[Congressional Record Volume 141, Number 165 (Tuesday, October 24, 1995)]
[House]
[Pages H10726-H10748]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               AMENDMENTS

  Under clause 6 of rule XXIII, proposed amendments were submitted as 
follows:

                               H.R. 2491

                         Offered By: Mr. Orton

                (Amendment to the Amendment Numbered 7)

       Amendment No. 8: At the end insert the following new title:
       
[[Page H 10727]]

                  TITLE XIV--BUDGET PROCESS PROVISIONS

                    CHAPTER 1--SHORT TITLE; PURPOSE

     SEC. 14001. SHORT TITLE.

       This title may be cited as the ``Balanced Budget 
     Enforcement Act of 1995''.

     SEC. 14002. PURPOSE.

       The purpose of this title is to enforce a path toward a 
     balanced budget by fiscal year 2002 and to make Federal 
     budget process more honest and open.

                      CHAPTER 2--BUDGET ESTIMATES

     SEC. 14051. BOARD OF ESTIMATES.

       (a) Establishment.--There is established a Board of 
     Estimates.
       (b) Duties of the Board.--(1) On the dates specified in 
     section 254, the Board shall issue a report to the President 
     and the Congress which states whether it has chosen (with no 
     modification)--
       (A) the sequestration preview report for the budget year 
     submitted by OMB under section 254(d) of the Balanced Budget 
     and Emergency Deficit Control Act of 1985 or the report for 
     that year submitted by CBO under that section; and
       (B) the final sequestration report for the budget year 
     submitted by OMB under section 254(g) of the Balanced Budget 
     and Emergency Deficit Control Act of 1985 or the report for 
     that year submitted by CBO under that section;

     that shall be used for purposes of the Balanced Budget and 
     Emergency Deficit Control Act of 1985, chapter 11 of title 
     31, United States Code, and section 403 of the Congressional 
     Budget Act of 1974. In making its choice, the Board shall 
     choose the report that, in its opinion, is the more accurate.
       (2) At any time the Board may change the list of major 
     estimating assumptions to be used by OMB and CBO in preparing 
     their sequestration preview reports.
       (c) Membership.--
       (1) Number and appointment.--The Board shall be composed of 
     5 members, the chairman of the Board of Governors of the 
     Federal Reserve System and 4 other members to be appointed by 
     the President as follows:
       (A) One from a list of at least 5 individuals nominated for 
     such appointment by the Speaker of the House of 
     Representatives.
       (B) One from a list of at least 5 individuals nominated for 
     such appointment by the majority leader of the Senate.
       (C) One from a list of at least 5 individuals nominated for 
     such appointment by the minority leader of the House of 
     Representatives.
       (D) One from a list of at least 5 individuals nominated for 
     such appointment by the minority leader of the Senate.

     No member appointed by the President may be an officer or 
     employee of any government. A vacancy in the Board shall be 
     filled in the manner in which the original appointment was 
     made.
       (2) Continuation of membership.--If any member of the Board 
     appointed by the President becomes an officer or employee of 
     a government, he may continue as a member of the Board for 
     not longer than the 30-day period beginning on the date he 
     becomes such an officer or employee.
       (3) Terms.--(A) Members shall be appointed for terms of 4 
     years.
       (B) Any member appointed to fill a vacancy occurring before 
     the expiration of the term for which his predecessor was 
     appointed shall be appointed only for the remainder of such 
     term. A member may serve after the expiration of his term 
     until his successor has taken office.
       (4) Basic pay.--Members of the Board shall serve without 
     pay.
       (5) Quorum.--Three members of the Board shall constitute a 
     quorum but a lesser number may hold hearings.
       (6) Chairman.--The Chairman of the Board shall be chosen 
     annually by its members.
       (7) Meetings.--The Board shall meet at the call of the 
     Chairman or a majority of its members.
       (d) Director and Staff.--
       (1) Appointment.--The Board shall have a Director who shall 
     be appointed by the members of the Board. Subject to such 
     rules as may be prescribed by the Board, the Director may 
     appoint and fix the pay of such personnel as the Director 
     considers appropriate.
       (2) Applicability of certain civil service laws.--The 
     Director and staff of the Board may be appointed without 
     regard to the provisions of title 5, United States Code, 
     governing appointments in the competitive service, and may be 
     paid without regard to the provisions of chapter 51 and 
     subchapter III of chapter 53 of such title relating to 
     classification and General Schedule pay rates, except that no 
     individual so appointed may receive pay in excess of the 
     annual rate of basic pay payable for GS-18 of the General 
     Schedule.
       (3) Staff of federal agencies.--Upon request of the Board, 
     the head of any Federal agency is authorized to detail, on a 
     reimbursable basis, any of the personnel of such agency to 
     the Board to assist the Board in carrying out its duties, 
     notwithstanding section 202(a) of the Legislative 
     Reorganization Act of 1946 (2 U.S.C. 72a(a)).
       (e) Powers.--
       (1) Hearings and sessions.--The Board may, for the purpose 
     of carrying out its duties, hold such hearings, sit and act 
     at such times and places, take such testimony, and receive 
     such evidence, as it considers appropriate.
       (2) Obtaining official data.--The Board may secure directly 
     from any department or agency of the United States 
     information necessary to enable it to carry out its duties. 
     Upon request of the Chairman of the Board, the head of such 
     department or agency shall furnish such information to the 
     Board.
       (3) Administrative support services.--The Administrator of 
     General Services shall provide to the Board on a reimbursable 
     basis such administrative support services as the Board may 
     request.
       (f) Definitions.--As used in this section:
       (1) The term ``Board'' refers to the Board of Estimates 
     established by subsection (a).
       (2) The term ``CBO'' refers to the Director of the 
     Congressional Budget Office.
       (3) The term ``OMB'' refers to the Director of the Office 
     of Management and Budget.
               Subtitle B--Discretionary Spending Limits

     SEC. 14101. DISCRETIONARY SPENDING LIMITS.

       (a) Limits.--Section 601(a)(2) of the Congressional Budget 
     Act of 1974 is amended by striking subparagraphs (A), (B), 
     (C), (D), and (F), by redesignating subparagraph (E) as 
     subparagraph (A) and by striking ``and'' at the end of that 
     subparagraph, and by inserting after subparagraph (A) the 
     following new subparagraphs:
       ``(B) with respect to fiscal year 1996, $498,113,000,000 in 
     new budget authority and $536,610,000,000 in outlays;
       ``(C) with respect to fiscal year 1997, $497,200,000,000 in 
     new budget authority and $530,736,000,000 in outlays;
       ``(D) with respect to fiscal year 1998, $496,700,000,000 in 
     new budget authority and $526,627,000,000 in outlays;
       ``(E) with respect to fiscal year 1999, $495,700,000,000 in 
     new budget authority and $524,722,000,000 in outlays;
       ``(F) with respect to fiscal year 2000, $497,700,000,000 in 
     new budget authority and $523,798,000,000 in outlays;
       ``(G) with respect to fiscal year 2001, $506,700,000,000 in 
     new budget authority and $530,023,000,000 in outlays; and
       ``(H) with respect to fiscal year 2002, $509,700,000,000 in 
     new budget authority and $530,023,000,000 in outlays.''.
       (b) Committee Allocations and Enforcement.--Section 602 of 
     the Congressional Budget Act of 1974 is amended--
       (1) in subsection (c), by striking ``1995'' and inserting 
     ``2002'' and by striking its last sentence; and
       (2) in subsection (d), by striking ``1992 to 1995'' in the 
     side heading and inserting ``1995 to 2002'' and by striking 
     ``1992 through 1995'' and inserting ``1995 through 2002''.
       (c) Five-Year Budget Resolutions.--Section 606 of the 
     Congressional Budget Act of 1974 is amended--
       (1) in subsection (a), by striking ``for fiscal year 1992, 
     1993, 1994, or 1995''; and
       (2) in subsection (d)(1), by striking ``for fiscal years 
     1992, 1993, 1994, and 1995'' and by striking ``(i) and 
     (ii)''.
       (d) Effective Date Repealer.--(1) Section 607 of the 
     Congressional Budget Act of 1974 is repealed.
       (2) The item relating to section 607 in the table of 
     contents set forth in section 1(b) of the Congressional 
     Budget and Impoundment Control Act of 1974 is repealed.
       (e) Sequestration Regarding Crime Trust Fund.--(1) Section 
     251A(b)(1) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 is amended by striking subparagraphs (B), 
     (C), and (D) and its last sentence and inserting the 
     following:
       ``(B) For fiscal year 1996, $2,227,000,000.
       ``(C) For fiscal year 1997, $3,846,000,000.
       ``(D) For fiscal year 1998, $4,901,000,000.
       ``(E) For fiscal year 1999, $5,639,000,000.
       ``(F) For fiscal year 2000, $6,225,000,000.
     ``The appropriate levels of new budget authority are as 
     follows: for fiscal year 1996, $4,087,000,000; for fiscal 
     year 1997, $5,000,000,000; for fiscal year 1998, 
     $5,500,000,000; for fiscal year 1999, $6,500,000,000; for 
     fiscal year 2000, $6,500,000,000.''.
       (2) The last two sentences of section 310002 of the Violent 
     Crime Control and Law Enforcement Act of 1994 (42 U.S.C. 
     14212) are repealed.

     SEC. 14102. TECHNICAL AND CONFORMING CHANGES.

       (a) General Statement.--Section 250(b) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985 is amended 
     by striking the first sentence and inserting the following: 
     ``This part provides for the enforcement of deficit reduction 
     through discretionary spending limits and pay-as-you-go 
     requirements for fiscal years 1995 through 2002.''.
       (b) Definitions.--Section 250(c) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 is amended--
       (1) by striking paragraph (6) and inserting the following:
       ``(6) The term `budgetary resources' means new budget 
     authority, unobligated balances, direct spending authority, 
     and obligation limitations.'';
       (2) in paragraph (9), by striking ``1992'' and inserting 
     ``1996''; and
       (3) in paragraph (14), by striking ``1995'' and inserting 
     ``2002''.

     SEC. 14103. ELIMINATION OF CERTAIN ADJUSTMENTS TO 
                   DISCRETIONARY SPENDING LIMITS.

       Section 251 of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 is amended--
       (1) in the side heading of subsection (a), by striking 
     ``1991-1998'' and inserting ``1995-2002'';
       (2) in the first sentence of subsection (b)(1), by striking 
     ``1992, 1993, 1994, 1995, 1996, 1997 or 1998'' and inserting 
     ``1995, 1996, 1997, 1998, 1999, 

[[Page H 10728]]
     2000, 2001, or 2002'' and by striking ``through 1998'' and inserting 
     ``through 2002'';
       (3) in subsection (b)(1), by striking subparagraphs (B) and 
     (C) and by striking ``the following:'' and all that follows 
     through ``The adjustments'' and inserting ``the following: 
     the adjustments'';
       (4) in subsection (b)(2), by striking ``1991, 1992, 1993, 
     1994, 1995, 1996, 1997, or 1998'' and inserting ``1995, 1996, 
     1997, 1998, 1999, 2000, 2001, or 2002'' and by striking 
     ``through 1998'' and inserting ``through 2002''; and
       (5) by repealing subsection (b)(2).
                  Subtitle C--Pay-As-You-Go Procedures

     SEC. 14201. PERMANENT EXTENSION OF PAY-AS-YOU-GO PROCEDURES; 
                   TEN-YEAR SCOREKEEPING.

       (a) Ten-year Scorekeeping.--Section 252 of the Balanced 
     Budget and Emergency Deficit Control Act of 1985 is amended--
       (1) in the side heading of subsection (a), by striking 
     ``Fiscal Years1992-1998''; and
       (2) in subsection (d), by striking ``each fiscal year 
     through fiscal year 1998'' each place it appears and 
     inserting ``each of the 10 succeeding fiscal years following 
     enactment of any direct spending or receipts legislation''.
       (b) Repeal of Emergencies.--Section 252(e) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985 is repealed.
       (c) Pay-As-You--Go Scorecard.--Upon enactment of this Act, 
     the Director of the Office of Management and Budget shall 
     reduce the balances of direct spending and receipts 
     legislation applicable to each fiscal year under section 252 
     of the Balanced Budget and Emergency Deficit Control Act of 
     1985 by an amount equal to the net deficit reduction achieved 
     through the enactment of this Act of direct spending and 
     receipts legislation for that year.
       (d) Pay-As-You-Go Point of Order.--Section 311 of the 
     Congressional Budget Act of 1974 is amended by redesignating 
     subsection (c) as subsection (d) and by inserting after 
     subsection (b) the following new subsection:
       ``(d) Pay-As-You-Go Point of Order.--It shall not be in 
     order in the Houe of Representatives or the Senate to 
     consider any bill, joint resolution, amendment, motion, or 
     conference report that would increase the deficit above the 
     maximum deficit amount set forth in section 253 for the 
     budget year or any of the 9 succeeding fiscal years after the 
     budget year, as measured by the sum of all applicable 
     estimates of direct spending and receipts legislation 
     applicable to that fiscal year.''.

     SEC. 14202. ELIMINATION OF EMERGENCY EXCEPTION.

       (a) Sequestration.--Section 252(b)(1) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985 is amended 
     by striking subparagraph (B), by striking the dash after 
     ``from'', and by striking ``(A)''.
       (b) Technical Change.--Section 252(c) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985 is amended 
     by inserting ``in the manner described in section 256.'' 
     after ``accounts'' the first place it appears and by striking 
     the remainder of the subsection.
                       Subtitle D--Miscellaneous

     SEC. 14301. TECHNICAL CORRECTION.

       Section 258 of the Balanced Budget and Emergency Deficit 
     Control Act of 1985, entitled ``Modification of Presidential 
     Order'', is repealed.

     SEC. 14302. REPEAL OF EXPIRATION DATE.

       (a) Expiration.--Section 275 of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 is amended by repealing 
     subsection (b) and by redesignating subsection (c) as 
     subsection (b).
       (b) Expiration.--Section 14002(c)(3) of the Omnibus Budget 
     Reconciliation Act of 1993 (2 U.S.C. 900 note; 2 U.S.C. 665 
     note) is repealed.
                      Subtitle E--Deficit Control

     SEC. 14401. DEFICIT CONTROL.

       (a) Deficit Control.--Part D of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 is amended to read as 
     follows:
                       ``Part D--Deficit Control

     ``SEC. 261. ESTABLISHMENT OF DEFICIT TARGETS.

       ``The deficit targets are as follows:

------------------------------------------------------------------------
            ``Fiscal year              Deficit (in billions of dollars) 
------------------------------------------------------------------------
  1996..............................                179.853             
  1997..............................                164.640             
  1998..............................                133.279             
  1999..............................                111.062             
  2000..............................                86.221              
  2001..............................                41.626              
  2002..............................                   0                
------------------------------------------------------------------------

     The deficit target for each fiscal year after 2002 shall be 
     zero.

     ``SEC. 262. SPECIAL DEFICIT MESSAGE BY PRESIDENT.

       ``(a) Special Message.--If the OMB sequestration preview 
     report submitted under section 254(d) indicates that deficit 
     for the budget year or any outyear will exceed the applicable 
     deficit target, or that the actual deficit target in the most 
     recently completed fiscal year exceeded the applicable 
     deficit target, the budget submitted under section 1105(a) of 
     title 31, United States Code, shall include a special deficit 
     message that includes proposed legislative changes to offset 
     the net deficit impact of the excess identified by that OMB 
     sequestration preview report for each such year through any 
     combination of:
       ``(1) Reductions in outlays.
       ``(2) Increases in revenues.
       ``(3) Increases in the deficit targets, if the President 
     submits a written determination that, because of economic or 
     programmatic reasons, only some or none of the excess should 
     be offset.
       ``(b) Introduction of President's Package.--Within 10 days 
     after the President submitted a special deficit message, the 
     text referred to in subsection (a) shall be introduced as a 
     joint resolution in the House of Representatives by the 
     chairman of its Committee on the Budget and in the Senate by 
     the chairman of its Committee on the Budget. If the chairman 
     fails to do so, after the 10th day the resolution may be 
     introduced by any Member of the House of Representatives or 
     the Senate, as the case may be. A joint resolution introduced 
     under this subsection shall be referred to the Committee on 
     the Budget of the House of Representatives or the Senate, as 
     the case may be.

