[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1234 Introduced in Senate (IS)]







104th CONGRESS
  1st Session
                                S. 1234

   To reduce delinquencies and to improve debt-collection activities 
                Governmentwide, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

           September 12 (legislative day, September 5), 1995

  Mr. Harkin introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To reduce delinquencies and to improve debt-collection activities 
                Governmentwide, and for other purposes.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 101. SHORT TITLE.

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

SEC. 102. EFFECTIVE DATE.

    (a) Except as provided in subsection (b), the provisions of this 
Act and the amendments made by this Act shall become effective October 
1, 1995.
    (b) The amendments made by title III of this Act shall become 
effective for levies issued after the date of enactment of this Act.

SEC. 103. TABLE OF CONTENTS.
              TITsubchapter a--general offset authorityVES
Sec. 201. Enhancement of administrative offset authority.
Sec. 202. House of Representatives as Legislative Agency.
Sec. 203. Exemption from computer matching requirements under the 
                            Privacy Act of 1974.
Sec. 204. Technicsubchapter b--salary offset authority
Sec. 301. Enhansubchapter c--taxpayer identifying numbers
Sec. 401. Access to taxpayer identifying numbers.
Sec. 402. Barring delinquent Federal debtors from obtaining Federal 
  subchapter d--expanding collection authorities and government-wide 
                            cross-servicing
Sec. 501. Expanding collection authorities under the Debt Collection 
                            Act of 1982.
Sec. 502. Governmentwide cross-servicing.
Sec. 503. Comsubchapter e--federal civil monetary penalties
Sec. 601. Adjusting Fedsubchapter f--gain sharingies for inflation.
Sec. 701. Debt subchapter g--tax refund offset authority
Sec. 801. Offset of tax refund payment by disbursing officials.
Sec. 802. Expanding tax refund offset authority.
Sec.subchapter h--definitions, due process rights, and severability
Sec. 901. Technical amendments to definitions.
Sec. 902. Severability. subchapter i--reporting
Sec. 1001. Monitoring and reporting.
                   Tsubchapter a--private attorneysT
Sec. 1101. Expandsubchapter b--nonjudicial foreclosure
Sec. 1201. Nonjudicial foreclosure of mortgages.
                     TITLE III--IRS LEVY AUTHORITY

Sec. 1301. Provision for continuous levy.
Sec. 1302. Modification of levy exemption.
Sec. 1303. Confidentiality and disclosure of returns and return 
                            information.
              TITLE I--GENERAL DEBT COLLECTION INITIATIVES

                 Subchapter A--General Offset Authority

SEC. 201. ENHANCEMENT OF ADMINISTRATIVE OFFSET AUTHORITY.

