[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4243 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4243

  To reduce waste, fraud, and error in Government programs by making 
  improvements with respect to Federal management and debt collection 
 practices, Federal payment systems, Federal benefit programs, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 16, 1998

  Mr. Horn (for himself, Mrs. Maloney of New York, Mr. Sessions, Mr. 
  Sununu, and Mr. Kanjorski) introduced the following bill; which was 
 referred to the Committee on Government Reform and Oversight, and in 
addition to the Committees on the Judiciary, and 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 reduce waste, fraud, and error in Government programs by making 
  improvements with respect to Federal management and debt collection 
 practices, Federal payment systems, Federal benefit programs, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Government Waste, 
Fraud, and Error Reduction Act of 1998''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
                TITLE I--GENERAL MANAGEMENT IMPROVEMENTS

Sec. 101. Improving financial management.
Sec. 102. Improving travel management.
         TITLE II--IMPROVING FEDERAL DEBT COLLECTION PRACTICES

Sec. 201. Miscellaneous technical corrections to subchapter II of 
                            chapter 37 of title 31, United States Code.
Sec. 202. Barring delinquent Federal debtors from obtaining Federal 
                            loans or loan insurance guarantees.
Sec. 203. Collection and compromise and nontax debts and claims.
             TITLE III--SALE OF DEBTS OWED TO UNITED STATES

Sec. 301. Authority to sell debts.
Sec. 302. Requirement to sell certain debts.
                TITLE IV--TREATMENT OF HIGH VALUE DEBTS

Sec. 401. Annual report on high value debts.
Sec. 402. Debarment from obtaining Federal loans or loan guarantees.
Sec. 403. Inspector General review.
Sec. 404. Requirement to seek seizure and forfeiture of assets securing 
                            high value debt.
                       TITLE V--FEDERAL PAYMENTS

Sec. 501. Transfer of responsibility to Secretary of the Treasury with 
                            respect to prompt payment.
Sec. 502. Promoting electronic payments.
       TITLE VI--FEDERAL BENEFIT VERIFICATION AND INTEGRITY TESTS

Sec. 601. Short title.
Sec. 602. Purposes.
Sec. 603. Definitions.
 Subtitle A--Notification of Federal Benefit Recipients Regarding Data 
                              Verification

Sec. 612. Program agency responsibility to provide correct information.
    Subtitle B--Federal Benefit Program Management Improvement Tests

Sec. 621. Tests of practices and techniques for improving Federal 
                            benefit program management.
Sec. 622. Sharing of information in national directory of new hires.
Sec. 623. Increased penalties and punitive damages under privacy act.
Sec. 624. Establishment of the Federal benefit verification and payment 
                            integrity board.
Sec. 625. Implementation of tested information technology practices or 
                            techniques.

SEC. 2. PURPOSES.

    The purposes of this Act are the following:
            (1) Reduce waste, fraud, and error in Federal benefit 
        programs.
            (2) Focus Federal agency management attention on high-risk 
        programs.
            (3) Better collect debts owed to the United States.
            (4) Improve Federal payment systems.
            (5) Improve reporting on Government operations.

                TITLE I--GENERAL MANAGEMENT IMPROVEMENTS

SEC. 101. IMPROVING FINANCIAL MANAGEMENT.

    (a) Repeal.--Section 3515 of title 31, United States Code, is 
amended--
            (1) in subsection (A)--
                    (A) by striking ``1997'' and inserting ``1999''; 
                and
                    (B) by inserting ``Congress and'' after ``submit 
                to'';
            (2) by striking subsection (e); and
            (3) by striking subsections (f), (g), and (h).
    (b) Authority to Accept Electronic Payment.--
            (1) In general.--Subject to an agreement between the head 
        of an executive agency and the applicable financial institution 
        or institutions, the head of such agency may accept an 
        electronic payment to satisfy a debt owed to the agency.
            (2) Guidelines for agreements regarding payment.--The 
        Director of the Office of Management and Budget shall develop 
        guidelines regarding agreements between agencies and financial 
        institutions under paragraph (1).
    (c) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), this 
        section shall take effect on the date of the enactment of this 
        Act.
            (2) Secretary's waiver authority.--Subsection (a)(1) of 
        this section shall take effect March 1, 1998.

SEC. 102. IMPROVING TRAVEL MANAGEMENT.