     ``SEC. 263. CONGRESSIONAL ACTION REQUIRED.

       ``(a) In General.--The requirements of this section shall 
     be in effect for any year in which the OMB sequestration 
     preview report submitted under section 254(d) indicates that 
     the deficit for the budget year or any outyear will exceed 
     the applicable deficit target.
       ``(b) Requirements for Special Budget Resolution in the 
     House.--The Committee on the Budget in the House shall report 
     not later than March 15 a joint resolution, either as a 
     separate section of the joint resolution on the budget 
     reported pursuant to section 301 of the Congressional Budget 
     Act of 1974 or as a separate resolution, that includes 
     reconciliation instructions instructing the appropriate 
     committees of the House and Senate to report changes in laws 
     within their jurisdiction to offset any excess in the deficit 
     identified in the OMB sequestration preview report submitted 
     under section 254(d) as follows:
       ``(1) Reductions in outlays.
       ``(2) Increases in revenues.
       ``(3) Increases in the deficit targets, except that any 
     increase in those targets may not be greater than the 
     increase included in the special reconciliation message 
     submitted by the President.
       ``(c) Procedure If House Budget Committee Fails to Report 
     Required Resolution.--
       ``(1) Automatic discharge of house budget committee.--In 
     the event that the House Committee on the Budget fails to 
     report a resolution meeting the requirements of subsection 
     (b), the committee shall be automatically discharged from 
     further consideration of the joint resolution reflecting the 
     President's recommendations introduced pursuant to section 
     5(b), and the joint resolution shall be placed on the 
     appropriate calendar.
       ``(2) Consideration by house of discharged resolution.--Ten 
     days after the House Committee on the Budget has been 
     discharged under paragraph (1), any member may move that the 
     House proceed to consider the resolution. Such motion shall 
     be highly privileged and not debatable. It shall not be in 
     order to consider any amendment to the resolution except 
     amendments which are germane and which do not change the net 
     deficit impact of the resolution. Consideration of such 
     resolution shall be pursuant to the procedures set forth in 
     section 305 of the Congressional Budget Act of 1974 and 
     subsection (d).
       ``(d) Consideration by the House of Representatives.--(1) 
     It shall not be in order in the House of Representatives to 
     consider a joint resolution on the budget unless that joint 
     resolution fully addresses the entirety of any excess of the 
     deficit targets as identified in the OMB sequestration 
     preview report submitted under section 254(d) through 
     reconciliation instructions requiring spending reductions, or 
     changes in the deficit targets.
       ``(2) If the joint resolution on the budget proposes to 
     eliminate or offset less than the entire excess for budget 
     year and any subsequent fiscal years, then the Committee on 
     the Budget shall report a separate resolution increasing the 
     deficit targets for each applicable year by the full amount 
     of the excess not offset or eliminated. It shall not be in 
     order to consider any joint resolution on the budget that 
     does not offset the full amount of the excess until the House 
     of Representatives has agreed to the resolution directing the 
     increase in the deficit targets.
       ``(e) Transmittal to Senate.--If a joint resolution passes 
     the House pursuant to subsection (d), the Clerk of the House 
     of Representatives shall cause the resolution to be 
     engrossed, certified, and transmitted to the Senate within 
     one calendar day of the day on which the resolution is 
     passed. The resolution shall be referred to the Senate 
     Committee on the Budget.
       ``(f) Requirements for Special Budget Resolution in the 
     Senate.--The Committee on the Budget in the Senate shall 
     report not later than April 1 a joint resolution, either as a 
     separate section of a budget resolution reported pursuant to 
     section 301 of the Congressional Budget Act of 1974 or as a 
     separate resolution, that shall include reconciliation 
     instructions instructing the appropriate committees of the 
     House and Senate to report changes in laws within their 
     jurisdiction to offset any excess through any combination of:

[[Page H 10729]]

       ``(1) Reductions in outlays.
       ``(2) Increases in revenues.
       ``(3) Increases in the deficit targets, except that any 
     increase in those targets may not be greater than the 
     increase included in the special reconciliation message 
     submitted by the President.
       ``(g) Procedure if Senate Budget Committee Fails to Report 
     Required Resolution.--
       ``(1) Automatic discharge of senate budget committee.--In 
     the event that the Senate Committee on the Budget fails to 
     report a resolution meeting the requirements of subsection 
     (f), the committee shall be automatically discharged from 
     further consideration of the joint resolution reflecting the 
     President's recommendations introduced pursuant to section 
     5(b), and the joint resolution shall be placed on the 
     appropriate calendar.
       ``(2) Consideration by senate of discharged resolution.--
     Ten days after the Senate Committee on the Budget has been 
     discharged under paragraph (1), any member may move that the 
     Senate proceed to consider the resolution. Such motion shall 
     be privileged and not debatable. Consideration of such 
     resolution shall be pursuant to the procedures set forth in 
     section 305 of the Congressional Budget Act of 1974 and 
     subsection (h).
       ``(h) Consideration by Senate.--(1) It shall not be in 
     order in the Senate to consider a joint resolution on the 
     budget unless that joint resolution fully addresses the 
     entirety of any excess of the deficit targets as identified 
     in the OMB sequestration report submitted under section 
     254(d) through reconciliation instructions requiring deficit 
     reductions, or changes in the deficit targets.
       ``(2) If the joint resolution on the budget proposes to 
     eliminate or offset less than the entire overage of a budget 
     year, then the Committee on the Budget shall report a 
     resolution increasing the deficit target by the full amount 
     of the overage not eliminated. It shall not be in order to 
     consider any joint resolution on the budget that does not 
     offset the entire amount of the overage until the Senate has 
     agreed to the resolution directing the increase in the 
     deficit targets.
       ``(i) Conference Reports Must Fully Address Deficit 
     Excess.--It shall not be in order in the House of 
     Representatives or the Senate to consider a conference report 
     on a joint resolution on the budget unless that conference 
     report fully addresses the entirety of any excess identified 
     by the OMB sequestration preview report submitted pursuant to 
     section 254(d) through reconciliation instructions requiring 
     deficit reductions, or changes in the deficit targets.

     ``SEC. 264. COMPREHENSIVE SEQUESTRATION.

       ``(a) Sequestration Based on Budget-Year Shortfall.--The 
     amount to be sequestered for the budget year is the amount 
     (if any) by which deficit exceeds the cap for that year under 
     section 261 or the amount that the actual deficit in the 
     preceding fiscal year exceeded the applicable deficit target.
       ``(b) Sequestration.--Within 15 days after Congress 
     adjourns to end a session and on May 15, there shall be a 
     sequestration to reduce the amount of deficit in the current 
     policy baseline and to repay any deficit excess in the most 
     recently completed fiscal year by the amounts specified in 
     subsection (b). The amount required to be sequestered shall 
     be achieved by reducing each spending account (or activity 
     within an account) by the uniform percentage necessary to 
     achieve that amount.''.
       (c) Conforming Changes.--(1) The table of sections set 
     forth in section 200 of the Balanced Budget and Emergency 
     Deficit Control Act of 1985 is amended by striking the items 
     relating to part D and inserting the following:

``Sec. 261. Establishment of deficit targets.
``Sec. 262. Special deficit message by president.
``Sec. 263. Congressional action required.
``Sec. 264. Comprehensive sequestration.''.

       (2) Section 250(c) of the Balanced Budget and Emergency 
     Deficit Control Act of 1985 is amended by inserting ``or in 
     part D'' after ``As used in this part''.

     SEC. 14402. SEQUESTRATION PROCESS.

       (a) Estimating Assumptions, Reports, and Orders.--Sections 
     254, 255, and 256 of the Balanced Budget and Emergency 
     Deficit Control Act of 1985 are amended to read as follows:

     ``SEC. 254. ESTIMATING ASSUMPTIONS, REPORTS, AND ORDERS.

       ``(a) Timetable.--The timetable with respect to this part 
     for any budget year is as follows:

Action to be completed:
OMB and CBO sequestration preview reports submitted to Board...........
Board selects sequestration preview report.............................
OMB publishes sequestration preview report.............................
OMB and CBO sequestration reports submitted to Board...................
Board selected midsession sequestration report.........................
President issues sequestration order...................................
President's midsession review; notification regarding military ........
  personnel.
OMB and CBO final budget year sequestration reports submitted to Board.
Board selects final sequestration report; President issues ............
  sequestration order.

       ``(b) Submission and Availability of Reports.--Each report 
     required by this section shall be submitted, in the case of 
     CBO, to the House of Representatives, the Senate, OMB, and 
     the Board and, in the case of OMB, to the House of 
     Representatives, the Senate, the President, and the Board on 
     the day it is issued. On the following day a notice of the 
     report shall be printed in the Federal Register.
       ``(c) Exchange of Preliminary Current Policy Baselines.--On 
     December 15 or 3 weeks after Congress adjourns to end a 
     session, whichever is later, OMB and CBO shall exchange their 
     preliminary current policy baselines for the budget-year 
     session starting in January.
       ``(d) Sequestration Preview Reports.--
       ``(1) Reporting requirement.--On December 31 or 2 weeks 
     after exchanging preliminary current policy baselines, 
     whichever is later, OMB and CBO shall each submit a 
     sequestration preview report.
       ``(2) Contents.--Each preview report shall set forth the 
     following:
       ``(A) Major estimating assumptions.--The major estimating 
     assumptions for the current year, the budget year, and the 
     outyears, and an explanation of them.
       ``(B) Current policy baseline.--A detailed display of the 
     current policy baseline for the current year, the budget 
     year, and the outyears, with an explanation of changes in the 
     baseline since it was last issued that includes the effect of 
     policy decisions made during the intervening period and an 
     explanation of the differences between OMB and CBO for each 
     item set forth in the report.
       ``(C) Deficits.--Estimates for the most recently completed 
     fiscal year, the budget year, and each subsequent year 
     through fiscal year 2002 of the deficits or surpluses in the 
     current policy baseline.
       ``(D) Discretionary spending limits.--Estimates for the 
     current year and each subsequent year through 2002 of the 
     applicable discretionary spending limits for each category 
     and an explanation of any adjustments in such limits under 
     section 251.
       ``(E) Sequestration of discretionary accounts.--Estimates 
     of the uniform percentage and the amount of budgetary 
     resources to be sequestered from discretionary programs given 
     the baseline level of appropriations, and if the President 
     chooses to exempt some or all military personnel from 
     sequestration, the effect of that decision on the percentage 
     and amounts.
       ``(F) Pay-as-you-go sequestration reports.--The preview 
     reports shall set forth, for the current year and the budget 
     year, estimates for each of the following:
       ``(i) The amount of net deficit increase or decrease, if 
     any, calculated under section 252(b).
       ``(ii) A list identifying each law enacted and 
     sequestration implemented after the date of enactment of this 
     section included in the calculation of the amount of deficit 
     increase or decrease and specifying the budgetary effect of 
     each such law.
       ``(iii) The sequestration percentage or (if the required 
     sequestration percentage is greater than the maximum 
     allowable percentage for medicare) percentages necessary to 
     eliminate a deficit increase under section 252(c).
       ``(G) Requirements for the deficit.--An estimate of the 
     amount of deficit reduction, if any, to be achieved for the 
     budget year and the current year necessary to comply with the 
     deficit targets or to repay any deficit excess in the 
     preceding fiscal year.
       ``(H) deficit sequestration.--Estimates of the uniform 
     percentage and the amount of comprehensive sequestration of 
     spending programs that will be necessary under section 264.
       ``(I) Amount of change in deficit projections.--Amounts 
     that deficit projections for the current year and the budget 
     year have changed as a result of changes in economic and 
     technical assumptions occurring after the enactment of the 
     Omnibus Budget Reconciliation Act of 1995.
       ``(e) Selection of Official Sequestration Preview Report.--
     On January 15 or 2 weeks after receiving the OMB and CBO 
     sequestration preview reports, whichever is later, the Board 
     shall choose either the OMB or CBO sequestration preview 
     report as the official report for purposes of this Act. The 
     Board shall add to the chosen report an analysis of which 
     reports submitted in previous years have proven to be more 
     accurate and recommendations about methods of improving the 
     accuracy of future reports. That report shall be set forth, 
     without change, in the budget submitted by the President 
     under section 1105(a) of title 31, United States Code, for 
     the budget year.
       ``(f) Agreeing on Earlier Dates.--The Chairman of the Board 
     may set earlier dates for subsections (c), (d), and (e) if 
     OMB and CBO concur.
       ``(g) Notification Regarding Military Personnel.--On or 
     before August 29, the President shall notify the Congress of 
     the manner in which he intends to exercise flexibility with 
     respect to military personnel accounts under section 
     251(a)(3).
       ``(h) Final Sequestration Reports.--
       ``(1) Reporting requirement.--Not later than 10 days 
     following the end of a budget-year session, OMB and CBO shall 
     each submit a final sequestration report. On May 1 of each 
     year, OMB and CBO shall each submit a midyear sequestration 
     report for the current year.
       ``(2) Contents.--Each such report shall be based upon laws 
     enacted through the date of 

[[Page H 10730]]
     the report and shall set forth all the information and estimates 
     required of a sequestration preview report required by 
     subsections (d)(2)(D) through (H). In addition, that report 
     shall include--
       ``(A) for each account to be sequestered, the baseline 
     level of sequestrable budgetary resources and the resulting 
     reductions in new budget authority and outlays; and
       ``(B) the effects of sequestration on the level of outlays 
     for each fiscal year through 2002.
       ``(i) Selection of Official Final Sequestration Report.--
     Not later than 5 days after receiving the final OMB and CBO 
     sequestration reports, the Board shall choose either the OMB 
     or CBO final sequestration report as the official report for 
     purposes of this Act, and shall issue a report stating that 
     decision and making any comments that the Board chooses.
       ``(j) Presidential Order.--(1) On the day that the Board 
     chooses a final sequestration report, the President shall 
     issue an order fully implementing without change all 
     sequestrations required by--
       ``(A) the final sequestration report that requires the 
     lesser amount of discretionary sequestration under section 
     250; and
       ``(B) the final sequestration report that requires the 
     lesser total amount of deficit sequestration under section 
     264.

     The order shall be effective on issuance and shall be issued 
     only if sequestration is required.
       ``(2)(A) If both the CBO and OMB final sequestration 
     reports require a sequestration of discretionary programs, 
     and the Board chooses the report requiring the greater 
     sequestration, then a positive amount equal to the difference 
     between the CBO and OMB estimates of discretionary new budget 
     authority for the budget year shall be subtracted from the 
     budget-year column and added to the column for the first 
     outyear of the discretionary scorecard under section 107 as 
     though that amount had been enacted in the next session of 
     Congress.
       ``(B) If one final sequestration report requires a 
     sequestration of discretionary programs and the Board chooses 
     that report, then an amount equal to the difference between 
     that report's estimate of discretionary new budget authority 
     for the budget year and the discretionary funding limit for 
     that year shall be subtracted from the budget-year column and 
     added to column for the first outyear of the discretionary 
     scorecard under section 107 as though that amount had been 
     enacted in the next session of Congress.
       ``(k) Use of Major Estimating Assumptions and Scorekeeping 
     Conventions.--In the estimates, projections, and reports 
     under subsections (c) and (d), CBO and OMB shall use the best 
     and most recent estimating assumptions available. In all 
     other reports required by this section and in all estimates 
     or calculations required by this Act, CBO and OMB shall use--
       ``(1) current-year and budget-year discretionary funding 
     limits chosen by the Board and the estimates chosen by the 
     Board of the deficit reduction necessary to comply with the 
     deficit targets in the budget year;
       ``(2) in estimating the effects of bills and discretionary 
     regulations, the major estimating assumptions most recently 
     chosen by the Board, except to the extent that they must be 
     altered to reflect actual results occurring or measured after 
     the Board's choice; and
       ``(3) scorekeeping conventions determined after 
     consultation among the House and Senate Committees on the 
     Budget, CBO, and OMB.

