserting after paragraph (5) the following new paragraph:
``(6) total new budget authority and total budget outlays for emergency funding requirements for natural disasters and national security emergencies to be included in a budget reserve account;''.
(b) Section 602 Allocations.--(1) Section 602 of the Congressional Budget Act of 1974 is amended by adding at the end the following new subsection:
``(f) Committee Spending Allocations and Suballocations for Budget Reserve Account.--
``(1) Allocations.--The joint explanatory statement accompanying a conference report on a budget resolution shall include allocations, consistent with the resolution recommended in the conference report, of the appropriate levels (for each fiscal year covered by that resolution) of total new budget authority and outlays to the Committee on Appropriations of each House for emergency funding requirements for natural disasters and national security emergencies to be included in a budget reserve account.
``(2) Suballocations.--As soon as practicable after a budget resolution is agreed to, the Committee on Appropriations of each House (after consulting with the Committee on Appropriations of the other House) shall suballocate each amount allocated to it for the budget year under paragraph (1) among its subcommittees. Each Committee on Appropriations shall promptly report to its House suballocations made or revised under this paragraph.''.
(2) Section 602(c) of the Congressional Budget Act of 1974 is amended by inserting ``or subsection (f)(1)'' after
``subsection (a)'' and by inserting ``or subsection (f)(2)'' after ``subsection (b)''.
SEC. 14803. REPORTING.
Not later than November 30, 1996, and at annual intervals thereafter, the Director of the Office of Management and Budget shall submit a report to each House of Congress listing the amounts of money expended from the budget reserve account established under section 1 for the fiscal year ending during that calendar year for each natural disaster and national security emergency.
CHAPTER 2--BASELINE REFORM
SEC. 14851. THE BASELINE.
(a) The second sentence of section 257(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended--
(1) by inserting ``but only for the purpose of adjusting the discretionary spending limits set forth in section 601(a)(2) of the Congressional Budget Act of 1974'' after
``for inflation as specified in paragraph (5); and
(2) by inserting ``but only for the purpose of adjusting the discretionary spending limits set forth in section 601(a)(2) of the Congressional Budget Act of 1974'' after
``to offset pay absorption and for pay annualization as specified in paragraph (4)''.
(b) Section 1109(a) of title 31, United States Code, is amended by adding after the first sentence the following new sentence: ``These estimates shall not include an adjustment for inflation for programs and activities subject to discretionary appropriations.''.
SEC. 14852. THE PRESIDENT'S BUDGET.
(a) Paragraph (5) of section 1105(a) of title 31, United States Code, is amended to read as follows:
``(5) except as provided in subsection (b) of this section, estimated expenditures and appropriations for the current year and estimated expenditures and proposed appropriations the President decides are necessary to support the Government in the fiscal year for which the budget is submitted and the 4 fiscal years following that year;''.
(b) Section 1105(a)(6) of title 31, United States Code, is amended by inserting ``current fiscal year and the'' before
``fiscal year''.
(c) Section 1105(a)(12) of title 31, United States Code, is amended by striking ``and'' at the end of subparagraph (A), by striking the period and inserting ``; and'' at the end of subparagraph (B), and by adding at the end the following new subparagraph:
``(C) the estimated amount for the same activity (if any) in the current fiscal year.''.
(d) Section 1105(a)(18) of title 31, United States Code, is amended by inserting ``new budget authority and'' before
``budget outlays''.
(e) Section 1105(a) of title 31, United States Code, is amended by adding at the end the following new paragraph:
``(30) a comparison of levels of estimated expenditures and proposed appropriations for each function and subfunction in the current fiscal year and the fiscal year for which the budget is submitted, along with the proposed increase or decrease of spending in percentage terms for each function and subfunction.''.
SEC. 14853. THE CONGRESSIONAL BUDGET.
Section 301(e) of the Congressional Budget Act of 1974 is amended by--
(1) inserting after the second sentence the following:
``The starting point for any deliberations in the Committee on the Budget of each House on the joint resolution on the budget for the next fiscal year shall be the estimated level of outlays for the current year in each function and subfunction. Any increases or decreases in the Congressional budget for the next fiscal year shall be from such estimated levels.''; and
(2) striking paragraph (8) and redesignating paragraphs (9) and (10) as paragraphs (10) and (11), respectively, and by inserting after paragraph (7) the following new paragraphs:
``(8) a comparison of levels for the current fiscal year with proposed spending and revenue levels for the subsequent fiscal years along with the proposed increase or decrease of spending in percentage terms for each function and subfunction; and
``(9) information, data, and comparisons indicating the manner in which and the basis on which, the committee determined each of the matters set forth in the joint resolution;''.
SEC. 14854. CONGRESSIONAL BUDGET OFFICE REPORTS TO
COMMITTEES.
(a) The first sentence of section 202(f)(1) of the Congressional Budget Act of 1974 is amended to read as follows: ``On or before February 15 of each year, the Director shall submit to the Committees on the Budget of the House of Representatives and the Senate a report for the fiscal year commencing on October 1 of that year with respect to fiscal policy, including (A) alternative levels of total revenues, total new budget authority, and total outlays
(including related surpluses and deficits) compared to comparable levels for the current year and (B) the levels of tax expenditures under existing law, taking into account projected economic factors and any changes in such levels based on proposals in the budget submitted by the President for such fiscal year.''.
(b) Section 202(f)(1) of the Congressional Budget Act of 1974 is amended by inserting after the first sentence the following new sentence: ``That report shall also include a table on sources of spending growth in total mandatory spending for the budget year and the ensuing 4 fiscal years, which shall include changes in outlays attributable to the following: cost-of-living adjustments; changes in the number of program recipients; increases in medical care prices, utilization and intensity of medical care; and residual factors.''.
(c) Section 308(a)(1) of the Congressional Budget Act of 1974 is amended--
(1) in subparagraph (C), by inserting ``, and shall include a comparison of those levels to comparable levels for the current fiscal year'' before ``if timely submitted''; and
(2) by striking ``and'' at the end of subparagraph (C), by striking the period and inserting ``; and'' at the end of subparagraph (D), and by adding at the end the following new subparagraph:
``(E) comparing the levels in existing programs in such measure to the estimated levels for the current fiscal year.''
(d) Title IV of the Congressional Budget Act of 1974 is amended by adding at the end the following new section:
``gao reports to budget committees
(a) ``Sec. 408. On or before January 15 of each year, the Comptroller General, after consultation with appropriate committees of the House of Representatives and Senate, shall submit to the Congress a report listing all programs, projects, and activities that fall within the definition of direct spending under section 250(c)(8) of the Balanced Budget and Emergency Deficit Control Act of 1985.''.
(b) Conforming Amendment.--The table of contents set forth in section 1(b) of the Congressional Budget and Impoundment Control Act of 1974 is amended by inserting after the item relating to section 407 the following new item:
``Sec. 408. GAO reports to budget committees.''.
CHAPTER 3--RESTRICTED USES OF CONTINUING RESOLUTIONS
SEC. 14871. RESTRICTIONS RESPECTING CONTINUING RESOLUTIONS.
(a) Rule XXI of the Rules of the House of Representatives is amended by adding at the end thereof the following new clause:
``9. (a) Any item of appropriation set forth in any joint resolution continuing appropriations, or amendment thereto, shall not exceed the rate it would have been at assuming the continuation of current law.
``(b) It shall not be in order in the House to consider any joint resolution continuing appropriations, or amendment thereto, which changes existing law.''.
(b) The amendment made by subsection (a) shall only apply to joint resolutions continuing appropriations for fiscal year 1996 or any subsequent fiscal year.
Subtitle J--Technical and Conforming Amendments
SEC. 14901. AMENDMENTS TO THE CONGRESSIONAL BUDGET AND
IMPOUNDMENT CONTROL ACT OF 1974.
(a) Definition of Budget Authority.--Paragraph (2) of section 3 of the Congressional Budget and Impoundment Control Act of 1974, the second time it appears, is amended by inserting ``in any form'' after ``promissory notes'', by inserting at the end of subparagraph (A) the following new sentence: ``Such term excludes transactions classified as means of financing.'', and by striking ``With respect to'' and all that follows through ``retirement account, any'' and inserting ``Any'', by inserting after subparagraph (B) the following:
``(C) Relationship to entitlement authority.--For purposes of titles III and IV, all references to budget authority shall be considered to include the amount of budget authority estimated to be needed to fund entitlement provisions under existing or proposed law, and all legislation increasing (or decreasing) the level of entitlement authority under existing law shall be considered to provide (or decrease) new budget authority in that amount.'',
and by redesignating the next subparagraph accordingly.
(b) Definition of Entitlement Authority.--Paragraph (9) of section 3 of the Congressional Budget and Impoundment Control Act of 1974 is amended by striking ``spending authority described by section 401(c)(2)(C)'' and inserting the following: ``, and the term `entitlement program' refers to, any provision of law that has the effect of requiring the Government to make net payments (including intragovernmental payments) regardless of the amount of budget authority that may be available to make those payments. Those terms shall include amounts estimated to be required under provisions of law that depend on the fulfillment of non-legislative conditions or are indefinite as to amount or timing. Except as provided in the next sentence, if a provision of law that otherwise requires the Government to make net payments is directly or indirectly limited by any other provision of law to an amount of available budget authority, then entitlement authority does not exist. Subchapter II of chapter 13 of title 31, United States Code, and the sequestration provisions of the Balanced Budget and Emergency Deficit Control Act of 1985 shall not be considered provisions of law that limit entitlement authority to the amount of available budget authority.''
(c) Definition of Means of Financing.--Section 3 of the Congressional Budget and Impoundment Control Act of 1974 is amended by adding at the end the following new paragraph:
``(11) The term `means of financing' means the financial transactions of the Government that consist of exchanges of money or monetary proxies of equal value and therefore are not counted as obligations, outlays, or revenues, such as net Federal borrowing from the public in any form, debt redemption, seignorage on coins and profits from the sale of gold, and changes in outstanding check or other monetary credits, including write-offs.''.
(d) CBO Studies.--Section 202(h) of the Congressional Budget Act of 1974 is amended by striking ``outlays, credit authority,'' and inserting ``outlays''.
(e) Required Contents of Budget Resolution.--Section 301(a) of the Congressional Budget Act of 1974 is amended by striking ``planning levels'', by striking ``two'' and inserting ``four'', by striking ``, budget outlays, direct loan obligations, and primary loan guarantee commitments'' both places it appears and inserting ``and outlays'', by striking paragraphs (5), (6) and (7), by striking the semicolon at the end of paragraph (4) and inserting a period, by inserting ``and'' after the semicolon at the end of paragraph (3), and by striking the last sentence.
(f) Technical Correction to Section 301(e).--Section 301(e) of the Congressional Budget Act of 1974 is amended by inserting ``new'' before ``budget authority'' in the second sentence.
(g) Committee Allocations and Suballocations.--Section 602(a)(1)(B) of the Congressional Budget Act of 1974 is amended by striking ``committee.'' and inserting ``committee, except that new budget authority and outlays for entitlement programs funded through annual appropriations shall be allocated and scored both to the Committee on Appropriations and to the committee that authorized such programs.''.
(h) Committee Allocations.--Section 302 of the Congressional Budget Act of 1974 is amended to read as follows:
``committee allocations
``Sec. 302. (a) Reports by Committees.--As soon as practicable after a joint resolution on the budget is enacted--
``(1) the Committee on Appropriations of each House shall, after consulting with the Committee on Appropriations of the other House--
``(A) subdivide among its subcommittees the allocation of budget outlays, new budget authority, and new credit authority allocated to it in the joint budget resolution;
``(B) further subdivide the amount with respect to each such subcommittee between controllable amounts and all other amounts; and
``(2) every other committee of the House and Senate to which an allocation was made in such joint budget resolution shall, after consulting with the committee or committees of the other House to which all or part of its allocation was made--
``(A) subdivide such allocation among its subcommittees or among programs over which it has jurisdiction; and
``(B) further subdivide the amount with respect to each subcommittee or program between controllable amounts and all other amounts.
Each such committee shall promptly report to its House the subdivisions made by it pursuant to this subsection.
``(b) Point of Order.--It shall not be in order in the House of Representatives or the Senate to consider any bill or resolution, or amendment thereto, providing--
``(1) new budget authority for a fiscal year;
``(2) new spending authority as described in section 401(c)(2) for a fiscal year; or
``(3) new credit authority for a fiscal year;within the jurisdiction of any committee which has received an appropriate allocation of such authority pursuant to section 301(a)(6) for such fiscal year, unless and until such committee makes the allocation of subdivisions required by subsection (a), in connection with the most recently enacted joint resolution on the budget for such fiscal year.
``(c) Subsequent Joint Resolutions.--In the case of a joint resolution on the budget referred to in section 304, the subdivisions under subsection (a) shall be required only to the extent necessary to take into account revisions made in the most recently enacted joint resolution on the budget.
``(d) Alteration of Allocations.--At any time after a committee reports the subdivision required to be made under subsection (a), such committee may report to its House an alteration of such subdivision. Any alteration of such subdivision must be consistent with any actions already taken by its House on legislation within the committee's jurisdiction.