    (a) Payment of State and Local Taxes on Travel Expenses.--
            (1) In general.--The Administrator of General Services 
        shall ensure that employees of executive agencies are not 
        inappropriately charged State and local taxes on travel 
expenses, including transportation, lodging, automobile rental, and 
other miscellaneous travel expenses.
            (2) Report.--Not later than March 31, 1999, the 
        Administrator shall, after consultation with the heads of 
        executive agencies, submit to Congress a report describing the 
        steps taken, and proposed to be taken, to carry out this 
        subsection.
    (b) Limited Exclusion From Requirement Regarding Occupation of 
Quarters.--Section 5911(e) of title 5, United States Code, is amended 
by adding at the end the following new sentence: ``The preceding 
sentence shall not apply with respect to lodging provided under chapter 
57 of this title.''.
    (c) Use of Travel Management Centers, Agents, and Electronic 
Payment Systems.--
            (1) Requirement to encourage use.--The head of each 
        executive agency shall, with respect to travel by employees of 
        the agency in the performance of the employment duties by the 
        employee, require, to the maximum extent possible, the use by 
        such employees of travel management centers, travel agents 
        authorized for use by such employees, and electronic 
        reservation and payment systems for the purpose of improving 
        efficiency and economy regarding travel by employees of the 
        agency.
            (2) Plan for implementation.--(A) The Administrator of 
        General Services shall develop a plan regarding the 
        implementation of this subsection and shall, after consultation 
        with the heads of executive agencies, submit to Congress a 
        report describing such plan and the means by which such agency 
        heads plan to ensure that employees use travel management 
        centers, travel agents, and electronic reservation and payment 
        systems as required by this subsection.
            (B) The Administrator shall submit the plan required under 
        subparagraph (A) not later than March 31, 1999.

         TITLE II--IMPROVING FEDERAL DEBT COLLECTION PRACTICES

SEC. 201. MISCELLANEOUS TECHNICAL CORRECTIONS TO SUBCHAPTER II OF 
              CHAPTER 37 OF TITLE 31, UNITED STATES CODE.

    (a) Child Support Enforcement.--Section 3716(h)(3) of title 31, 
United States Code, is amended to read as follows:
    ``(3) In applying this subsection with respect to any debt owed to 
a State, other than past due support being enforced by the State, 
subsection (c)(3)(A) shall not apply.''.
    (b) Charges by Debt Collection Contractors.--
            (1) Collection by secretary of the treasury.--Section 
        3711(g) of title 31, United States Code, is amended by adding 
        at the end the following:
    ``(11) The amount received by a person for performance of 
collection services under this section shall not be limited by State 
law.''.
            (2) Collection by program agency.--Section 3718 of title 
        31, United States Code, is amended by adding at the end the 
        following:
    ``(h) The amount received by a person for performance of collection 
services under this section or section 3711(g) of this title shall not 
be limited by State law.''.
    (c) Debt Sales.--Section 3711 of title 31, United States Code, is 
amended by striking subsection (i).
    (d) Gainsharing.--Section 3720C(b)(2)(D) of title 31, United States 
Code, is amended by striking ``delinquent loans'' and inserting 
``debts''.
    (e) Provisions Relating to Private Collection Contractors.--
            (1) Collection by secretary of the treasury.--Section 
        3711(g) of title 31, United States Code, is further amended by 
        adding at the end the following:
    ``(12) In attempting to collect under this subsection any debt owed 
to the United States, a private collection contractor shall not be 
precluded from verifying the debtor's current employer, the location of 
the payroll office of the debtor's current employer, the period the 
debtor has been employed by their current employer, and the 
compensation received by the debtor from their current employer.
    ``(13)(A) The Secretary of the Treasury shall provide that any 
contract with a private collection contractor under this subsection 
shall include a provision that the contractor shall be subject to 
penalties under the contract--
            ``(i) if the contractor fails to comply with any 
        restrictions under applicable law regarding the collection 
        activities of debt collectors; or
            ``(ii) if the contractor engages in unreasonable or abusive 
        debt collection practices in connection with the collection of 
        debt under the contract.
    ``(B) Notwithstanding any other provision of law, a private 
collection contractor under this subsection--
            ``(i) shall not be subject to any liability or contract 
        penalties in connection with efforts to collect a debt pursuant 
        to a contract under this subsection by reason of actions that 
        are required by the contract or by applicable law or 
        regulations; and
            ``(ii) shall not be subject to payment of damages or 
        attorney's fees by reason of any action in connection with 
        efforts to collect such debt, except in a case of bad faith, 
        intentional misconduct, or unreasonable or abusive debt 
        collection practices by the contractor.
    ``(14)(A) The Secretary of the Treasury shall provide that any 
contract with a private collection contractor under this subsection 
shall include a provision--
            ``(i) that the contractor shall be measured on performance 
        in collecting delinquent debt under the contract and 
        compensated based on success in collecting such debt; and
            ``(ii) that employees of the contractor involved in the 
        collection of debt under the contract receive a minimum level 
        of compensation, to be determined by the Secretary, based on 
        the wage and performance compensation structure prevalent in 
        the industry in the region in which the contractor is located.
    ``(B) The Secretary shall have sole responsibility and authority 
for enforcing minimum compensation requirements included in contracts 
pursuant to this section.''.
            (2) Collection by program agency.--Section 3718 of title 
        31, United States Code, is further amended by adding at the end 
        the following:
    ``(j) In attempting to collect under this subsection any debt owed 
to the United States, a private collection contractor shall not be 
precluded from verifying the current place of employment of the debtor, 
the location of the payroll office of the debtor's current employer, 
the period the debtor has been employed by their current employer, and 
the compensation received by the debtor from their current employer.
    ``(k)(1) The head of an executive, judicial, or legislative agency 
that contracts with a private collection contractor to collect a debt 
owed to the agency, or a guaranty agency or institution of higher 
education that contracts with a private collection contractor to 
collect a debt owed under any loan program authorized under title IV of 
the Higher Education Act of 1965, shall include a provision in the 
contract that the contractor--
            ``(A) shall be subject to penalties under the contract if 
        the contractor fails to comply with any restrictions imposed 
        under applicable law on the collection activities of debt 
        collectors; and
            ``(B) shall be subject to penalties under the contract if 
        the contractor engages in unreasonable or abusive debt 
        collection practices in connection with the collection of debt 
        under the contract.
    ``(2) Notwithstanding any other provision of law--
            ``(A) a private collection contractor under this section 
        shall not be subject to any liability or contract penalties in 
        connection with efforts to collect a debt owed to an executive, 
        judicial, or legislative agency, or owed under any loan program 
        authorized under title IV of the Higher Education Act of 1965, 
        by reason of actions required by the contract, or by applicable 
        law or regulations; and
            ``(B) such a contractor shall not be subject to payment of 
        damages or attorney's fees by reason of any action in 
        connection with efforts to collect such a debt, except in a 
        case of bad faith, intentional misconduct, or unreasonable or 
        abusive debt collection practices by the contractor.
    ``(l)(1) The head of each executive, judicial, or legislative 
agency administering a contract with a private collection contractor 
under this section shall include in the contract a provision--
            ``(A) that the contractor is measured based on performance 
        in collecting delinquent debt owed to the agency and 
        compensated based on success in collecting such debt; and
            ``(B) that employees of the contractor involved in 
        collection of such debt receive a minimum level of 
        compensation, to be determined by the agency head, based on the 
        wage and performance compensation structure prevalent in the 
        industry in the region in which the contractor is located.
    ``(2) The head of the agency shall have sole responsibility and 
authority for enforcing minimum compensation requirements included in 
contracts pursuant to this section.''.
    (f) Clerical Amendment.--Section 3720A(h) of title 31, United 
States Code, is amended--
            (1) beginning in paragraph (3), by striking the close 
        quotation marks and all that follows through the matter 
        preceding subsection (i); and
            (2) by adding at the end the following:
``For purposes of this subsection, the disbursing official for the 
Department of the Treasury is the Secretary of the Treasury or his or 
her designee.''.
    (g) Correction of References to Federal Agency.--(1) Sections 
3716(c)(6) and 3720A (a), (b), (c), and (e) of title 31, United States 
Code, are each amended by striking ``Federal agency'' each place it 
appears and inserting ``executive, judicial, or legislative agency''.
    (2) Section 3716(h)(2)(C), of title 31, United States Code, are 
each amended by striking ``a Federal agency'' and inserting ``an 
executive, judicial, or legislative agency''.
    (3) Section 3720B of title 31, United States Code, is amended--
            (A) by striking ``a Federal agency'' each place it appears 
        and inserting ``an executive, judicial, or legislative 
        agency''; and
            (B) by striking ``any Federal agency'' and inserting ``any 
        executive, judicial, or legislative agency''.