     In applying the two previous sentences, the major estimating 
     assumptions and other calculations required by this Act that 
     are included in the statement of managers accompanying the 
     conference report on this Act shall be considered, for all 
     purposes of this Act, to be the report of the Board chosen 
     under subsection (e) for fiscal year 1993.
       ``(l) Bill Cost Estimates.--Within 10 days after the 
     enactment of any discretionary appropriations, direct 
     spending, or receipts legislation, CBO and OMB shall transmit 
     to each other, the Board, and to the Congress an estimate of 
     the budgetary effects of that law, following the estimating 
     requirements of this section. Those estimates may not change 
     after the 10-day period except--
       ``(1) to the extent those estimates are subsumed within 
     (and implicitly changed by) the estimates made in preparation 
     of a new baseline under subsections (c), (d), and (h);
       ``(2) to reflect a choice of the Board regarding an 
     official set of estimates under subsections (l) and (n); and
       ``(3) to correct clerical errors or errors in the 
     application of this Act.

     ``SEC. 255. EXEMPT PROGRAMS AND ACTIVITIES.

       ``The following budget accounts, activities within 
     accounts, or income shall be exempt from sequestration--
       ``(1) net interest;
       ``(2) deposit insurance and pension benefit guarantees;
       ``(3) all payments to trust funds from excise taxes or 
     other receipts or collections properly creditable to those 
     trust funds;
       ``(4) offsetting receipts and collections;
       ``(5) all payments from one Federal direct spending budget 
     account to another Federal budget account; all 
     intragovernmental funds including those from which funding is 
     derived primarily from other Government accounts;
       ``(6) expenses to the extent they result from private 
     donations, bequests, or voluntary contributions to the 
     Government;
       ``(7) nonbudgetary activities, including but not limited 
     to--
       ``(A) credit liquidating and financing accounts;
       ``(B) the Pension Benefit Guarantee Corporation Trust 
     Funds;
       ``(C) the Thrift Savings Fund;
       ``(D) the Federal Reserve System; and
       ``(E) appropriations for the District of Columbia to the 
     extent they are appropriations of locally raised funds;
       ``(8) payments resulting from Government insurance, 
     Government guarantees, or any other form of contingent 
     liability, to the extent those payments result from 
     contractual or other legally binding commitments of the 
     Government at the time of any sequestration;
       ``(9) the following accounts, which largely fulfill 
     requirements of the Constitution or otherwise make payments 
     to which the Government is committed--
       Administration of Territories, Northern Mariana Islands 
     Covenant grants (14-0412-0-1-806);
       Bureau of Indian Affairs, miscellaneous payments to Indians 
     (14-2303-0-1-452);
       Bureau of Indian Affairs, miscellaneous trust funds, tribal 
     trust funds (14-9973-0-7-999);
       Claims, defense;
       Claims, judgments, and relief act (20-1895-0-1-806);
       Compact of Free Association, economic assistance pursuant 
     to Public Law 99-658 (14-0415-0-1-806);
       Compensation of the President (11-0001-0-1-802);
       Customs Service, miscellaneous permanent appropriations 
     (20-9992-0-2-852);
       Eastern Indian land claims settlement fund (14-2202-0-1-
     806)
       Farm Credit System Financial Assistance Corporation, 
     interest payments (20-1850-0-1-351);
       Internal Revenue collections of Puerto Rico (20-5737-0-2-
     852);
       Panama Canal Commission, operating expenses and capital 
     outlay (95-5190-0-2-403);
       Payments of Vietnam and USS Pueblo prisoner-of-war claims 
     (15-0104-0-1-153);
       Payments to copyright owners (03-5175-0-2-376);
       Payments to the United States territories, fiscal 
     assistance (14-0418-0-1-801);
       Salaries of Article III judges;
       Soldier's and Airmen's Home, payment of claims (84-8930-0-
     7-705);
       Washington Metropolitan Area Transit Authority, interest 
     payments (46-0300-0-1-401).
       ``(10) the following noncredit special, revolving, or 
     trust-revolving funds--
       Coinage profit fund (20-5811-0-2-803);
       Exchange Stabilization Fund (20-4444-0-3-155);
       Foreign Military Sales trust fund (11-82232-0-7-155);
       ``(11)(A) any amount paid as regular unemployment 
     compensation by a State from its account in the Unemployment 
     Trust Fund (established by section 904(a) of the Social 
     Security Act);
       ``(B) any advance made to a State from the Federal 
     unemployment account (established by section 904(g) of such 
     Act) under title XII of such Act and any advance appropriated 
     to the Federal unemployment account pursuant to section 1203 
     of such Act;
       ``(C) any payment made from the Federal Employees 
     Compensation Account (as established under section 909 of 
     such Act) for the purpose of carrying out chapter 85 of title 
     5, United States Code, and funds appropriated or transferred 
     to or otherwise deposited in such Account;
       ``(12) the earned income tax credit (payments to 
     individuals pursuant to section 32 of the Internal Revenue 
     Code of 1986);
       ``(13) the uranium enrichment program; and
       ``(14) benefits payable under the old-age, survivors, and 
     disability insurance program established under title II of 
     the Social Security Act.

     ``SEC. 256. GENERAL AND SPECIAL SEQUESTRATION RULES.

       ``(a) Permanent Sequestration of deficit.--
       ``(1) The purpose of any sequestration under this Act is to 
     ensure deficit reduction in the budget year and all 
     subsequent fiscal years, so that the budget-year cap in 
     section 262 is not exceeded.
       ``(2) Obligations in sequestered spending accounts shall be 
     reduced in the fiscal year in which a sequestration occurs 
     and in all succeeding fiscal years. Notwithstanding any other 
     provision of this section, after the first deficit 
     sequestration, any later sequestration shall reduce spending 
     outlays by an amount in addition to, rather than in lieu of, 
     the reduction in spending outlays in place under the existing 
     sequestration or sequestrations.
       ``(b) Uniform Percentages.--
       ``(1) In calculating the uniform percentage applicable to 
     the sequestration of all spending programs or activities 
     under section 266 the sequestrable base for spending programs 
     and activities is the total budget-year level of outlays for 
     those programs or activities in the current policy baseline 
     minus--
       ``(A) those budget-year outlays resulting from obligations 
     incurred in the current or prior fiscal years, and
       ``(B) those budget-year outlays resulting from exemptions 
     under section 253.
       ``(2) For any direct spending program in which--
       ``(A) outlays pay for entitlement benefits,

[[Page H 10731]]

       ``(B) a budget-year sequestration takes effect after the 
     1st day of the budget year, and
       ``(C) that delay reduces the amount of entitlement 
     authority that is subject to sequestration in the budget 
     year,

     the uniform percentage otherwise applicable to the 
     sequestration of that program in the budget year shall be 
     increased as necessary to achieve the same budget-year outlay 
     reduction in that program as would have been achieved had 
     there been no delay.
       ``(3) If the uniform percentage otherwise applicable to the 
     budget-year sequestration of a program or activity is 
     increased under paragraph (2), then it shall revert to the 
     uniform percentage calculated under paragraph (1) when the 
     budget year is completed.
       ``(c) General Rules for Sequestration.--
       ``(1) Indefinite authority.--Except as otherwise provided, 
     sequestration in accounts for which obligations are 
     indefinite shall be taken in a manner to ensure that 
     obligations in the fiscal year of a sequestration and 
     succeeding fiscal years are reduced, from the level that 
     would actually have occurred, by the applicable sequestration 
     percentage or percentages.
       ``(2) Cancellation of budgetary resources.--Budgetary 
     resources sequestered from any account other than an 
     entitlement trust, special, or revolving fund account shall 
     revert to the Treasury and be permanently canceled or 
     repealed.
       ``(3) Indexed benefit payments.--If, under any entitlement 
     program--
       ``(A) benefit payments are made to persons or governments 
     more frequently than once a year, and
       ``(B) the amount of entitlement authority is periodically 
     adjusted under existing law to reflect changes in a price 
     index,

     then for the first fiscal year to which a sequestration order 
     applies, the benefit reductions in that program accomplished 
     by the order shall take effect starting with the payment made 
     at the beginning of January or 7 weeks after the order is 
     issued, whichever is later. For the purposes of this 
     subsection, Veterans Compensation shall be considered a 
     program that meets the conditions of the preceding sentence.
       ``(4) Programs, projects, or activities.--Except as 
     otherwise provided, the same percentage sequestration shall 
     apply to all programs, projects, and activities within a 
     budget account (with programs, projects, and activities as 
     delineated in the appropriation Act or accompanying report 
     for the relevant fiscal year covering that account, or for 
     accounts not included in appropriation Acts, as delineated in 
     the most recently submitted President's budget).
       ``(5) Implementing regulations.--Administrative regulations 
     or similar actions implementing the sequestration of a 
     program or activity shall be made within 120 days of the 
     effective date of the sequestration of that program or 
     activity.
       ``(6) Distribution formulas.--To the extent that 
     distribution or allocation formulas differ at different 
     levels of budgetary resources within an account, program, 
     project, or activity, a sequestration shall be interpreted as 
     producing a lower total appropriation, with that lower 
     appropriation being obligated as though it had been the pre-
     sequestration appropriation and no sequestration had 
     occurred.
       ``(7) Contingent fees.--In any account for which fees 
     charged to the public are legally determined by the level of 
     appropriations, fees shall be charged on the basis of the 
     presequestration level of appropriations.
       ``(d) Non-JOBS Portion of AFDC.--Any sequestration order 
     shall accomplish the full amount of any required reduction in 
     payments for the non-jobs portion of the aid to families with 
     dependant children program under the Social Security Act by 
     reducing the Federal reimbursement percentage (for the fiscal 
     year involved) by multiplying that reimbursement percentage, 
     on a State-by-State basis, by the uniform percentage 
     applicable to the sequestration of nonexempt direct spending 
     programs or activities.
       ``(e) JOBS Portion of AFDC.--
       ``(1) Full amount of sequestration required.--Any 
     sequestration order shall accomplish the full amount of any 
     required reduction of the job opportunities and basic skills 
     training program under section 402(a)(19), and part F of 
     title VI, of the Social Security Act, in the manner specified 
     in this subsection. Such an order may not reduce any Federal 
     matching rate pursuant to section 403(l) of the Social 
     Security Act.
       ``(2) New allotment formula.--
       ``(A) General rule.--Notwithstanding section 403(k) of the 
     Social Security Act, each State's percentage share of the 
     amount available after sequestration for direct spending 
     pursuant to section 403(l) of such Act shall be equal to that 
     percentage of the total amount paid to the States pursuant to 
     such section 403(l) for the prior fiscal year that is 
     represented by the amount paid to such State pursuant to such 
     section 403(l) for the prior fiscal year, except that a State 
     may not be allotted an amount under this subparagraph that 
     exceeds the amount that would have been allotted to such 
     State pursuant to such section 403(k) had the sequestration 
     not been in effect.
       ``(B) Reallotment of amounts remaining unallotted after 
     application of general rule.--Any amount made available after 
     sequestration for direct spending pursuant to section 403(l) 
     of the Social Security Act that remains unallotted as a 
     result of subparagraph (A) of this paragraph shall be 
     allotted among the States in proportion to the absolute 
     difference between the amount allotted, respectively, to each 
     State as a result of such subparagraph and the amount that 
     would have been allotted to such State pursuant to section 
     403(k) of such Act had the sequestration not been in effect, 
     except that a State may not be allotted an amount under this 
     subparagraph that results in a total allotment to the State 
     under this paragraph of more than the amount that would have 
     been allotted to such State pursuant to such section 403(k) 
     had the sequestration not been in effect.
       ``(f) Child Support Enforcement Program.--Any sequestration 
     order shall accomplish the full amount of any required 
     reduction in payments under sections 455 and 458 of the 
     Social Security Act by reducing the Federal matching rate for 
     State administrative costs under the program, as specified 
     (for the fiscal year involved) in section 455(a) of such Act, 
     to the extent necessary to reduce such expenditures by that 
     amount.
       ``(g) Commodity Credit Corporation.--
       ``(1) Effective date.--For the Commodity Credit 
     Corporation, the date on which a sequestration order takes 
     effect in a fiscal year shall vary for each crop of a 
     commodity. In general, the sequestration order shall take 
     effect when issued, but for each crop of a commodity for 
     which 1-year contracts are issued as an entitlement, the 
     sequestration order shall take effect with the start of the 
     sign-up period for that crop that begins after the 
     sequestration order is issued. Payments for each contract in 
     such a crop shall be reduced under the same terms and 
     conditions.
       ``(2) Dairy program.--(A) As the sole means of achieving 
     any reduction in outlays under the milk price-support 
     program, the Secretary of Agriculture shall provide for a 
     reduction to be made in the price received by producers for 
     all milk produced in the United States and marketed by 
     producers for commercial use. That price reduction (measured 
     in cents per hundredweight of milk marketed) shall occur 
     under subparagraph (A) of section 201(d)(2) of the 
     Agricultural Act of 1949 (7 U.S.C. 1446(d)(2)(A)), shall 
     begin on the day any sequestration order is issued, and shall 
     not exceed the aggregate amount of the reduction in outlays 
     under the milk price-support program, that otherwise would 
     have been achieved by reducing payments made for the purchase 
     of milk or the products of milk under this subsection during 
     that fiscal year.
       ``(3) Effect of delay.--For purposes of subsection (b)(1), 
     the sequestrable base for the Commodity Credit Corporation is 
     the budget-year level of gross outlays resulting from new 
     budget authority that is subject to reduction under 
     paragraphs (1) and (2), and subsection (b)(2) shall not 
     apply.
       ``(4) Certain authority not to be limited.--Nothing in this 
     Act shall restrict the Corporation in the discharge of its 
     authority and responsibility as a corporation to buy and sell 
     commodities in world trade, or limit or reduce in any way any 
     appropriation that provides the Corporation with funds to 
     cover its net realized losses.
       ``(h) Extended Unemployment Compensation.--(1) A State may 
     reduce each weekly benefit payment made under the Federal-
     State Extended Unemployment Compensation Act of 1970 for any 
     week of unemployment occurring during any period with respect 
     to which payments are reduced under any sequestration order 
     by a percentage not to exceed the percentage by which the 
     Federal payment to the State under section 204 of such Act is 
     to be reduced for such week as a result of such order.
       ``(2) A reduction by a State in accordance with 
     subparagraph (A) shall not be considered as a failure to 
     fulfill the requirements of section 3304(a)(11) of the 
     Internal Revenue Code of 1986.
       ``(i) Federal Employees Health Benefits Fund.--For the 
     Federal Employees Health Benefits Fund, a sequestration order 
     shall take effect with the next open season. The 
     sequestration shall be accomplished by annual payments from 
     that Fund to the General Fund of the Treasury. Those annual 
     payments shall be financed solely by charging higher 
     premiums. For purposes of subsection (b)(1), the sequestrable 
     base for the Fund is the budget-year level of gross outlays 
     resulting from claims paid after the sequestration order 
     takes effect, and subsection (b)(2) shall not apply.
       ``(j) Federal Housing Finance Board.--Any sequestration of 
     the Federal Housing Finance Board shall be accomplished by 
     annual payments (by the end of each fiscal year) from that 
     Board to the general fund of the Treasury, in amounts equal 
     to the uniform sequestration percentage for that year times 
     the gross obligations of the Board in that year.
       ``(k) Federal Pay.--
       ``(1) In general.--Except as provided in section 10(b)(3), 
     new budget authority to pay Federal personnel from direct 
     spending accounts shall be reduced by the uniform percentage 
     calculated under section 264, as applicable, but no 
     sequestration order may reduce or have the effect of reducing 
     the rate of pay to which any individual is entitled under any 
     statutory pay system (as increased by any amount payable 
     under section 5304 of title 5, United States Code, or section 
     302 of the Federal Employees Pay Comparability Act of 1990) 
     or the rate of any element of military pay to which any 
     individual is entitled under title 37, United States Code, or 
     any increase in rates of pay 