``(e) Legislation Subject to Point of Order.--After enactment of a joint resolution on the budget for a fiscal year, it shall not be in order in the House of Representatives or the Senate to consider any bill, resolution, or amendment providing new budget authority for such fiscal year, new entitlement authority effective during such fiscal year, or new credit authority for such fiscal year, or any conference report on any such bill or resolution, if--
``(1) the enactment of such bill or resolution as reported;
``(2) the adoption and enactment of such amendment; or
``(3) the enactment of such bill or resolution in the form recommended in such conference report;
would cause the appropriate allocation made pursuant to section 301(a)(6) or subdivision made under subsection (a) of this section for such fiscal year of new discretionary budget authority, new entitlement authority, or new credit authority, to be exceeded.
``(f) Determinations by Budget Committees.--For purposes of this section, the levels of new budget authority, spending authority as described in section 401(c)(2), outlays and new credit authority for a fiscal year, shall be determined on the basis of estimates made by the Committee on the Budget of the House of Representatives or the Senate, as the case may be.''.
(i) Cost Estimates and Scorekeeping Reports.--Section 308 of the Congressional Budget Act of 1974 is amended--
(1) in its title, by striking ``, new spending authority, or new credit authority,'';
(2) by striking ``, new spending authority described in section 401(c)(2), or new credit authority,'' the 3 times it appears;
(3) in subsection (a), by striking ``in the reports submitted'', by inserting ``302(a) or'' before ``302(b)'', in paragraph (1)(B) by striking ``spending authority'' and everything that follows through ``401(c)(2) which is'' and inserting ``budget authority'' and by striking ``annual appropriations'' and inserting ``annual discretionary appropriations'', and in paragraph (1)(C) by striking ``such budget authority'' and all that follows through ``loan guarantee commitments'' and inserting ``new budget authority, outlays, or revenues''; and
(4) in subsection (c), by adding ``and'' at the end of paragraph (1), by striking ``period;'' and inserting
``period.'' at the end of paragraph (2), and by striking paragraphs (3), (4), and (5).
(j) Technical Correction to Section 312.--Section 312 of the Congressional Budget Act of 1974 is amended by inserting
``(a)'' after ``312.''.
(k) Consideration of Legislation That Has Not Been Reported.--Section 312 of the Congressional Budget Act of 1974 is amended by inserting at the end the following:
``(c) Consideration of Legislation That Has Not Been Reported.--In the House of Representatives, any point of order under title III or IV that would lie against consideration of a bill or joint resolution as reported by a committee shall also lie against a motion to consider legislation respecting which no report has been filed.''
(l) Conforming Amendments to Section 313.--Section 313 of the Congressional Budget Act of 1974 is amended by striking
``or section 258C'' and everything that follows through
``Deficit Control Act of 1985'', by striking ``; and (F)'' and everything that follows through ``310(g)'', by redesignating the second subsection (c) and subsection (d) as subsections (d) and (e), respectively, and by striking ``or
(b)(1)(F),''.
(m) Borrowing and Contract Authority.--Section 401 of the Congressional Budget Act of 1974 is amended
(1) in subsection (a), by striking ``new spending authority described in subsection (c)(2)(A) or (B)'' both times it appears and inserting ``borrowing authority or contract authority'';
(2) by repealing subsections (b) and (c) and by redesignating subsection (d) as subsection (b); and
(3) in subsection (b) (as redesignated), by striking
``Subsections (a) and (b)'' and inserting ``Subsection (a)'', by inserting ``non-interest'' before ``receipts'' in paragraph (1)(B), by repealing paragraph (2), and by redesignating paragraph (3) as paragraph (2).
(n) Credit Authority.--Section 402(a) of the Congressional Budget Act of 1974 is amended by inserting before the period the following: ``, except that this provision shall not apply with respect to programs that, as of August 15, 1992, provide credit authority as an entitlement''.
SEC. 14902. TECHNICAL AND CONFORMING AMENDMENTS TO THE RULES
OF THE HOUSE OF REPRESENTATIVES.
(a) Miscellaneous Conforming Amendment.--Clause 4(h) of rule X of the Rules of the House of Representatives is amended by striking ``or section 602 (in the case of fiscal years 1991 through 1995)''.
(b) Repealer.--Rule XLIX of the Rules of the House of Representatives is repealed.
SEC. 14903. PRESIDENT'S BUDGET.
(a) Definitions.--Section 1101 of title 31, United States Code, is amended by adding at the end the following:
``(3) `Expenditures' has the same meaning as the term
`outlays' in the Balanced Budget and Emergency Deficit Control Act of 1985.
``(4) All other terms used herein or in the documents prepared hereunder shall have the meanings set forth in the Balanced Budget and Emergency Deficit Control Act of 1985.''.
(b) Byrd Amendment.--Section 1103 of title 31, United States Code, is amended by striking ``commitment that budget'' and inserting ``commitment that, starting with fiscal year 2002,''.
(c) President's Budget Submission.--Section 1105(a) of title 31, United States Code, is amended--
(1) in the first sentence by striking ``On or after the first Monday in January but not later than the first Monday in February of each year'' and inserting ``On or before the first Monday in February or the 21st calendar day beginning after the date the Board of Estimates issues a report to the President under section 254 of the Balanced Budget and Emergency Deficit Control Act of 1985'';
(2) in paragraph (15) by striking ``section 301(a)(1)-(5)'' and inserting ``section 301(a)(1)-(4);
(3) in paragraph (16) by striking ``section 3(a)(3)'' and inserting ``section 3(3)''; and
(4) by adding at the end the following new paragraph:
``(32) an analysis of the financial condition of Government-sponsored enterprises and the financial exposure of the Government, if any, posed by them.''.
(d) Use of Official Estimates.--Section 1105(f) of title 31, United States Code, is amended by inserting at the end the following new sentence: ``That budget shall be consistent with the discretionary funding limit and the direct spending and receipts deficit reduction requirement for that year chosen by the Board of Estimates and shall be based upon the major estimating assumptions chosen by that Board.''.
Subtitle K--Truth in Legislating
SEC. 14951. IDENTITY, SPONSOR, AND COST OF CERTAIN PROVISIONS
REQUIRED TO BE REPORTED.
(a) Identity, Sponsor, and Cost.--Clause 4 of rule X of the Rules of the House of Representatives is amended by adding at the end thereof the following:
``(j)(1) Except as provided by subparagraph (2), the report or joint explanatory statement accompanying each bill or joint resolution of a public character reported by a committee or committee of conference shall contain, in plain and understandable language--
``(A) an identification of each provision (if any) of the bill or joint resolution which benefits only 10 or fewer beneficiaries in any one of the following categories: persons, corporations, partnerships, institutions, organizations, transactions, events, items of property, projects, civil subdivisions within one or more States, or issuances of bonds;
``(B) the name of each beneficiary of such provision;
``(C) the name of any Member or Members who sponsored the inclusion of each such provision and an indication of each such provision requested by any agency, instrumentality, or officer of the United States; and
``(D) an estimate by the Congressional Budget Office or the Joint Committee on Taxation, whichever is appropriate, of the costs which would be incurred in carrying out such provision or any loss in revenues resulting from such provision for the fiscal year for which costs or loss in revenues, as the case may be, first occurs and each of the next 5 fiscal years.
``(2)(A) Subparagraph (1) shall not apply with respect to any provision of a bill or joint resolution or of a conference report on a bill or joint resolution if the beneficiary of such provision is the United States or any agency or instrumentality thereof.
``(B) Subparagraph (1)(D) shall not apply with respect to any provision of a bill or joint resolution or of a conference report on a bill or joint resolution if the costs which would be incurred in carrying out such provision or any loss in revenues resulting from such provision are identified clearly in the report or joint explanatory statement accompanying such bill or joint resolution.
``(3) It shall not be in order to consider any such bill or joint resolution in the House if the report or joint explanatory statement of the committee or committee of conference which reported that bill or joint resolution does not comply with subparagraph (1). The requirements of subparagraph (1) may be waived only upon a separate vote directed solely to that subject.''.
(b) Effective Date.--The amendment made by subsection (a) shall apply to bills and joint resolutions reported by a committee of the House of Representatives after the date of enactment of this Act.
H.R. 2517
Offered By: Mr. Davis
Amendment No. 1: Page 1588, lines 3 through 7, amend subsection (c) to read as follows:
(c) National Technical Information Service.--
(1) Government corporation.--All functions of the National Technical Information Service are transferred to the Director of the Office of Management and Budget who shall within 6 months after the effective date specified in section 17101 submit to Congress a proposal for legislation to establish the National Technical Information Service as a wholly owned Government corporation. The proposal should provide for the corporation to perform substantially the same functions that, as of the date of enactment of this act, are performed by the National Technical Information Service.
(2) Transfer to national institute for science and technology.--Not later than 18 months after the effective date specified in section 17101, the National Technical Information Service (or any successor corporation established pursuant to a proposal under paragraph (1)) shall be transferred to the National Institute for Science and Technology established by section 17207.
(3) Funding.--No funds are authorized to be appropriated for the National Technical Information Service or any successor corporation established pursuant to a proposal under paragraph (1).
H.R. 2517
Offered By: Mr. Horn
Amendment No. 2: Page 308, after line 5, insert the following:
Subtitle A--Federal Employee and Congressional Benefits; Availability of Surplus Property for Homeless Assistance
Page 333, after line 15, insert the following new subtitle:
Subtitle B--Debt Collection Improvement Act of 1995
SEC. 5201. SHORT TITLE.
This subtitle may be cited as the ``Debt Collection Improvement Act of 1995''.
SEC. 5202. TABLE OF CONTENTS.
The table of contents for this subtitle is as follows:
Sec. 5201. Short title.
Sec. 5202. Table of contents.
Sec. 5203. Effective date.
Sec. 5204. Purposes.
Part I--General Debt Collection Initiatives
subpart a--general offset authority
Sec. 5211. Expansion of administrative offset authority.
Sec. 5212. Enhancement of administrative offset authority.
Sec. 5213. Exemption from computer matching requirements under the
Privacy Act of 1974.
Sec. 5214. Use of administrative offset authority for debts to States.
Sec. 5215. Technical and conforming amendments.
subpart b--salary offset authority
Sec. 5221. Enhancement of salary offset authority.
subpart c--taxpayer identifying numbers
Sec. 5231. Access to taxpayer identifying numbers; barring delinquent debtors from credit assistance.
Sec. 5232. Barring delinquent Federal debtors from obtaining Federal loans or loan guarantees.
subpart d--expansion and enhancement of collection authorities
Sec. 5241. Repeal of limitations on collection authorities.
Sec. 5242. Disclosure to consumer reporting agencies and commercial reporting agencies.
Sec. 5243. Contracts for collection services.
Sec. 5244. Cross-servicing partnerships and centralization of debt collection activities in the Department of the Treasury.
Sec. 5245. Compromise of claims.
Sec. 5246. Wage garnishment requirement.
Sec. 5247. Debt sales by agencies.
Sec. 5248. Adjustments of administrative debt.
Sec. 5249. Dissemination of information regarding identity of delinquent debtors.
subpart e--federal civil monetary penalties
Sec. 5251. Adjusting Federal civil monetary penalties for inflation.
subpart f--gain sharing
Sec. 5261. Debt collection improvement account.
subpart g--tax refund offset authority
Sec. 5271. Offset of tax refund payment by disbursing officials.
Sec. 5272. Expanding tax refund offset authority.
Sec. 5273. Expanding authority to collect past-due support.
Sec. 5274. Use of tax refund offset authority for debts to States.
subpart h--disbursements
Sec. 5281. Electronic funds transfer.
Sec. 5282. Requirement to include taxpayer identifying number with payment voucher.
subpart i--miscellaneous
Sec. 5291. Miscellaneous amendments to definitions.
Sec. 5292. Monitoring and reporting.
Sec. 5293. Review of standards and policies for compromise or write-
down of delinquent debts.
Part II--Justice Debt Management
Sec. 5301. Expanded use of private attorneys.
Sec. 5302. Nonjudicial foreclosure of mortgages.
SEC. 5203. EFFECTIVE DATE.
Except as otherwise provided in this subtitle, the provisions of this subtitle and the amendments made by this subtitle shall become effective October 1, 1995.
SEC. 5204. PURPOSES.
The purposes of this subtitle are the following:
(1) To maximize collections of delinquent debts owed to the Government by ensuring quick action to enforce recovery of debts and the use of all appropriate collection tools.
(2) To minimize the costs of debt collection by consolidating related functions and activities and utilizing interagency teams.
(3) To reduce losses arising from debt management activities by requiring proper screening of potential borrowers, aggressive monitoring of all accounts, and sharing of information within and among Federal agencies.
(4) To ensure that the public is fully informed of the Federal Government's debt collection policies and that debtors are cognizant of their financial obligations to repay amounts owed to the Federal Government.