SEC. 202. BARRING DELINQUENT FEDERAL DEBTORS FROM OBTAINING FEDERAL 
              LOANS OR LOAN INSURANCE GUARANTEES.

    (a) In General.--Section 3720B of title 31, United States Code, is 
amended to read as follows:
``Sec. 3720B. Barring delinquent Federal debtors from obtaining Federal 
              benefits
    ``(a)(1) A person shall not be eligible for the award or renewal of 
any Federal benefit described in paragraph (2) if the person has an 
outstanding debt (other than a debt under the Internal Revenue Code of 
1986) with any executive, judicial, or legislative agency that is in a 
delinquent status, as determined under standards prescribed by the 
Secretary of the Treasury. Such a person may obtain additional Federal 
benefits described in paragraph (2) only after such delinquency is 
resolved in accordance with those standards.
    ``(2) The Federal benefits referred to in paragraph (1) are the 
following:
            ``(A) Financial assistance in the form of a loan (other 
        than a disaster loan) or loan insurance or guarantee.
            ``(B) Any Federal permit or license otherwise required by 
        law.
    ``(b)(1) The Secretary of the Treasury may exempt any class of 
claims from the application of subsection (a), at the request of an 
executive, judicial, or legislative agency.
    ``(2) The Secretary of the Treasury may waive the application of 
subsection (a) with respect to any Federal permit or license otherwise 
required by law.
    ``(c)(1) The head of any executive, judicial, or legislative agency 
may waive the application of subsection (a) to any Federal benefit that 
is administered by the agency.
    ``(2) The head of an executive, judicial, or legislative agency may 
delegate the waiver authority under paragraph (1) to the Chief 
Financial Officer of the agency.
    ``(3) The Chief Financial Officer of an agency to whom waiver 
authority is delegated under paragraph (2) may redelegate that 
authority only to the Deputy Chief Financial Officer of the agency. The 
Deputy Chief Financial Officer may not redelegate that authority.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 37 of title 31, United States Code, is amended by striking the 
item relating to section 3720B and inserting the following:

``3720B. Barring delinquent Federal debtors from obtaining Federal 
                            benefits.''.