    (a) 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, or of a 
unit of general local government.''.
    (b) 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, legislative, or judicial agency must either--
            ``(1) adopt regulations on collecting by administrative 
        offset promulgated by the Department of Justice, the General 
        Accounting Office and/or the Department of the Treasury without 
        change; or
            ``(2) prescribe independent regulations on collecting by 
        administrative offset consistent with the regulations 
        promulgated under 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 (d); and
            (4) by inserting after subsection (b) the following new 
        subsection:
    ``(c)(1)(A) Except as provided in subparagraph (B) or (C), a 
disbursing official of the Department of the Treasury, the Department 
of Defense, the United States Postal Service, or any disbursing 
official of the United States designated by the Secretary of the 
Treasury, is authorized to offset 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, as amended, shall not be subject to 
offset under this subsection.
    ``(2) Neither the disbursing official nor the payment certifying 
agency shall be liable--
            ``(A) for the amount of the offset on the basis that the 
        underlying obligation, represented by the payment before the 
        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 under the Social Security Act, part 
B of the Black Lung Benefits Act, or 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.
    ``(B) The Secretary of the Treasury shall exempt means-tested 
programs when notified by the head of the respective agency. The 
Secretary may exempt other payments from 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 the standards prescribed by the 
Secretary. Such standards shall give due consideration to whether 
offset would tend to interfere substantially with or defeat the 
purposes of the payment certifying agency's program.
    ``(C) The provisions of sections 205(b)(1) and 1631(c)(1) of the 
Social Security Act shall not apply to any offset executed pursuant to 
this section against benefits authorized by either title II or title 
XVI of the Social Security Act.
    ``(4) The Secretary of the Treasury is authorized to 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 the claim. Fees charged to the agencies shall 
be based only on actual offsets completed. Fees charged under this 
subsection concerning delinquent claims may be considered as costs 
pursuant to section 3717(e) of this title. Fees charged under this 
subsection shall be deposited into the `Account' determined by the 
Secretary of the Treasury in accordance with section 3711(g) 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 such payment in accordance with section 552a 
of title 5, United States Code, even when the payment has been exempt 
from offset. Where payments are made electronically, the Secretary is 
authorized to obtain the current address of the debtor/payee from the 
institution receiving the payment. Upon request by the Secretary, the 
institution receiving the payment shall report the current address of 
the debtor/payee to the Secretary.
    ``(6) The Secretary of the Treasury is authorized to prescribe such 
rules, regulations, and procedures as the Secretary of the Treasury 
deems necessary to carry out the purposes of this subsection. The 
Secretary shall consult with the heads of affected agencies in the 
development of such rules, regulations, and procedures.
    ``(7)(A) Any Federal agency that is owed by a named person a past-
due legally enforceable non-tax debt that is over 180 days delinquent 
(other than any past-due support), including non-tax debt administered 
by a third party acting as an agent for the Federal Government, shall 
notify the Secretary of the Treasury of all such non-tax debts for 
purposes of offset under this subsection.
    ``(B) An agency may delay notification under subparagraph (A) with 
respect to a debt that is secured by bond or other instruments in lieu 
of bond, or for which there is another specific repayment source, in 
order to allow sufficient time to either collect the debt through 
normal collection processes (including collection by internal 
administrative offset) or render a final decision on any protest filed 
against the claim.
    ``(8) The disbursing official conducting the offset shall notify 
the payee in writing of--
            ``(A) the occurrence of an offset to satisfy a past-due 
        legally enforceable debt, including a description of the type 
        and amount of the payment otherwise payable to the debtor 
        against which the offset was executed;
            ``(B) the identity of the creditor agency requesting the 
        offset; and
            ``(C) a contact point within the creditor agency that will 
        handle concerns regarding the offset.''.
Where 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 no later than the date 
of the offset. Notwithstanding the preceding sentence, the failure of 
the debtor to receive such notice shall not impair the legality of such 
offset.
    ``(9) A levy pursuant to the Internal Revenue Code of 1986 shall 
take precedence over requests for offset received from other 
agencies.''.
    (c) Section 3701(a) of title 31, United States Code, is amended by 
adding at the end the following new paragraph:
            ``(8) `non-tax claim' means any claim from any agency of 
        the Federal Government other than a claim by the Internal 
        Revenue Service under the Internal Revenue Code of 1986.''.

SEC. 202. HOUSE OF REPRESENTATIVES AS LEGISLATIVE AGENCY.

    (a) Section 3701(a) of title 31, United States Code, is amended by 
adding the following new paragraphs after paragraph (7):
    ``(8) For purposes of subchapters I and II of chapter 37 of title 
31, United States Code (relating to claims of or against United States 
Government), the United States House of Representatives shall be 
considered to be a legislative agency (as defined in section 3701(a)(4) 
of such title), and the Clerk of the House of Representatives shall be 
deemed to be the head of such legislative agency.
    ``(9) Regulations prescribed by the Clerk of the House of 
Representatives pursuant to section 3716 of title 31, United States 
Code, shall not become effective until they are approved by the 
Committee on Rules of the House of Representatives.''.

SEC. 203. EXEMPTION FROM COMPUTER MATCHING REQUIREMENTS UNDER THE 
              PRIVACY ACT OF 1974.

    Section 552a(a) of title 5, United States Code, is amended--
            (1) in paragraph (2), by inserting ``acting in an 
        individual, not a business capacity'' after ``residence'';
            (2) in paragraph (8)(B)--
                    (A) by striking ``or'' at the end of clause (vi);
                    (B) by inserting ``or'' at the end of clause (vii); 
                and
                    (C) by adding after clause (vii) the following new 
                clause:
                            ``(viii) matches for administrative offset 
                        or claims collection pursuant to subsection 
                        3716(c) of title 31, section 5514 of this 
                        title, or any other payment intercept or offset 
                        program authorized by statute;''.
SEC. 204. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) 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 title 26, 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, 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 sections 3711, 3716, 3717, and 3718, by striking 
        ``the head of an executive or legislative agency'' each place 
        it appears and inserting instead ``the head of an executive, 
        judicial, or legislative agency''.
    (b) Subsection 6103(l)(10) of title 26, United States Code, is 
amended--
            (1) in subparagraph (A), by inserting ``and to officers and 
        employees of the Department of the Treasury in connection with 
        such reduction'' adding after ``6402''; and
            (2) in subparagraph (B), by adding ``and to officers and 
        employees of the Department of the Treasury in connection with 
        such reduction'' after ``agency''.