(5) To ensure that debtors have all appropriate due process rights, including the ability to verify, challenge, and compromise claims, and access to administrative appeals procedures which are both reasonable and protect the interests of the United States.
(6) To encourage agencies, when appropriate, to sell delinquent debt, particularly debts with underlying collateral.
(7) To rely on the experience and expertise of private sector professionals to provide debt collection services to Federal agencies.
PART I--GENERAL DEBT COLLECTION INITIATIVES
Subpart A--General Offset Authority
SEC. 5211. EXPANSION OF ADMINISTRATIVE OFFSET AUTHORITY.
Chapter 37 of title 31, United States Code, is amended--
(1) in each of sections 3711, 3716, 3717, and 3718, by striking ``the head of an executive or legislative agency'' each place it appears and inserting ``the head of an executive, judicial, or legislative agency''; and
(2) by amending section 3701(a)(4) to read as follows:
``(4) `executive, judicial, or legislative agency' means a department, agency, court, court administrative office, or instrumentality in the executive, judicial, or legislative branch of government, including government corporations.''.
SEC. 5212. ENHANCEMENT OF ADMINISTRATIVE OFFSET AUTHORITY.
(a) Persons Subject to Administrative Offset.--Section 3701(c) of title 31, United States Code, is amended to read as follows:
``(c) In sections 3716 and 3717 of this title, the term
`person' does not include an agency of the United States Government.''.
(b) Requirements and Procedures.--Section 3716 of title 31, United States Code, is amended--
(1) by amending subsection (b) to read as follows:
``(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).'';
(2) by amending subsection (c)(2) to read as follows:
``(2) when a statute explicitly prohibits using administrative offset or setoff to collect the claim or type of claim involved.'';
(3) by redesignating subsection (c) as subsection (e); and
(4) by inserting after subsection (b) the following new subsections:
``(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) Notwithstanding any other provision of law
(including sections 207 and 1631(d)(1) of the Act of August 14, 1935 (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)), 15 percent of payments due to an individual under the Social Security Act, under part B of the Black Lung Benefits Act, under any law administered by the Railroad Retirement Board, or as compensation or benefits arising from service of an individual with the United States Government, shall be subject to offset under this section except that a greater percentage may be deducted by offset with the written consent of the individual.
``(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) 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 either title II or title XVI of the Social Security Act, respectively.
``(D)(i) Payments to any qualified individual shall not be subject to administrative offset under this subsection. Prior to offset of any debtor's Federal benefit payment under this subsection, the debtor shall be provided a written notice of the exemption described in this paragraph and an opportunity to provide data to qualify for the exemption.
``(ii) In this subparagraph, the term `qualified individual' means an individual whose income in the year preceding application of this paragraph did not exceed 150 percent of the poverty level and who has less than $5,000 in assets.
``(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)(4) of this title, and shall be collected and accounted for in accordance with the provisions of that section.
``(5) The Secretary of the Treasury may disclose to a creditor agency the current address of any payee and any data related to certifying and authorizing payments to a payee in accordance with section 552a of title 5, United States Code, even if the payment has been exempt from administrative offset. If a payment is made electronically, the Secretary may obtain the current address of the payee to the Secretary.
``(6) The Secretary of the Treasury 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.
``(7) 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.
``(8)(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 not 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.
``(9) 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.''.
(c) Nontax Claim Defined.--Section 3701 of title 31, United States Code, is amended--
(1) in subsection (b) by inserting ``and subsection (a)(8) of this section'' after ``of this chapter''; and
(2) in subsection (a) by adding at the end the following new paragraph:
``(8) `nontax claim' means any claim, other than a claim of the Internal Revenue Service under the Internal Revenue Code of 1986.''.
SEC. 5213. EXEMPTION FROM COMPUTER MATCHING REQUIREMENTS
UNDER THE PRIVACY ACT OF 1974.
Section 3716 of title 31, United States Code, as amended by section 5212(b) of this subtitle, is further amended by adding at the end the following new subsections:
``(f) The Secretary may waive the requirements of sections 552(o) and (p) of title 5 for administrative offset or claims collection upon written certification by the head of the 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.''.
SEC. 5214. USE OF ADMINISTRATIVE OFFSET AUTHORITY FOR DEBTS
TO STATES.
Section 3716 of title 31, United States Code, as amended by sections 5212 and 5213 of this subtitle, is further amended by adding at the end the following new subsection:
``(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.''.
SEC. 5215. TECHNICAL AND CONFORMING AMENDMENTS.
(a) Title 31.--Title 31, United States Code, is amended--
(1) in section 3322(a), by inserting ``section 3716 and section 3720A of this title, section 6331 of the Internal Revenue Code of 1986 (26 U.S.C. 6331), and'' after ``Except as provided in'';
(2) in section 3325(a)(3), by inserting ``or pursuant to payment intercepts or offsets pursuant to section 3716 or 3720A of this title, or pursuant to levies executed under section 6331 of the Internal Revenue Code of 1986 (26 U.S.C. 6331),'' after ``voucher''; and
(3) in each of section 3711(e)(2) and 3717(h) by inserting
``, the Secretary of the Treasury,'' after ``Attorney General''.
(b) Internal Revenue Code of 1986.--Subsection 6103(1)(10)(A) of the Internal Revenue Code of 1986 (26 U.S.C. 6103(1)(10)(A)) is amended--
(1) in subparagraph (A), by inserting ``and to officers and employees of the Department of the Treasury in connection with such reduction'' after ``6402''; and
(2) in subparagraph (B), by inserting ``and officers and employees of the Department of the Treasury'' after
``agency'' the first place it appears.
Subpart B--Salary Offset Authority
SEC. 5221. ENHANCEMENT OF SALARY OFFSET AUTHORITY.
Section 5514 of title 5, United States Code, is amended--
(1) in subsection (a)--
(A) by adding at the end of paragraph (1) the following:
``All Federal agencies to which debts are owned and which have outstanding delinquent debts shall participate in a computer match at least annually of their delinquent debt records with records of Federal employees to identify those employees who are delinquent in repayment of those debts. Matched Federal employee records shall include, but shall not be limited to, records of active Civil Service employees government-wide, military active duty personnel, military reservists, United States Postal Service employees, employees of other government corporations, and seasonal and temporary employees. The Secretary of the Treasury shall establish and maintain an interagency consortium to implement centralized salary offset computer matching, and promulgate regulations for this program. Agencies that perform centralized salary offset computer matching services under this subsection are authorized to charge a fee sufficient to cover the full costs for such services.'';
(B) by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5), respectively;
(C) by inserting after paragraph (2) the following new paragraph:
``(3) Paragraph (2) shall not apply to routine intraagency adjustments of pay that are attributable to clerical or administrative errors or delays in processing pay documents that have occurred within the four pay periods preceding the adjustment and to any adjustment that amounts to $50 or less, if at the time of such adjustment, or as soon thereafter as practical, the individual is provided written notice of the nature and the amount of the adjustment and a point of contact for contesting such adjustment.''; and
(D) by amending paragraph (5)(B) (as redesignated by subparagraph (b) of this paragraph) to read as follows:
``(B) `agency' includes executives departments and agencies, the United States Postal Service, the Postal Rate Commission, the Senate, the House of Representatives, and any court, court administrative office, or instrumentality in the judicial or legislative branches of the Government, and government corporation.'';
(2) by adding after subsection (c) the following new subsection:
``(d) A levy pursuant to the Internal Revenue Code of 1986 shall take precedence over deductions under this section.''.
Subpart C--Taxpayer Identifying Numbers
SEC. 5231. ACCESS TO TAXPAYER IDENTIFYING NUMBERS; BARRING
DELINQUENT DEBTORS FROM CREDIT ASSISTANCE.
Section 4 of the Debt Collection Act of 1982 (Public Law 97-365, 96 Stat. 1749, 26 U.S.C. 6103 note) is amended--
(1) in subsection (b), by striking ``For purposes of this section'' and inserting ``For purposes of subsection (a)''; and
(2) by adding at the end the following new subsections:
``(c) Federal Agencies.--
``(1) In general.--Each Federal agency shall require each person doing business with that agency to furnish to that agency such person's taxpayer identifying number.
``(2) Doing business.--For purposes of this subsection, a person shall be considered to be doing business with a Federal agency if the person is--
``(A) a lender or servicer in a Federal guaranteed or insured loan program administered by the agency;
``(B) an applicant for, or recipient of--
``(i) a Federal guaranteed, insured, or direct loan administered by the agency; or
``(ii) a Federal license, permit, right-of-way, grant, or benefit payment administered by the agency or insurance administered by the agency;
``(C) a contractor of the agency;
``(D) assessed a fine, fee, royalty or penalty by the agency; and
``(E) in a relationship with the agency that may give rise to a receivable due to that agency, such as a partner of a borrower in or a guarantor of a Federal direct or insured loan administered by the agency.
``(3) Disclosure.--Each agency shall disclose to a person required to furnish a taxpayer identifying number under this subsection its intent to use such number for purposes of collecting and reporting on any delinquent amounts arising out of such person's relationship with the Government.
``(4) Definitions.--For purposes of this subsection--
``(A) the term `taxpayer identifying number' has the meaning given such term in section 6109 of the Internal Revenue Code of 1986 (26 U.S.C. 6109); and
``(B) the term `person'--
``(i) subject to clause (ii), means an individual, sole proprietorship, partnership, corporation, or nonprofit organization, or any other form of business association; and
``(ii) does not include debtors under third party claims of the United States, other than debtors owing claims resulting from petroleum pricing violations.
``(d) Access to Social Security Numbers and Other Information.--Notwithstanding section 552a(b) of title 5, United States Code, creditor agencies to which a delinquent claim is owed, and their agents, may match their debtor records with Department of Health and Human Services, Department of Labor, and Social Security Administration records to obtain names (including names of employees), name controls, names of employers, Social Security numbers, addresses (including addresses of employers), and dates of birth. The Department of Health and Human Services, the Department of Labor, and the Social Security Administration shall release that information to creditor agencies and may charge reasonable fees sufficient to pay the costs associated with that release.
``(e) Electronic Payments.--If a payment is made electronically by any executive, judicial, or legislative agency, the Secretary of the Treasury may obtain from the institution receiving the payment the taxpayer identification number of any joint holder of the account to which the payment is made. Upon request of the Secretary, the institution receiving the payment shall report the taxpayer identification number of the joint holder to the Secretary.''.
SEC. 5232. BARRING DELINQUENT FEDERAL DEBTORS FROM OBTAINING
FEDERAL LOANS OR LOAN GUARANTEES.
(a) In General.--Title 31, United States Code, is amended by inserting after section 3720A the following new section:
``Sec. 3720B. Barring delinquent Federal debtors from obtaining Federal loans or loan guarantees
``(a) Unless this subsection is waived by the head of a Federal agency, a person may not obtain any Federal financial assistance in the form of a loan (other than a disaster loan) or loan guarantee administered by the agency if the person has an outstanding debt with any Federal agency which is in a delinquent status, as determined under standards prescribed by the Secretary of the Treasury. Such a person may obtain additional loans or loan guarantees only after such delinquency is resolved in accordance with those standards. The Secretary of the Treasury may exempt, at the request of an agency, any class of claims.
``(b) The head of a Federal agency may delegate the waiver authority under subsection (a) to the Chief Financial Officer of the agency. The waiver authority may be redelegated only to the Deputy Chief Financial Officer of the agency.
``(c) For purposes of this section, the term `person' means--
``(1) an individual; or
``(2) any sole proprietorship, partnership, corportation, nonprofit organization, or other form of business association.''.
(b) Clerical Amendments.--The table of sections for subchapter II of chapter 37 of title 31, United States Code, is amended by inserting after the item relating to section 3720A the following new item:
``3720B. Barring delinquent Federal debtors from obtaining Federal loans or loan guarantees.''.
Subpart D--Expansion and Enhancement of Collection Authorities
SEC. 5241. REPEAL OF LIMITATIONS ON COLLECTION AUTHORITIES.
(a) Debt Collection Act of 1982.--Section 8(e) of the Debt Collection Act of 1982 (5 U.S.C. 5514 note) is repealed. Section 3701(d) of title 31, United States Code, is amended to read as follows:
``(d) Sections 3711(f) and 3716 through 3719 of this title do not apply to a claim or debt under, or to amounts payable under, the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.) unless the Internal Revenue Service has ceased active collection efforts and the claim or debt is considered by the Secretary of the Treasury to be currently not collectible.''.
(b) Social Security Domestic Employment Reform Act of 1994.--Section 5 of the Social Security Domestic Employment Reform Act of 1994 (Public Law 103-387) is repealed.
SEC. 5242. DISCLOSURE TO CONSUMER REPORTING AGENCIES AND
COMMERCIAL REPORTING AGENCIES.
Section 3711(f) of title 31, United States Code, is amended--
(1) by striking ``may'' the first place it appears and inserting ``shall'';
(2) by striking ``an individual'' each place it appears and inserting ``a covered person'';
(3) by striking ``the individual'' each place it appears and inserting ``the covered person''; and
(4) by adding at the end the following new paragraphs:
``(4) The head of each executive agency shall require, as a condition for guaranteeing any loan, financing, or other extension of credit under any law to a covered person, that the lender provide information relating to the extension of credit to consumer reporting agencies or commercial reporting agencies, as appropriate.