SEC. 203. COLLECTION AND COMPROMISE OF NONTAX DEBTS AND CLAIMS.

    (a) Use of Private Collection Contractors and Federal Debt 
Collection Centers.--Paragraph (5) of section 3711(g) of title 31, 
United States Code, is amended to read as follows:
    ``(5)(A) Nontax debts referred or transferred under this subsection 
shall be serviced, collected, or compromised, or collection action 
thereon suspended or terminated, in accordance with otherwise 
applicable statutory requirements and authorities.
    ``(B) The head of each executive agency that operates a debt 
collection center may enter into an agreement with the Secretary of the 
Treasury to carry out the purposes of this subsection.
    ``(C) The Secretary of the Treasury shall--
            ``(i) maintain a schedule of private collection contractors 
        and debt collection centers operated by agencies, that are 
        eligible for referral of claims under this subsection;
            ``(ii) maximize collections of delinquent debts by 
        referring delinquent debts promptly;
            ``(iii) maintain competition between private collection 
        contractors and debt collection centers operated by agencies;
            ``(iv) ensure, to the maximum extent practicable, that a 
        private collection contractor to which a debt is referred is 
        responsible, to the greatest extent practicable, for any 
        administrative costs associated with the contract under which 
        the referral is made.
    ``(D) The Secretary may, at the request of a State, refer to a 
private collection contractor a child support debt or claim 
administered by the State.''.
    (b) Limitation on Discharge Before Use of Private Collection 
Contractor or Debt Collection Center.--Paragraph (9) of section 3711(g) 
of title 31, United States Code, is amended--
            (1) by redesignating subparagraphs (A) through (H) in order 
        as clauses (i) through (viii);
            (2) by inserting ``(A)'' after ``(9)'';
            (3) in subparagraph (A) (as designated by paragraph (2) of 
        this subsection) in the matter preceding clause (i) (as 
        designated by paragraph (1) of this subsection), by inserting 
        ``and subject to subparagraph (B)'' after ``as applicable''; 
        and
            (4) by adding at the end the following:
    ``(B)(i) The head of an executive, judicial, or legislative agency 
may not terminate collection action on a debt unless the debt has been 
referred to a private collection contractor or a debt collection center 
for a period to be determined by the Secretary of the Treasury.
    ``(ii) The Secretary of the Treasury may, at the request of an 
agency, waive the application of clause (i) to any debt, or class of 
debts, if the Secretary of the Treasury determines that the waiver is 
in the best interest of the United States.''.

             TITLE III--SALE OF DEBTS OWED TO UNITED STATES

SEC. 301. AUTHORITY TO SELL DEBTS.

    (a) Purpose.--The purpose of this section is to provide that the 
head of each executive, judicial, or legislative agency shall establish 
a program of debt sales in order to--
            (1) minimize the loan and debt portfolios of the agency;
            (2) improve credit management while serving public needs;
            (3) reduce delinquent debts held by the agency; and
            (4) obtain the maximum value for loan and debt assets.
    (b) Sales Authorized.--(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 (2 U.S.C. 661c(b)) and using competitive 
procedures, any nontax debt owed to the United States that is 
administered by the agency.
    (2) Costs the agency incurs in selling debt pursuant to this 
section may be deducted from the proceeds received from the sale. Such 
costs may include, but are not limited to--
            (A) the costs of computer hardware and software, 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;
            (E) the costs of contractors assisting in the sale of debt;
            (F) the fees of appraisers, auctioneers, and realty 
        brokers;
            (G) the costs of advertising and surveying; and
            (H) other reasonable costs incurred by the agency.
    (3) Sales of debt under this section--
            (A) shall be for--
                    (i) cash; or
                    (ii) cash and a residuary equity, joint venture, or 
                profit participation, if the head of the agency 
                determines that the proceeds will be greater than the 
                proceeds from a sale solely for cash;
            (B) shall be without recourse against the United States, 
        but may include the use of guarantees if otherwise authorized 
        by law; and
            (C) shall transfer to the purchaser all rights of the 
        United States to demand payment of the debt, other than with 
        respect to a residuary equity, joint venture, or profit 
        participation under subparagraph (A)(ii).
    (c) Existing Authority Not Affected.--This section is not intended 
to limit existing statutory authority of the head of an executive, 
judicial, or legislative agency to sell loans, debts, or other assets.

SEC. 302. REQUIREMENT TO SELL CERTAIN DEBTS.