                 Subchapter B--Salary Offset Authority

SEC. 301. 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 
                owed and are delinquent in repayment, 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, active Civil Service employees government-
                wide, military active duty personnel, military 
                reservists, United States Postal Service employees, and 
                records of 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 cost 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) The provisions of paragraph (2) shall not apply to 
        routine intra-agency 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, provided that 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) 
                to read as follows:
                    ``(B) For purposes of this section `agency' 
                includes executive departments and agencies, the United 
                States Postal Service, the Postal Rate Commission, the 
                United States Senate, the United States House of 
                Representatives, and any court, court administrative 
                office, or instrumentality in the judicial or 
                legislative branches of government, and government 
                corporations.'';
            (2) by adding at the end of subsection (b) the following 
        new paragraphs:
            ``(3) For purposes of this section, the Clerk of the House 
        of Representatives shall be deemed to be the head of the 
        agency. Regulations prescribed by the Clerk of the House of 
        Representatives pursuant to subsection (b)(1) shall be subject 
        to the approval of the Committee on Rules of the House of 
        Representatives.
            ``(4) For purposes of this section, the Secretary of the 
        Senate shall be deemed to be the head of the agency. 
        Regulations prescribed by the Secretary of the Senate pursuant 
        to subsection (b)(1) shall be subject to the approval of the 
        Committee on Rules and Administration of the Senate.''; and
            (3) by adding after subsection (c) the following new 
        subsection:
    ``(d) A levy pursuant to the Internal Revenue Code of 1986 shall 
take precedence over requests for offset received from other 
agencies.''.
               Subchapter C--Taxpayer Identifying Numbers

SEC. 401. 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 instead ``For purposes of subsection 
        (a)''; and
            (2) by adding at the end thereof the following new 
        subsections:
    ``(c) Federal Agencies.--Each Federal agency shall require each 
person doing business with that agency to furnish to that agency such 
person's taxpayer identifying number.
            ``(1) For purposes of this subsection, a person is 
        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;
                    ``(B) an applicant for, or recipient of--
                            ``(i) a Federal guaranteed, insured, or 
                        direct loan; or
                            ``(ii) a Federal license, permit, right-of-
                        way, grant, benefit payment or insurance;
                    ``(C) a contractor of the agency;
                    ``(D) assessed a fine, fee, royalty or penalty by 
                that agency;
                    ``(E) in a relationship with a Federal 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; and
                    ``(F) is a joint holder of any account to which 
                Federal benefit payments are transferred 
                electronically.
            ``(2) Each agency shall disclose to the 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 
        persons's relationship with the government.
            ``(3) For purposes of this subsection:
                    ``(A) The term `taxpayer identifying number' has 
                the meaning given such term in section 6109 of title 
                26, United States Code.
                    ``(B) The term `person' means an individual, sole 
                proprietorship, partnership, corporation, nonprofit 
                organization, or any other form of business 
                association, but with the exception of debtors owing 
                claims resulting from petroleum pricing violations does 
                not include debtors under third party claims of the 
                United States.
    ``(d) Access to Social Security Numbers.--Notwithstanding section 
552a of title 5, United States Code, creditor agencies to which a 
delinquent claim is owed, and their agents, may match their debtor 
records with the Social Security Administration records to verify name, 
name control, Social Security number, address, and date of birth.''.

SEC. 402. BARRING DELINQUENT FEDERAL DEBTORS FROM OBTAINING FEDERAL 
              LOANS OR LOAN GUARANTEES.