``(5) The head of each executive agency may provide to a consumer reporting agency or commercial reporting agency information from a system of records that a covered person is responsible for a claim which is current, if notice required by section 552a(e)(4) of title 5 indicates that information in the system may be disclosed to a consumer reporting agency or commercial reporting agency, respectively.
``(6) In this subsection, the term `covered person' means an individual, a sole proprietorship, a corporation
(including a nonprofit corporation), or any other form of business association.''.
SEC. 5243. CONTRACTS FOR COLLECTION SERVICES.
Section 3718 of title 31, United States Code, is amended--
(1) in subsection (a), by striking the first sentence and inserting the following: ``Under conditions the head of an executive, judicial, or legislative agency considers appropriate, the head of the agency may enter into a contract with a person for collection service to recover indebtedness owed, or to locate or recover assets of, the United States Government. The head of an agency may not enter into a contract under the preceding sentence to locate or recover assets of the United States held by a State government or financial institution unless that agency has established procedures approved by the Secretary of the Treasury to identify and recover such assets.'';
(2) in subsection (d), by inserting ``, or to locate or recover assets of,'' after ``owed'';
(3) by amending subsection (f) to read as follows:
``(f)(1) The head of each Federal agency that administers a program that gives rise to a delinquent debt or is responsible for collecting delinquent debt shall enter into contracts on a competitive basis with 3 or more persons for the collection of any such debt that is past-due and legally enforceable and on which the agency has ceased active collection efforts. Contracts under this subsection shall be awarded on a competitive basis.
``(2) The performance of contractors in carrying out such contracts shall be evaluated upon, and incentives shall be provided and sanctions imposed under such contracts, as appropriate, based upon--
``(A) collection success;
``(B) compliance with all applicable laws, including the Fair Debt Collection Practices Act (16 U.S.C. 1692 et seq.), the Omnibus Taxpayer Bill of Rights (102 Stat. 3720), and section 6103 of the Internal Revenue code of 1986 (26 U.S.C. 6103); and
``(C) incidence of valid debtor complaints.
``(3) The head of each agency referred to in paragraph (1) shall--
``(A) within 3 years after the date of enactment of the Debt Collection Improvement Act of 1995, refer for collection to persons with contracts under this subsection not less than 50 percent of the amount of delinquent debts upon which the agency has ceased active collection efforts;
``(B) begin referring debts not later than 180 days after the date of enactment of the Debt Collection Improvement Act of 1995 and require that collection efforts pursuant to such a referral begin by not later than 90 days after the date of referral; and
``(C) report to the Congress on debts referred by each Federal agency and amounts received by the United States pursuant to that referral.
``(4) For purposes of this subsection, an agency shall be considered to have ceased active collection efforts if--
``(A) the debt is not the subject of litigation and has not in the preceding 90 days been the subject of a payment, an execution of a written promise to pay, or an affirmative attempt to locate or contact the debtor, or
``(B) in the case of debt owed under the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.), if the Internal Revenue Service has classified the debt as `currently not collectible' or a similar classification in accordance with criteria and procedures substantially similar to those in effect for such classifications on September 20, 1995.
``(5) Each contract for collection services under this subsection shall--
``(A) include safeguards against unauthorized disclosure of confidential information;
``(B) provide that the Federal agency shall not disclose to a contractor any information concerning the debtor other than--
``(i) information necessary to locate and contact the debtor, such as name, address, telephone number, employer address and telephone number, and Social Security Number; and
``(ii) the nature and amount of the debt;
``(C) prohibit the release by the contractor of confidential information regarding a debtor obtained as a result of a contract under this subsection to any third person without the debtor's written consent;
``(D) limit the contractor's activities to--
``(i) contacting debtors by mail;
``(ii) contacting debtors by phone to remind taxpayers of a delinquency, provide information on payment options, and secure taxpayer intentions of repayment;
``(iii) providing skiptracing services and asset and employment location services to establish a mailing address or phone number for delinquent debtors;
``(iv) providing lockbox services for receipt and processing of payments; and
``(v) providing data processing services in conjunction with collection activities;
``(E) preclude the contractor from determining the amount of a debt, compromising a debt, receiving or processing collection proceeds, or mailing standard collection notices and billing statements; and
``(F) require the contractor to comply with section 552a of title 5 (popularly known as the `Privacy Act'), the Fair Debt Collection Practices Act, and the Taxpayers Bill of Rights.
``(6) The Secretary of the Treasury may exempt from the application of this subsection any class of nontax claims as necessary to protect the interests of the United States.''; and
(4) by adding at the end the following new subsection:
``(h) The Secretary of the Treasury may enter into contracts for Governmentwide collection of debts and recovery of assets consistent with subsections (a) and (f). The head of a Federal agency may enter into an agreement with the Secretary of the Treasury to obtain services under these contracts, and, if such agreement results in the performance of the required services for debt collection services for debt collection under subsection (f), the head of a Federal agency shall be deemed to be in compliance with subsection
(f).''.
SEC. 5244. CROSS-SERVICING PARTNERSHIPS AND CENTRALIZATION OF
DEBT COLLECTION ACTIVITIES IN THE DEPARTMENT OF
THE TREASURY.
Section 3711 of title 31, United States Code, is amended by adding at the end the following new subsections:
``(g)(1) If a nontax debt or claim owed to the United States has been delinquent for a period of 180 days--
``(A) the head of the executive, judicial, or legislative agency that administers the program that gave rise to the debt or claim shall transfer the debt or claim to the Secretary of the Treasury; and
``(B) upon such transfer the Secretary of the Treasury shall take appropriate action to collect or terminate collection actions on the debt or claim.
``(2) Paragraph (1) shall not apply--
``(A) to any debt or claim that--
``(i) is in litigation or foreclosure;
``(ii) will be disposed of under an asset sales program within 1 year after the date the debt or claim is first delinquent, or a greater period of time if a delay would be in the best interests of the United States, as determined by the Secretary of the Treasury;
``(iii) has been referred to a private collection contractor for collection for a period of time determined by the Secretary of the Treasury;
``(iv) has been referred by, or with the consent of, the Secretary of the Treasury to a debt collection center for a period of time determined by the Secretary of the Treasury; or
``(v) will be collected under internal offset, if such offset is sufficient to collect the claim within 3 years after the date the debt or claim is first delinquent; and
``(B) to any other specific class of debt or claim, as determined by the Secretary of the Treasury at the request of the head of an executive, judicial, or legislative agency or otherwise.
``(3) For purposes of this section, the Secretary of the Treasury may designate, and withdraw such designation of debt collection centers operated by other Federal agencies. The Secretary of the Treasury shall designate such centers on the basis of their performance in collecting delinquent claims owed to the Government.
``(4) At the discretion of the Secretary of the Treasury, referral of a nontax claim may be made to--
``(A) any executive department or agency operating a debt collection center for servicing, collection, compromise, or suspension or termination of collection action;
``(B) a contractor operating under a contract for servicing or collection action; or
``(C) the Department of Justice for litigation.
``(5) nontax claims referred or transferred under this section shall be serviced, collected, or compromised, or collection action thereon suspended or terminated, in accordance with otherwise applicable statutory requirements and authorities. Executive departments and agencies operating debt collection centers may enter into agreements with the Secretary of the Treasury to carry out the purposes of this subsection. The Secretary of the Treasury shall--
``(A) maintain competition in carrying out this subsection;
``(B) maximize collections of delinquent debts by placing delinquent debts quickly;
``(C) maintain a schedule of contractors and debt collection centers eligible for referral of claims; and
``(D) refer delinquent debts to the person most appropriate to collect the type or amount of claim involved.
``(6) Any agency operating a debt collection center to which nontax claims are referred or transferred under this subsection may charge a fee sufficient to cover the full cost of implementing this subsection. The agency transferring or referring the nontax claim shall be charged the fee, and the agency charging the fee shall collect such fee by retaining the amount of the fee from amounts collected pursuant to this subsection. Agencies may agree to pay through a different method, or to fund an activity from another account or from revenue received from the procedure described under section 3720C of this title. Amounts charged under this subsection concerning delinquent claims may be considered as costs pursuant to section 3717(e) of this title.
``(7) Notwithstanding any other law concerning the depositing and collection of Federal payments, including section 3302(b) of this title, agencies collecting fees may retain the fees from amounts collected. Any fee charged pursuant to this subsection shall be deposited into an account to be determined by the executive department or agency operating the debt collection center charging the fee
(in this subsection referred to in this section as the
`Account'). Amounts deposited in the Account shall be available until expended to cover costs associated with the implementation and operation of Governmentwide debt collection activities. Costs properly chargeable to the Account include--
``(A) the costs of computer hardware and software, word processing and telecommunications equipment, and other equipment, supplies, and furniture;
``(B) personnel training and travel costs;
``(C) other personnel and administrative costs;
``(D) the costs of any contract for identification, billing, or collection services; and
``(E) reasonable costs incurred by the Secretary of the Treasury, including services and utilities provided by the Secretary, and administration of the Account.
``(8) Not later than January 1 of each year, there shall be deposited into the Treasury as miscellaneous receipts an amount equal to the amount of unobligated balances remaining in the Account at the close of business on September 30 of the preceding year, minus any part of such balance that the executive department or agency operating the debt collection center determines is necessary to cover or defray the costs under this subsection for the fiscal year in which the deposit is made.
``(9) At the end of each calendar year, the head of an executive, judicial, or legislative agency which, regarding a claim owed to the agency, is required to report a discharge of indebtedness as income under the 6050P of the Internal Revenue Code of 1984 (26 U.S.C. 6050P) shall either complete the appropriate form 1099 or submit to the Secretary of the Treasury such information as is necessary for the Secretary of the Treasury to complete the appropriate form 1099. The Secretary may exempt specific classes of claims from this requirement, at the request of the head of an agency. The Secretary of the Treasury shall incorporate this information into the appropriate form and submit the information to the taxpayer and the Internal Revenue Service. Before completing a discharge of indebtedness, the head of an executive, judicial, or legislative agency shall certify that all appropriate steps have been taken with respect to a delinquent debt, including (as applicable)--
``(A) administrative offset,
``(B) tax refund offset,
``(C) Federal salary offset,
``(D) referral to private debt collection agencies,
``(E) referral to agencies operating a debt collection center,
``(F) reporting delinquencies to credit reporting bureaus,
``(G) garnishing the wages of delinquent debtors, and
``(H) litigation or foreclosure.
``(10) To carry out the purpose of this subsection, the Secretary of the Treasury may prescribe such rules, regulations, and procedures as the Secretary considers necessary.
``(h)(1) The head of an executive, judicial, or legislative agency acting under subsection (a) (1), (2), or (3) of this section to collect a claim, compromise a claim, or terminate collection action on a claim may obtain a consumer report (as that term is defined in section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a)) or comparable credit information on any person who is liable for the claim.
``(2) The obtaining of a consumer report under this subsection is deemed to be a circumstance or purpose authorized or listed under section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b).''.
SEC. 5245. COMPROMISE OF CLAIMS.
Section 11 of the Administrative Dispute Resolution Act
(Public Law 101-552, 104 Stat. 2736, 5 U.S.C. 571 note) is amended by adding at the end the following sentence: ``This section shall not apply to section 8(b) of this Act.''.
SEC. 5246. WAGE GARNISHMENT REQUIREMENT.
(a) In General.--Chapter 37 of title 31, United States Code, is amended in subchapter II by adding after section 3720C, as added by section 5261 of this subtitle, the following new section:
``Sec. 3720D. Garnishment
``(a) Notwithstanding any provision of State law, the head of an executive, judicial, or legislative agency that administers a program that gives rise to a delinquent nontax debt owed to the United States by an individual may in accordance with this section garnish the disposable pay of the individual to collect the amount owed, if the individual is not currently making required repayment in accordance with any agreement between the agency head and the individual.
``(b) In carrying out any garnishment of disposable pay of an individual under subsection (a), the head of an executive, judicial, or legislative agency shall comply with the following requirements:
``(1) The amount deducted under this section for any pay period may not exceed 15 percent of disposable pay, except that a greater percentage may be deducted with the written consent of the individual.
``(2) The individual shall be provided written notice, sent by mail to the individual's last known address, a minimum of 30 days prior to the initiation of proceedings, from the head of the executive, judicial, or legislative agency, informing the individual of--
``(A) the nature and amount of the debt to be collected;
``(B) the intention of the agency to initiate proceedings to collect the debt through deductions from pay; and
``(C) an explanation of the rights of the individual under this section.
``(3) The individual shall provide an opportunity to inspect and copy records relating to the debt.
``(4) The individual shall be provided an opportunity to enter into a written agreement with the executive, judicial, or legislative agency, under terms agreeable to the head of the agency, to establish a schedule for repayment of the debt.