    (a) Sale of Delinquent Debts.--The head of each executive, 
judicial, or legislative agency shall sell any nontax debt owed to the 
United States that is delinquent for more than one year, pursuant to a 
schedule determined by the Secretary of the Treasury to maximize the 
proceeds from such sale. Sales under this subsection shall be conducted 
under the authority in section 301.
    (b) Sale of Loans.--The head of each executive, judicial, or 
legislative agency shall sell each loan obligation arising from a 
program administered by the agency, not later than 6 months after the 
loan is disbursed, unless the Secretary of the Treasury determines that 
a longer period is necessary to protect the financial interests of the 
United States. Sales under this subsection shall be conducted under the 
authority in section 301.
    (c) Sale of Debts After Termination of Collection Action.--After 
terminating collection action, the head of an executive, judicial, or 
legislative agency shall sell, using competitive procedures, any nontax 
debt or class of debts owed to the United States, unless the Secretary 
of the Treasury determines that the sale is not in the best interests 
of the United States.
    (d) Limitations.--(1) The head of an executive, judicial, or 
legislative agency shall not, without the approval of the Attorney 
General, sell any debt that is the subject of an allegation of or 
investigation for fraud, or that has been referred to the Department of 
Justice for litigation.
    (2) The head of an executive, judicial, or legislative agency shall 
not sell debts for less than the net present value of such debts, as 
determined pursuant to the Federal Credit Reform Act of 1990, adjusted 
by the net present value of the estimated administrative costs 
associated with administering the loan.
    (3) The Secretary of the Treasury may, after a study and review, 
exempt a class of debts from the requirement in paragraph (2) if the 
Secretary determines that the sale of such debts is not in the best 
financial interests of the United States.
    (4) The head of an executive, judicial, or legislative agency may 
exempt from sale any class of debts if--
            (A) the head of the agency determines that the sale would 
        interfere with the mission of the agency administering the 
        program under which the indebtedness was incurred;
            (B) the head of the agency provides to the Secretary of the 
        Treasury a certification that such sale would interfere with 
        the mission of the agency; and
            (C) the Secretary of the Treasury concurs with the head of 
        the agency that such sale would interfere with the mission of 
        the agency.

             TITLE IV--TREATMENT OF HIGH VALUE NONTAX DEBTS

SEC. 401. ANNUAL REPORT ON HIGH VALUE NONTAX DEBTS.

    (a) In General.--Not later than 90 days after the end of each 
fiscal year, the head of each agency that administers a program that 
gives rise to a delinquent high value nontax debt shall submit a report 
to Congress that lists each such debt.
    (b) Content.--A report under this section shall, for each debt 
listed in the report, include the following:
            (1) The name of each person liable for the debt.
            (2) The amounts of principal, interest, and penalty 
        comprising the debt.
            (3) The actions the agency has taken to collect the debt.
            (4) Specification of any portion of the debt that has been 
        written-down administratively or due to a bankruptcy 
        proceeding.
    (c) Definitions.--In this subsection:
            (1) Agency; debt.--Each of the terms ``agency'' and 
        ``debt'' has the meaning that term has in chapter 37 of title 
        31, United States Code, as amended by this Act.
            (2) High value nontax debt.--The term ``high value nontax 
        debt'' means a nontax debt having an outstanding value 
        (including principal, interest, and penalties) that exceeds 
        $1,000,000.

SEC. 402. DEBARMENT FROM OBTAINING FEDERAL LOANS OR LOAN GUARANTEES.

    Section 3720B of title 31, United States Code, is amended--
            (1) in subsection (a) by inserting ``(1)'' after ``(a)'';
            (2) by redesignating subsection (b) as paragraph (2) of 
        subsection (a);
            (3) in subsection (a)(2) (as so redesignated) by striking 
        ``under subsection (a)'' and inserting ``under paragraph (1)''; 
        and
            (4) by adding at the end the following:
    ``(b)(1) A person may not obtain any Federal financial assistance 
in the form of a loan (other than a disaster loan) or loan insurance or 
guarantee if the person has an outstanding high value nontax 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.
    ``(2) In this subsection, the term `high value nontax debt' means a 
debt having an outstanding value (including principal, interest, and 
penalties) that exceeds $1,000,000.''.

SEC. 403. INSPECTOR GENERAL REVIEW.

    Section 3718 of title 31, United States Code, is amended by adding 
at the end the following:
    ``(j)(1) The Inspector General of each agency shall review and 
report to the Congress and the head of an agency on each compromise, 
default, or final resolution in bankruptcy of a high value nontax debt 
arising out of the activities of, or referred to, the agency.
    ``(2) In each review and report to an agency under this subsection, 
the Inspector General shall rate the performance of the head of the 
agency in seeking to collect the debt, and recommend any changes in the 
debt collection practices of the agency that are appropriate to reduce 
the aggregate amount of high value nontax debts that are resolved 
finally in whole or in part by compromise, default, or bankruptcy to 
less than 1 percent of the aggregate amount of all high value nontax 
debts.
    ``(3) In this subsection, the term `high value nontax debt' means a 
debt--
            ``(A) having an outstanding value (including principal, 
        interest, and penalties) that exceeds $1,000,000; and
            ``(B) that has not been referred to the Department of 
        Justice for litigation or to the Department of the Treasury for 
        collection action.''.

SEC. 404. REQUIREMENT TO SEEK SEIZURE AND FORFEITURE OF ASSETS SECURING 
              HIGH VALUE NONTAX DEBT.

