[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3611 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 3611

To amend the Internal Revenue Code of 1986 and the Higher Education Act 
of 1965 to facilitate the disclosure of tax return information to carry 
     out the Higher Education Act of 1965, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 13, 2018

   Mr. Alexander (for himself, Mr. Whitehouse, Mrs. Murray, and Mr. 
   Gardner) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 and the Higher Education Act 
of 1965 to facilitate the disclosure of tax return information to carry 
     out the Higher Education Act of 1965, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Faster Access to Federal Student Aid 
Act of 2018''.

SEC. 2. SECURE DISCLOSURE OF TAX-RETURN INFORMATION TO CARRY OUT THE 
              HIGHER EDUCATION ACT OF 1965.

    (a) Amendments to the Internal Revenue Code of 1986.--
            (1) In general.--Paragraph (13) of section 6103(l) of the 
        Internal Revenue Code of 1986 is amended to read as follows:
            ``(13) Disclosure of return information to carry out the 
        higher education act of 1965.--
                    ``(A) Income-contingent or income-based repayment 
                and total and permanent disability discharge.--The 
                Secretary shall, upon written request from the 
                Secretary of Education, disclose to officers, 
                employees, and contractors of the Department of 
                Education, as specifically authorized and designated by 
                the Secretary of Education, only for the purpose of 
                (and to the extent necessary in) establishing, 
                renewing, administering, and conducting analyses and 
                forecasts for estimating costs related to income-
                contingent or income-based repayment programs, and the 
                discharge of loans based on a total and permanent 
                disability (within the meaning of section 437(a) of the 
                Higher Education Act of 1965), under title IV of the 
                Higher Education Act of 1965, the following return 
                information (as defined in subsection (b)(2)) with 
                respect to taxpayers identified by the Secretary of 
                Education as participating in the loan programs under 
                title IV of such Act, for taxable years specified by 
                such Secretary:
                            ``(i) Taxpayer identity information with 
                        respect to such taxpayer.
                            ``(ii) The filing status of such taxpayer.
                            ``(iii) Type of tax return from which the 
                        return information is provided.
                            ``(iv) The adjusted gross income of such 
                        taxpayer.
                            ``(v) Total number of exemptions claimed, 
                        or total number of individuals and dependents 
                        claimed, as applicable, on the return.
                            ``(vi) Number of children with respect to 
                        which tax credits under section 24 are claimed 
                        on the return.
                            ``(vii) Other information determined to be 
                        necessary by agreement between the Secretary 
                        and the Secretary of Education to administer 
                        the Federal financial aid programs as required 
                        by the Higher Education Act of 1965.
                    ``(B) Federal student financial aid.--The Secretary 
                shall, upon written request from the Secretary of 
                Education, disclose to officers, employees, and 
                contractors of the Department of Education, as 
                specifically authorized and designated by the Secretary 
                of Education, only for the purpose of (and to the 
                extent necessary in) determining eligibility for, and 
                amount of, Federal student financial aid under programs 
                authorized by title IV of the Higher Education Act of 
                1965 and conducting analyses and forecasts for 
                estimating costs related to such programs, the 
                following return information (as defined in subsection 
                (b)(2)) with respect to taxpayers identified by the 
                Secretary of Education as applicants for Federal 
                student financial aid under title IV of such Act, for 
                taxable years specified by such Secretary:
                            ``(i) Taxpayer identity information with 
                        respect to such taxpayer.
                            ``(ii) The filing status of such taxpayer.
                            ``(iii) Type of tax return from which the 
                        return information is provided.
                            ``(iv) The adjusted gross income of such 
                        taxpayer.
                            ``(v) The amount of any net earnings from 
                        self-employment (as defined in section 1402), 
                        wages (as defined in section 3121(a) or 
                        3401(a)), and taxable income from a farming 
                        business (as defined in section 236A(e)(4)) for 
                        the period reported on the return.
                            ``(vi) The total income tax of such 
                        taxpayer.
                            ``(vii) Total number of exemptions claimed, 
                        or total number of individuals and dependents 
                        claimed, as applicable, on the return.
                            ``(viii) Number of children with respect to 
                        which tax credits under section 24 are claimed 
                        on the return.
                            ``(ix) Amount of any credit claimed under 
                        section 25A for the taxable year.
                            ``(x) Amount of individual retirement 
                        account distributions not included in adjusted 
                        gross income for the taxable year.
                            ``(xi) Amount of individual retirement 
                        account contributions and payments to self-
                        employed SEP, Keogh, and other qualified plans 
                        which were deducted from income for the taxable 
                        year.
                            ``(xii) The amount of tax-exempt interest.
                            ``(xiii) Amounts from retirement pensions 
                        and annuities not included in adjusted gross 
                        income for the taxable year.
                            ``(xiv) If applicable, the fact that there 
                        is no return filed for such taxpayer for the 
                        applicable year.
                            ``(xv) Other information determined to be 
                        necessary by agreement between the Secretary 
                        and the Secretary of Education to administer 