    (a) Title 31, United States Code, is amended by adding after 
section 3720A the following new section:
``Sec. 3720B. Barring delinquent Federal debtors from obtaining Federal 
              loans or loan guarantees
    ``(a) Unless waived by the head of the agency, no person may obtain 
any Federal financial assistance in the form of a loan or a loan 
guarantee if such person has an outstanding Federal non-tax debt which 
is in a delinquent status, as determined under the standards prescribed 
by the Secretary of the Treasury, with a Federal agency. Any such 
person may obtain additional Federal financial assistance only after 
such delinquency is resolved, pursuant to these standards. This section 
shall not apply to loans or loan guarantees where a statute 
specifically permits extension of Federal financial assistance to 
borrowers in delinquent status.
    ``(b) The head of the agency may delegate the waiver authority 
described in 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, `person' means an individual; 
or sole proprietorship, partnership, corporation, non-profit 
organization, or any other form of business association.''.
    (b) 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.''.
   Subchapter D--Expanding Collection Authorities and Governmentwide 
                            Cross-Servicing
SEC. 501. EXPANDING COLLECTION AUTHORITIES UNDER THE DEBT COLLECTION 
              ACT OF 1982.

    (a) Subsection 8(e) of the Debt Collection Act of 1982 (Public Law 
97-365, 31 U.S.C. 3701(d) and 5 U.S.C. 5514 note) is repealed.
    (b) Section 5 of the Social Security Domestic Employment Reform Act 
of 1994 (Public Law 103-387) is repealed.
    (c) Section 631 of the Tariff Act of 1930 (19 U.S.C. 1631), is 
repealed.
    (d) Title 31, United States Code, is amended--
            (1) in section 3701--
                    (A) by amending subsection (a)(4) to read as 
                follows:
            ``(4) `executive, judicial or legislative agency' means a 
        department, military department, agency, court, court 
        administrative office, or instrumentality in the executive, 
        judicial or legislative branches of government, including 
        government corporations.''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(d) Sections 3711(f) and 3716-3719 of this title do not apply to 
a claim or debt under, or to an amount payable under, the Internal 
Revenue Code of 1986.'';
            (2) by amending section 3711(f) to read as follows:
    ``(f)(1) When trying to collect a claim of the Government, the head 
of an executive or legislative agency may disclose to a consumer 
reporting agency information from a system of records that an 
individual is responsible for a claim if notice required by section 
552a(e)(4) of title 5, United States Code, indicates that information 
in the system may be disclosed to a consumer reporting agency.
    ``(2) The information disclosed to a consumer reporting agency 
shall be limited to--
            ``(A) information necessary to establish the identity of 
        the individual, including name, address and taxpayer 
        identifying number;
            ``(B) the amount, status, and history of the claim; and
            ``(C) the agency or program under which the claim arose.''; 
        and
            (3) in section 3718--
                    (A) in subsection (a), by striking the first 
                sentence and inserting instead the following: ``Under 
                conditions the head of an executive, legislative or 
                judicial agency considers appropriate, the head of an 
                agency may make a contract with a person for collection 
                service to recover indebtedness owed, or to locate or 
                recover assets of, the United States Government. No 
                head of an agency may enter into a contract 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.''; 
                and
                    (B) in subsection (d), by inserting ``, or to 
                locate or recover assets of,'' after ``owed''.

SEC. 502. GOVERNMENTWIDE CROSS-SERVICING.