    The head of an agency authorized to collect a high value nontax 
debt that is delinquent shall promptly seek seizure and forfeiture of 
assets pledged to the United States in any transaction giving rise to 
the nontax debt.

                       TITLE V--FEDERAL PAYMENTS

SEC. 501. TRANSFER OF RESPONSIBILITY TO SECRETARY OF THE TREASURY WITH 
              RESPECT TO PROMPT PAYMENT.

    (a) Definition.--Section 3901(a)(3) of title 31, United States 
Code, is amended by striking ``Director of the Office of Management and 
Budget'' and inserting ``Secretary of the Treasury''.
    (b) Interest.--Section 3902(c)(3) of title 31, United States Code, 
is amended by striking ``Director of the Office of Management and 
Budget'' and inserting ``Secretary of the Treasury''.
    (c) Regulations.--Section 3903(a)(1) of title 31, United States 
Code, is amended by striking ``Director of the Office of Management and 
Budget'' and inserting ``Secretary of the Treasury''.
    (d) Reports.--Section 3906(a) of title 31, United States Code, is 
amended by striking ``Director of the Office of Management and Budget'' 
each place it appears and inserting ``Secretary of the Treasury''.

SEC. 502. PROMOTING ELECTRONIC PAYMENTS.

    Section 3903(a) of title 31, United States Code, is amended--
            (1) by amending paragraph (1) to read as follows:
            ``(1) provide that the required payment date is--
                    ``(A) the date payment is due under the contract 
                for the item of property or service provided; or
                    ``(B) no later than 30 days after a proper invoice 
                for the amount due is received if a specific payment 
                date is not established by contract;''; and
            (2) by striking ``and'' after the semicolon at the end of 
        paragraph (8), by striking the period at the end of paragraph 
        (9) and inserting a semicolon, and by adding at the end the 
        following:
            ``(10) provide that the Secretary of the Treasury may waive 
        the application of requirements under paragraph (1) to provide 
        for early payment of vendors in cases where an agency will 
        implement an electronic payment technology which improves 
        agency cash management and business practice; and
            ``(11) provide that a vendor is required to pay interest to 
        the United States on unearned amounts in its possession.''.

       TITLE VI--FEDERAL BENEFIT VERIFICATION AND INTEGRITY TESTS

SEC. 601. SHORT TITLE.

    This title may be cited as the ``Federal Benefit Verification and 
Integrity Act''.

SEC. 602. PURPOSES.

    The purposes of this title are the following:
            (1) To reduce errors in Federal benefit programs that lead 
        to waste, fraud, or abuse and encourage agencies to work 
        together to identify common sources of errors.
            (2) To identify solutions to common problems that will save 
        money for the taxpayer and demonstrate the Government's ability 
        to deliver Federal benefits to the right person, at the right 
        time, for the right amount.
            (3) To focus on increasing accuracy and efficiency for 
        Federal benefit program eligibility, financial and program 
        management, and debt collection.
            (4) To improve the coordination of Government information 
        resources across Government agencies to strengthen the delivery 
        of Federal benefits.
            (5) To balance the need for data in verifying eligibility 
        with the paperwork burden and privacy intrusion that data 
        sharing imposes.
            (6) To emphasize deterring and preventing fraud in the 
        provision of Federal benefits, rather than seeking to detect 
        fraud after Federal benefits have been provided.
            (7) To ensure that agencies administering federally funded 
        benefit programs inform applicants applying for benefits under 
        those programs that their data can be shared to verify their 
        eligibility for those benefits.
            (8) To encourage individuals to provide accurate 
        information when applying for benefits under federally funded 
        benefit programs.

SEC. 603. DEFINITIONS.

    In this title:
            (1) Board.--The term ``Board'' means the Federal Benefit 
        Verification and Payment Integrity Board established under this 
        title.
            (2) Federal benefit program.--The term ``Federal benefit 
        program'' means any program administered or funded by the 
        Federal Government, or by any agent or State on behalf of the 
        Federal Government, providing cash assistance or in-kind 
        assistance in the form of payments, grants, loans, or loan 
        guarantees to or for the benefit of any person.

 Subtitle A--Notification of Federal Benefit Recipients Regarding Data 
                              Verification

SEC. 612. PROGRAM AGENCY RESPONSIBILITY TO PROVIDE CORRECT INFORMATION.

    (a) In General.--An agency that administers a Federal benefit 
payment program shall provide notice informing applicants under the 
program, in information material and instructions accompanying program 
application forms, that applicants' data may be verified to the extent 
permitted by law.
    (b) Agency Compliance.--An agency may comply with subsection (a) by 
modifying program materials and applications to include such notice as 
part of their normal reissuance cycle for reprinting forms, but in no 
case later than December 31, 2000.
    (c) Record of Acknowledgments.--The head of each agency that 
administers a Federal benefit program shall maintain a record of each 
applicant's acknowledgment that the applicant has received notice of 
the uses and disclosures to be made of the applicant's information, for 
as long as the applicant receives benefits from or owes a debt to the 
Government under the program.