``(5) The individual shall be provided an opportunity for a hearing in accordance with subsection (c) on the determination of the head of the executive, judicial, or legislative agency concerning--
``(A) the existence or the amount of the debt, and
``(B) in the case of an individual whose repayment schedule is established other than by a written agreement pursuant to paragraph (4), the terms of the repayment schedule.
``(6) If the individual has been reemployed within 12 months after having been involuntarily separated from employment, no amount may be deducted from the disposable pay of the individual until the individual has been reemployed continuously for at least 12 months.
``(c)(1) A hearing under subsection (b)(5) shall be provided prior to issuance of a garnishment order if the individual, on or before the 15th day following the mailing of the notice described in subsection (b)(2), and in accordance with such procedures as the head of the executive, judicial, or legislative agency may prescribe, files a petition requesting such a hearing.
``(2) If the individual does not file a petition requesting a hearing prior to such date, the head of the agency shall provide the individual a hearing under subsection (a)(5) upon request, but such hearing need not be provided prior to issuance of a garnishment order.
``(3) The hearing official shall issue a final decision at the earliest practicable date, but not later than 60 days after the filing of the petition requesting the hearing.
``(d) The notice to the employer of the withholding order shall contain only such information as may be necessary for the employer to comply with the withholding order.
``(e)(1) An employer may not discharge from employment, refuse to employ, or take disciplinary action against an individual subject to wage withholding in accordance with this section by reason of the fact that the individual's wages have been subject to garnishment under this section, and such individual may sue in a State or Federal court of competent jurisdiction any employer who takes such action.
``(2) The court shall award attorneys' fees to a prevailing employee and, in its discretion, may order reinstatement of the individual, award punitive damages and back pay to the employee, or order such other remedy as may be reasonably necessary.
``(f)(1) The employer of an individual--
``(A) shall pay to the head of an executive, judicial, or legislative agency as directed in a withholding order issued in an action under this section with respect to the individual, and
``(B) shall be liable for any amount that the employer fails to withhold from wages due an employee following receipt by such employer of notice of the withholding order, plus attorneys' fees, costs, and, in the court's discretion, punitive damages.
``(2)(A) The head of an executive, judicial, or legislative agency may sue an employer in a State or Federal court of competent jurisdiction to recover amounts for which the employer is liable under paragraph (1)(B).
``(B) A suit under this paragraph may not be filed before the termination of the collection action, unless earlier filing is necessary to avoid expiration of any applicable statute of limitations period.
``(3) Notwithstanding paragraphs (1) and (2), an employer shall not be required to vary its normal pay and disbursement cycles in order to comply with this subsection.
``(g) For the purpose of this section, the term `disposable pay' means that part of the compensation of any individual from an employer remaining after the deduction of any amounts required by any other law to be withheld.
``(h) The Secretary of the Treasury shall issue regulations to implement this section.''.
(b) Clerical Amendment.--The table of sections for subchapter II of chapter 37 of title 31, United States code, is amended by inserting after the item relating to section 3720C (as added by section 5261 of this subtitle) the following new item:
``3720D. Garnishment.''.
SEC. 5247. DEBT SALES BY AGENCIES.
Section 3711 of title 31, United States Code, is further amended by adding at the end the following new subsection:
``(h)(1) The head of an executive, judicial, or legislative agency may sell, subject to section 504(b) of the Federal Credit Reform Act of 1990 and using competitive procedures, any nontax debt owed to the United States that is delinquent for more than 90 days. Appropriate fees charged by a contractor to assist in the conduct of a sale under this subsection may be payable from the proceeds of the sale.
``(2) After terminating collection action, the head of an executive, judicial, or legislative agency shall sell, using competitive procedures, any nontax debt or class of nontax debts owed to the United States, if the Secretary of the Treasury determines the sale is in the best interests of the United States.
``(3) Sales of nontax debt under this subsection--
``(A) shall be for--
``(i) cash, or
``(ii) cash and a residuary equity or profit participation, if the head of the agency reasonably determines that the proceeds will be greater than sale solely for cash,
``(B) shall be without recourse, but may include the use of guarantees if otherwise authorized, and
``(C) shall transfer to the purchaser all rights of the Government to demand payment of the nontax debt, other than with respect to a residuary equity or profit participation under subparagraph (A)(ii).
``(4)(A) Within one year after the date of enactment of the Debt Collection Improvement Act of 1995, and every year thereafter, each executive agency with current and delinquent collateralized debts shall report to the Congress on the valuation of its existing portfolio of loans, notes and guarantees, and other collateralized debts based on standards developed by the Director of the Office of Management and Budget, in consultation with the Secretary of the Treasury.
``(B) The Director of the Office of Management and Budget shall determine what information is required to be reported to comply with subparagraph (A). At a minimum, for each financing account and for each liquidating account (as those terms are defined in sections 502(7) and 502(8), respectively, of the Federal Credit Reform Act of 1990) the following information shall be reported:
``(i) The cumulative balance of current debts outstanding, the estimated net present value of such debts, the annual administrative expenses of those debts (including the portion of salaries and expenses that are directly related thereto), and the estimated net proceeds that would be received by the Government if such debts were sold.
``(ii) The cumulative balance of delinquent debts, debts outstanding, the estimated net present value of such debts, the annual administrative expenses of those debts (including the portion of salaries and expenses that are directly related thereto), and the estimated net proceeds that would be received by the Government if such debts were sold.
``(iii) The cumulative balance of guaranteed loans outstanding, the estimated net present value of such guarantees, the annual administrative expenses of such guarantees (including the portion of salaries and expenses that are directly related to such guaranteed loans), and the estimated net proceeds that would be received by the Government if such loan guarantees were sold.
``(iv) The cumulative balance of defaulted loans that were previously guaranteed and have resulted in loans receivables, the estimated net present value of such loan assets, the annual administrative expenses of such loan assets (including the portion of salaries and expenses that are directly related to such loan assets), and the estimated net proceeds that would be received by the Government if such loan assets were sold.
``(v) The marketability of all debts.
``(5) This subsection is not intended to limit existing statutory authority of agencies to sell loans, debts, or other assets.''.
SEC. 5248. ADJUSTMENTS OF ADMINISTRATIVE DEBT.
Section 3717 of title 31, United States Code, is amended by adding at the end of subsection (h) the following new subsection.
``(i)(1) The head of an executive, judicial, or legislative agency may increase an administrative claim by the cost of living adjustment in lieu of charging interest and penalties under this section. Adjustments under this subsection will be computed annually.
``(2) For the purpose of this subsection--
``(A) the term `cost of living adjustment' means the percentage by which the Consumer Price Index for the month of June of the calendar year preceding the adjustment exceeds the Consumer Price Index for the month of June of the calendar year in which the claim was determined or last adjusted; and
``(B) the term `administrative claim' includes all debt that is not based on an extension of government credit through direct loans, loan guarantees, or insurance, including fines, penalties, and overpayments.''.
SEC. 5249. DISSEMINATION OF INFORMATION REGARDING IDENTITY OF
DELINQUENT DEBTORS.
(a) In General.--Chapter 37 of title 31, United States Code, is amended in subchapter II by adding after section 3720D, as added by section 5246 of this subtitle, the following new section:
``Sec. 3720E. Dissemination of information regarding identity of delinquent debtors
``(a) The head of any agency may, with the review of the Secretary of the Treasury, for the purpose of collecting any delinquent nontax debt owed by any person, publish or otherwise publicly disseminate information regarding the identity of the person and the existence of the nontax debt.
``(b)(1) The Secretary of the Treasury, in consultation with the Director of the Office of Management and Budget and the heads of other appropriate Federal agencies, shall issue regulations establishing procedures and requirements the Secretary considers appropriate to carry out this section.
``(2) Regulations under this subsection shall include--
``(A) standards for disseminating information that maximize collections of delinquent nontax debts, by directing actions under this section toward delinquent debtors that have assets or income sufficient to pay their delinquent nontax debt;
``(B) procedures and requirements that prevent dissemination of information under this section regarding persons who have not had an opportunity to verify, contest, and compromise their nontax debt in accordance with this subchapter; and
``(C) procedures to ensure that persons are not incorrectly identified pursuant to this section.''.
(b) Clerical Amendment.--The table of sections for subchapter II of chapter 37 of title 31, United States Code, is amended by adding after the item relating to section 3720D
(as added by section 5246 of this subtitle) the following new item:
``3720E. Dissemination of information regarding identity of delinquent debtors.''.
Subpart E--Federal Civil Monetary Penalties
SEC. 5251. ADJUSTING FEDERAL CIVIL MONETARY PENALTIES FOR
INFLATION.
(a) In General.--the Federal Civil Penalties Inflation Adjustment Act of 1990 (Public Law 101-410, 104 Stat. 890; 28 U.S.C. 2461 note) is amended--
(1) by amending section 4 to read as follows:
``Sec. 4. The head of each agency shall, not later than 180 days after the date of enactment of the Debt Collection Improvement Act of 1995, and at least once every 4 years thereafter--
``(1) by regulation adjust each civil monetary penalty provided by law within the jurisdiction of the Federal agency, except for any penalty under the Internal Revenue Code of 1986, by the inflation adjustment described under section 5 of this Act; and
``(2) publish each such regulation in the Federal Register.'';
(2) in section 5(a), by striking ``The adjustment described under paragraphs (4) and (5)(A) of section 4'' and inserting
``The inflation adjustment under section 4''; and
(3) by adding at the end the following new section:
``Sec. 7. Any increase under this Act in a civil monetary penalty shall apply only to violations which occur after the date the increase takes effect.''.
(b) Limitation on Initial Adjustment.--The first adjustment of a civil monetary penalty made pursuant to the amendment made by to subsection (a) may not exceed 10 percent of such penalty.
Subpart F--Gain Sharing
SEC. 5261. DEBT COLLECTION IMPROVEMENT ACCOUNT.
(a) In General.--Title 31, United States Code, is amended by inserting after section 372B (as added by section 5232 of this subtitle) the following new section:
``Sec. 3720C. Debt Collection Improvement Account
``(a)(1) There is hereby established in the Treasury a special fund to be known as the `Debt Collection Improvement Account' (hereinafter in this section referred to as the
`Account').
``(2) The Account shall be maintained and managed by the Secretary of the Treasury, who shall ensure that agency programs are credited with amounts transferred under subsection (b)(1).
``(b)(1) Not later than 30 days after the end of a fiscal year, an agency may transfer to the Account the amount described in paragraph (3), as adjusted under paragraph (4).
``(2) Agency transfers to the Account may include collections from--
``(A) salary, administrative, and tax refund offsets;
``(B) automated levy authority;
``(C) the Department of Justice;
``(D) private collection agencies;
``(E) sales of delinquent loans; and
``(F) contracts to locate or recover assets.
``(3) The amount referred to in paragraph (1) shall be 5 percent of the amount of delinquent debt collected by an agency in a fiscal year, minus the greater of--
``(A) 5 percent of the amount of delinquent debt collected by the agency in the previous fiscal year, or
``(B) 5 percent of the amount of delinquent debt collected by the agency in the previous 4 fiscal years.
``(4) In consultation with the Secretary of the Treasury, the Office of Management and Budget may adjust the amount described in paragraph (3) for an agency to reflect the level of effort in credit management programs by the agency. As an indicator of the level of effort in credit management, the Office of Management and Budget shall consider the following:
``(A) The number of days between the date a claim or debt became delinquent and the date which an agency referred the debt or claim to the Secretary of the Treasury or obtained an exemption from this referral under section 3711(g)(2) of this title.
``(B) The ratio of delinquent debts or claims to total receivables for a given program, and the change in this ratio over a period of time.
``(c)(1) The Secretary of the Treasury may make payments from the Account solely to reimburse agencies for qualified expenses. For agencies with franchise funds, such payments may be credited to subaccounts designated for debt collection.
``(2) For purposes of this section, the term `qualified expenses' means expenditures for the improvement of tax administration, credit management, debt collection, and debt recovery activities, including--
``(A) account servicing (including cross-servicing under section 3711(g) of this title),
``(B) automatic data processing equipment acquisitions,
``(C) delinquent debt collection,
``(D) measures to minimize delinquent debt,
``(E) sales of delinquent debt,
``(F) asset disposition, and
``(G) training of personnel involved in credit and debt management.
``(3)(A) Amounts in the Account shall be available to the Secretary of the Treasury for purposes of this section to the extent and in amounts provided in advance in appropriation Acts.
``(B) As soon as practicable after the end of the third fiscal year after which appropriations are made pursuant to this section, and every 3 years thereafter, any unappropriated balance in the Account shall be transferred to the general fund of the Treasury as miscellaneous receipts.
``(d) For direct loans and loan guarantee programs subject to title V of the Congressional Budget Act of 1974, amounts credited in accordance with subsection (c) shall be considered administrative costs.
``(e) The Secretary of the Treasury shall prescribe such rules, regulations, and procedures as the Secretary considers necessary or appropriate to carry out the purposes of this section.''.