    Section 3711 of title 31, United States Code, is amended by adding 
at the end the following new subsection:
    ``(g)(1) At the discretion of the head of an executive, judicial or 
legislative agency, referral of a non-tax claim may be made to any 
executive department or agency operating a debt collection center for 
servicing and collection in accordance with an agreement entered into 
under paragraph (2). Referral or transfer of a claim may also be made 
to the Secretary of the Treasury for servicing, collection, compromise, 
and/or suspension or termination of collection action. Non-tax claims 
referred or transferred under this section shall be serviced, 
collected, compromised, and/or collection action suspended or 
terminated in accordance with existing statutory requirements and 
authorities.
    ``(2) Executive departments and agencies operating debt collection 
centers are authorized to enter into agreements with the heads of 
executive, judicial, or legislative agencies to service and/or collect 
nontax claims referred or transferred under this subsection. The heads 
of other executive departments and agencies are authorized to enter 
into agreements with the Secretary of the Treasury for servicing or 
collection of referred or transferred non-tax claims or other Federal 
agencies operating debt collection centers to obtain debt collection 
services from those agencies.
    ``(3) Any agency to which non-tax claims are referred or 
transferred under this subsection is authorized to charge a fee 
sufficient to cover the full cost of implementing this subsection. The 
agency transferring or referring the non-tax 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 the activity from another account or from revenue received from 
section 701. Amounts charged under this subsection concerning 
delinquent claims may be considered as costs pursuant to section 
3717(e) of this title.
    ``(4) 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 
(hereafter 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, but are not limited to--
            ``(A) the costs of computer hardware and software, word 
        processing and telecommunications equipment, 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 but not limited to, services and utilities 
        provided by the Secretary, and administration of the Account.
    ``(5) 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.
    ``(6)(A) The head of an executive, legislative, or judicial agency 
shall transfer to the Secretary of the Treasury all non-tax claims over 
90 days delinquent for additional collection action and/or closeout. A 
taxpayer identification number shall be included with each claim 
provided if it is in the agency's possession.
    ``(B) Subparagraph (A) shall not apply--
            ``(i) to claims that--
                    ``(I) are in litigation or foreclosure;
                    ``(II) will be disposed of under the loan sales 
                program of a federal department or agency within 90 
                days; or
                    ``(III) have been referred to a private collection 
                contractor for collection within 90 days;
            ``(ii) to claims which may be collected after the 90-day 
        period in accordance with specific statutory authority or 
        procedural guidelines, provided that the head of an executive, 
        legislative, or judicial agency provides notice of such claims 
        to the Secretary of the Treasury; and
            ``(iii) to other specific class of claims as determined by 
        the Secretary of the Treasury at the request of the head of an 
        agency.
    ``(C) The head of an executive, legislative, or judicial agency 
shall transfer to the Secretary of the Treasury all non-tax claims on 
which the agency has ceased collection activity. The Secretary may 
exempt specific classes of claims from this requirement, at the request 
of the head of an agency, or otherwise. The Secretary shall review 
transferred claims to determine if additional collection action is 
warranted. The Secretary may, in accordance with section 6050P of title 
26, United States Code, report to the Internal Revenue Service on 
behalf of the creditor agency any claims that have been discharged 
within the meaning of such section.
    ``(7) At the end of each calendar year, the head of an executive, 
legislative, or judicial agency which, regarding a claim owed to the 
agency, is required to report a discharge of indebtedness as income 
under the 6050P of title 26, United States Code, 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 of the Treasury shall 
incorporate this information into the appropriate form and submit the 
information to the taxpayer and Internal Revenue Service.
    ``(8) To carry out the purposes of this subsection, the Secretary 
of the Treasury is authorized--
            ``(A) to prescribe such rules, regulations, and procedures 
        as the Secretary deems necessary; and
            ``(B) to designate debt collection centers operated by 
        other Federal agencies.''.

SEC. 503. COMPROMISE OF CLAIMS.

    Section 11 of the Administrative Dispute Resolution Act (Public Law 
101-552, 104 Stat. 2736, 5 U.S.C. 581 note) is amended by adding at the 
end thereof the following sentence: ``This section shall not apply to 
section 8(b) of this Act.''.

             Subchapter E--Federal Civil Monetary Penalties

SEC. 601. ADJUSTING FEDERAL CIVIL MONETARY PENALTIES FOR INFLATION.

    (a) 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, by regulation adjust 
each civil monetary penalty provided by law within the jurisdiction of 
the Federal agency, except for any penalty under title 26, United 
States Code, by the inflation adjustment described under section 5 of 
this Act and 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''; and
            (3) by adding at the end the following new section:
    ``Sec. 7. Any increase to a civil monetary penalty resulting from 
this Act shall apply only to violations which occur after the date any 
such increase takes effect.''.
    (b) The initial adjustment of a civil monetary penalty made 
pursuant to section 4 of Federal Civil Penalties Inflation Adjustment 
Act of 1990 (as amended by subsection (a)) may not exceed 10 percent of 
such penalty.

                       Subchapter F--Gain Sharing

SEC. 701. DEBT COLLECTION IMPROVEMENT ACCOUNT.