[[Page H 10732]]
     which is scheduled to take effect under section 5303 of title 5, United 
     States Code, section 1009 of title 37, United States Code, or 
     any other provision of law.
       ``(2) Definitions.--For purposes of this subsection:
       ``(A) The term `statutory pay system' shall have the 
     meaning given that term in section 5302(1) of title 5, United 
     States Code.
       ``(B) The term `elements of military pay' means--
       ``(i) the elements of compensation of members of the 
     uniformed services specified in section 1009 of title 37, 
     United States Code,
       ``(ii) allowances provided members of the uniformed 
     services under sections 403a and 405 of such title, and
       ``(iii) cadet pay and midshipman pay under section 203(c) 
     of such title.
       ``(C) The term `uniformed services' shall have the meaning 
     given that term in section 101(3) of title 37, United States 
     Code.
       ``(l) Guaranteed Student Loans.--(A) For all student loans 
     under part B of title IV of the Higher Education Act of 1965 
     made on or after the date of a sequestration, the origination 
     fees shall be increased by a uniform percentage sufficient to 
     produce the dollar savings in student loan programs for the 
     fiscal year of the sequestration required by section 264, and 
     all subsequent origination fees shall be increased by the 
     same percentage, notwithstanding any other provision of law.
       ``(B) The origination fees to which paragraph (A) applies 
     are those specified in sections 428H(f)(1) and 438(c) of that 
     Act.
       ``(m) Insurance Programs.--Any sequestration in a Federal 
     program that sells insurance contracts to the public 
     (including the Federal Crop Insurance Fund, the National 
     Insurance Development Fund, the National Flood Insurance 
     Fund, insurance activities of the Overseas Private Insurance 
     Corporation, and Veterans' life insurance programs) shall be 
     accomplished by annual payments from the insurance fund or 
     account to the general fund of the Treasury. The amount of 
     each annual payment by each such fund or account shall be the 
     amount received by the fund or account by increasing premiums 
     on contracts entered into after the date a sequestration 
     order takes effect by the uniform sequestration percentage, 
     and premiums shall be increased accordingly.
       ``(n) Medicaid.--The November 15th estimate of medicaid 
     spending by States shall be the base estimate from which the 
     uniform percentage reduction under any sequestration, applied 
     across-the-board by State, shall be made. Succeeding Federal 
     payments to States shall reflect that reduction. The Health 
     Care Financing Administration shall reconcile actual medicaid 
     spending for each fiscal year with the base estimate as 
     reduced by the uniform percentage, and adjust each State's 
     grants as soon as practicable, but no later than 100 days 
     after the end of the fiscal year to which the base estimate 
     applied, to comply with the sequestration order.
       ``(o) Medicare.--
       ``(1) Timing of application of reductions.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     if a reduction is made in payment amounts pursuant to a 
     sequestration order, the reduction shall be applied to 
     payment for services furnished after the effective date of 
     the order. For purposes of the previous sentence, in the case 
     of inpatient services furnished for an individual, the 
     services shall be considered to be furnished on the date of 
     the individual's discharge from the inpatient facility.
       ``(B) Payment on the basis of cost reporting periods.--In 
     the case in which payment for services of a provider of 
     services is made under title XVIII of the Social Security Act 
     on a basis relating to the reasonable cost incurred for the 
     services during a cost reporting period of the provider, if a 
     reduction is made in payment amounts pursuant to a 
     sequestration order, the reduction shall be applied to 
     payment for costs for such services incurred at any time 
     during each cost reporting period of the provider any part of 
     which occurs after the effective date of the order, but only 
     (for each such cost reporting period) in the same proportion 
     as the fraction of the cost reporting period that occurs 
     after the effective date of the order.
       ``(2) No increase in beneficiary charges in assignment-
     related cases.--If a reduction in payment amounts is made 
     pursuant to a sequestration order for services for which 
     payment under part B of title XVIII of the Social Security 
     Act is made on the basis of an assignment described in 
     section 1842(b)(3)(B)(ii), in accordance with section 
     1842(b)(6)(B), or under the procedure described in section 
     1870(f)(1) of such Act, the person furnishing the services 
     shall be considered to have accepted payment of the 
     reasonable charge for the services, less any reduction in 
     payment amount made pursuant to a sequestration order, as 
     payment in full.
       ``(p) Postal Service Fund.--Any sequestration of the Postal 
     Service Fund shall be accomplished by annual payments from 
     that Fund to the General Fund of the Treasury, and the 
     Postmaster General of the United States shall have the duty 
     to make those payments during the fiscal year to which the 
     sequestration order applies and each succeeding fiscal year. 
     The amount of each annual payment shall be--
       ``(1) the uniform sequestration percentage, times
       ``(2) the estimated gross obligations of the Postal Service 
     Fund in that year other than those obligations financed with 
     an appropriation for revenue foregone for that year.

     Any such payment for a fiscal year shall be made as soon as 
     possible during the fiscal year, except that it may be made 
     in installments within that year if the payment schedule is 
     approved by the Secretary of the Treasury. Within 30 days 
     after the sequestration order is issued, the Postmaster 
     General shall submit to the Postal Rate Commission a plan for 
     financing the annual payment for that fiscal year and publish 
     that plan in the Federal Register. The plan may assume 
     efficiencies in the operation of the Postal Service, 
     reductions in capital expenditures, increases in the prices 
     of services, or any combination, but may not assume a lower 
     Fund surplus or higher Fund deficit and must follow the 
     requirements of existing law governing the Postal Service in 
     all other respects. Within 30 days of the receipt of that 
     plan, the Postal Rate Commission shall approve the plan or 
     modify it in the manner that modifications are allowed under 
     current law. If the Postal Rate Commission does not respond 
     to the plan within 30 days, the plan submitted by the 
     Postmaster General shall go into effect. Any plan may be 
     later revised by the submission of a new plan to the Postal 
     Rate Commission, which may approve or modify it.
       ``(q) Power Marketing Administrations and T.V.A.--Any 
     sequestration of the Department of Energy power marketing 
     administration funds or the Tennessee Valley Authority fund 
     shall be accomplished by annual payments from those funds to 
     the General Fund of the Treasury, and the administrators of 
     those funds shall have the duty to make those payments during 
     the fiscal year to which the sequestration order applies and 
     each succeeding fiscal year. The amount of each annual 
     payment by a fund shall be--
       ``(1) the uniform sequestration percentage, times
       ``(2) the estimated gross obligations of the fund in that 
     year.

     Any such payment for a fiscal year shall be made as soon as 
     possible during the fiscal year, except that it may be made 
     in installments within that year if the payment schedule is 
     approved by the Secretary of the Treasury. Annual payments by 
     a fund may be financed by reductions in costs required to 
     produce the presequester amount of power (but those 
     reductions shall not include reductions in the amount of 
     power supplied by the fund), by reductions in capital 
     expenditures, by increases in rates, or by any combination, 
     but may not be financed by a lower fund surplus or a higher 
     fund deficit and must follow the requirements of existing law 
     governing the fund in all other respects. The administrator 
     of a fund or the TVA Board is authorized to take the actions 
     specified above in order to make the annual payments to the 
     Treasury.
       ``(r) Veterans' Housing Loans.--(1) For all housing loans 
     guaranteed, insured, or made under chapter 37 of title 38, 
     United States Code, on or after the date of a sequestration, 
     the origination fees shall be increased by a uniform 
     percentage sufficient to produce the dollar savings in 
     veterans' housing programs for the fiscal year of the 
     sequestration required by section 264, and all subsequent 
     origination fees shall be increased by the same percentage, 
     notwithstanding any other provision of law.
       ``(2) The origination fees to which paragraph (1) applies 
     are those referred to in section 3729 of title 38, United 
     States Code.''.
       (b) Conforming Changes.--(1) The item relating to section 
     254 in the table of sections set forth in section 200 of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 is 
     amended to read as follows:

``Sec. 254. Estimating assumptions, reports, and orders.''.

       (2) The item relating to section 256 in the table of 
     sections set forth in section 200 of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 is amended to read as 
     follows:

``Sec. 256. General and special sequestration rules.''.

       (c) Within 30 days after the date of enactment of this Act, 
     the Director of the Office of Management and Budget and the 
     Director of the Congressional Budget Office shall each issue 
     a report that includes projections of Federal spending, 
     revenues, and deficits as a result of enactment of this Act 
     and setting forth the economic and technical assumptions used 
     to make those projections.
                       Subtitle F--Line Item Veto

     SEC. 14501. LINE ITEM VETO AUTHORITY.

       (a) In General.--Notwithstanding the provisions of part B 
     of title X of the Congressional Budget and Impoundment 
     Control Act of 1974, and subject to the provisions of this 
     section, the President may rescind all or part of the dollar 
     amount of any discretionary budget authority specified in an 
     appropriation Act for fiscal year 1996 or conference report 
     or joint explanatory statement accompanying a conference 
     report on the Act, or veto any targeted tax benefit provision 
     in this reconciliation Act, if the President--
       (1) determines that--
       (A) such rescission or veto would help reduce the Federal 
     budget deficit;
       (B) such rescission or veto will not impair any essential 
     Government functions; and
       (C) such rescission or veto will not harm the national 
     interest; and
       (2) notifies the Congress of such rescission or veto by a 
     special message not later than 10 calendar days (not 
     including Sundays) after the date of the enactment of an 
     appropriation Act providing such budget authority, or of this 
     reconciliation Act in the case of a targeted tax benefit.

[[Page H 10733]]

       (b) Deficit Reduction.--In each special message, the 
     President may also propose to reduce the appropriate 
     discretionary spending limit set forth in section 601(a)(2) 
     of the Congressional Budget Act of 1974 by an amount that 
     does not exceed the total amount of discretionary budget 
     authority rescinded by that message.
       (c) Separate Messages.--The President shall submit a 
     separate special message under this section for each 
     appropriation Act and for this reconciliation Act.
       (d) Limitation.--No special message submitted by the 
     President under this section may change any prohibition or 
     limitation of discretionary budget authority set forth in any 
     appropriation Act.
       (e) Special Rule for Previously Enacted Appropriation 
     Acts.--Notwithstanding subsection (a)(2), in the case of any 
     unobligated discretionary budget authority provided by any 
     appropriation Act for fiscal year 1996 that is enacted before 
     the date of the enactment of this Act, the President may 
     rescind all or part of that discretionary budget authority 
     under the terms of this subtitle if the President notifies 
     the Congress of such rescission by a special message not 
     later than 10 calendar days (not including Sundays) after the 
     date of the enactment of this Act.

     SEC. 14502. LINE ITEM VETO EFFECTIVE UNLESS DISAPPROVED.

       (a) In General.--
       (1) Any amount of budget authority rescinded under this 
     subtitle as set forth in a special message by the President 
     shall be deemed canceled unless, during the period described 
     in subsection (b), a rescission/receipts disapproval bill 
     making available all of the amount rescinded is enacted into 
     law.
       (2) Any provision of law vetoed under this subtitle as set 
     forth in a special message by the President shall be deemed 
     repealed unless, during the period described in subsection 
     (b), a rescission/receipts disapproval bill restoring that 
     provision is enacted into law.
       (b) Congressional Review Period.--The period referred to in 
     subsection (a) is--
       (1) a congressional review period of 20 calendar days of 
     session, beginning on the first calendar day of session after 
     the date of submission of the special message, during which 
     Congress must complete action on the rescission/receipts 
     disapproval bill and present such bill to the President for 
     approval or disapproval;
       (2) after the period provided in paragraph (1), an 
     additional 10 days (not including Sundays) during which the 
     President may exercise his authority to sign or veto the 
     rescission/receipts disapproval bill; and
       (3) if the President vetoes the rescission/receipts 
     disapproval bill during the period provided in paragraph (2), 
     an additional 5 calendar days of session after the date of 
     the veto.
       (c) Special Rule.--If a special message is transmitted by 
     the President under this subtitle and the last session of the 
     Congress adjourns sine die before the expiration of the 
     period described in subsection (b), the rescission or veto, 
     as the case may be, shall not take effect. The message shall 
     be deemed to have been retransmitted on the first Monday in 
     February of the succeeding Congress and the review period 
     referred to in subsection (b) (with respect to such message) 
     shall run beginning after such first day.

     SEC. 14503. DEFINITIONS.

       As used in this subtitle:
       (1) The term ``rescission/receipts disapproval bill'' means 
     a bill which only disapproves, in whole, rescissions of 
     discretionary budget authority or only disapproves vetoes of 
     targeted tax benefits in a special message transmitted by the 
     President under this subtitle and--
       (A)(i) in the case of a special message regarding 
     rescissions, the matter after the enacting clause of which is 
     as follows: ``That Congress disapproves each rescission of 
     discretionary budget authority of the President as submitted 
     by the President in a special message on ________.'', the 
     blank space being filled in with the appropriate date and the 
     public law to which the message relates; and
       (ii) in the case of a special message regarding vetoes of 
     targeted tax benefits, the matter after the enacting clause 
     of which is as follows: ``That Congress disapproves each veto 
     of targeted tax benefits of the President as submitted by the 
     President in a special message on ________.'', the blank 
     space being filled in with the appropriate date and the 
     public law to which the message relates; and
       (B) the title of which is as follows: ``A bill to 
     disapprove the recommendations submitted by the President on 
     ________.'', the blank space being filled in with the date of 
     submission of the relevant special message and the public law 
     to which the message relates.
       (2) The term ``calendar days of session'' shall mean only 
     those days on which both Houses of Congress are in session.
       (3) The term ``targeted tax benefit'' means any provision 
     of this reconciliation Act determined by the President to 
     provide a Federal tax deduction, credit, exclusion, 
     preference, or other concession to 100 or fewer 
     beneficiaries. Any partnership, limited partnership, trust, 
     or S corporation, and any subsidiary or affiliate of the same 
     parent corporation, shall be deemed and counted as a single 
     beneficiary regardless of the number of partners, limited 
     partners, beneficiaries, shareholders, or affiliated 
     corporate entities.
       (4) The term ``appropriation Act'' means any general or 
     special appropriation Act for fiscal year 1996, and any Act 
     or joint resolution making supplemental, deficiency, or 
     continuing appropriations for fiscal year 1996.

     SEC. 14504. CONGRESSIONAL CONSIDERATION OF LINE ITEM VETOES.