``(b) Clerical Amendment.--The table of sections for chapter 37 of title 31, United States Code, is amended by inserting after the item relating to section 3720B (as added by section 5232 of this subtitle) the following new item:
``3720C. Debt Collection Improvement Account.''.
Subpart G--Tax Refund Offset Authority
SEC. 5271. OFFSET OF TAX REFUND PAYMENT BY DISBURSING
OFFICIALS.
Section 3720A(h) of title 31, United States Code, is amended to read as follows:
``(h) The disbursing official of the Department of the Treasury--
``(1) shall notify a taxpayer in writing of--
``(A) the occurrence of an offset to satisfy a past-due legally enforceable nontax debt;
``(B) the identity of the creditor agency requesting the offset; and
``(C) a correct point within the creditor agency that will handle concerns regarding the offset;
``(2) shall notify the Internal Revenue Service on a weekly basis of--
``(A) the occurrence of an offset to satisfy a past-due legally enforceable nontax debt;
``(B) the amount of such offset; and
``(C) any other information required by regulations; and
``(3) shall match payment records with requests for offset by using a name control, taxpayer identifying number (as that term is used in section 6109 of the Internal Revenue Code of 1986), and any other necessary identifiers.''.
SEC. 5272. EXPANDING TAX REFUND OFFSET AUTHORITY.
(a) Discretionary Authority.--Section 3720A of title 31, United States Code, is amended by adding after subsection (h) (as amended by section 5271 of this subtitle) the following new subsection:
``(i) An agency subject to section 9 of the Act of May 18, 1933, (16 U.S.C. 831h), may implement this section at its discretion.''.
(b) Federal Agency Defined.--Section 6402(f) of the Internal Revenue Code of 1986 (26 U.S.C. 6402(f)), is amended to read as follows:
``(f) Federal Agency.--For purposes of this section, the term `Federal agency' means a department, agency, or instrumentality of the United States, and includes a Government corporation (as such term is defined in section 103 of title 5, United States Code).''.
SEC. 5273. EXPANDING AUTHORITY TO COLLECT PAST-DUE SUPPORT.
(a) Notification of Secretary of the Treasury.--Section 3720A(a) of title 31, United States Code, is amended to read as follows:
``(a) Any Federal agency that is owed by a person a past-due, legally enforceable debt (including debt administered by a third party acting as an agent for the Federal Government) shall, and any agency subject to section 9 of the Act of May 18, 1933 (16 U.S.C. 831h), owed such a debt may, in accordance with regulations issued pursuant to subsections
(b) and (d), notify the Secretary of the Treasury at least once each year of the amount of such debt.''.
(b) Implementation of Support Collection by Secretary of the Treasury.--Section 464(a) of the Act of August 14, 1935
(42 U.S.C. 664(a)) is amended--
(1) in paragraph (1), by adding at the end the following:
``This subsection may be executed by the disbursing official of the Department of the Treasury.''; and
(2) in paragraph (2)(A), by adding at the end the following: ``This subsection may be executed by the disbursing official of the Department of the Treasury.''.
SEC. 5274. USE OF TAX REFUND OFFSET AUTHORITY FOR DEBTS TO
STATES.
(a) In General.--Section 6402 of the Internal Revenue Code of 1986 (26 U.S.C. 6402) is amended by redesignating subsections (e) through (l) as subsections (f) through (j), respectively, and by inserting after subsection (d) of the following new subsection:
``(e) Collection of Past-Due, Legally Enforceable State Debts.--
``(1) In general.--Upon receiving notice from any State that a named person owes a past-due, legally enforceable State debt to such State or a legally constituted subdivision of the State, the Secretary shall apply this subsection with respect to the past-due, legally enforceable State debt if--
``(A) the appropriate State official requests that an offset be performed; and
``(B) a reciprocal agreement between the Secretary and the State is in effect to offset Federal and State debts.
``(2) Actions to be taken.--Under such conditions as may be prescribed by the Secretary, the Secretary shall--
``(A) reduce the amount of any overpayment payable to such person by the amount of such State debt;
``(B) pay the amount by which such overpayment is reduced under subparagraph (A) to such State and notify such State of such person's name, taxpayer identification number, address, and the amount collected; and
``(C) notify the person making such overpayment that the overpayment has been reduced by an amount necessary to satisfy a past-due, legally enforceable State debt.
If an offset is made pursuant to a joint return, the notice under subparagraph (B) shall include the names, taxpayer identification numbers, and addresses of each person filing such return.
``(3) Priorities for offset.--Any overpayment by a person shall be reduced pursuant to this subsection--
``(A) after such overpayment is reduced pursuant to--
``(i) subsection (a) with respect to any liability for any internal revenue tax on the part of the person who made the overpayment,
``(ii) subsection (c) with respect to past-due support, and
``(iii) subsection (d) with respect to any past-due, legally enforceable debt owed to a Federal agency, and
``(B) before such overpayment is credited to the future liability for any Federal internal revenue tax of such person pursuant to subsection (b).
If the Secretary receives notice from 1 or more State agencies of more than 1 debt subject to paragraph (1) that is owed by such person to such an agency, an overpayment by such person shall be applied against such debts in the order in which such debts accrued.
``(4) Notice; consideration of evidence.--No State may take action under this subsection until such State--
``(A) notifies the person owing the past-due State debt that the State proposes to take action pursuant to this section,
``(B) gives such person at least 60 days to present evidence that all or part of such liability is not past-due or not legally enforceable,
``(C) considers any evidence presented by such person and determines that an amount of such debt is past-due and legally enforceable, and
``(D) satisfies such other conditions as the Secretary may prescribe to ensure that the determination made under subparagraph (C) is valid and that the State has made reasonable efforts to obtain payment of such State debt.
``(5) Past-due, legally enforceable state debt.--For purposes of this subsection, the term `past-due, legally enforceable State debt' means a debt--
``(A)(i) which resulted from--
``(I) a judgment rendered by a court of competent jurisdiction which has determined an amount of debt to be due, or
``(II) a determination after an administrative hearing which has determined an amount of debt to be due, and
``(ii) which is no longer subject to judicial review, or
``(B) which resulted from a State tax which has not been collected, the time for redetermination of which has expired, and which has not been delinquent for more than 10 years.
For purposes of this paragraph, the term `State tax' includes any local tax administered by the chief tax administration agency of the State.
``(6) Regulations.--The Secretary shall issue regulations prescribing the time and manner in which States must submit notices of past-due, legally enforceable State debts and the necessary information that must be contained in or accompany such notices. The regulations--
``(A) shall specify the types of State debts to which the reduction procedure established by paragraph (1) may be applied;
``(B) shall specify the minimum amount of debt to which the reduction procedure established by paragraph (1) may be applied;
``(C) shall specify the requirements for reciprocal offset in which participating States will participate; and
``(D) may require States to pay a fee to reimburse the Secretary to reimburse appropriations which bore all or part of the cost of applying such procedure.
``(7) Erroneous payment to state.--Any State receiving notice from the Secretary that an erroneous payment has been made to such State under paragraph (1) shall pay promptly to the Secretary, in accordance with such regulations as the Secretary may prescribe, an amount equal to the amount of such erroneous payment (without regard to whether any other amounts payable to such State under such paragraph have been paid to such State).''
(b) Disclosure of Certain Information to States Requesting Refund Offsets for Past-Due, Legally Enforceable State Debts.--(1) Paragraph (10) of section 6103(l) of the Internal Revenue Code of 1986 (26 U.S.C. 6103(l)(10)) is amended by striking ``(c) or (d)'' and inserting ``(c), (d), and (e)''.
(2) The paragraph heading for such paragraph (10) is amended by striking ``section 6402(c) or 6402(d)'' and inserting ``subsection (c), (d), or (e) of section 6402''.
(c) Conforming Amendments.--(1) Subsection (a) of section 6402 of the Internal Revenue Code of 1986 (26 U.S.C. 6402(a)) is amended by striking ``(c) and (d)'' and inserting ``(c),
(d), and (e)''.
(2) Paragraph (2) of section 6402(d) of the Internal Revenue Code of 1986 (26 U.S.C. 6402(d)(2)) is amended by striking ``and before such overpayment'' and inserting ``and before such overpayment is reduced pursuant to subsection (e) and before such overpayment''.
(3) Subsection (f) of section 6402 of the Internal Revenue Code of 1986, as redesignated by subsection (a), is amended--
(A) by striking ``(c) or (d)'' and inserting ``(c), (d), or
(e)'', and
(B) by striking ``Federal agency'' and inserting ``Federal agency or State''.
(4) Subsection (h) of section 6402 of the Internal Revenue Code of 1986, as redesignated by subsection (a), is amended by striking ``subsection (c)'' and inserting ``subsection (c) or (e)''.
(d) Effective Date.--The amendments made by this section shall apply to refunds payable under section 6402 of the Internal Revenue Code of 1986 after December 31, 1996.
Subpart H--Disbursements
SEC. 5281. ELECTRONIC FUNDS TRANSFER.
Section 3332 of title 31, United States Code, popularly known as the Federal Financial Management Act of 1994, is amended--
(1) by redesignating subsection (e) as subsection (h), and inserting after subsection (d) the following new subsections:
``(e)(1) Notwithstanding subsections (a) through (d) of this section, sections 5120(a) and (d) of title 38, and any other provision of law, all Federal payments to a recipient who begins to receive that type of payments on or after January 1, 1996, shall be made by electronic funds transfer.
``(2) The head of a Federal agency shall, with respect to Federal payments made or authorized by the agency, waive the application of paragraph (1) to a recipient of those payments upon receipt of written certification from the recipient that the recipient does not have an account with a financial institution or an authorized payment agent.
``(f)(1) Notwithstanding any other provision of law
(including subsections (a) through (e) of this section and sections 5120(a) and (d) of title 38), except as provided in paragraph (2) all Federal payments made after January 1, 1999, shall be made by electronic funds transfer.
``(2)(A) The Secretary of the Treasury may waive application of this subsection to payments--
``(i) for individuals or classes of individuals for whom compliance imposes a hardship;
``(ii) for classification or types of checks; or
``(iii) in other circumstances as may be necessary.
``(B) The Secretary of the Treasury shall make determinations under subparagraph (A) based on standards developed by the Secretary.
``(g) Each recipient of Federal payments required to be made by electronic funds tranfer shall--
``(1) designate 1 or more financial institutions or other authorized agents to which such payments shall be made; and
``(2) provide to the Federal agency that makes or authorizes the payments information necessary for the recipient to receive electronic funds transfer payments through each institution or agent designated under paragraph
(1).''; and
(2) by adding after subsection (h) (as so redesignated) the following new subsections:
``(i)(1) The Secretary of the Treasury may prescribe regulations that the Secretary considers necessary to carry out this section.
``(2) Regulations under this subsection shall ensure that individuals required under subsection (g) to have an account at a financial institution because of the application of subsection (f)(1)--
``(A) will have access to such an account at a reasonable cost; and
``(B) are given the same consumer protections with respect to the account as other account holders at the same financial institution.
``(j) For purposes of this section--
``(1) The term `electronic funds transfer' means any transfer of funds, other than a transaction originated by cash, check, or similar paper instrument, that is initiated through an electronic terminal, telephone, computer, or magnetic tape, for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit an account. The term includes Automated Clearing House transfers, Fed Wire transfers, transfers made at automatic teller machines, and point-of-sale terminals.
``(2) The term `Federal agency' means--
``(A) an agency (as defined in section 101 of this title); and
``(B) a Government corporation (as defined in section 103 of title 5).
``(3) The term `Federal payments' includes--
``(A) Federal wage, salary, and retirement payments;
``(B) vendor and expense reimbursement payments;
``(C) benefit payments; and
``(D) tax refund payments and other miscellaneous payments.''.
SEC. 5282. REQUIREMENT TO INCLUDE TAXPAYER IDENTIFYING NUMBER
WITH PAYMENT VOUCHER.
Section 3325 of title 31, United States Code, is amended by adding at the end the following new subsection:
``(d) The head of an executive agency or an officer or employee of an executive agency referred to in subsection
(a)(1)(B), as applicable, shall include with each certified voucher submitted to a disbursing official pursuant to this section the taxpayer identifying number of each person to whom payment may be made under the voucher.''.
Subpart I--Miscellaneous
SEC. 5291. MISCELLANEOUS AMENDMENTS TO DEFINITIONS.
Section 3701 of title 31, United States Code, is amended--
(1) by amending subsection (a)(1) to read as follows:
``(1) `administrative offset' means withholding funds payable by the United States (including funds payable by the United States on behalf of a State government) to, or held by the United States for, a person to satisfy a claim.'';
(2) by amending subsection (b) to read as follows:
``(b)(1) In subchapter II of this chapter, The term `claim' or `debt' means any amount of funds or property that has been determined by an appropriate official of the Federal Government to be owed to the United States by a person, organization, or entity other than another Federal agency. A claim includes, without limitation--
``(A) funds owed on account of loans made, insured, or guaranteed by the Government, including any deficiency or any difference between the price obtained by the Government in the sale of a property and the amount owed to the Government on a mortgage on the property,
``(B) expenditures of nonappropriated funds,
``(C) over-payments, including payments disallowed by audits performed by the Inspector General of the agency administering the program,
``(D) any amount the United States is authorized by statute to collect for the benefit of any person,
``(E) the unpaid share of any non-Federal partner in a program involving a Federal payment and a matching, or cost-sharing, payment by the non-Federal partner,
``(F) any fines or penalties assessed by an agency; and
``(G) other amounts of money or property owed to the Government.
