1.This Act may be cited as the
Subsidized Stafford Loan Reduced
Interest Rate Extension Act of 2012
.
<enum>I</enum><header>Extension of
Reduced Interest Rate</header>
<section id="id2A72F8759F504B938770968040BDBB86" section-type="subsequent-section"><enum>101.</enum><header>Interest rate
extension</header><text display-inline="no-display-inline">Section 455(b)(7)(D)
of the Higher Education Act of 1965 (20 U.S.C. 1087e(b)(7)(D)) is
amended—</text>
<paragraph id="H0B649A74464C4C0ABC94CB5A93D5240B"><enum>(1)</enum><text>in the matter
preceding clause (i), by striking <quote>and before July 1, 2012,</quote> and
inserting <quote>and before July 1, 2013,</quote>; and</text>
</paragraph><paragraph id="H2DB83C6E067947798B5349EB115A7422"><enum>(2)</enum><text>in clause (v), by
striking <quote>and before July 1, 2012,</quote> and inserting <quote>and
before July 1, 2013,</quote>.</text>
</paragraph></section><enum>II</enum><header>Improper
Payments Elimination and Recovery Improvement</header>
<section id="id4D9969F7F1D045B5AB79518D93317BB7"><enum>201.</enum><header>Short
title</header><text display-inline="no-display-inline">This title may be cited
as the <quote><short-title>Improper Payments Elimination
and Recovery Improvement Act of 2012</short-title></quote>.</text>
</section><section id="idE28B5138C82D4F078851B43AD57528E1"><enum>202.</enum><header>Definition</header><text display-inline="no-display-inline">In this title, the term <term>agency</term>
means an executive agency defined under section 105 of title 5, United States
Code.</text>
</section><section id="id2D2DC7DE399747D0A658A6ADEF64CEB3"><enum>203.</enum><header>Improving the
Determination of Improper Payments By Federal Agencies</header>
<subsection id="ID8f76d033540f4488af0c7b07329b27ea"><enum>(a)</enum><header>In
general</header><text>The Director of the Office of Management and Budget shall
on an annual basis—</text>
<paragraph id="IDfc42b3bd1f244998a1adb4dfe4d139a5"><enum>(1)</enum><text>identify a list
of high-priority Federal programs for greater levels of oversight and
review—</text>
<subparagraph id="id65C97ABE07AE4F28B5E1FD6CEE047216"><enum>(A)</enum><text>in which the
highest dollar value or majority of governmentwide improper payments occur;
or</text>
</subparagraph><subparagraph id="idD49C937FE37141498E2D29931FCB81DF"><enum>(B)</enum><text>for which there
is a higher risk of improper payments;</text>
</subparagraph></paragraph><paragraph id="ID5ed6615d559f42e8a7d994c6787af4d1"><enum>(2)</enum><text>in coordination
with the agency responsible for administering the high-priority program—</text>
<subparagraph id="id6B5328E0CD6B46038DE8DC04F6D3735C"><enum>(A)</enum><text>establish
semi-annual or quarterly targets and actions for reducing improper payments
associated with each high-priority program; or</text>
</subparagraph><subparagraph id="id8385C1AE35364D75831F42308F63BC2F"><enum>(B)</enum><text>if such targets
are in effect on the date of enactment of this Act, establish supplemental
targets; and</text>
</subparagraph></paragraph><paragraph id="IDbcf2bfed29954630857afe1ea2c0f312"><enum>(3)</enum><text>determine the
entities that have received the greatest amount of improper payments (or, if
improper payments are identified solely on the basis of a sample, the entities
that have received the greatest amount of improper payments in the applicable
sample).</text>
</paragraph></subsection><subsection id="IDc22c99ca306846449d5047a6bc8abb13"><enum>(b)</enum><header>Report on
high-Dollar improper payments</header>
<paragraph id="idB6BC2D8502F14274A10C28F66CB67393"><enum>(1)</enum><header>In
general</header><text>Subject to Federal privacy policies and to the extent
permitted by law, each agency on a quarterly basis shall submit to the
Inspector General of that agency, and make available to the public (including
availability through the Internet), a report on any high-dollar improper
payments identified by the agency.</text>