                        the Federal financial aid programs as required 
                        by the Higher Education Act of 1965.
                    ``(C) Restriction on use of disclosed 
                information.--
                            ``(i) In general.--Return information 
                        disclosed under subparagraphs (A) and (B) may 
                        be used by officers, employees, and contractors 
                        of the Department of Education, as specifically 
                        authorized and designated by the Secretary of 
                        Education, only for the purposes and to the 
                        extent necessary described in such 
                        subparagraphs and for mitigating risks (as 
                        defined in clause (ii)) relating to the 
                        programs described in such subparagraphs.
                            ``(ii) Mitigating risks.--For purposes of 
                        this subparagraph, the term `mitigating risks' 
                        means, with respect to the programs described 
                        in subparagraphs (A) and (B)--
                                    ``(I) analyzing or estimating costs 
                                associated with potential changes to 
                                the need-analysis formula,
                                    ``(II) oversight activities by the 
                                Office of Inspector General of the 
                                Department of Education as authorized 
                                by the Inspector General Act of 1978, 
                                as amended,
                                    ``(III) developing or administering 
                                statistical models that inform support 
                                to populations of Federal student loan 
                                borrowers who are at risk of default or 
                                delinquency,
                                    ``(IV) reducing the net cost of 
                                improper payments to Federal financial 
                                aid recipients, and
                                    ``(V) producing aggregate 
                                statistics for reporting, research, or 
                                consumer information on the performance 
                                of programs or institutions of higher 
                                education participating in the programs 
                                under title IV of the Higher Education 
                                Act of 1965.
                        Such term does not include the conduct of 
                        criminal investigations or prosecutions.
                            ``(iii) Redisclosure to institutions of 
                        higher education, state higher education 
                        agencies, and designated scholarship 
                        organizations.--The Secretary of Education, and 
                        officers, employees, and contractors of the 
                        Department of Education, may disclose return 
                        information received under subparagraph (B), 
                        solely for the use in the application, award, 
                        and administration of Federal student financial 
                        aid, State aid, or aid awarded by eligible 
                        institutions or such entities as the Secretary 
                        of Education may designate, to the following 
                        persons:
                                    ``(I) An institution of higher 
                                education with which the Secretary of 
                                Education has an agreement under 
                                subpart 1 of part A, or part D or E, of 
                                title IV of the Higher Education Act of 
                                1965.
                                    ``(II) A State higher education 
                                agency.
                                    ``(III) A scholarship organization 
                                which is designated by the Secretary of 
                                Education as of the date of the 
                                enactment of the Faster Access to 
                                Federal Student Aid Act of 2018 as an 
                                organization eligible to receive the 
                                information provided under this clause.
                        The preceding sentence shall only apply to the 
                        extent that the taxpayer with respect to whom 
                        the return information relates provides consent 
                        for such disclosure to the Secretary of 
                        Education as part of the application for 
                        Federal student financial aid under title IV of 
                        the Higher Education Act of 1965.
                    ``(D) Required notification periods.--
                            ``(i) Notification to congress.--The 
                        Secretary and the Secretary of Education shall 
                        issue joint notifications to the Committees on 
                        Finance and Health, Education, Labor, and 
                        Pensions of the Senate and the Committees on 
                        Ways and Means and Education and the Workforce 
                        of the House of Representatives not less than 
                        120 days prior to the first disclosure of any 
                        type of return information under subparagraph 
                        (A)(vii) or (B)(xv) with respect to which such 
                        a notification has not been previously made.
                            ``(ii) Public notice and comment.--There 
                        shall be a public notice and comment period 
                        beginning not less than 60 days prior to the 
                        first disclosure of any type of return 
                        information under subparagraph (A)(vii) or 
                        (B)(xv) with respect to which such a 
                        notification has not been previously made, 
                        subsequent to the period allotted for 
                        Congressional comment under clause (i).''.
            (2) Confidentiality of return information.--Section 
        6103(a)(3) of such Code is amended by inserting ``, (13)(A), 
        (13)(B)'' after ``(12)''.
            (3) Conforming amendments.--Section 6103(p)(4) of such Code 
        is amended--
                    (A) by inserting ``(A), (13)(B)'' after ``(13)'' 
                each place it occurs, and
                    (B) by inserting ``, (13)(A), (13)(B)'' after 
                ``(l)(10)'' each place it occurs.
    (b) Effective Date.--The amendments made by this section shall 
apply to disclosures made under section 6103(l)(13) of the Internal 
Revenue Code of 1986 (as amended by this section) after the date of the 
enactment of this Act.