    (a) Title 31, United States Code, is amended by inserting after 
section 3720B 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 
referred to as the `Account').
    ``(2) The Account shall be maintained and managed by the Secretary 
of the Treasury, who shall ensure that programs are credited with the 
amounts described in subsection (b) and with allocations described in 
subsection (c).
    ``(b)(1) Not later than 30 days after the end of a fiscal year, an 
agency other than the Department of Justice is authorized to transfer 
to the Account a dividend not to exceed three percent of the debt 
collection improvement amount as described in paragraph (3).
    ``(2) Agency transfers to the Account may include collections 
from--
            ``(A) salary, administrative and tax referral offsets;
            ``(B) automated levy authority;
            ``(C) the Department of Justice; and
            ``(D) private collection agencies.
    ``(3) For purposes of this section, the term `debt collection 
improvement amount' means the amount by which the collection of 
delinquent debt with respect to a particular program during a fiscal 
year exceeds the delinquent debt baseline for such program for such 
fiscal year. The Office of Management and Budget shall determine the 
baseline from which increased collections are measured over the prior 
fiscal year, taking into account the recommendations made by the 
Secretary of the Treasury in consultation with creditor agencies.
    ``(c)(1) The Secretary of the Treasury is authorized to make 
payments from the Account solely to reimburse agencies for qualified 
expenses. For agencies with franchise funds, payments may be credited 
to subaccounts designated for debt collection.
    ``(2) For purposes of this paragraph, the term `qualified expenses' 
means expenditures for the improvement of tax administration and agency 
debt collection and debt recovery activities including, but not limited 
to, account servicing (including cross-servicing under section 502 of 
the Debt Collection Improvement Act of 1955), automatic data processing 
equipment acquisitions, delinquent debt collection, measures to 
minimize delinquent debt, asset disposition, and training of personnel 
involved in credit and debt management.
    ``(3) Payments made to agencies pursuant to paragraph (1) shall be 
in proportion to their contributions to the Account.
    ``(4)(A) Amounts in the Account shall be available to the Secretary 
of the Treasury to the extent and in the amounts provided in advance in 
appropriation Acts, for purposes of this section. Such amounts are 
authorized to be appropriated without fiscal year limitation.
    ``(B) As soon as practicable after the end of third fiscal year 
after which appropriations are made pursuant to this section, and every 
3 years thereafter, any unappropriated balance in the account as 
determined by the Secretary of the Treasury in consultation with 
agencies, shall be transferred to the Treasury general fund as 
miscellaneous receipts.
    ``(d) For direct loan 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 
and shall not be included in the estimated payments to the Government 
for the purpose of calculating the cost of such programs.
    ``(e) The Secretary of the Treasury shall prescribe such rules, 
regulations, and procedures as the Secretary deems necessary or 
appropriate to carry out the purposes of this section.''.
    (b) 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 3720B the following new item:

``3720C. Debt Collection Improvement Account.''.
               Subchapter G--Tax Refund Offset Authority
SEC. 801. OFFSET OF TAX REFUND PAYMENT BY DISBURSING OFFICIALS.

    Section 3720A(h) of title 31, United States Code, is amended to 
read as follows:
    ``(h)(1) The term `Secretary of the Treasury' may include the 
disbursing official of the Department of the Treasury.
    ``(2) The disbursing official of the Department of the Treasury--
            ``(A) shall notify a taxpayer in writing of--
                    ``(i) the occurrence of an offset to satisfy a 
                past-due legally enforceable non-tax debt;
                    ``(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) shall notify the Internal Revenue Service on a weekly 
        basis of--
                    ``(i) the occurrence of an offset to satisfy a 
                past-due legally enforceable non-tax debt;
                    ``(ii) the amount of such offset; and
                    ``(iii) any other information required by 
                regulations; and
            ``(C) shall match payment records with requests for offset 
        by using a name control, taxpayer identifying number (as 
        defined in 26 U.S.C. 6109), and any other necessary 
        identifiers.''.

SEC. 802. EXPANDING TAX REFUND OFFSET AUTHORITY.

    (a) Section 3720A of title 31, United States Code, is amended by 
adding after subsection (h) 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) Section 6402(f) of title 26, United States Code, 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. 803. EXPANDING AUTHORITY TO COLLECT PAST-DUE SUPPORT.