</paragraph><paragraph id="idB2E3AC91D2314AD1AC423350BB994202"><enum>(2)</enum><header>Contents</header><text>Each
report under this subsection—</text>
<subparagraph id="id9552A0A31C414FD48E768261F063FCDA"><enum>(A)</enum><text>shall
describe—</text>
<clause id="id92E44475C9164A5898F735D7335DEDCD"><enum>(i)</enum><text>any
action the agency—</text>
<subclause id="idB5002A90C31A4F52A4FE9D8CCBBD9AC0"><enum>(I)</enum><text>has taken or
plans to take to recover improper payments; and</text>
</subclause><subclause id="id85F579A9133945F59B9661DED7DD16A6"><enum>(II)</enum><text>intends to take
to prevent future improper payments; and</text>
</subclause></clause></subparagraph><subparagraph id="id18CD4940B7FB41A1859780D5A2282D9B"><enum>(B)</enum><text>shall not include
any referrals the agency made or anticipates making to the Department of
Justice, or any information provided in connection with such referrals.</text>
</subparagraph></paragraph><paragraph id="id7FA5E14472C04E78A2DA2121A0DF8927"><enum>(3)</enum><header>Availability of
information to Inspector General</header><text>Paragraph (2)(B) shall not
prohibit any referral or information being made available to an Inspector
General as otherwise provided by law.</text>
</paragraph><paragraph id="id35D1DE94C8DC452B867E0A81E40B82E3"><enum>(4)</enum><header>Assessment</header><text>After
the review of each report under this subsection, the Inspector General
shall—</text>
<subparagraph id="id4F26546C2983456BADDFC46615933E70"><enum>(A)</enum><text>assess the level
of risk associated with the applicable program and the quality of the improper
payment estimates and methodology of the agency;</text>
</subparagraph><subparagraph id="id11816053843444D2A9BCB03F494D275D"><enum>(B)</enum><text>determine the
extent of additional oversight or financial controls warranted to identify and
prevent improper payments; and</text>
</subparagraph><subparagraph id="id524E39D849744BF08175520733889AC4"><enum>(C)</enum><text>provide the head
of the agency with any recommendations, for modifying any plans of the agency,
including improvements for improper payments determination and estimation
methodology.</text>
</subparagraph></paragraph></subsection><subsection id="ID74ad530a4b774259b4d0488b2dff2c08"><enum>(c)</enum><header>Improved
estimates</header>
<paragraph id="idD7711BEC440F4FE5BC6E02D8A5A58A4E"><enum>(1)</enum><header>In
general</header><text>Not later than 180 days after the date of enactment of
this Act, the Director of the Office of Management and Budget shall provide
guidance to agencies for improving the estimates of improper payments under the
Improper Payments Information Act of 2002 (31 U.S.C. 3321 note).</text>
</paragraph><paragraph id="ID8c6960a5768d4a6d9de9ad3d9bda41ac"><enum>(2)</enum><header>Guidance</header><text>Guidance
under this subsection shall—</text>
<subparagraph id="idB025AB5BB6554ABBA8CC91436DC5FCFD"><enum>(A)</enum><text>strengthen the
estimation process of agencies by reviewing the underlying validity of payments
to ensure amounts being billed are proper; and</text>
</subparagraph><subparagraph id="idAA5BFE0DD29D4A7CBE489849AB857482"><enum>(B)</enum><text>include—</text>
<clause id="id0C7EF7F4B88C485E8AB69CE02DBD8A7C"><enum>(i)</enum><text>access to more
complete data as part of reviews;</text>
</clause><clause id="ID737f86faaad84172a5d2c2bd2f2c4465"><enum>(ii)</enum><text>ending reliance
on self-reporting of improper payments as a replacement for estimates, and
relying on the development of a robust process to estimate and identify
improper payments across the agency;</text>
</clause><clause id="ID54a00e0eb53f458185bf3a613952fdea"><enum>(iii)</enum><text>all
overpayments in the improper payments estimate, regardless of whether
improperly paid funds have been or are being recovered;</text>
</clause><clause id="ID80922fab8e204076b6de8b32cc1cd850"><enum>(iv)</enum><text>ensuring
that—</text>
<subclause id="id4EFEE21813D8410F9A8614F0EFB3D2C8"><enum>(I)</enum><text>the review of
payments to employees shall include analysis of employee data, including pay