SEC. 3. NOTIFICATION OF REQUEST FOR TAX RETURN INFORMATION.

    (a) In General.--Part G of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1088 et seq.) is amended by adding at the end the 
following:

``SEC. 494. NOTIFICATION OF REQUEST FOR TAX RETURN INFORMATION.

    ``The Secretary shall advise students and borrowers who submit an 
application for Federal student financial aid under this title or for 
the discharge of a loan based on permanent and total disability, as 
described in section 437(a), or who request an income-contingent or 
income-based repayment plan on their loan (as well as parents and 
spouses who sign such an application or request or a Master Promissory 
Note on behalf of those students and borrowers) that the Secretary has 
the authority to request that the Internal Revenue Service disclose 
their tax return information (as well as that of parents and spouses 
who sign such an application or request or a Master Promissory Note on 
behalf of those students and borrowers) to officers, employees, and 
contractors of the Department of Education as authorized under section 
6103(1)(13) of the Internal Revenue Code of 1986, to the extent 
necessary for the Secretary to carry out this title.''.
    (b) Conforming Amendment.--Section 484(q) of the Higher Education 
Act of 1965 (20 U.S.C. 1091(q)) is amended to read as follows:
    ``(q) reserved''.

SEC. 4. REPORTS ON IMPLEMENTATION.

    (a) In General.--Not later than each specified date, the Secretary 
of Education and the Secretary of the Treasury shall issue joint 
reports to the Committees on Health, Education, Labor, and Pensions and 
Finance of the Senate and the Committees on Education and the Workforce 
and Ways and Means of the House of Representatives regarding the 
amendments made by this Act. Each such report shall include, as 
applicable--
            (1) an update on the status of implementation of the 
        amendments made by this Act,
            (2) an evaluation of the processing of applications for 
        Federal student financial aid, and applications for income-
        based repayment and income contingent repayment, under title IV 
        of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), 
        in accordance with the amendments made by this Act, and
            (3) implementation issues and suggestions for potential 
        improvements.
    (b) Specified Date.--For purposes of subsection (a), the term 
``specified date'' means--
            (1) the date that is 90 days after the date of the 
        enactment of this Act,
            (2) the date that is 120 days after the first day that the 
        disclosure process established under section 6103(l)(13) of the 
        Internal Revenue Code of 1986, as amended by section 2(a) of 
        this Act, is operational and accessible to officers, employees, 
        and contractors of the Department of Education (as specifically 
        authorized and designated by the Secretary of Education), and
            (3) the date that is 1 year after the report date described 
        in paragraph (2).
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