       (a) Presidential Special Message.--Whenever the President 
     rescinds any budget authority as provided in this subtitle or 
     vetoes any provision of law as provided in this subtitle, the 
     President shall transmit to both Houses of Congress a special 
     message specifying--
       (1) the amount of budget authority rescinded or the 
     provision vetoed;
       (2) any account, department, or establishment of the 
     Government to which such budget authority is available for 
     obligation, and the specific project or governmental 
     functions involved;
       (3) the reasons and justifications for the determination to 
     rescind budget authority or veto any provision pursuant to 
     this subtitle;
       (4) to the maximum extent practicable, the estimated 
     fiscal, economic, and budgetary effect of the rescission or 
     veto; and
       (5) all actions, circumstances, and considerations relating 
     to or bearing upon the rescission or veto and the decision to 
     effect the rescission or veto, and to the maximum extent 
     practicable, the estimated effect of the rescission upon the 
     objects, purposes, and programs for which the budget 
     authority is provided.
       (b) Transmission of Messages to House and Senate.--
       (1) Each special message transmitted under this subtitle 
     shall be transmitted to the House of Representatives and the 
     Senate on the same day, and shall be delivered to the Clerk 
     of the House of Representatives if the House is not in 
     session, and to the Secretary of the Senate if the Senate is 
     not in session. Each special message so transmitted shall be 
     referred to the appropriate committees of the House of 
     Representatives and the Senate. Each such message shall be 
     printed as a document of each House.
       (2) Any special message transmitted under this subtitle 
     shall be printed in the first issue of the Federal Register 
     published after such transmittal.
       (c) Introduction of Rescission/Receipts Disapproval 
     Bills.--The procedures set forth in subsection (d) shall 
     apply to any rescission/receipts disapproval bill introduced 
     in the House of Representatives not later than the third 
     calendar day of session beginning on the day after the date 
     of submission of a special message by the President under 
     this subtitle.
       (d) Consideration in the House of Representatives.--
       (1) The committee of the House of Representatives to which 
     a rescission/receipts disapproval bill is referred shall 
     report it without amendment, and with or without 
     recommendation, not later than the eighth calendar day of 
     session after the date of its introduction. If the committee 
     fails to report the bill within that period, it is in order 
     to move that the House discharge the committee from further 
     consideration of the bill. A motion to discharge may be made 
     only by an individual favoring the bill (but only after the 
     legislative day on which a Member announces to the House the 
     Member's intention to do so). The motion is highly 
     privileged. Debate thereon shall be limited to not more than 
     one hour, the time to be divided in the House equally between 
     a proponent and an opponent. The previous question shall be 
     considered as ordered on the motion to its adoption without 
     intervening motion. A motion to reconsider the vote by which 
     the motion is agreed to or disagreed to shall not be in 
     order.
       (2) After a rescission/receipts disapproval bill is 
     reported or the committee has been discharged from further 
     consideration, it is in order to move that the House resolve 
     into the Committee of the Whole House on the State of the 
     Union for consideration of the bill. All points of order 
     against the bill and against consideration of the bill are 
     waived. The motion is highly privileged. The previous 
     question shall be considered as ordered on that motion to its 
     adoption without intervening motion. A motion to reconsider 
     the vote by which the motion is agreed to or disagreed to 
     shall not be in order. During consideration of the bill in 
     the Committee of the Whole, the first reading of the bill 
     shall be dispensed with. General debate shall proceed without 
     intervening motion, shall be confined to the bill, and shall 
     not exceed two hours equally divided and controlled by a 
     proponent and an opponent of the bill. No amendment to the 
     bill is in order, except any Member may move to strike the 
     disapproval of any rescission or rescissions of budget 
     authority or any proposed repeal of a targeted tax benefit, 
     as applicable, if supported by 49 other Members. At the 
     conclusion of the consideration of the bill for amendment, 
     the Committee shall rise and report the bill to the House. 
     The previous question shall be considered as ordered on the 
     bill and amendments thereto to final passage without 
     intervening motion. A motion to reconsider the vote on 
     passage of the bill shall not be in order.
       (3) Appeals from the decisions of the Chair relating to the 
     application of the rules of the House of Representatives to 
     the procedure relating to a bill described in subsection (a) 
     shall be decided without debate.
       (4) It shall not be in order to consider more than one bill 
     described in subsection (c) or more than one motion to 
     discharge described in paragraph (1) with respect to a 
     particular special message.

[[Page H 10734]]

       (5) Consideration of any rescission/receipts disapproval 
     bill under this subsection is governed by the rules of the 
     House of Representatives except to the extent specifically 
     provided by the provisions of this subtitle.
       (e) Consideration in the Senate.--
       (1) Any rescission/receipts disapproval bill received in 
     the Senate from the House shall be considered in the Senate 
     pursuant to the provisions of this subtitle.
       (2) Debate in the Senate on any rescission/receipts 
     disapproval bill and debatable motions and appeals in 
     connection therewith, shall be limited to not more than ten 
     hours. The time shall be equally divided between, and 
     controlled by, the majority leader and the minority leader or 
     their designees.
       (3) Debate in the Senate on any debatable motions or appeal 
     in connection with such bill shall be limited to one hour, to 
     be equally divided between, and controlled by the mover and 
     the manager of the bill, except that in the event the manager 
     of the bill is in favor of any such motion or appeal, the 
     time in opposition thereto shall be controlled by the 
     minority leader or his designee. Such leaders, or either of 
     them, may, from the time under their control on the passage 
     of the bill, allot additional time to any Senator during the 
     consideration of any debatable motion or appeal.
       (4) A motion to further limit debate is not debatable. A 
     motion to recommit (except a motion to recommit with 
     instructions to report back within a specified number of days 
     not to exceed one, not counting any day on which the Senate 
     is not in session) is not in order.
       (f) Points of Order.--
       (1) It shall not be in order in the Senate to consider any 
     rescission/receipts disapproval bill that relates to any 
     matter other than the rescission of budget authority or veto 
     of the provision of law transmitted by the President under 
     this subtitle.
       (2) It shall not be in order in the Senate to consider any 
     amendment to a rescission/receipts disapproval bill.
       (3) Paragraphs (1) and (2) may be waived or suspended in 
     the Senate only by a vote of three-fifths of the members duly 
     chosen and sworn.

     SEC. 14505. REPORT OF THE GENERAL ACCOUNTING OFFICE.

       On January 6, 1997, the Comptroller General shall submit a 
     report to each House of Congress which provides the following 
     information:
       (1) A list of each proposed Presidential rescission of 
     discretionary budget authority and veto of a targeted tax 
     benefit submitted through special messages for fiscal year 
     1996, together with their dollar value, and an indication of 
     whether each rescission of discretionary budget authority or 
     veto of a targeted tax benefit was accepted or rejected by 
     Congress.
       (2) The total number of proposed Presidential rescissions 
     of discretionary budget authority and vetoes of a targeted 
     tax benefit submitted through special messages for fiscal 
     year 1996, together with their total dollar value.
       (3) The total number of Presidential rescissions of 
     discretionary budget authority or vetoes of a targeted tax 
     benefit submitted through special messages for fiscal year 
     1996 and approved by Congress, together with their total 
     dollar value.
       (4) A list of rescissions of discretionary budget authority 
     initiated by Congress for fiscal year 1996, together with 
     their dollar value, and an indication of whether each such 
     rescission was accepted or rejected by Congress.
       (5) The total number of rescissions of discretionary budget 
     authority initiated and accepted by Congress for fiscal year 
     1996, together with their total dollar value.

     SEC. 14506. JUDICIAL REVIEW.

       (a) Expedited Review.--
       (1) Any Member of Congress may bring an action, in the 
     United States District Court for the District of Columbia, 
     for declaratory judgment and injunctive relief on the ground 
     that any provision of this subtitle violates the 
     Constitution.
       (2) A copy of any complaint in an action brought under 
     paragraph (1) shall be promptly delivered to the Secretary of 
     the Senate and the Clerk of the House of Representatives, and 
     each House of Congress shall have the right to intervene in 
     such action.
       (3) Any action brought under paragraph (1) shall be heard 
     and determined by a three-judge court in accordance with 
     section 2284 of title 28, United States Code.
       (4) Nothing in this section or in any other law shall 
     infringe upon the right of the House of Representatives to 
     intervene in an action brought under paragraph (1) without 
     the necessity of adopting a resolution to authorize such 
     intervention.
       (b) Appeal to Supreme Court.--Notwithstanding any other 
     provision of law, any order of the United States District 
     Court for the District of Columbia which is issued pursuant 
     to an action brought under paragraph (1) of subsection (a) 
     shall be reviewable by appeal directly to the Supreme Court 
     of the United States. Any such appeal shall be taken by a 
     notice of appeal filed within 10 days after such order is 
     entered; and the jurisdictional statement shall be filed 
     within 30 days after such order is entered. No stay of an 
     order issued pursuant to an action brought under paragraph 
     (1) of subsection (a) shall be issued by a single Justice of 
     the Supreme Court.
       (c) Expedited Consideration.--It shall be the duty of the 
     District Court for the District of Columbia and the Supreme 
     Court of the United States to advance on the docket and to 
     expedite to the greatest possible extent the disposition of 
     any matter brought under subsection (a).
                 Subtitle G--Enforcing Points of Order

     SEC. 14601. POINTS OF ORDER IN THE SENATE.

       (a) Waiver.--The second sentence of section 904(c) of the 
     Congressional Budget Act of 1974 is amended by inserting 
     ``303(a),'' after ``302(f),'', by inserting ``311(c),'' after 
     ``311(a),'', by inserting ``606(b),'' after ``601(b),'', and 
     by inserting ``253(d), 253(h), 253(i),'' before 
     ``258(a)(4)(C)''.
       (b) Appeals.--The third sentence of section 904(c) of the 
     Congressional Budget Act of 1974 is amended by inserting 
     ``303(a),'' after ``302(f),'', by inserting ``311(c),'' after 
     ``311(a),'', by inserting ``606(b),'' after ``601(b),'', and 
     by inserting ``253(d), 253(h), 253(i),'' before 
     ``258(a)(4)(C)''.

     SEC. 14602. POINTS OF ORDER IN THE HOUSE OF REPRESENTATIVES.

       Section 904 of the Congressional Budget Act of 1974 is 
     amended by redesignating subsection (d) as subsection (e) and 
     by inserting after subsection (c) the following new 
     subsection:
       ``(d) In the House of Representatives, a separate vote 
     shall be required on that part of any resolution or order 
     that makes in order the waiver of any points of order 
     referred to in subsection (c).''.
                 Subtitle H--Deficit Reduction Lock-box

     SEC. 14701. DEFICIT REDUCTION LOCK-BOX PROVISIONS OF 
                   APPROPRIATION MEASURES.

       (a) Deficit Reduction Lock-box Provisions.--Title III of 
     the Congressional Budget Act of 1974 is amended by adding at 
     the end the following new section:


     ``deficit reduction lock-box provisions of appropriation bills

       ``Sec. 314. (a) Any appropriation bill that is being marked 
     up by the Committee on Appropriations (or a subcommittee 
     thereof) of either House shall contain a line item entitled 
     `Deficit Reduction Lock-box'.
       ``(b) Whenever the Committee on Appropriations of either 
     House reports an appropriation bill, that bill shall contain 
     a line item entitled `Deficit Reduction Account' comprised of 
     the following:
       ``(1) Only in the case of any general appropriation bill 
     containing the appropriations for Treasury and Postal Service 
     (or resolution making continuing appropriations (if 
     applicable)), an amount equal to the amounts by which the 
     discretionary spending limit for new budget authority and 
     outlays set forth in the most recent OMB sequestration 
     preview report pursuant to section 601(a)(2) exceed the 
     section 602(a) allocation for the fiscal year covered by that 
     bill.
       ``(2) Only in the case of any general appropriation bill 
     (or resolution making continuing appropriations (if 
     applicable)), an amount not to exceed the amount by which the 
     appropriate section 602(b) allocation of new budget authority 
     exceeds the amount of new budget authority provided by that 
     bill (as reported by that committee), but not less than the 
     sum of reductions in budget authority resulting from adoption 
     of amendments in the committee which were designated for 
     deficit reduction.
       ``(3) Only in the case of any bill making supplemental 
     appropriations following enactment of all general 
     appropriation bills for the same fiscal year, an amount not 
     to exceed the amount by which the section 602(a) allocation 
     of new budget authority exceeds the sum of all new budget 
     authority provided by appropriation bills enacted for that 
     fiscal year plus that supplemental appropriation bill (as 
     reported by that committee).
       ``(c) It shall not be in order for the Committee on Rules 
     of the House of Representatives to report a resolution that 
     restricts the offering of amendments to any appropriation 
     bill adjusting the level of budget authority contained in a 
     Deficit Reduction Account.
       ``(d) Whenever a Member of either House of Congress offers 
     an amendment (whether in subcommittee, committee, or on the 
     floor) to an appropriation bill to reduce spending, that 
     reduction shall be placed in the deficit reduction lock-box 
     unless that Member indicates that it is to be utilized for 
     another program, project, or activity covered by that bill. 
     If the amendment is agreed to and the reduction was placed in 
     the deficit reduction lock-box, then the line item entitled 
     `Deficit Reduction Lock-box' shall be increased by the amount 
     of that reduction. Any amendment pursuant to this subsection 
     shall be in order even if amendment portions of the bill are 
     not read for amendment with respect to the Deficit Reduction 
     Lock-box.
       ``(e) It shall not be in order in the House of 
     Representatives or the Senate to consider a conference report 
     or amendment of the Senate that modifies any Deficit 
     Reduction Lock-box provision that is beyond the scope of that 
     provision as so committed to the conference committee.
       ``(f) It shall not be in order to offer an amendment 
     increasing the Deficit Reduction Lock-box Account unless the 
     amendment increases rescissions or reduces appropriations by 
     an equivalent or larger amount, except that it shall be in 
     order to offer an amendment increasing the amount in the 
     Deficit Reduction Lock-box by the amount that the appropriate 
     602(b) allocation of new budget authority exceeds the amount 
     of new budget authority provided by that bill.

[[Page H 10735]]

       ``(g) It shall not be in order for the Committee on Rules 
     of the House of Representatives to report a resolution which 
     waives subsection (c).''.
       (b) Conforming Amendment.--The table of contents set forth 
     in section 1(b) of the Congressional Budget and Impoundment 
     Control Act of 1974 is amended by inserting after the item 
     relating to section 313 the following new item:

``Sec. 314. Deficit reduction lock-box provisions of appropriation 
              measures.''.

     SEC. 14702. DOWNWARD ADJUSTMENTS.

       (a) Downward Adjustments.--The discretionary spending limit 
     for new budget authority for any fiscal year set forth in 
     section 601(a)(2) of the Congressional Budget Act of 1974, as 
     adjusted in strict conformance with section 251 of the 
     Balanced Budget and Emergency Deficit Control Act of 1985, 
     shall be reduced by the amount of budget authority 
     transferred to the Deficit Reduction Lockbox for that fiscal 
     year under section 314 of the Budget Control and Impoundment 
     Act of 1974. The adjusted discretionary spending limit for 
     outlays for that fiscal year and each outyear as set forth in 
     such section 601(a)(2) shall be reduced as a result of the 
     reduction of such budget authority, as calculated by the 
     Director of the Office of Management and Budget based upon 
     such programmatic and other assumptions set forth in the 
     joint explanatory statement of managers accompanying the 
     conference report on that bill. All such reductions shall 
     occur within ten days of enactment of any appropriations 
     bill.
       (b) Definition.--As used in this section, the term 
     ``appropriation bill'' means any general or special 
     appropriation bill, and any bill or joint resolution making 
     supplemental, deficiency, or continuing appropriations.
       (c) Rescission.--Funds in the Deficit Reduction Lockbox 
     shall be rescinded upon reductions in discretionary limits 
     pursuant to subsection (a).

     SEC. 14703. CBO TRACKING.

       Section 202 of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following new subsection:
       ``(i) Scorekeeping.--To facilitate compliance by the 
     Committee on Appropriations with section 314, the Office 
     shall score all general appropriation measures (including 
     conference reports) as passed by the House of 
     Representatives, as passed the Senate and as enacted into 
     law. The scorecard shall include amounts contained in the 
     Deficit Reduction Lock-Box. The chairman of the Committee on 
     Appropriations of the House of Representatives or the Senate, 
     as the case may be, shall have such scorecard published in 
     the Congressional Record.''.
Subtitle I--Emergency Spending; Baseline Reform; Continuing Resolutions 
                                 Reform

                     CHAPTER 1--EMERGENCY SPENDING

     SEC. 14801. ESTABLISHMENT OF BUDGET RESERVE ACCOUNT.

       (a) Establishment.--A budget reserve account (hereinafter 
     in this section referred to as the ``account'') shall be 
     established for the purpose of setting aside adequate funding 
     for natural disasters and national security emergencies.
       (b) Prior Appropriation Required.--The account shall 
     consist of such sums as may be provided in advance in 
     appropriation Acts for a particular fiscal year.
       (c) Restriction on Use of Funds.--(1) Notwithstanding any 
     other provision of law, the amounts in the account shall not 
     be available for other than emergency funding requirements 
     for particular natural disasters or national security 
     emergencies so designated by Acts of Congress.
       (2) Funds in the account that are not obligated during the 
     fiscal year for which they are appropriated may only be used 
     for deficit reduction purposes.
       (d) New Point of Order.--(1) Title IV of the Congressional 
     Budget Act of 1974 is amended by adding at the end the 
     following new section:


                 ``point of order regarding emergencies

       ``Sec. 408. It shall not be in order in the House of 
     Representatives or the Senate to consider any bill or joint 
     resolution, or amendment thereto or conference report 
     thereon, containing an emergency designation for purposes of 
     section 251(b)(2)(D) or 252(e) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 if it also provides an 
     appropriation or direct spending for any other item or 
     contains any other matter, but that bill or joint resolution, 
     amendment, or conference report may contain rescissions of 
     budget authority or reductions of direct spending, or that 
     amendment may reduce amounts for that emergency.''.
       (2) The table of contents set forth in section 1(b) of the 
     Congressional Budget and Impoundment Control Act of 1974 is 
     amended by inserting after the item relating to section 407 
     the following new item:

``Sec. 408. Point of order regarding emergencies.''.