grade data, locality pay, and other factors that affect pay; and</text>
</subclause><subclause id="id3DBD322A1FD54AF99F38AAE9577F9566"><enum>(II)</enum><text>reviews address
high-risk or high-dollar personnel payments, including travel, pay, and
purchase cards;</text>
</subclause></clause><clause id="ID46a00144ae7c4d22a99a703403604f2a"><enum>(v)</enum><text>reassessing
high-risk programs to better reflect the unique processes, procedures, and
risks of improper payments, including assessments for each program to reflect
different risk components and better direct corrective actions; and</text>
</clause><clause id="ID9dfe5eb25cc6471f9536ae243ca39a03"><enum>(vi)</enum><text>confirming that
inter-agency transfers are proper using a methodology comparable to that used
to assess program level improper payments.</text>
</clause></subparagraph></paragraph></subsection></section><section id="idBDE114A5022B4BABB825643E59F905C6"><enum>204.</enum><header>Improper
Payments Information</header><text display-inline="no-display-inline">Section
2(a)(3)(A)(ii) of the Improper Payments Information Act of 2002 (31 U.S.C. 3321
note) is amended by striking <quote>with respect to fiscal years following
September 30th of a fiscal year beginning before fiscal year 2013 as determined
by the Office of Management and Budget</quote> and inserting <quote>with
respect to fiscal year 2014 and each fiscal year thereafter</quote>.</text>
</section><section id="ID2f3cafc2730f4a179c1c59df34ba68fc"><enum>205.</enum><header>Do not pay
initiative</header>
<subsection id="ID142b861249b84040b45ea8711f0c818c"><enum>(a)</enum><header>Prepayment and
preaward procedures</header>
<paragraph id="id692DF761660C4811BF7863F9D99867A5"><enum>(1)</enum><header>In
general</header><text>Each agency shall review prepayment and preaward
procedures and ensure that a thorough review of available databases with
relevant information on eligibility occurs to determine program or award
eligibility and prevent improper payments before the release of any Federal
funds, to the extent permitted by law.</text>
</paragraph><paragraph id="id9C8CBD22D79B4864A71B48263BD2E8BF"><enum>(2)</enum><header>Databases</header><text>At
a minimum, each agency shall, before payment and award, check the following
databases (if applicable and permitted by law) to verify eligibility:</text>
<subparagraph id="id27D03F30D59945298259C4085B644414"><enum>(A)</enum><text>The Death Master
File of the Social Security Administration.</text>
</subparagraph><subparagraph id="idE9D1049F86B842CDBF7B02AFC9AEC4AB"><enum>(B)</enum><text>The General
Services Administration’s Excluded Parties List System.</text>
</subparagraph><subparagraph id="idD87F974D7D134FDDBC8838BF68E8E1D2"><enum>(C)</enum><text>The Debt Check
Database of the Department of the Treasury.</text>
</subparagraph><subparagraph id="idC134BC4D08864C4CB4425F8155E89569"><enum>(D)</enum><text>The Credit Alert
System or Credit Alert Interactive Voice Response System of the Department of
Housing and Urban Development.</text>
</subparagraph><subparagraph id="idBA1898F1CEBA4549AC859A667E1BC3BF"><enum>(E)</enum><text>The List of
Excluded Individuals/Entities of the Office of Inspector General of the
Department of Health and Human Services.</text>
</subparagraph></paragraph></subsection><subsection id="ID9f5030e48e824d7680a4bc17327574e9"><enum>(b)</enum><header>Do not pay
list</header>
<paragraph id="id2DAF05A2B68C4958BA29FC2F6ACF40D4"><enum>(1)</enum><header>Establishment</header><text>There
is established the Do Not Pay List which shall consist of—</text>
<subparagraph id="idE2657A9837B24A6397B60AFF417E32AB"><enum>(A)</enum><text>the databases
described under subsection (a)(2); and</text>
</subparagraph><subparagraph id="id51B4221390B042E8B0EEE2B375665116"><enum>(B)</enum><text>any other
database designated by the Director of the Office of Management and Budget in
consultation with agencies.</text>
</subparagraph></paragraph><paragraph id="id5C1995CFDEC540F2ABE948C98E23F72C"><enum>(2)</enum><header>Other