    Subtitle B--Federal Benefit Program Management Improvement Tests

SEC. 621. TESTS OF PRACTICES AND TECHNIQUES FOR IMPROVING FEDERAL 
              BENEFIT PROGRAM MANAGEMENT.

    (a) Authority To Conduct Tests.--
            (1) In general.--A Federal agency that administers a 
        Federal benefit program may conduct a test of information 
        technology practices or techniques to improve income 
        verification, debt collection, data privacy and integrity 
        protection, and identification authentication in the 
        administration of the program, in accordance with a proposal 
        approved by the Federal Benefit Verification and Payment 
        Integrity Board established by this subtitle.
            (2) Waiver of regulations.--Upon the request of the Board, 
        the head of an agency may waive the enforcement of any 
        regulation of the agency for the purposes of carrying out a 
        test under this section.
            (3) Identification of test areas.--The Director of the 
        Office of Management and Budget and the Chief Information 
        Officers' Council shall each recommend to the Board, within 120 
        days after the date of enactment of this Act, various 
        information technology practices and techniques that should be 
        tested under this subtitle.
    (b) Approval of Agency Proposals.--
            (1) In general.--The head of a Federal agency may develop 
        and submit to the Board a proposal for carrying out a test 
        under this section for a specific Federal benefit program 
        administered by the agency. The proposal shall contain specific 
        goals, including a schedule, for improving customer service and 
        error reduction in the program and other information requested 
        by the Board.
            (2) Contents.--The proposal shall provide for the testing 
        of information sharing in an integrated manner where feasible 
        of electronic practices and techniques for improving Federal 
        benefit program management, including the following:
                    (A) Use of encryption and electronic signature 
                technology consistent with techniques acceptable to the 
                National Institute of Standards and Technology, to 
                protect the confidentiality and integrity of 
                information.
                    (B) Use of other security controls and monitoring 
                tools.
                    (C) Use of risk profiles and risk alert 
                technologies, including use of Federal, State, and 
                private databases such as the National Directory of New 
                Hires, Federal and State tax data, and credit bureau 
                data.
                    (D) Establishment of a management framework for 
                exploring and reducing the information security risks 
                associated with Federal agency operations and 
                technologies, including risk assessments and disaster 
                recovery planning.
            (3) Consultation.--Any agency whose proposals would require 
        access to another agency's database shall consult with that 
        agency prior to submission of the proposal to the Board.
            (4) Privacy safeguards.--A proposal submitted to the Board 
        must contain a description of appropriate administrative, 
        technical, and physical safeguards to ensure the security and 
        confidentiality of records and to protect against any 
        anticipated threats or hazards to their security or integrity 
        which could result in substantial harm, embarrassment, 
        inconvenience, or unfairness to any individual on whom 
        information is maintained. The proposal shall include, in 
        particular, prohibitions on duplication and redisclosure of 
        records provided by the source agency within or outside the 
        recipient entity, except where required by law or essential to 
        the conduct of the test.
            (5) Agency reimbursement.--The proposal shall include an 
        estimate for reimbursement that may be charged by a Federal 
        agency to another agency in conducting tests under the 
        proposal.
            (6) Review of proposals.--Not later than 60 days after the 
        date of receipt of a proposal under this subsection, the Board 
        shall review and recommend disposition of the proposal to the 
        heads of the data sharing agencies under the proposal.
    (c) Cooperative Agreements and Contracts.--The head of an agency 
participating in a test under this section, in consultation with the 
Board, may enter into a cooperative agreement with a State or contract 
with a private entity under which the State or private entity, 
respectively, may provide services on behalf of the Federal agency in 
carrying out the test.
    (d) General Implementation Plan.--The Board shall prepare a plan 
for the implementation of this section, including for the coordination 
of the conduct of tests under this subtitle and the procedures for 
submission of proposals for those tests.
    (e) Reports on Results of Tests.--
            (1) Annual report.--Beginning not later than 1 year after 
        the date of enactment of this Act, the Board shall submit 
        annually to the Congress a report on the tests conducted under 
        this section.
            (2) Content.--The report shall include--
                    (A) an estimate of potential cost savings and other 
                impacts demonstrated by the tests;
                    (B) an analysis of the feasibility of applying the 
                practices and techniques demonstrated in each test 
                within the Federal Government, including analysis of 
                what was the least amount of information that was 
                necessary to verify eligibility of applicants under 
                each Federal benefit program that participated in the 
                tests;
                    (C) an assessment of the value of State data in 
                those tests; and
                    (D) such recommendations as the Board considers 
                appropriate.
    (f) Authority To Request Test.--The Board may request the head of a 
Federal agency that administers a Federal benefit program to conduct a 
test under this section, including the preparation and submission of a 
proposal for such a test in accordance with this section. The head of 
an agency shall respond within 30 days by approving or disapproving 
such a request of the Board.
    (g) Use of Test Information.--Information on any individual 
obtained in the course of a test under this section shall not be used 
as the exclusive basis of a decision concerning the rights, benefits, 
or privileges of any individual.

SEC. 622. SHARING OF INFORMATION IN NATIONAL DIRECTORY OF NEW HIRES.

