[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3809 Introduced in House (IH)]







104th CONGRESS
  2d Session
                                H. R. 3809

To improve the ability of the United States Government to collect debts 
                  owed to it, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 12, 1996

 Mr. Pallone (for himself, Mr. Wynn, Mr. Klug, Mr. Canady of Florida, 
 and Mr. Porter) introduced the following bill; which was referred to 
  the Committee on the Judiciary, and in addition to the Committee on 
   Ways and Means, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To improve the ability of the United States Government to collect debts 
                  owed to it, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Debt Collection Act Amendments of 
1995''.

SEC. 2. IMPROVED DEBT COLLECTION PRACTICES.

    (a) Use of Contractors Specializing in Debt Collection.--Section 
3718(a) of title 31, United States Code, is amended by striking ``Under 
conditions'' and all that follows through ``make'' and inserting ``The 
head of an executive or legislative agency shall make''.
    (b) Salary Offset.--Subsection (a)(1) of section 5514 of title 5, 
United States Code, is amended by striking ``may be collected'' and 
inserting ``shall be collected''.
    (c) Disclosure to Consumer Reporting Agencies.--Subsection (f)(1) 
of section 3711 of title 31, United States Code, is amended by striking 
``may disclose'' and inserting ``shall disclose''.
    (d) Administrative Offsets.--Subsection (a) of section 3716 of 
title 31, United States Code, is amended by striking ``may'' the first 
place it appears and inserting ``shall''.
    (e) Report to the Internal Revenue Service of Debts Paid in Full.--
Subchapter II of chapter 37 of title 31, United States Code, is amended 
by adding at the end the following new section:
``Sec. 3720B. Report to the Internal Revenue Service of Debts Paid in 
              Full
    ``The head of a Federal agency shall report any debt that has been 
paid in full to the Internal Revenue Service promptly after the agency 
has determined that the debt has been paid in full.''.
    (f) Disclosure by Internal Revenue Service of Address 
Information.--Section 6103(m)(2)(A) of the Internal Revenue Code of 
1986 is amended by inserting before the period ``, or any other law 
granting a Federal agency the authority to collect or compromise a 
Federal claim against the taxpayer''.
    (g) Audits and Report of Audit.--
            (1) Audits of federal agencies.--The Comptroller General of 
        the United States shall annually conduct audits of each Federal 
        agency to determine--
                    (A) the amount of debt owed to the agency;
                    (B) the amount of debt owed to the agency that is 
                delinquent; and
                    (C) any action taken by the agency to recover the 
                delinquent debt.
            (2) Reports to congress.--The Comptroller General shall 
        submit annually to the Congress a report containing the 
        information obtained through the audits prepared pursuant to 
        paragraph (1).
    (h) Extension of Pilot Debt Collection Project.--
            (1) Extension of pilot project.--Section 5 of Public Law 
        99-578 (31 U.S.C. 3718 note) is repealed.
            (2) Additional reporting requirements.--Section 3718(c) of 
        title 31, United States Code, is amended--
                    (A) in paragraph (2), by striking ``and'' at the 
                end thereof; and
                    (B) in paragraph (3)--
                            (i) in subparagraph (C), by striking the 
                        period and adding at the end ``; and''; and
                            (ii) by adding after subparagraph (C) the 
                        following new subparagraph:
                    ``(D) the total cost of the pilot program 
                established by Public Law 99-578 (100 Stat. 3305) as 
                well as the total amount of debt recovered under that 
                pilot program.''.
            (3) Use of recovered funds to reduce budget deficit.--
        Section 3718 of title 31, United States Code, is amended by 
        adding at the end the following new subsection:
    ``(h) Except as provided by subsection (d), any amount recovered 
through a contract entered into under subsection (b) shall be used to 
reduce the budget deficit of the United States. Notwithstanding the 
preceding sentence, a percentage (which is hereafter specified by law) 
of the amount recovered through such a contract shall be paid to the 
agency on whose behalf such amount was recovered for use by such agency 
in collecting indebtedness owed to such agency.''

SEC. 3. IMPROVED LOAN ORIGINATION PROCEDURES.

    (a) Improved Prescreening Procedures.--
            (1) Chapter 97 of title 31, United States Code, is amended 
        by adding at the end the following new section:
``Sec. 9704. Improved prescreening procedures
    ``The head of a Federal agency may not make a loan to a loan 
applicant until the applicant has been prescreened to determine if the 
applicant is creditworthy. The determination of creditworthiness shall 
include an evaluation of the ability and willingness of the applicant 
to repay the debt, the agency's level of acceptable risk, other agency 
or Federal Government obligations that could jeopardize or be 
jeopardized by the loan under consideration, and the existence of other 
debts owed by the loan applicant to the Federal Government, including a 
tax delinquent account with the Internal Revenue Service.''.
            (2) Section 6103(m)(2)(A) of the Internal Revenue Code of 
        1986 is amended by striking ``the Secretary may'' and inserting 
        ``the Secretary shall''.
    (b) Denial of Credit to Applicants With Delinquent Debts.--Chapter 
97 of title 31, United States Code, as amended by subsection (a), is 
further amended by adding at the end the following new section:
``Sec. 9705. Denial of credit to applicants with delinquent debts
    ``The head of a Federal agency may not make a loan to a loan 
applicant who owes a delinquent debt to the Federal Government, 
including the Internal Revenue Service.''.

SEC. 4. USE OF ADMINISTRATIVE CHARGES TO IMPROVE CREDIT MANAGEMENT 
              TECHNIQUES.

    Section 3717 of title 31, United States Code, is amended by adding 
at the end the following new subsection:
    ``(i) The Secretary shall deposit in a special fund any amounts 
received by a Federal agency to cover the cost of processing and 
handling delinquent claims under subsection (e). The Secretary shall, 
without further appropriation and upon request by the agency, disburse 
money from such fund to the agency solely for the use of improving 
credit management techniques, except that the access of each agency to 
funds in the special account shall be limited to the amount that the 
agency received to cover the cost of processing and handling delinquent 
claims under subsection (e).''.

SEC. 5. TECHNICAL AMENDMENTS.

    (a) Chapter 37 Amendments.--The table of sections at the beginning 
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. Report to the Internal Revenue Service of debts paid in 
                            full.''.
    (b) Chapter 97 Amendments.--The table of sections at the beginning 
of chapter 97 of title 31, United States Code, is amended by adding at 
the end the following new items:

``9704. Improved prescreening procedures.
``9705. Denial of credit to applicants with delinquent debts.''.
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