databases</header><text>In making designations of other databases under
paragraph (1)(B), the Director of the Office of Management and Budget shall
consider—</text>
<subparagraph id="idDFE17A660192492BA8056199635858F1"><enum>(A)</enum><text>any database that
assists in preventing improper payments; and</text>
</subparagraph><subparagraph id="id932AF7475F3F4F24AC8D8D17AC2AB6F4"><enum>(B)</enum><text>the database of
incarcerated individuals established under subsection (f).</text>
</subparagraph></paragraph><paragraph id="id87BAFC1B85404023A7E5AF0B5B5BD264"><enum>(3)</enum><header>Access and
review by agencies</header><text>For purposes of identifying and preventing
improper payment, each agency shall have access to, and use of, the Do Not Pay
List to determine payment or award eligibility when the Director of the Office
of Management and Budget determines the Do Not Pay List is appropriately
established for the agency.</text>
</paragraph><paragraph id="id38AF93488C93472EAAE37260A499470C"><enum>(4)</enum><header>Payment
otherwise required</header><text>When using the Do Not Pay List, an agency
shall recognize that there may be circumstances under which the law requires a
payment or award to be made to a recipient, regardless of whether that
recipient is on the Do Not Pay List.</text>
</paragraph></subsection><subsection id="ID1a18f5948d7149cb869fd18abfb184b4"><enum>(c)</enum><header>Database
integration plan</header><text>Not later than 60 days after the date of
enactment of this Act, the Director of the Office of Management and Budget
shall provide to the Congress a plan for—</text>
<paragraph id="idF42AFE1D177B45C0B16E9C6081BBC73E"><enum>(1)</enum><text>inclusion of
other databases on the Do Not Pay List;</text>
</paragraph><paragraph id="idFB89DFDB9E844F1493F4ED809B91D2E8"><enum>(2)</enum><text>to the extent
permitted by law, agency access to the Do Not Pay List; and</text>
</paragraph><paragraph id="id3C2287FC9E8C4975A7513BC2EF3F9505"><enum>(3)</enum><text>the multilateral
data use agreements described under subsection (e).</text>
</paragraph></subsection><subsection id="ID3a47fda6e4d94ed8a6ff1f56147fe6b4"><enum>(d)</enum><header>Initial working
system</header>
<paragraph id="idBD6A87AEACA7467D84E5B615FBE14A74"><enum>(1)</enum><header>Establishment</header><text>Not
later than 90 days after the date of enactment of this Act, the Director of the
Office of Management and Budget shall establish a working system for prepayment
and preaward review that includes the Do Not Pay List as described under this
section.</text>
</paragraph><paragraph id="id14297F64857841CABF28EE9802124E3B"><enum>(2)</enum><header>Initial
system</header><text>The working system established under paragraph (1)—</text>
<subparagraph id="idF9E4AB9F9A8349DAB98BBD23A110BE8B"><enum>(A)</enum><text>may be located
within an appropriate agency;</text>
</subparagraph><subparagraph id="id9BF28EEDB47D4F598147CE1DA335322E"><enum>(B)</enum><text>shall include not
less than 3 agencies;</text>
</subparagraph><subparagraph id="id1BE6916A599C47E9819D20EFF5F01161"><enum>(C)</enum><text>shall include
fraud and improper payments detection through predictive modeling and other
analytic technologies and other techniques; and</text>
</subparagraph><subparagraph id="id6DD4B012E5CA4FBBB48878C8FA86E7DD"><enum>(D)</enum><text>may provide for
the use of commercial database sources, commercial analysis, and other
functionality for payment or award reviews, as determined appropriate by the
Director of the Office of Management and Budget for verifying Federal
data.</text>
</subparagraph></paragraph><paragraph id="id6945C06BA5BF407C9217985C7ABD3071"><enum>(3)</enum><header>Application to
all agencies</header><text>Not later than January 1, 2013, each agency shall
review all payments and awards for all programs of that agency through the
system established under this subsection.</text>
</paragraph></subsection><subsection id="IDe1ab8d1e9fae4bdbb56bfcf16b9356c0"><enum>(e)</enum><header>Multilateral