    (a) Availability of Information.--Notwithstanding section 453(l) of 
the Social Security Act (42 U.S.C. 653(l)), the Secretary of Health and 
Human Services may disclose information to another Federal agency from 
the National Directory of New Hires established pursuant to section 
453(i) of that Act (42 U.S.C. 653(i)) based on matches conducted by the 
Department of Health and Human Services for purposes of conducting a 
test under this subtitle.
    (b) Authority To Disclose Information.--The head of an agency to 
whom information is disclosed under this section may disclose the 
information to another Federal agency for use by the agency only as 
specified under a test proposal under this subtitle. The head of a 
Federal agency to whom information is disclosed under this subsection 
may disclose such information to a State agency administering a 
federally funded benefit program, a public housing authority, or a 
guaranty agency (as that term is defined in section 435(j) of the 
Higher Education Act of 1965) only for the purpose of conducting the 
test.
    (c) Redisclosure Limitation.--An entity that receives information 
for use in a test under this title that it was not otherwise authorized 
by law to obtain may not redisclose the information or use it for any 
other purpose.
    (d) Sharing of State Information.--The provision of information 
pursuant to subsection (a) shall not affect any determination of 
whether a State meets the requirements of section 303(h)(1)(C) of the 
Social Security Act.

SEC. 623. INCREASED PENALTIES AND PUNITIVE DAMAGES UNDER PRIVACY ACT.

    (a) Increased Penalties.--Section 552a(i) of title 5, United States 
Code, is amended in each of paragraphs (1) and (3) by striking ``shall 
be guilty'' and all that follows through the period and inserting 
``shall be fined not more than $10,000, imprisoned for not more than 
one year, or both.''.
    (b) Punitive Damages.--Section 552a(g)(4) of title 5, United States 
Code, is amended--
            (1) by redesignating subparagraphs (A) and (B) as clauses 
        (i) and (ii), respectively;
            (2) by inserting ``(A)'' after ``(4)''; and
            (3) by adding at the end the following:
``(2) In any such suit in which the court determines that the agency 
acted in a manner that was willful and intentional, the court may award 
punitive damages in addition to damages and costs referred to in 
subparagraph (A).''.

SEC. 624. ESTABLISHMENT OF THE FEDERAL BENEFIT VERIFICATION AND PAYMENT 
              INTEGRITY BOARD.

    (a) Establishment.--There is hereby established the Federal Benefit 
Verification and Payment Integrity Board.
    (b) Membership.--The Board shall be composed of 10 members 
appointed from among Federal or State employees, as follows:
            (1) 3 members, of whom one shall be appointed by the head 
        of each of 3 Federal agencies designated by the Director of the 
        Office of Management and Budget. The Director shall designate 
        agencies under this paragraph from among the Federal agencies 
        responsible for administering Federal benefit programs.
            (2) 2 members appointed by the Director of the Office of 
        Management and Budget, of whom at least one shall be a State 
        employee appointed to represent federally funded State 
        administered benefits programs.
            (3) 1 member appointed by the Secretary of Health and Human 
        Services.
            (4) 1 member appointed by the Secretary of the Treasury.
            (5) 1 member appointed by the Commissioner of Social 
        Security.
            (6) 1 member appointed by the Secretary of Labor.
            (7) 1 member appointed by the Director of the Office of 
        Management and Budget to address privacy concerns.
    (c) Chairperson.--The Director of the Office of Management and 
Budget shall designate one of the members of the Board as the 
chairperson of the Board.
    (d) Administrative Support.--The heads of Federal agencies having a 
member on the Board may provide to the Board such administrative and 
other support services and facilities as the Board may require to 
perform its functions under this subtitle.
    (e) Travel Expenses.--Members of the Board shall receive travel 
expenses, including per diem, in lieu of subsistence, in accordance 
with sections 5702 and 5703 of title 5, United States Code.
    (f) Reports.--The Board shall periodically report to the Director 
of the Office of Management and Budget regarding its activities.

SEC. 625. IMPLEMENTATION OF TESTED INFORMATION TECHNOLOGY PRACTICES OR 
              TECHNIQUES.

    (a) Recommendations.--If the Board determines that any information 
technology practice, technique, or information sharing initiative 
tested under this subtitle was successfully demonstrated in the test 
and should be implemented in the administration of a Federal benefit 
program, the Board--
            (1) shall recommend regulations or legislation to implement 
        that practice, technique, or initiative, if the Board 
        determines that implementation is not otherwise prohibited 
        under another law; or
            (2) include in its annual report to the Congress under 
        section 621 recommendations for such legislation as may be 
        necessary to authorize that implementation.
    (b) Requirements Regarding Data Processing Systems.--The Board 
shall include in any recommendation of regulations under subsection 
(a)--
            (1) provisions that ensure use of generally accepted data 
        processing system development methodology; and
            (2) provisions that will result in system architecture that 
        will facilitate information exchange, increase data sharing, 
        and reduce costs, by elimination of redundancy in development 
        and acquisition of data processing systems.
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