     SEC. 14802. CONGRESSIONAL BUDGET PROCESS CHANGES.

       (a) Contents of joint Resolutions on the Budget.--Section 
     301(a) of the Congressional Budget Act of 1974 is amended by 
     redesignating paragraphs (6) and (7) as paragraphs (7) and 
     (8), respectively, and by inserting after paragraph (5) the 
     following new paragraph:
       ``(6) total new budget authority and total budget outlays 
     for emergency funding requirements for natural disasters and 
     national security emergencies to be included in a budget 
     reserve account;''.
       (b) Section 602 Allocations.--(1) Section 602 of the 
     Congressional Budget Act of 1974 is amended by adding at the 
     end the following new subsection:
       ``(f) Committee Spending Allocations and Suballocations for 
     Budget Reserve Account.--
       ``(1) Allocations.--The joint explanatory statement 
     accompanying a conference report on a budget resolution shall 
     include allocations, consistent with the resolution 
     recommended in the conference report, of the appropriate 
     levels (for each fiscal year covered by that resolution) of 
     total new budget authority and outlays to the Committee on 
     Appropriations of each House for emergency funding 
     requirements for natural disasters and national security 
     emergencies to be included in a budget reserve account.
       ``(2) Suballocations.--As soon as practicable after a 
     budget resolution is agreed to, the Committee on 
     Appropriations of each House (after consulting with the 
     Committee on Appropriations of the other House) shall 
     suballocate each amount allocated to it for the budget year 
     under paragraph (1) among its subcommittees. Each Committee 
     on Appropriations shall promptly report to its House 
     suballocations made or revised under this paragraph.''.
       (2) Section 602(c) of the Congressional Budget Act of 1974 
     is amended by inserting ``or subsection (f)(1)'' after 
     ``subsection (a)'' and by inserting ``or subsection (f)(2)'' 
     after ``subsection (b)''.

     SEC. 14803. REPORTING.

       Not later than November 30, 1996, and at annual intervals 
     thereafter, the Director of the Office of Management and 
     Budget shall submit a report to each House of Congress 
     listing the amounts of money expended from the budget reserve 
     account established under section 1 for the fiscal year 
     ending during that calendar year for each natural disaster 
     and national security emergency.

                       CHAPTER 2--BASELINE REFORM

     SEC. 14851. THE BASELINE.

       (a) The second sentence of section 257(c) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985 is amended--
       (1) by inserting ``but only for the purpose of adjusting 
     the discretionary spending limits set forth in section 
     601(a)(2) of the Congressional Budget Act of 1974'' after 
     ``for inflation as specified in paragraph (5); and
       (2) by inserting ``but only for the purpose of adjusting 
     the discretionary spending limits set forth in section 
     601(a)(2) of the Congressional Budget Act of 1974'' after 
     ``to offset pay absorption and for pay annualization as 
     specified in paragraph (4)''.
       (b) Section 1109(a) of title 31, United States Code, is 
     amended by adding after the first sentence the following new 
     sentence: ``These estimates shall not include an adjustment 
     for inflation for programs and activities subject to 
     discretionary appropriations.''.

     SEC. 14852. THE PRESIDENT'S BUDGET.

       (a) Paragraph (5) of section 1105(a) of title 31, United 
     States Code, is amended to read as follows:
       ``(5) except as provided in subsection (b) of this section, 
     estimated expenditures and appropriations for the current 
     year and estimated expenditures and proposed appropriations 
     the President decides are necessary to support the Government 
     in the fiscal year for which the budget is submitted and the 
     4 fiscal years following that year;''.
       (b) Section 1105(a)(6) of title 31, United States Code, is 
     amended by inserting ``current fiscal year and the'' before 
     ``fiscal year''.
       (c) Section 1105(a)(12) of title 31, United States Code, is 
     amended by striking ``and'' at the end of subparagraph (A), 
     by striking the period and inserting ``; and'' at the end of 
     subparagraph (B), and by adding at the end the following new 
     subparagraph:
       ``(C) the estimated amount for the same activity (if any) 
     in the current fiscal year.''.
       (d) Section 1105(a)(18) of title 31, United States Code, is 
     amended by inserting ``new budget authority and'' before 
     ``budget outlays''.
       (e) Section 1105(a) of title 31, United States Code, is 
     amended by adding at the end the following new paragraph:
       ``(30) a comparison of levels of estimated expenditures and 
     proposed appropriations for each function and subfunction in 
     the current fiscal year and the fiscal year for which the 
     budget is submitted, along with the proposed increase or 
     decrease of spending in percentage terms for each function 
     and subfunction.''.

     SEC. 14853. THE CONGRESSIONAL BUDGET.

       Section 301(e) of the Congressional Budget Act of 1974 is 
     amended by--
       (1) inserting after the second sentence the following: 
     ``The starting point for any deliberations in the Committee 
     on the Budget of each House on the joint resolution on the 
     budget for the next fiscal year shall be the estimated level 
     of outlays for the current year in each function and 
     subfunction. Any increases or decreases in the Congressional 
     budget for the next fiscal year shall be from such estimated 
     levels.''; and
       (2) striking paragraph (8) and redesignating paragraphs (9) 
     and (10) as paragraphs (10) and (11), respectively, and by 
     inserting after paragraph (7) the following new paragraphs:
       ``(8) a comparison of levels for the current fiscal year 
     with proposed spending and revenue levels for the subsequent 
     fiscal years along with the proposed increase or decrease of 
     spending in percentage terms for each function and 
     subfunction; and
       ``(9) information, data, and comparisons indicating the 
     manner in which and the basis 

[[Page H 10736]]
     on which, the committee determined each of the matters set forth in the 
     joint resolution;''.

     SEC. 14854. CONGRESSIONAL BUDGET OFFICE REPORTS TO 
                   COMMITTEES.

       (a) The first sentence of section 202(f)(1) of the 
     Congressional Budget Act of 1974 is amended to read as 
     follows: ``On or before February 15 of each year, the 
     Director shall submit to the Committees on the Budget of the 
     House of Representatives and the Senate a report for the 
     fiscal year commencing on October 1 of that year with respect 
     to fiscal policy, including (A) alternative levels of total 
     revenues, total new budget authority, and total outlays 
     (including related surpluses and deficits) compared to 
     comparable levels for the current year and (B) the levels of 
     tax expenditures under existing law, taking into account 
     projected economic factors and any changes in such levels 
     based on proposals in the budget submitted by the President 
     for such fiscal year.''.
       (b) Section 202(f)(1) of the Congressional Budget Act of 
     1974 is amended by inserting after the first sentence the 
     following new sentence: ``That report shall also include a 
     table on sources of spending growth in total mandatory 
     spending for the budget year and the ensuing 4 fiscal years, 
     which shall include changes in outlays attributable to the 
     following: cost-of-living adjustments; changes in the number 
     of program recipients; increases in medical care prices, 
     utilization and intensity of medical care; and residual 
     factors.''.
       (c) Section 308(a)(1) of the Congressional Budget Act of 
     1974 is amended--
       (1) in subparagraph (C), by inserting ``, and shall include 
     a comparison of those levels to comparable levels for the 
     current fiscal year'' before ``if timely submitted''; and
       (2) by striking ``and'' at the end of subparagraph (C), by 
     striking the period and inserting ``; and'' at the end of 
     subparagraph (D), and by adding at the end the following new 
     subparagraph:
       ``(E) comparing the levels in existing programs in such 
     measure to the estimated levels for the current fiscal 
     year.''
       (d) Title IV of the Congressional Budget Act of 1974 is 
     amended by adding at the end the following new section:


                   ``gao reports to budget committees

       (a) ``Sec. 408. On or before January 15 of each year, the 
     Comptroller General, after consultation with appropriate 
     committees of the House of Representatives and Senate, shall 
     submit to the Congress a report listing all programs, 
     projects, and activities that fall within the definition of 
     direct spending under section 250(c)(8) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985.''.
       (b) Conforming Amendment.--The table of contents set forth 
     in section 1(b) of the Congressional Budget and Impoundment 
     Control Act of 1974 is amended by inserting after the item 
     relating to section 407 the following new item:

``Sec. 408. GAO reports to budget committees.''.

          CHAPTER 3--RESTRICTED USES OF CONTINUING RESOLUTIONS

     SEC. 14871. RESTRICTIONS RESPECTING CONTINUING RESOLUTIONS.

       (a) Rule XXI of the Rules of the House of Representatives 
     is amended by adding at the end thereof the following new 
     clause:
       ``9. (a) Any item of appropriation set forth in any joint 
     resolution continuing appropriations, or amendment thereto, 
     shall not exceed the rate it would have been at assuming the 
     continuation of current law.
       ``(b) It shall not be in order in the House to consider any 
     joint resolution continuing appropriations, or amendment 
     thereto, which changes existing law.''.
       (b) The amendment made by subsection (a) shall only apply 
     to joint resolutions continuing appropriations for fiscal 
     year 1996 or any subsequent fiscal year.
            Subtitle J--Technical and Conforming Amendments

     SEC. 14901. AMENDMENTS TO THE CONGRESSIONAL BUDGET AND 
                   IMPOUNDMENT CONTROL ACT OF 1974.

       (a) Definition of Budget Authority.--Paragraph (2) of 
     section 3 of the Congressional Budget and Impoundment Control 
     Act of 1974, the second time it appears, is amended by 
     inserting ``in any form'' after ``promissory notes'', by 
     inserting at the end of subparagraph (A) the following new 
     sentence: ``Such term excludes transactions classified as 
     means of financing.'', and by striking ``With respect to'' 
     and all that follows through ``retirement account, any'' and 
     inserting ``Any'', by inserting after subparagraph (B) the 
     following:
       ``(C) Relationship to entitlement authority.--For purposes 
     of titles III and IV, all references to budget authority 
     shall be considered to include the amount of budget authority 
     estimated to be needed to fund entitlement provisions under 
     existing or proposed law, and all legislation increasing (or 
     decreasing) the level of entitlement authority under existing 
     law shall be considered to provide (or decrease) new budget 
     authority in that amount.'',

     and by redesignating the next subparagraph accordingly.
       (b) Definition of Entitlement Authority.--Paragraph (9) of 
     section 3 of the Congressional Budget and Impoundment Control 
     Act of 1974 is amended by striking ``spending authority 
     described by section 401(c)(2)(C)'' and inserting the 
     following: ``, and the term `entitlement program' refers to, 
     any provision of law that has the effect of requiring the 
     Government to make net payments (including intragovernmental 
     payments) regardless of the amount of budget authority that 
     may be available to make those payments. Those terms shall 
     include amounts estimated to be required under provisions of 
     law that depend on the fulfillment of non-legislative 
     conditions or are indefinite as to amount or timing. Except 
     as provided in the next sentence, if a provision of law that 
     otherwise requires the Government to make net payments is 
     directly or indirectly limited by any other provision of law 
     to an amount of available budget authority, then entitlement 
     authority does not exist. Subchapter II of chapter 13 of 
     title 31, United States Code, and the sequestration 
     provisions of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 shall not be considered provisions of law 
     that limit entitlement authority to the amount of available 
     budget authority.''
       (c) Definition of Means of Financing.--Section 3 of the 
     Congressional Budget and Impoundment Control Act of 1974 is 
     amended by adding at the end the following new paragraph:
       ``(11) The term `means of financing' means the financial 
     transactions of the Government that consist of exchanges of 
     money or monetary proxies of equal value and therefore are 
     not counted as obligations, outlays, or revenues, such as net 
     Federal borrowing from the public in any form, debt 
     redemption, seignorage on coins and profits from the sale of 
     gold, and changes in outstanding check or other monetary 
     credits, including write-offs.''.
       (d) CBO Studies.--Section 202(h) of the Congressional 
     Budget Act of 1974 is amended by striking ``outlays, credit 
     authority,'' and inserting ``outlays''.
       (e) Required Contents of Budget Resolution.--Section 301(a) 
     of the Congressional Budget Act of 1974 is amended by 
     striking ``planning levels'', by striking ``two'' and 
     inserting ``four'', by striking ``, budget outlays, direct 
     loan obligations, and primary loan guarantee commitments'' 
     both places it appears and inserting ``and outlays'', by 
     striking paragraphs (5), (6) and (7), by striking the 
     semicolon at the end of paragraph (4) and inserting a period, 
     by inserting ``and'' after the semicolon at the end of 
     paragraph (3), and by striking the last sentence.
       (f) Technical Correction to Section 301(e).--Section 301(e) 
     of the Congressional Budget Act of 1974 is amended by 
     inserting ``new'' before ``budget authority'' in the second 
     sentence.
       (g) Committee Allocations and Suballocations.--Section 
     602(a)(1)(B) of the Congressional Budget Act of 1974 is 
     amended by striking ``committee.'' and inserting ``committee, 
     except that new budget authority and outlays for entitlement 
     programs funded through annual appropriations shall be 
     allocated and scored both to the Committee on Appropriations 
     and to the committee that authorized such programs.''.
       (h) Committee Allocations.--Section 302 of the 
     Congressional Budget Act of 1974 is amended to read as 
     follows:


                        ``committee allocations

       ``Sec. 302. (a) Reports by Committees.--As soon as 
     practicable after a joint resolution on the budget is 
     enacted--
       ``(1) the Committee on Appropriations of each House shall, 
     after consulting with the Committee on Appropriations of the 
     other House--
       ``(A) subdivide among its subcommittees the allocation of 
     budget outlays, new budget authority, and new credit 
     authority allocated to it in the joint budget resolution;
       ``(B) further subdivide the amount with respect to each 
     such subcommittee between controllable amounts and all other 
     amounts; and
       ``(2) every other committee of the House and Senate to 
     which an allocation was made in such joint budget resolution 
     shall, after consulting with the committee or committees of 
     the other House to which all or part of its allocation was 
     made--
       ``(A) subdivide such allocation among its subcommittees or 
     among programs over which it has jurisdiction; and
       ``(B) further subdivide the amount with respect to each 
     subcommittee or program between controllable amounts and all 
     other amounts.