data use agreements</header>
<paragraph id="idAEF0C65F521C41258FB691C493B7830F"><enum>(1)</enum><header>In
general</header><text>Not later than 60 days after the date of enactment of
this Act, the Director of the Office of Management and Budget shall develop a
plan to establish a multilateral data use agreement authority to carry out this
section, including access to databases such as the New Hire Database under
section 453(j) of the Social Security Act (42 U.S.C. 653(j)).</text>
</paragraph><paragraph id="IDeb9fe0bfd15d4d39b62292d3ce11b38a"><enum>(2)</enum><header>General
protocols and security</header>
<subparagraph id="idABA3A5EF0A89490EBFF0B46BE02DF966"><enum>(A)</enum><header>In
general</header><text>The multilateral data use agreements shall be consistent
with protocols to ensure the secure transfer and storage of any data provided
to another entity or individual—</text>
<clause id="idD5F565CF35E549269B3764918F82397E"><enum>(i)</enum><text>under the
provisions of, or amendments made by, this section; and</text>
</clause><clause id="id66BE5A7142084635BA11AF56318C137B"><enum>(ii)</enum><text>consistent with
applicable information, privacy, security, and disclosure laws,
including—</text>
<subclause id="id257DF1EB8F4247048B743185516DA918"><enum>(I)</enum><text>the regulations
promulgated under the Health Insurance Portability and Accountability Act of
1996 and section 552a of title 5, United States Code; and</text>
</subclause><subclause id="idAB33D74F7149465286515EAC30182C33"><enum>(II)</enum><text>subject to any
information systems security requirements under such laws or otherwise required
by the Director of the Office of Management and Budget.</text>
</subclause></clause></subparagraph><subparagraph id="idF4C7634AC1C34336A2C437BBB88C2223"><enum>(B)</enum><header>Consultation</header><text>The
Director of the Office of Management and Budget shall consult with—</text>
<clause id="idFD7C34F4E81841C39963645D404CE911"><enum>(i)</enum><text>the
Council of Inspectors General on Integrity and Efficiency before implementing
this paragraph; and</text>
</clause><clause id="id532C8C4FADA1496FA96FC0783CC543A2"><enum>(ii)</enum><text>the Secretary of
Health and Human Services, the Social Security Administrator, and the head of
any other agency, as appropriate.</text>
</clause></subparagraph></paragraph></subsection><subsection id="ID31d70c8e088c412092554d03cf600ae0"><enum>(f)</enum><header>Development and
access to a database of incarcerated individuals</header>
<paragraph id="id3523A66DAFDE48A4876FAF1488731B00"><enum>(1)</enum><header>In
general</header><text>The Attorney General shall develop and maintain a
database of individuals incarcerated at Federal and State facilities.</text>
</paragraph><paragraph id="id7DA123AE50D048B39B5ED97D3C6AE372"><enum>(2)</enum><header>Availability
and update</header><text>The database developed under this subsection shall
be—</text>
<subparagraph id="id757E9C632C9E49EBB536AFB886BA62CF"><enum>(A)</enum><text>available to
agencies to carry out this section and prevent waste, fraud, and abuse;
and</text>
</subparagraph><subparagraph id="idDFB98B6CC7D64EF19E468C6BB99EDE1E"><enum>(B)</enum><text>updated no less
frequently than on a weekly basis.</text>
</subparagraph></paragraph></subsection><subsection id="IDda7d7f40ce3b42abbd916844e4f20280"><enum>(g)</enum><header>Plan To improve
the Social Security Administration death master file</header>
<paragraph id="id8513F2FEF64D4D229A415942C557EAD7"><enum>(1)</enum><header>Establishment</header><text>In
conjunction with the Commissioner of Social Security and in consultation with
stakeholders and the States, the Director of the Office of Management and
Budget, shall establish a plan for improving the quality and timeliness of
death data maintained by the Social Security Administration, including death
information reported to the Commissioner under section 205(r) of the Social
Security Act (42 U.5.C. 405(r)).</text>