``(2) For purposes of sections 3716 of this title, each of the terms `claim' and `debt' includes an amount of funds or property owed by a person to a State (including any past-due support being enforced by the State), the District of Columbia, American Samoa, Guam, the United States Virgin Islands, the Commonwealth of the Northern Mariana Islands, or the Commonwealth of Puerto Rico.''; and
(3) by adding after subsection (f) (as added by section 5242 of this subtitle) the following new subsection:
``(g) In section 3716 of this title--
``(1) `creditor agency' means any agency owed a claim that seeks to collect that claim through administrative offset; and
``(2) `payment certifying agency' means any agency that has transmitted a voucher to a disbursing official for disbursement.''.
SEC. 5292. MONITORING AND REPORTING.
(a) Guidelines.--The Secretary of the Treasury, in consultation with concerned Federal agencies, may establish guidelines, including information on outstanding debt, to assist agencies in the performance and monitoring of debt collection activities.
(b) Report.--Not later than 3 years after the date of enactment of this subtitle, the Secretary of the Treasury shall report to the Congress on collection services provided by Federal agencies or entities collecting debt on behalf of other Federal agencies under the authorities contained in section 3711(g) of title 31, United States Code, as added by section 5244 of this subtitle.
(c) Agency Reports.--Section 3719 of title 31, United States Code, is amended--
(1) in subsection (a)--
(A) by amending the first sentence to read as follows: ``In consultation with the Comptroller General of the United States, the Secretary of the Treasury shall prescribe regulations requiring the head of each agency with outstanding nontax claims to prepare and submit to the Secretary at least once each year a report summarizing the status of loans and accounts receivable that are managed by the head of the agency.''; and
(B) in paragraph (3), by striking ``Director'' and inserting ``Secretary''; and
(2) in subsection (b), by striking ``Director'' and inserting ``Secretary''.
(d) Consolidation of Reports.--Notwithstanding any other provision of law, the Secretary of the Treasury may consolidate reports concerning debt collection otherwise required to be submitted by the Secretary into one annual report.
SEC. 5293. REVIEW OF STANDARDS AND POLICIES FOR COMPROMISE OR
WRITE-DOWN OF DELINQUENT DEBTS.
The Director of the Office of Management and Budget shall--
(1) review the standards and policies of each Federal agency for compromising, writing-down, forgiving, or discharging indebtedness arising from programs of the agency;
(2) determine whether those standards and policies are consistent and protect the interests of the United States;
(3) in the case of any Federal agency standard or policy that the Secretary determines is not consistent or does not protect the interests of the United States, direct the head of the agency to make appropriate modifications to the standard or policy; and
(4) report annually to the Congress on--
(A) deficiencies in the standards and policies of Federal agencies for compromising, writing-down, forgiving, or discharging indebtedness; and
(B) progress made in improving those standards and policies.
PART II--JUSTICE DEBT MANAGEMENT
SEC. 5301. EXPANDED USE OF PRIVATE ATTORNEYS.
(a) Elimination of Limitation on Fees.--Section 3718(b)(1)(A) of title 31, United States Code, is amended by striking the fourth sentence.
(b) Repeal.--Sections 3 and 5 of the Act of October 28, 1986 (popularly known as the Federal Debt Recovery Act; Public Law 99-578, 100 Stat. 3305) are hereby repealed.
SEC. 5302. NONJUDICIAL FORECLOSURE OF MORTGAGES.
Chapter 176 of title 28, United States Code, is amended--
(1) in the table of subchapters at the beginning of the chapter by adding at the end the following new item:
``E. Nonjudicial foreclosure................................3401''; and
(2) by adding at the end of the chapter the following new subchapter:
``SUBCHAPTER E--NONJUDICIAL FORECLOSURE
``Sec.
``3401. Definitions.
``3402. Rules of construction.
``3403. Election of procedure.
``3404. Designation of foreclosure trustee.
``3405. Notice of foreclosure sale; statute of limitations.
``3406. Service of notice of foreclosure sale.
``3407. Cancellation of foreclosure sale.
``3408. Stay.
``3409. Conduct sale; postponement.
``3410. Transfer of title and possession.
``3411. Record of foreclosure and sale.
``3412. Effect of sale.
``3413. Disposition of sale proceeds.
``3414. Deficiency judgment.
``Sec. 3401. Definitions
``As used in this subchapter--
``(1) `agency' means--
``(A) an Executive department, as set forth in section 101 of title 5, United States Code;
``(B) an independent establishment, as defined in section 104 of title 5, United States Code (except that it shall not include the General Accounting Office);
``(C) a military department, as set forth in section 102 of title 5, United States Code; and
``(D) a wholly owned government corporation, as defined in section 9101(3) of title 31, United States Code;
``(2) `agency head' means the head and any assistant head of an agency, and may upon the designation by the head of an agency include the chief official of any principal division of an agency or any other employee of an agency;
``(3) `bona fide purchaser' means a purchaser for value in good faith and without notice of any adverse claim who acquires the seller's interest free of any adverse claim;
``(4) `debt instrument' means a note, mortgage bond, guaranty, or other instrument creating a debt or other obligation, including any instrument incorporated by reference therein and any instrument or agreement amending or modifying a debt instrument;
``(5) `file' or `filing' means docketing, indexing, recording, or registering, or any other requirement for perfecting a mortgage or a judgment;
``(6) `foreclosure trustee' means an individual, partnership, association, or corporation, or any employee thereof, including a successor, appointed by the agency head to conduct a foreclosure sale pursuant to this subchapter;
``(7) `mortgage' means a deed of trust, deed to secure debt, security agreement, or any other form of instrument under which any interest in real property, including leaseholds, life estates, reversionary interests, and any other estates under applicable law is conveyed in trust, mortgaged, encumbered, pledged, or otherwise rendered subject to a lien, for the purpose of securing the payment of money or the performance of any other obligation;
``(8) `of record' means an interest recorded pursuant to Federal or State statutes that provide for official recording of deeds, mortgages, and judgments, and that establish the effect of such records as notice to creditors, purchasers, and other interested persons;
``(9) `owner' means any person who has an ownership interest in property and includes heirs, devisees, executors, administrators, and other personal representatives, and trustees of testamentary trusts if the owner of record is deceased;
``(10) `sale' means a sale conducted pursuant to this subchapter, unless the context requires otherwise; and
``(11) `security property' means real property, or any interest in real property including leaseholds, life estates, reversionary interests, and any other estates under applicable State law that secure a mortgage.
``Sec. 3402. Rules of construction
``(a) In General.--If an agency head elects to proceed under this subchapter, this subchapter shall apply and the provisions of this subchapter shall govern in the event of a conflict with any other provision of Federal law or State law.
``(b) Limitation.--This subchapter shall not be construed to supersede or modify the operation of--
``(1) the lease-back/buy-back provisions under section 335 of the Consolidated Farm and Rural Development Act, or regulations promulgated thereunder; or
``(2) The Multifamily Mortgage Foreclosure Act of 1981.
``(c) Effect on Other Laws.--This subchapter shall not be construed to curtail or limit the rights of the United States or any of its agencies--
``(1) to foreclose a mortgage under any other provision of Federal law or State law; or
``(2) to enforce any right under Federal law or State law in lieu of or in addition to foreclosure, including any right to obtain a monetary judgment.
``(d) Application to Mortgages.--The provisions of this subchapter may be used to foreclose any mortgage, whether executed prior or subsequent to the effective date of this subchapter.
``Sec. 3403. Election of procedure
``(a) Security Property Subject to Foreclosure.--An agency head may foreclose a mortgage upon the breach of a covenant or condition in a debt instrument or mortgage for which acceleration or foreclosure is authorized. An agency head may not institute foreclosure proceedings on the mortgage under any other provision of law, or refer such mortgage for litigation, during the pendency of foreclosure proceedings pursuant to this subchapter.
``(b) Effect of Cancellation of Sale.--If a foreclosure sale is canceled pursuant to section 3407, the agency head may thereafter foreclose on the security property in any manner authorized by law.
``Sec. 3404. Designation of foreclosure trustee
``(a) In General.--An agency head shall designate a foreclosure trustee who shall supersede any trustee designated in the mortgage. A foreclosure trustee designated under this section shall have a nonjudicial power of sale pursuant to this subchapter.
``(b) Designation of Foreclosure Trustee.--
``(1) An agency head may designate as foreclosure trustee--
``(A) an officer or employee of the agency;
``(B) an individual who is a resident of the State in which the security property is located; or
``(C) a partnership, association, or corporation, if such entity is authorized to transact business under the laws of the State in which the security property is located.
``(2) The agency head is authorized to enter into personal services and other contracts not inconsistent with this subchapter.
``(c) Method of Designation.--An agency head shall designate the foreclosure trustee in writing. The foreclosure trustee may be designated by name, title, or position. An agency head may designate one or more foreclosure trustees for the purpose of proceedings with multiple foreclosures or a class of foreclosures.
``(d) Availability of Designation.--An agency head may designate such foreclosure trustees as the agency head deems necessary to carry out the purposes of this subchapter.
``(e) Multiple Foreclosure Trustees Authorized.--An agency head may designate multiple foreclosure trustees for different tracts of a secured property.
``(f) Removal of Foreclosure Trustees; Successor Foreclosure Trustees.--An agency head may, with or without cause or notice, remove a foreclosure trustee and designate a successor trustee as provided in this section. The foreclosure sale shall continue without prejudice notwithstanding the removal of the foreclosure trustee and designation of a successor foreclosure trustee. Nothing in this section shall be construed to prohibit a successor foreclosure trustee from postponing the foreclosure sale in accordance with this subchapter.
``Sec. 3405. Notice of foreclosure sale; statute of limitations
``(a) In General.--
``(1) Not earlier than 21 days nor later than ten years after acceleration of a debt instrument or demand on a guaranty, the foreclosure trustee shall serve a notice of foreclosure sale in accordance with this subchapter.
``(2) For purposes of computing the time period under paragraph (1), there shall be excluded all periods during which there is in effect--
``(A) a judicially imposed stay of foreclosure; or
``(B) a stay imposed by section 362 of title 11, United States Code.
``(3) In the event of partial payment or written acknowledgement of the debt after acceleration of the debt instrument, the right to foreclose shall be deemed to accrue again at the time of each such payment or acknowledgement.
``(b) Notice of Foreclosure Sale.--The notice of foreclosure sale shall include--
``(1) the name, title, and business address of the foreclosure trustee as of the date of the notice;
``(2) the names of the original parties to the debt instrument and the mortgage, and any assignees of the mortgagor of record;
``(3) the street address or location of the security property, and a generally accepted designation used to describe the security property, or so much thereof as is to be offered for sale, sufficient to identify the property to be sold;
``(4) the date of the mortgage, the office in which the mortgage is filed, and the location of the filing of the mortgage;
``(5) the default or defaults upon which foreclosure is based, and the date of the acceleration of the debt instrument;
``(6) the date, time, and place of the foreclosure sale;
``(7) a statement that the foreclosure is being conducted in accordance with this subchapter;
``(8) the types of costs, if any, to be paid by the purchaser upon transfer of title; and
``(9) the terms and conditions of sale, including the method and time of payment of the foreclosure purchase price.
``Sec. 3406. Service of notice of foreclosure sale
``(a) Record Notice.--At least 21 days prior to the date of the foreclosure sale, the notice of foreclosure sale required by section 3405 shall be filed in the manner authorized for filing a notice of an action concerning real property according to the law of the State where the security property is located or, if none, in the manner authorized by section 3201 of this chapter.
``(b) Notice by Mail.--
``(1) At least 21 days prior to the date of the forecloure sale, the notice set forth in section 3405 shall be sent by registered or certified mail, return receipt requested--
``(A) to the current owner of record of the security property as the record appears on the date that the notice of foreclosure sale is recorded pursuant to subsection (a);
``(B) to all debtors, including the mortgagor, assignees of the mortgagor and guarantors of the debt instrument;
``(C) to all persons having liens, interests or encumbrances of record upon the security property, as the record appears on the date that the notice of foreclosure sale is recorded pursuant to subseciton (a); and
``(D) to any occupants of the security property.
If the names of the occupants of the security property are not known to the agency, or the security property has more than one dwelling unit, the notice shall be posted at the security property.
``(2) The notice shall be sent to the debtor at the address, if any, set forth in the debt instrument or mortgage as the place to which notice is to be sent, and if different, to the debtor's last known address as shown in the mortgage record of the agency. The notice shall be sent to any person other than the debtor to that person's address of record or, if there is no address of record, to any address at which the agency in good faith believes the notice is likely to come to that person's attention.