     Each such committee shall promptly report to its House the 
     subdivisions made by it pursuant to this subsection.
       ``(b) Point of Order.--It shall not be in order in the 
     House of Representatives or the Senate to consider any bill 
     or resolution, or amendment thereto, providing--
       ``(1) new budget authority for a fiscal year;
       ``(2) new spending authority as described in section 
     401(c)(2) for a fiscal year; or
       ``(3) new credit authority for a fiscal year;
     within the jurisdiction of any committee which has received 
     an appropriate allocation of such authority pursuant to 
     section 301(a)(6) for such fiscal year, unless and until such 
     committee makes the allocation of subdivisions required by 
     subsection (a), in connection with the most recently enacted 
     joint resolution on the budget for such fiscal year.
       ``(c) Subsequent Joint Resolutions.--In the case of a joint 
     resolution on the budget referred to in section 304, the 
     subdivisions under subsection (a) shall be required only to 
     the extent necessary to take into account revisions made in 
     the most recently enacted joint resolution on the budget.
       ``(d) Alteration of Allocations.--At any time after a 
     committee reports the subdivision required to be made under 
     subsection 

[[Page H 10737]]
     (a), such committee may report to its House an alteration of such 
     subdivision. Any alteration of such subdivision must be 
     consistent with any actions already taken by its House on 
     legislation within the committee's jurisdiction.
       ``(e) Legislation Subject to Point of Order.--After 
     enactment of a joint resolution on the budget for a fiscal 
     year, it shall not be in order in the House of 
     Representatives or the Senate to consider any bill, 
     resolution, or amendment providing new budget authority for 
     such fiscal year, new entitlement authority effective during 
     such fiscal year, or new credit authority for such fiscal 
     year, or any conference report on any such bill or 
     resolution, if--
       ``(1) the enactment of such bill or resolution as reported;
       ``(2) the adoption and enactment of such amendment; or
       ``(3) the enactment of such bill or resolution in the form 
     recommended in such conference report;

     would cause the appropriate allocation made pursuant to 
     section 301(a)(6) or subdivision made under subsection (a) of 
     this section for such fiscal year of new discretionary budget 
     authority, new entitlement authority, or new credit 
     authority, to be exceeded.
       ``(f) Determinations by Budget Committees.--For purposes of 
     this section, the levels of new budget authority, spending 
     authority as described in section 401(c)(2), outlays and new 
     credit authority for a fiscal year, shall be determined on 
     the basis of estimates made by the Committee on the Budget of 
     the House of Representatives or the Senate, as the case may 
     be.''.
       (i) Cost Estimates and Scorekeeping Reports.--Section 308 
     of the Congressional Budget Act of 1974 is amended--
       (1) in its title, by striking ``, new spending authority, 
     or new credit authority,'';
       (2) by striking ``, new spending authority described in 
     section 401(c)(2), or new credit authority,'' the 3 times it 
     appears;
       (3) in subsection (a), by striking ``in the reports 
     submitted'', by inserting ``302(a) or'' before ``302(b)'', in 
     paragraph (1)(B) by striking ``spending authority'' and 
     everything that follows through ``401(c)(2) which is'' and 
     inserting ``budget authority'' and by striking ``annual 
     appropriations'' and inserting ``annual discretionary 
     appropriations'', and in paragraph (1)(C) by striking ``such 
     budget authority'' and all that follows through ``loan 
     guarantee commitments'' and inserting ``new budget authority, 
     outlays, or revenues''; and
       (4) in subsection (c), by adding ``and'' at the end of 
     paragraph (1), by striking ``period;'' and inserting 
     ``period.'' at the end of paragraph (2), and by striking 
     paragraphs (3), (4), and (5).
       (j) Technical Correction to Section 312.--Section 312 of 
     the Congressional Budget Act of 1974 is amended by inserting 
     ``(a)'' after ``312.''.
       (k) Consideration of Legislation That Has Not Been 
     Reported.--Section 312 of the Congressional Budget Act of 
     1974 is amended by inserting at the end the following:
       ``(c) Consideration of Legislation That Has Not Been 
     Reported.--In the House of Representatives, any point of 
     order under title III or IV that would lie against 
     consideration of a bill or joint resolution as reported by a 
     committee shall also lie against a motion to consider 
     legislation respecting which no report has been filed.''
       (l) Conforming Amendments to Section 313.--Section 313 of 
     the Congressional Budget Act of 1974 is amended by striking 
     ``or section 258C'' and everything that follows through 
     ``Deficit Control Act of 1985'', by striking ``; and (F)'' 
     and everything that follows through ``310(g)'', by 
     redesignating the second subsection (c) and subsection (d) as 
     subsections (d) and (e), respectively, and by striking ``or 
     (b)(1)(F),''.
       (m) Borrowing and Contract Authority.--Section 401 of the 
     Congressional Budget Act of 1974 is amended
       (1) in subsection (a), by striking ``new spending authority 
     described in subsection (c)(2)(A) or (B)'' both times it 
     appears and inserting ``borrowing authority or contract 
     authority'';
       (2) by repealing subsections (b) and (c) and by 
     redesignating subsection (d) as subsection (b); and
       (3) in subsection (b) (as redesignated), by striking 
     ``Subsections (a) and (b)'' and inserting ``Subsection (a)'', 
     by inserting ``non-interest'' before ``receipts'' in 
     paragraph (1)(B), by repealing paragraph (2), and by 
     redesignating paragraph (3) as paragraph (2).
       (n) Credit Authority.--Section 402(a) of the Congressional 
     Budget Act of 1974 is amended by inserting before the period 
     the following: ``, except that this provision shall not apply 
     with respect to programs that, as of August 15, 1992, provide 
     credit authority as an entitlement''.

     SEC. 14902. TECHNICAL AND CONFORMING AMENDMENTS TO THE RULES 
                   OF THE HOUSE OF REPRESENTATIVES.

       (a) Miscellaneous Conforming Amendment.--Clause 4(h) of 
     rule X of the Rules of the House of Representatives is 
     amended by striking ``or section 602 (in the case of fiscal 
     years 1991 through 1995)''.
       (b) Repealer.--Rule XLIX of the Rules of the House of 
     Representatives is repealed.

     SEC. 14903. PRESIDENT'S BUDGET.

       (a) Definitions.--Section 1101 of title 31, United States 
     Code, is amended by adding at the end the following:
       ``(3) `Expenditures' has the same meaning as the term 
     `outlays' in the Balanced Budget and Emergency Deficit 
     Control Act of 1985.
       ``(4) All other terms used herein or in the documents 
     prepared hereunder shall have the meanings set forth in the 
     Balanced Budget and Emergency Deficit Control Act of 1985.''.
       (b) Byrd Amendment.--Section 1103 of title 31, United 
     States Code, is amended by striking ``commitment that 
     budget'' and inserting ``commitment that, starting with 
     fiscal year 2002,''.
       (c) President's Budget Submission.--Section 1105(a) of 
     title 31, United States Code, is amended--
       (1) in the first sentence by striking ``On or after the 
     first Monday in January but not later than the first Monday 
     in February of each year'' and inserting ``On or before the 
     first Monday in February or the 21st calendar day beginning 
     after the date the Board of Estimates issues a report to the 
     President under section 254 of the Balanced Budget and 
     Emergency Deficit Control Act of 1985'';
       (2) in paragraph (15) by striking ``section 301(a)(1)-(5)'' 
     and inserting ``section 301(a)(1)-(4);
       (3) in paragraph (16) by striking ``section 3(a)(3)'' and 
     inserting ``section 3(3)''; and
       (4) by adding at the end the following new paragraph:
       ``(32) an analysis of the financial condition of 
     Government-sponsored enterprises and the financial exposure 
     of the Government, if any, posed by them.''.
       (d) Use of Official Estimates.--Section 1105(f) of title 
     31, United States Code, is amended by inserting at the end 
     the following new sentence: ``That budget shall be consistent 
     with the discretionary funding limit and the direct spending 
     and receipts deficit reduction requirement for that year 
     chosen by the Board of Estimates and shall be based upon the 
     major estimating assumptions chosen by that Board.''.
                    Subtitle K--Truth in Legislating

     SEC. 14951. IDENTITY, SPONSOR, AND COST OF CERTAIN PROVISIONS 
                   REQUIRED TO BE REPORTED.

       (a) Identity, Sponsor, and Cost.--Clause 4 of rule X of the 
     Rules of the House of Representatives is amended by adding at 
     the end thereof the following:
       ``(j)(1) Except as provided by subparagraph (2), the report 
     or joint explanatory statement accompanying each bill or 
     joint resolution of a public character reported by a 
     committee or committee of conference shall contain, in plain 
     and understandable language--
       ``(A) an identification of each provision (if any) of the 
     bill or joint resolution which benefits only 10 or fewer 
     beneficiaries in any one of the following categories: 
     persons, corporations, partnerships, institutions, 
     organizations, transactions, events, items of property, 
     projects, civil subdivisions within one or more States, or 
     issuances of bonds;
       ``(B) the name of each beneficiary of such provision;
       ``(C) the name of any Member or Members who sponsored the 
     inclusion of each such provision and an indication of each 
     such provision requested by any agency, instrumentality, or 
     officer of the United States; and
       ``(D) an estimate by the Congressional Budget Office or the 
     Joint Committee on Taxation, whichever is appropriate, of the 
     costs which would be incurred in carrying out such provision 
     or any loss in revenues resulting from such provision for the 
     fiscal year for which costs or loss in revenues, as the case 
     may be, first occurs and each of the next 5 fiscal years.
       ``(2)(A) Subparagraph (1) shall not apply with respect to 
     any provision of a bill or joint resolution or of a 
     conference report on a bill or joint resolution if the 
     beneficiary of such provision is the United States or any 
     agency or instrumentality thereof.
       ``(B) Subparagraph (1)(D) shall not apply with respect to 
     any provision of a bill or joint resolution or of a 
     conference report on a bill or joint resolution if the costs 
     which would be incurred in carrying out such provision or any 
     loss in revenues resulting from such provision are identified 
     clearly in the report or joint explanatory statement 
     accompanying such bill or joint resolution.
       ``(3) It shall not be in order to consider any such bill or 
     joint resolution in the House if the report or joint 
     explanatory statement of the committee or committee of 
     conference which reported that bill or joint resolution does 
     not comply with subparagraph (1). The requirements of 
     subparagraph (1) may be waived only upon a separate vote 
     directed solely to that subject.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to bills and joint resolutions reported by a 
     committee of the House of Representatives after the date of 
     enactment of this Act.

                               H.R. 2517

                         Offered By: Mr. Davis

       Amendment No. 1: Page 1588, lines 3 through 7, amend 
     subsection (c) to read as follows:
       (c) National Technical Information Service.--
       (1) Government corporation.--All functions of the National 
     Technical Information Service are transferred to the Director 
     of the Office of Management and Budget who shall within 6 
     months after the effective date specified in section 17101 
     submit to Congress a proposal for legislation to establish 
     the National Technical Information Service as a wholly owned 
     Government corporation. The proposal should provide for the 
     corporation to perform substantially the same functions that, 
     as of the date of enactment of this act, are performed by the 
     National Technical Information Service. 

[[Page H 10738]]

       (2) Transfer to national institute for science and 
     technology.--Not later than 18 months after the effective 
     date specified in section 17101, the National Technical 
     Information Service (or any successor corporation established 
     pursuant to a proposal under paragraph (1)) shall be 
     transferred to the National Institute for Science and 
     Technology established by section 17207.
       (3) Funding.--No funds are authorized to be appropriated 
     for the National Technical Information Service or any 
     successor corporation established pursuant to a proposal 
     under paragraph (1).

                               H.R. 2517

                          Offered By: Mr. Horn

       Amendment No. 2: Page 308, after line 5, insert the 
     following:

 Subtitle A--Federal Employee and Congressional Benefits; Availability 
              of Surplus Property for Homeless Assistance

       Page 333, after line 15, insert the following new subtitle:

          Subtitle B--Debt Collection Improvement Act of 1995

     SEC. 5201. SHORT TITLE.

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

     SEC. 5202. TABLE OF CONTENTS.

       The table of contents for this subtitle is as follows:

Sec. 5201. Short title.
Sec. 5202. Table of contents.
Sec. 5203. Effective date.
Sec. 5204. Purposes.

              Part I--General Debt Collection Initiatives


                  subpart a--general offset authority

Sec. 5211. Expansion of administrative offset authority.
Sec. 5212. Enhancement of administrative offset authority.
Sec. 5213. Exemption from computer matching requirements under the 
              Privacy Act of 1974.
Sec. 5214. Use of administrative offset authority for debts to States.
Sec. 5215. Technical and conforming amendments.


                   subpart b--salary offset authority

Sec. 5221. Enhancement of salary offset authority.


                subpart c--taxpayer identifying numbers

Sec. 5231. Access to taxpayer identifying numbers; barring delinquent 
              debtors from credit assistance.
Sec. 5232. Barring delinquent Federal debtors from obtaining Federal 
              loans or loan guarantees.


     subpart d--expansion and enhancement of collection authorities

Sec. 5241. Repeal of limitations on collection authorities.
Sec. 5242. Disclosure to consumer reporting agencies and commercial 
              reporting agencies.
Sec. 5243. Contracts for collection services.
Sec. 5244. Cross-servicing partnerships and centralization of debt 
              collection activities in the Department of the Treasury.
Sec. 5245. Compromise of claims.
Sec. 5246. Wage garnishment requirement.
Sec. 5247. Debt sales by agencies.
Sec. 5248. Adjustments of administrative debt.
Sec. 5249. Dissemination of information regarding identity of 
              delinquent debtors.


              subpart e--federal civil monetary penalties

Sec. 5251. Adjusting Federal civil monetary penalties for inflation.


                        subpart f--gain sharing

Sec. 5261. Debt collection improvement account.


                 subpart g--tax refund offset authority

Sec. 5271. Offset of tax refund payment by disbursing officials.
Sec. 5272. Expanding tax refund offset authority.
Sec. 5273. Expanding authority to collect past-due support.
Sec. 5274. Use of tax refund offset authority for debts to States.


                        subpart h--disbursements

Sec. 5281. Electronic funds transfer.
Sec. 5282. Requirement to include taxpayer identifying number with 
              payment voucher.


                        subpart i--miscellaneous

Sec. 5291. Miscellaneous amendments to definitions.
Sec. 5292. Monitoring and reporting.
Sec. 5293. Review of standards and policies for compromise or write-
              down of delinquent debts.

                    Part II--Justice Debt Management

Sec. 5301. Expanded use of private attorneys.
Sec. 5302. Nonjudicial foreclosure of mortgages.

     SEC. 5203. EFFECTIVE DATE.

       Except as otherwise provided in this subtitle, the 
     provisions of this subtitle and the amendments made by this 
     subtitle shall become effective October 1, 1995.

     SEC. 5204. PURPOSES.

       The purposes of this subtitle are the following:
       (1) To maximize collections of delinquent debts owed to the 
     Government by ensuring quick action to enforce recovery of 
     debts and the use of all appropriate collection tools.
       (2) To minimize the costs of debt collection by 
     consolidating related functions and activities and utilizing 
     interagency teams.
       (3) To reduce losses arising from debt management 
     activities by requiring proper screening of potential 
     borrowers, aggressive monitoring of all accounts, and sharing 
     of information within and among Federal agencies.
       (4) To ensure that the public is fully informed of the 
     Federal Government's debt collection policies and that 
     debtors are cognizant of their financial obligations to repay 
     amounts owed to the Federal Government.
       (5) To ensure that debtors have all appropriate due process 
     rights, including the ability to verify, challenge, and 
     compromise claims, and access to administrative appeals 
     procedures which are both reasonable and protect the 
     interests of the United States.
       (6) To encourage agencies, when appropriate, to sell 
     delinquent debt, particularly debts with underlying 
     collateral.
       (7) To rely on the experience and expertise of private 
     sector professionals to provide debt collection services to 
     Federal agencies.

              PART I--GENERAL DEBT COLLECTION INITIATIVES

                  Subpart A--General Offset Authority

     SEC. 5211. EXPANSION OF ADMINISTRATIVE OFFSET AUTHORITY.

       Chapter 37 of title 31, United States Code, is amended--
       (1) in each of sections 3711, 3716, 3717, and 3718, by 
     striking ``the head of an executive or legislative agency'' 
     each place it appears and inserting ``the head of an 
     executive, judicial, or legislative agency''; and
       (2) by amending section 3701(a)(4) to read as follows:
       ``(4) `executive, judicial, or legislative agency' means a 
     department, agency, court, court administrative office, or 
     instrumentality in the executive, judicial, or legislative 
     branch of government, including government corporations.''.

     SEC. 5212. ENHANCEMENT OF ADMINISTRATIVE OFFSET AUTHORITY.