</paragraph><paragraph id="idD37E887601E84BB18E44698D3BB478EF"><enum>(2)</enum><header>Actions under
plan</header><text>The plan established under this subsection shall include
actions agencies are required to take to—</text>
<subparagraph id="id87725F6994F040ABB98141F8BC4EBA9F"><enum>(A)</enum><text>increase the
quality and frequency of access;</text>
</subparagraph><subparagraph id="id4064E1B0643F4808BD3C15CEDD53E7D7"><enum>(B)</enum><text>achieve a goal of
at least daily access as appropriate; and</text>
</subparagraph><subparagraph id="id8604F96ECBC145D5A02D65156AEA74C3"><enum>(C)</enum><text>provide for all
States to use modern, electronic means for providing data.</text>
</subparagraph></paragraph><paragraph id="idCC234A501FBC4F0282C360A51C629C5A"><enum>(3)</enum><header>Report</header><text>Not
later than 120 days after the date of enactment of this Act, the Director of
the Office of Management and Budget shall submit a report to Congress on the
plan established under this subsection, including recommended
legislation.</text>
</paragraph></subsection></section><section id="IDcefb1026dc0f4c92bdb58ef2a877cbea"><enum>206.</enum><header>Improving
recovery of improper payments</header>
<subsection id="IDd61709fe1eac48f1833aabeca79dbd0c"><enum>(a)</enum><header>In
general</header><text>The Director of the Office of Management and Budget shall
determine—</text>
<paragraph id="ID2f847827950e47818f333d2e7f8c2235"><enum>(1)</enum><text>current and
historical rates and amounts of recovery of improper payments (or, in cases in
which improper payments are identified solely on the basis of a sample,
recovery rates and amounts estimated on the basis of the applicable sample),
including specific information of amounts and payments recovered by recovery
audit contractors; and</text>
</paragraph><paragraph id="ID5a08a81ed1da44c987604b072912ccae"><enum>(2)</enum><text>targets for
recovering improper payments, including specific information on amounts and
payments recovered by recovery audit contractors.</text>
</paragraph></subsection><subsection id="ID4b8d8342f6c14f26940c224a9ba8ca5b"><enum>(b)</enum><header>Recovery audit
contractor programs</header>
<paragraph id="ID15a8a75c444a4f039cf68763c4a5489d"><enum>(1)</enum><header>Establishment</header><text>Not
later than 90 days after the date of enactment of this Act, the Director of the
Office of Management and Budget shall establish a plan for no less than 10
Recovery Audit Contracting programs for the purpose of identifying and
recovering overpayments and underpayments in 10 agencies.</text>
</paragraph><paragraph id="idC074845078E9432A8587E7EDC396DE40"><enum>(2)</enum><header>Review of
commercial payments</header><text>Of the programs established under this
subsection, 5 programs shall review commercial payments by an agency.</text>
</paragraph><paragraph id="id4F1DF2DA29D3454397F52475F14E63DD"><enum>(3)</enum><header>Duration</header><text>Any
program established under this subsection shall terminate not more than 3 years
after the date on which the program is established.</text>
</paragraph><paragraph id="ID0f4dd9ae045d43398ae86e5497ea7bf3"><enum>(4)</enum><header>Reports</header>
<subparagraph id="id5895D55E233C4EAAAD049480061C67E1"><enum>(A)</enum><header>In
general</header><text>Not later than 3 months after the completion of a
program, the head of the agency conducting the program shall submit a report on
the program to Congress.</text>
</subparagraph><subparagraph id="id45A0390A709943B3B0C8656601B995C7"><enum>(B)</enum><header>Contents</header><text>Each
report under this paragraph shall include—</text>
<clause id="IDdde9101a30304010a6145876ee1482ef"><enum>(i)</enum><text>a
description of the impact of the program on savings and recoveries; and</text>
</clause><clause id="IDccc3fdce6e96413fb053957711d61520"><enum>(ii)</enum><text>such
recommendations as the head of the agency considers appropriate on extending or
expanding the program.</text>
</clause></subparagraph></paragraph></subsection></section>