``(3) Notice by mail pursuant to this subsection shall be effective upon mailing.
``(c) Notice By Publication.--The notice of the foreclosure sale shall be published at least once a week for each of three successive weeks prior to the sale in at least one newspaper of general circulation in any county or counties in which the security property is located. If there is no newspaper published at least weekly that has a general circulation in at least one county in which the security property is located, copies of the notice of foreclosure sale shall instead be posted at least 21 days prior to the sale at the courthouse of any county or counties in which the property is located and the place where the sale is to be held.
``Sec. 3407. Cancellation of foreclosure sale
``(a) In General.--At any time prior to the foreclosure sale, the foreclosure trustee shall cancel the sale--
``(1) if the debtor or the holder of any subordinate interest in the security property tenders the performance due under the debt instrument and mortgage, including any amounts due because of the exercise of the right to accelerate, and the expenses of proceeding to foreclosure incurred to the time of tender; or
``(2) if the security property is a dwelling of four units or fewer, and the debtor--
``(A) pays or tenders all sums which would have been due at the time of tender in the absence of any acceleration;
``(B) performs any other obligation which would have been required in the absence of any acceleration; and
``(C) pays or tenders all costs of foreclosure incurred for which payment from the proceeds of the sale would be allowed; or
``(3) for any reason approved by the agency head.
``(b) Limitation.--The debtor may not, without the approval of the agency head, cure the default under subsection (a)(2) if, within the preceding 12 months, the debtor has cured a default after being served with a notice of foreclosure sale pursuant to this subchapter.
``(c) Notice of Cancellation.--The foreclosure trustee shall file a notice of the cancellation in the same place and manner provided for the filing of the notice of foreclosure sale under section 3406(a).
``Sec. 3408. Stay
``If, prior to the time of sale, foreclosure proceedings under this subchapter are stayed in any manner, including the filing of bankruptcy, no person may thereafter cure the default under the provisions of section 3407(a)(2). If the default is not cured at the time a stay is terminated, the foreclosure trustee shall proceed to sell the security property as provided in this subchapter.
``Sec. 3409. Conduct of sale; postponement
``(a) Sale Procedures.--Foreclosure shall pursuant to this subchapter shall be at public auction and shall be scheduled to begin at a time between the hours of 9:00 a.m. and 4:00 p.m. local time. The foreclosure sale shall be held at the location specified in the notice of foreclosure sale, which shall be a location where real estate foreclosure auctions are customarily held in the county or one of the counties in which the property to be sold is located or at a courthouse therein, or upon the property to be sold. Sale of security property situated in two or more counties may be held in any one of the counties in which any part of the security property is situated. The foreclosure trustee may designate the order in which multiple tracts of security property are sold.
``(b) Bidding Requirements.--Written one-price sealed bids shall be accepted by the foreclosure trustee, if submitted by the agency head or other persons for entry by announcement by the foreclosure trustee at the sale. The sealed bids shall be submitted in accordance with the terms set forth in the notice of foreclosure sale. The agency head or any other person may bid at the foreclosure sale, even if the agency head or other person previously submitted a written one-price bid. The agency head may bid a credit against the debt due without the tender or payment of cash. The foreclosure trustee may serve as auctioneer, or may employ an auctioneer who may be paid from the sale proceeds. If an auctioneer is employed, the foreclosure trustee is not required to attend the sale. The foreclosure trustee or an auctioneer may bid as directed by the agency head.
``(c) Postponement of Sale.--The foreclosure trustee shall have discretion, prior to or at the time of sale, to postpone the foreclosure sale. The foreclosure trustee may postpone a sale to a later hour the same day by announcing or posting the new time and place of the foreclosure sale at the time and place originally scheduled for the foreclosure sale. The foreclosure trustee may instead postpone the foreclosure sale for not fewer than 9 nor more than 31 days, by serving notice that the foreclosure sale has been postponed to a specified date, and the notice may include any revisions the foreclosure trustee deems appropriate. The notice shall be served by publication, mailing, and posting in accordance with section 3406(b) and (c), except that publication may be made on any of three separate days prior to the new date of the foreclosure sale, and mailing may be made at any time at least 7 days prior to the new date of the foreclosure sale.
``(d) Liability of Successful Bidder Who Fails To Comply.--The foreclosure trustee may require a bidder to make a cash deposit before the bid is accepted. The amount or percentage of the cash deposit shall be stated by the foreclosure trustee in the notice of foreclosure sale. A successful bidder at the foreclosure sale who fails to comply with the terms of the sale shall forfeit the cash deposit or, at the election of the foreclosure trustee, shall be liable to the agency on a subsequent sale of the property for all net losses incurred by the agency as a result of such failure.
``(e) Effect of Sale.--Any foreclosure sale held in accordance with this subchapter shall be conclusively presumed to have been conducted in a legal, fair, and commercially reasonable manner. The sale price shall be conclusively presumed to constitute the reasonably equivalent value of the security property.
``Sec. 3410. Transfer of title and possession
``(a) Deed.--After receipt of the purchase price in accordance with the terms of the sale as provided in the notice of foreclosure sale, the foreclosure trustee shall execute and deliver to the purchaser a deed conveying the security property to the purchaser that grants and conveys title to the security property without warranty or covenants to the purchaser. The execution of the foreclosure trustee's deed shall have the effect of conveying all of the right, title, and interest in the security property covered by the mortgage. Notwithstanding any other law to the contrary, the foreclosure trustee's deed shall be a conveyance of the security property and not a quitclaim. No judicial proceeding shall be required ancillary or supplementary to the procedures provided in this subchapter to establish the validity of the conveyance.
``(b) Death of Purchaser Prior to Consummation of Sale.--If a purchaser dies before execution and delivery of the deed conveying the security property to the purchaser, the foreclosure trustee shall execute and deliver the deed to the representative of the purchaser's estate upon payment of the purchase price in accordance with the terms of sale. Such delivery to the representative of the purchaser's estate shall have the same effect as if accomplished during the lifetime of the purchaser.
``(c) Purchaser Considered Bona Fide Purchaser Without Notice.--The purchaser of property under this subchapter shall be presumed to be a bona fide purchaser without notice of defects, if any, in the title conveyed to the purchaser.
``(d) Possession by Purchaser; Continuing Interests.--A purchaser at a foreclosure sale conducted pursuant to this subchapter shall be entitled to possession upon passage of title to the security property, subject to any interest or interests senior to that of the mortgage. The right to possession of any person without an interest senior to the mortgage who is in possession of the property shall terminate immediately upon the passage of title to the security property, and the person shall vacate the security property immediately. The purchaser shall be entitled to take any steps available under Federal law or State law to obtain possession.
``(e) Right of Redemption; Right of Possession.--This subchapter shall preempt all Federal and State rights of redemption, statutory, or common law. Upon conclusion of the public auction of the security property, no person shall have a right of redemption.
``(f) Prohibition of Imposition of Tax on Conveyance by the United States or Agency Thereof.--No tax, or fee in the nature of a tax, for the transfer of title to the security property by the foreclosure trustee's deed shall be imposed upon or collected from the foreclosure trustee or the purchaser by any State or political subdivision thereof.
``Sec. 3411. Record of foreclosure and sale
``(a) Recital Requirements.--The foreclosure trustee shall recite in the deed to the purchaser, or in an addendum to the foreclosure trustee's deed, or shall prepare an affidavit stating--
``(1) the date, time, and place of sale;
``(2) the date of the mortgage, the office in which the mortgage is filed, and the location of the filing of the mortgage;
``(3) the persons served with the notice of foreclosure sale;
``(4) the date and place of filing of the notice of foreclosure sale under section 3406(a);
``(5) that the foreclosure was conducted in accordance with the provisions of this subchapter; and
``(6) the sale amount.
``(b) Effect of Recitals.--The recitals set forth in subsection (a) shall be prima facie evidence of the truth of such recitals. Compliance with the requirements of subsection
(a) shall create a conclusive presumption of the validity of the sale in favor of bona fide purchasers and encumbrancers for value without notice.
``(c) Deed To Be Accepted for Filing.--The register of deeds or other appropriate official of the county or counties where real estate deeds are regularly filed shall accept for filing and shall file the foreclosure trustee's deed and affidavit, if any, and any other instruments submitted for filing in relation to the foreclosure of the security property under this subchapter.
Sec. 3412. Effect of sale
``A sale conducted under this subchapter to a bona fide purchaser shall bar all claims upon the security property by--
``(1) any person to whom the notice of foreclosure sale was mailed as provided in this subchapter who claims an interest in the property subordinate to that of the mortgage, and their heir, devisee, executor, administrator, successor, or assignee claiming under any such person;
``(2) any person claiming any interest in the property subordinate to that of the mortgage, if such person had actual knowledge of the sale;
``(3) any person so claiming, whose assignment, mortgage, or other conveyance was not filed in the proper place for filing, or whose judgment or decree was not filed in the proper place for filing, prior to the date of filing of the notice of foreclosure sale as required by section 3406(a), and the heir, devisee, executor, administrator, successor, or assignee of such a person; or
``(4) any other person claiming under a statutory lien or encumbrance not required to be filed and attaching to the title or interest of any person designated in any of the foregoing subsections of this section.
Sec. 3413. Disposition of sale proceeds
``(a) Distribution of Sale Proceeds.--The foreclosure trustee shall distribute the proceeds of the foreclosure sale in the following order:
``(1)(A) First, to pay the commission of the foreclosure trustee, other than an agency employee, the greater of--
``(i) the sum of--
``(I) 3 percent of the first $1,000 collected, plus
``(I) 1.5 percent on the excess of any sum collected over
$1,000; or
``(ii) $250.
``(B) The amounts described in subparagraph (A)(i) shall be computed on the gross proceeds of all security property sold at a single sale.
``(2) Thereafter, to pay the expense of any auctioneer employed by the foreclosure trustee, if any, except that the commission payable to the foreclosure trustee pursuant to paragraph (1) shall be reduced by the amount paid to an auctioneer, unless the agency head determines that such reduction would adversely affect the ability of the agency head to retain qualified foreclosure trustees or auctioneers.
``(3) Thereafter, to pay for the costs of foreclosure, including--
``(A) reasonable and necessary advertising costs and postage incurred in giving notice pursuant to section 3406;
``(B) mileage for posting notices and for the foreclosure trustee's or auctioneer's attendance at the sale of the rate provided in section 1921 of title 28, United States Code, for mileage by the most reasonable road distance;
``(C) reasonable and necessary costs actually incurred in connection with any search of title and lien records; and
``(D) necessary costs incurred by the foreclosure trustee to file documents.
``(4) Thereafter, to pay valid real property tax liens or assessments, if required by the notice of foreclosure sale.
``(5) Thereafter, to pay any liens senior to the mortgage, if required by the notice of foreclosure sale.
``(6) Thereafter, to pay service charges and advancement for taxes, assessments, and property insurance premiums.
``(7) Thereafter, to pay late charges and other administrative costs and the principal and interest balances secured by the mortgage, including expenditures for the necessary protection, preservation, and repair of the security property as authorized under the debt instrument or mortgage and interest thereon if provided for in the debt instrument or mortgage, pursuant to the agency's procedure.
``(b) Insufficient Proceeds.--In the event there are no proceeds of sale or the proceeds are insufficient to pay the costs and expenses set forth in subsection (a), the agency head shall pay such costs and expenses as authorized by applicable law.
``(c) Surplus Monies.--
``(1) After making the payments required by subsection (a), the foreclosure trustee shall--
``(A) distribute any surplus to pay liens in the order of priority under Federal law or the law of the State where the security property is located; and
``(B) pay to the person who was the owner of record on the date the notice of foreclosure sale was filed the balance, if any, after any payments made pursuant to paragraph (1).
``(2) If the person to whom such surplus is to be paid cannot be located, or if the surplus available is insufficient to pay all claimants and the claimants cannot agree on the distribution of the surplus, that portion of the sale proceeds may be deposited by the foreclosure trustee with an appropriate official authorized under law to receive funds under such circumstances. If such a procedure for the deposit of disputed funds is not available, and the foreclosure trustee files a bill of interpleader or is sued as a stakeholder to determine entitlement to such funds, the foreclosure trustee's necessary costs in taking or defending such action shall be deducted first from the disputed funds.
Sec. 3414. Deficiency judgment
``(a) In General.--If after deducting the disbursements described in section 3413, the price at which the security property is sold at a foreclosure sale in insufficient to pay the unpaid balance of the debt secured by the security property, counsel for the United States may commence an action or actions against any or all debtors to recover the deficiency, unless specifically prohibited by the mortgage. The United States is also entitled to recover any amount authorized by section 3011 and costs of the action.
``(b) Limitation.--Any action commenced to recover the deficiency shall be brought within 6 years of the last sale of security property.
``(c) Credits.--The amount payable by a private mortgage guaranty insurer shall be credited to the account of the debtor prior to the commencement of an action for any deficiency owed by the debtor. Nothing in this subsection shall curtail or limit the subrogation rights of a private mortgage guaranty insurer.''.