    (a) Section 3720A(a) of title 31, United States Code, is amended to 
read as follows:
    ``(a) Any Federal agency that is owed by a named person a past-due, 
legally enforceable debt (including past-due support and debt 
administered by a third party acting as an agent for the Federal 
Government) shall, in accordance with regulations issued pursuant to 
subsections (b) and (d), notify the Secretary of the Treasury at least 
once a year of the amount of such debt.''.
    (b) Section 664(a) of the Act of August 13, 1935, as amended (42 
U.S.C. 664(a)) is amended--
            (1) in paragraph (1), by adding at the end thereof the 
        following: ``This subsection may be implemented by the 
        Secretary of the Treasury in accordance with section 3720A of 
        title 31, United States Code.''; and
            (2) in paragraph (2)(A), by adding at the end thereof the 
        following: ``This subsection may be implemented by the 
        Secretary of the Treasury in accordance with section 3720A of 
        title 31, United States Code.''.

    Subchapter H--Definitions, Due Process Rights, and Severability

SEC. 901. TECHNICAL 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 money 
        payable by the United States (including money 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 (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 
        branches of government, including government corporations.'';
            (3) by amending subsection (b) to read as follows:
    ``(b)(1) The term `claim' or `debt' means any amount of money 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, money owed on account of loans insured or 
guaranteed by the Government, non-appropriated funds, over-payments, 
any amount the United States is authorized by statute to collect for 
the benefit of any person, and other amounts of money or property due 
the Government.
    ``(2) For purposes of section 3716 of this title, the term `claim' 
also includes an amount of money or property owed by a person to a 
State, the District of Columbia, American Samoa, the United States 
Virgin Islands, the Commonwealth of the Northern Mariana Islands, or 
the Commonwealth of Puerto Rico where there is also a federal monetary 
interest or in cases of court ordered child support.'';
            (4) by adding after subsection (d) the following new 
        subsection:
    ``(e) In section 3716 of this title--
            ``(1) `creditor agency' means any entity owed a claim that 
        seeks to collect that claim through administrative offset; and
            ``(2) `payment certifying agency' means any Federal 
        department, agency, or instrumentality and government 
        corporation, that has transmitted a voucher to a disbursing 
        official for disbursement.''.

SEC. 902. SEVERABILITY.

    If any provision of this title, or the amendments made by this 
title, or the application of any provision to any entity, person, or 
circumstance is for any reason adjudged by a court of competent 
jurisdiction to be invalid, the remainder of this title, and the 
amendments made by this title, or its application shall not be 
affected.

                        Subchapter I--Reporting

SEC. 1001. MONITORING AND REPORTING.

    (a) The Secretary of the Treasury, in consultation with concerned 
Federal agencies, is authorized to establish guidelines, including 
information on outstanding debt, to assist agencies in the performance 
and monitoring of debt collection activities.
    (b) Not later than three years after the date of enactment of this 
Act, 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 502 of this Act.
    (c) 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, the Secretary of the Treasury shall prescribe 
                regulations requiring the head of each agency with 
                outstanding non-tax claims to prepare and submit to the 
                Secretary at least once a year a report summarizing the 
                status of loans and accounts receivable 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) Notwithstanding any other provision of law, the Secretary of 
the Treasury is authorized to consolidate all reports concerning debt 
collection into one annual report.

                   TITLE II--JUSTICE DEBT MANAGEMENT

                    Subchapter A--Private Attorneys

SEC. 1101. EXPANDED USE OF PRIVATE ATTORNEYS.

    (a) Section 3718(b)(1)(A) of title 31, United States Code, is 
amended by striking the fourth sentence.
    (b) Sections 3 and 5 of the Federal Debt Recovery Act (Public Law 
99-578, 100 Stat. 3305) are hereby repealed.

                 Subchapter B--Nonjudicial Foreclosure

SEC. 1201. NONJUDICIAL FORECLOSURE OF MORTGAGES.

    Chapter 176 of title 28 of the United States Code is amended by 
adding at the end thereof the following:

                ``Subchapter E--Nonjudicial Foreclosure
``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 of 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 defined 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 defined 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.
            ``(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 1985 
        of title 7, United States Code, or regulations promulgated 
        thereunder; or
            ``(2) The Multifamily Mortgage Foreclosure Act of 1981 
        (chapter 38 of title 12, United States Code).
    ``(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, 
                provided 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 proceeding 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 forecloseure 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 the following:
            ``(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 foreclosure 
        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 subsection 
                (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 sale 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 the 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) 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
                            ``(II) 1.5 percent on the excess of any sum 
                        collected over $1,000; or
                    ``(ii) $250; and
            ``(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) 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) 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 at 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) to pay valid real property tax liens or assessments, 
        if required by the notice of foreclosure sale;
            ``(5) to pay any liens senior to the mortgage, if required 
        by the notice of foreclosure sale;
            ``(6) to pay service charges and advancements for taxes, 
        assessments, and property insurance premiums; and
            ``(7) 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 is 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.''.

                     TITLE III--IRS LEVY AUTHORITY

     Subchapter A--Amendments To The Internal Revenue Code of 1986

SEC. 1301. PROVISION FOR CONTINUOUS LEVY.

    Section 6331 of the Internal Revenue Code of 1986 (26 U.S.C. 6331) 
is amended--
            (1) by redesignating subsection (h) as subsection (i); and
            (2) by inserting after subsection (g) the following new 
        subsection:
    ``(h) Continuing Levy on Non-Means Tested Federal Payments.--The 
effect of a levy on non-means tested Federal payments to or received by 
a taxpayer shall be continuous from the date such levy is first made 
until such levy is released. Notwithstanding section 6334, such levy 
shall attach up to 15 percent of any salary or pension payment due to 
the taxpayer. For the purposes of this subsection, the term `non-means 
tested Federal payment' refers to a Federal payment for which 
eligibility is not based on the income and/or assets of a payee.''.
SEC. 1302. MODIFICATION OF LEVY EXEMPTION.

    Section 6334 of the Internal Revenue Code of 1986 (26 U.S.C. 6334) 
is amended by adding at the end the following new subsection:
    ``(f) Levy Allowed on Certain Non-Means Tested Federal Payments.--
Non-means tested amounts--
            ``(1) described in subsections (a)(7) and (a)(9) of this 
        section; and
            ``(2) annuity or pension payments under the Railroad 
        Retirement Act and benefits under the Railroad Unemployment 
        Insurance Act described in subsection (a)(6) of this section,
shall not be exempt from levy if the Secretary approves the levy of 
such property.''.

SEC. 1303. CONFIDENTIALITY AND DISCLOSURE OF RETURNS AND RETURN 
              INFORMATION.

    (a) Section 6103 of the Internal Revenue Code of 1986 (26 U.S.C. 
6103) is amended by adding at the end of subsection (k) the following 
new paragraph:
            ``(8) Levies on certain government payments.--
                    ``(A) Disclosure of return information in levies on 
                financial management service.--The Secretary may 
                disclose to officers and employees of the Financial 
                Management Service return information, including 
                taxpayer identity information, the amount of any unpaid 
                liability under this title (including penalties and 
                interest), and the type of tax and tax period to which 
                such unpaid liability relates, in serving a notice of 
                levy, or release of such levy, with respect to any 
                applicable government payment.
                    ``(B) Restriction on use of disclosed 
                information.--Return information disclosed under 
                subparagraph (A) may be used by officers and employees 
                of the Financial Management Service only for the 
                purpose of, and to the extent necessary in, 
                transferring levied funds in satisfaction of the levy, 
                maintaining appropriate agency records in regard to 
                such levy or the release thereof, notifying the 
                taxpayer and the agency certifying such payment that 
                the levy has been honored, or in the defense of any 
                litigation ensuing from the honor of such levy.
                    ``(C) Applicable government payment.--For purposes 
                of this paragraph, the term `applicable government 
                payment' means any non-means tested Federal payment, as 
                defined in section 6331(h) certified to the Financial 
                Management Service for disbursement and any other 
                payment certified to the Financial Management Service 
                for disbursement and which the Commissioner designates 
                by published notice.''.
    (b) Section 6301(p) of the Internal Revenue Code of 1986 (26 U.S.C. 
6301(p)), is amended--
            (1) in paragraph (3)(A), by inserting ``(8)'' after 
        ``(6),''; and
            (2) in paragraph (4), by inserting ``(k)(8),'' after ``(j) 
        (1) or (2),''.
    (c) Section 552a(a)(8)(B) of title 5, United States Code, is 
amended by adding at the end the following new clause:
                            ``(ix) matches performed incident to a levy 
                        described in section 6103(k)(8) of the Internal 
                        Revenue Code of 1986.''.
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