       (a) Persons Subject to Administrative Offset.--Section 
     3701(c) of title 31, United States Code, is amended to read 
     as follows:
       ``(c) In sections 3716 and 3717 of this title, the term 
     `person' does not include an agency of the United States 
     Government.''.
       (b) Requirements and Procedures.--Section 3716 of title 31, 
     United States Code, is amended--
       (1) by amending subsection (b) to read as follows:
       ``(b) Before collecting a claim by administrative offset, 
     the head of an executive, judicial, or legislative agency 
     must either--
       ``(1) adopt, without change, regulations on collecting by 
     administrative offset promulgated by the Department of 
     Justice, the General Accounting Office, or the Department of 
     the Treasury; or
       ``(2) prescribe regulations on collecting by administrative 
     offset consistent with the regulations referred to in 
     paragraph (1).'';
       (2) by amending subsection (c)(2) to read as follows:
       ``(2) when a statute explicitly prohibits using 
     administrative offset or setoff to collect the claim or type 
     of claim involved.'';
       (3) by redesignating subsection (c) as subsection (e); and
       (4) by inserting after subsection (b) the following new 
     subsections:
       ``(c)(1)(A) Except as otherwise provided in this 
     subsection, a disbursing official of the Department of the 
     Treasury, the Department of Defense, the United States Postal 
     Service, or any other government corporation, or any 
     disbursing official of the United States designated by the 
     Secretary of the Treasury, shall offset at least annually the 
     amount of a payment which a payment certifying agency has 
     certified to the disbursing official for disbursement, by an 
     amount equal to the amount of a claim which a creditor agency 
     has certified to the Secretary of the Treasury pursuant to 
     this subsection.
       ``(B) An agency that designates disbursing officials 
     pursuant to section 3321(c) of this title is not required to 
     certify claims arising out of its operations to the Secretary 
     of the Treasury before such agency's disbursing officials 
     offset such claims.
       ``(C) Payments certified by the Department of Education 
     under a program administered by the Secretary of Education 
     under title IV of the Higher Education Act of 1965 shall not 
     be subject to administrative offset under this subsection.
       ``(2) Neither the disbursing official nor the payment 
     certifying agency shall be liable--
       ``(A) for the amount of the administrative offset on the 
     basis that the underlying obligation, represented by the 
     payment before the administrative offset was taken, was not 
     satisfied; or
       ``(B) for failure to provide timely notice under paragraph 
     (8).
       ``(3)(A) Notwithstanding any other provision of law 
     (including sections 207 and 1631(d)(1) of the Act of August 
     14, 1935 (42 U.S.C. 407 and 1383(d)(1)), section 413(b) of 
     Public Law 91-173 (30 U.S.C. 923(b)), and section 14 of the 
     Act of August 29, 1935 (45 U.S.C. 231m)), 15 percent of 
     payments due to an individual under the Social Security Act, 
     under part B of the Black Lung Benefits Act, under any law 
     administered by the Railroad Retirement Board, or as 
     compensation or benefits arising from service of an 
     individual with the United States Government, shall be 
     subject to offset under this section except that a greater 
     percentage may be deducted by offset with the written consent 
     of the individual.
       ``(B) The Secretary of the Treasury shall exempt from 
     administrative offset under this subsection payments under 
     means-tested programs when requested by the head of the 
     respective agency. The Secretary may exempt other payments 
     from administrative offset under this subsection upon the 
     written request of the head of a payment certifying 

[[Page H 10739]]
     agency. A written request for exemption of other payments must provide 
     justification for the exemption under standards prescribed by 
     the Secretary. Such standards shall give due consideration to 
     whether administrative offset would tend to interfere 
     substantially with or defeat the purposes of the payment 
     certifying agency's program. The Secretary shall report to 
     the Congress annually on exemptions granted under this 
     section.
       ``(C) The provisions of sections 205(b)(1) and 1631(c)(1) 
     of the Social Security Act shall not apply to any 
     administrative offset executed pursuant to this section 
     against benefits authorized by either title II or title XVI 
     of the Social Security Act, respectively.
       ``(D)(i) Payments to any qualified individual shall not be 
     subject to administrative offset under this subsection. Prior 
     to offset of any debtor's Federal benefit payment under this 
     subsection, the debtor shall be provided a written notice of 
     the exemption described in this paragraph and an opportunity 
     to provide data to qualify for the exemption.
       ``(ii) In this subparagraph, the term `qualified 
     individual' means an individual whose income in the year 
     preceding application of this paragraph did not exceed 150 
     percent of the poverty level and who has less than $5,000 in 
     assets.
       ``(4) The Secretary of the Treasury may charge a fee 
     sufficient to cover the full cost of implementing this 
     subsection. The fee may be collected either by the retention 
     of a portion of amounts collected pursuant to this 
     subsection, or by billing the agency referring or 
     transferring a claim for those amounts. Fees charged to the 
     agencies shall be based on actual administrative offsets 
     completed. Amounts received by the United States as fees 
     under this subsection shall be deposited into the account of 
     the Department of the Treasury under section 3711(g)(4) of 
     this title, and shall be collected and accounted for in 
     accordance with the provisions of that section.
       ``(5) The Secretary of the Treasury may disclose to a 
     creditor agency the current address of any payee and any data 
     related to certifying and authorizing payments to a payee in 
     accordance with section 552a of title 5, United States Code, 
     even if the payment has been exempt from administrative 
     offset. If a payment is made electronically, the Secretary 
     may obtain the current address of the payee to the Secretary.
       ``(6) The Secretary of the Treasury may prescribe such 
     rules, regulations, and procedures as the Secretary of the 
     Treasury considers necessary to carry out this subsection. 
     The Secretary shall consult with the heads of affected 
     agencies in the development of such rules, regulations, and 
     procedures.
       ``(7) Any Federal agency that is owed by a person a past 
     due legally enforceable nontax debt that is over 180 days 
     delinquent, including nontax debt administered by a third 
     party acting as an agent for the Federal government, shall 
     notify the Secretary of the Treasury of all such nontax debts 
     for purposes of administrative offset under this subsection.
       ``(8)(A) The disbursing official conducting an 
     administrative offset with respect to a payment to a payee 
     shall notify the payee in writing of--
       ``(i) the occurrence of the administrative offset to 
     satisfy a past due legally enforceable debt, including a 
     description of the type and amount of the payment otherwise 
     payable to the payee against which the offset was executed;
       ``(ii) the identity of the creditor agency requesting the 
     offset; and
       ``(iii) a contact point within the creditor agency that 
     will handle concerns regarding the offset.
       ``(B) If the payment to be offset is a periodic benefit 
     payment, the disbursing official shall take reasonable steps, 
     as determined by the Secretary of the Treasury, to provide 
     the notice to the payee not later than the date on which the 
     payee is otherwise scheduled to receive the payment, or as 
     soon as practical thereafter, but not later than the date of 
     the administrative offset. Notwithstanding the preceding 
     sentence, the failure of the debtor to receive such notice 
     shall not impair the legality of such administrative offset.
       ``(9) A levy pursuant to the Internal Revenue Code of 1986 
     shall take precedence over requests for administrative offset 
     pursuant to other laws.
       ``(d) Nothing in this section is intended to prohibit the 
     use of any other administrative offset authority existing 
     under statute or common law.''.
       (c) Nontax Claim Defined.--Section 3701 of title 31, United 
     States Code, is amended--
       (1) in subsection (b) by inserting ``and subsection (a)(8) 
     of this section'' after ``of this chapter''; and
       (2) in subsection (a) by adding at the end the following 
     new paragraph:
       ``(8) `nontax claim' means any claim, other than a claim of 
     the Internal Revenue Service under the Internal Revenue Code 
     of 1986.''.

     SEC. 5213. EXEMPTION FROM COMPUTER MATCHING REQUIREMENTS 
                   UNDER THE PRIVACY ACT OF 1974.

       Section 3716 of title 31, United States Code, as amended by 
     section 5212(b) of this subtitle, is further amended by 
     adding at the end the following new subsections:
       ``(f) The Secretary may waive the requirements of sections 
     552(o) and (p) of title 5 for administrative offset or claims 
     collection upon written certification by the head of the 
     executive, judicial, or legislative agency seeking to collect 
     the claim that the requirements of subsection (a) of this 
     section have been met.
       ``(g) The Data Integrity Board of the Department of the 
     Treasury established under 552a(u) of title 5 shall review 
     and include in reports under paragraph (3)(D) of that section 
     a description of any matching activities conducted under this 
     section. If the Secretary has granted a waiver under 
     subsection (f) of this section, no other Data Integrity Board 
     is required to take any action under section 552a(u) of title 
     5.''.

     SEC. 5214. USE OF ADMINISTRATIVE OFFSET AUTHORITY FOR DEBTS 
                   TO STATES.

       Section 3716 of title 31, United States Code, as amended by 
     sections 5212 and 5213 of this subtitle, is further amended 
     by adding at the end the following new subsection:
       ``(h)(1) The Secretary may, in the discretion of the 
     Secretary, apply subsection (a) with respect to any past-due, 
     legally-enforceable debt owed to a State if--
       ``(A) the appropriate State disbursing official requests 
     that an offset be performed; and
       ``(B) a reciprocal agreement with the State is in effect 
     which contains, at a minimum--
       ``(i) requirements substantially equivalent to subsection 
     (b) of this section; and
       ``(ii) any other requirements which the Secretary considers 
     appropriate to facilitate the offset and prevent duplicative 
     efforts.
       ``(2) This subsection does not apply to--
       ``(A) the collection of a debt or claim on which the 
     administrative costs associated with the collection of the 
     debt or claim exceed the amount of the debt or claim;
       ``(B) any collection of any other type, class, or amount of 
     claim, as the Secretary considers necessary to protect the 
     interest of the United States; or
       ``(C) the disbursement of any class or type of payment 
     exempted by the Secretary of the Treasury at the request of a 
     Federal agency.''.

     SEC. 5215. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Title 31.--Title 31, United States Code, is amended--
       (1) in section 3322(a), by inserting ``section 3716 and 
     section 3720A of this title, section 6331 of the Internal 
     Revenue Code of 1986 (26 U.S.C. 6331), and'' after ``Except 
     as provided in'';
       (2) in section 3325(a)(3), by inserting ``or pursuant to 
     payment intercepts or offsets pursuant to section 3716 or 
     3720A of this title, or pursuant to levies executed under 
     section 6331 of the Internal Revenue Code of 1986 (26 U.S.C. 
     6331),'' after ``voucher''; and
       (3) in each of section 3711(e)(2) and 3717(h) by inserting 
     ``, the Secretary of the Treasury,'' after ``Attorney 
     General''.
       (b) Internal Revenue Code of 1986.--Subsection 
     6103(1)(10)(A) of the Internal Revenue Code of 1986 (26 
     U.S.C. 6103(1)(10)(A)) is amended--
       (1) in subparagraph (A), by inserting ``and to officers and 
     employees of the Department of the Treasury in connection 
     with such reduction'' after ``6402''; and
       (2) in subparagraph (B), by inserting ``and officers and 
     employees of the Department of the Treasury'' after 
     ``agency'' the first place it appears.

                   Subpart B--Salary Offset Authority

     SEC. 5221. ENHANCEMENT OF SALARY OFFSET AUTHORITY.

       Section 5514 of title 5, United States Code, is amended--
       (1) in subsection (a)--
       (A) by adding at the end of paragraph (1) the following: 
     ``All Federal agencies to which debts are owned and which 
     have outstanding delinquent debts shall participate in a 
     computer match at least annually of their delinquent debt 
     records with records of Federal employees to identify those 
     employees who are delinquent in repayment of those debts. 
     Matched Federal employee records shall include, but shall not 
     be limited to, records of active Civil Service employees 
     government-wide, military active duty personnel, military 
     reservists, United States Postal Service employees, employees 
     of other government corporations, and seasonal and temporary 
     employees. The Secretary of the Treasury shall establish and 
     maintain an interagency consortium to implement centralized 
     salary offset computer matching, and promulgate regulations 
     for this program. Agencies that perform centralized salary 
     offset computer matching services under this subsection are 
     authorized to charge a fee sufficient to cover the full costs 
     for such services.'';
       (B) by redesignating paragraphs (3) and (4) as paragraphs 
     (4) and (5), respectively;
       (C) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) Paragraph (2) shall not apply to routine intraagency 
     adjustments of pay that are attributable to clerical or 
     administrative errors or delays in processing pay documents 
     that have occurred within the four pay periods preceding the 
     adjustment and to any adjustment that amounts to $50 or less, 
     if at the time of such adjustment, or as soon thereafter as 
     practical, the individual is provided written notice of the 
     nature and the amount of the adjustment and a point of 
     contact for contesting such adjustment.''; and
       (D) by amending paragraph (5)(B) (as redesignated by 
     subparagraph (b) of this paragraph) to read as follows:
       ``(B) `agency' includes executives departments and 
     agencies, the United States Postal Service, the Postal Rate 
     Commission, the Senate, the House of Representatives, and any 
     court, court administrative office, or instrumentality in the 
     judicial or legislative branches of the Government, and 
     government corporation.'';

[[Page H 10740]]

       (2) by adding after subsection (c) the following new 
     subsection:
       ``(d) A levy pursuant to the Internal Revenue Code of 1986 
     shall take precedence over deductions under this section.''.

                Subpart C--Taxpayer Identifying Numbers

     SEC. 5231. ACCESS TO TAXPAYER IDENTIFYING NUMBERS; BARRING 
                   DELINQUENT DEBTORS FROM CREDIT ASSISTANCE.

       Section 4 of the Debt Collection Act of 1982 (Public Law 
     97-365, 96 Stat. 1749, 26 U.S.C. 6103 note) is amended--
       (1) in subsection (b), by striking ``For purposes of this 
     section'' and inserting ``For purposes of subsection (a)''; 
     and
       (2) by adding at the end the following new subsections:
       ``(c) Federal Agencies.--
       ``(1) In general.--Each Federal agency shall require each 
     person doing business with that agency to furnish to that 
     agency such person's taxpayer identifying number.
       ``(2) Doing business.--For purposes of this subsection, a 
     person shall be considered to be doing business with a 
     Federal agency if the person is--
       ``(A) a lender or servicer in a Federal guaranteed or 
     insured loan program administered by the agency;
       ``(B) an applicant for, or recipient of--
       ``(i) a Federal guaranteed, insured, or direct loan 
     administered by the agency; or
       ``(ii) a Federal license, permit, right-of-way, grant, or 
     benefit payment administered by the agency or insurance 
     administered by the agency;
       ``(C) a contractor of the agency;
       ``(D) assessed a fine, fee, royalty or penalty by the 
     agency; and
       ``(E) in a relationship with the agency that may give rise 
     to a receivable due to that agency, such as a partner of a 
     borrower in or a guarantor of a Federal direct or insured 
     loan administered by the agency.
       ``(3) Disclosure.--Each agency shall disclose to a person 
     required to furnish a taxpayer identifying number under this 
     subsection its intent to use such number for purposes of 
     collecting and reporting on any delinquent amounts arising 
     out of such person's relationship with the Government.
       ``(4) Definitions.--For purposes of this subsection--
       ``(A) the term `taxpayer identifying number' has the 
     meaning given such term in section 6109 of the Internal 
     Revenue Code of 1986 (26 U.S.C. 6109); and
       ``(B) the term `person'--
       ``(i) subject to clause (ii), means an individual, sole 
     proprietorship, partnership, corporation, or nonprofit 
     organization, or any other form of business association; and
       ``(ii) does not include debtors under third party claims of 
     the United States, other than debtors owing claims resulting 
     from petroleum pricing violations.
       ``(d) Access to Social Security Numbers and Other 
     Information.--Notwithstanding section 552a(b) of title 5, 
     United States Code, creditor agencies to which a delinquent 
     claim is owed, and their agents, may match their debtor 
     records with Department of Health and Human Services, 
     Department of Labor, and Social Security Administration 
     records to obtain names (including names of employees), name 
     controls, names of employers, Social Security numbers, 
     addresses (including addresses of employers), and dates of 
     birth. The Department of Health and Human Services, the 
     Department of Labor, and the Social Security Administration 
     shall release that information to creditor agencies and may 
     charge reasonable fees sufficient to pay the costs associated 
     with that release.
       ``(e) Electronic Payments.--If a payment is made 
     electronically by any executive, judicial, or legislative 
     agency, the Secretary of the Treasury may obtain from the 
     institution receiving the payment the taxpayer identification 
     number of any joint holder of the account to which the 
     payment is made. Upon request of the Secretary, the 
     institution receiving the payment shall report the taxpayer 
     identification number of the joint holder to the 
     Secretary.''.

     SEC. 5232. BARRING DELINQUENT FEDERAL DEBTORS FROM OBTAINING 
                   FEDERAL LOANS OR LOAN GUARANTEES.

       (a) In General.--Title 31, United States Code, is amended 
     by inserting after section 3720A the following new section:

     ``Sec. 3720B. Barring delinquent Federal debtors from 
       obtaining Federal loans or loan guarantees

       ``(a) Unless this subsection is waived by the head of a 
     Federal agency, a person may not obtain any Federal financial 
     assistance in the form of a loan (other than a disaster loan) 
     or loan guarantee administered by the agency if the person 
     has an outstanding 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. 
     The Secretary of the Treasury may exempt, at the request of 
     an agency, any class of claims.
       ``(b) The head of a Federal agency may delegate the waiver 
     authority under subsection (a) to the Chief Financial Officer 
     of the agency. The waiver authority may be redelegated only 
     to the Deputy Chief Financial Officer of the agency.
       ``(c) For purposes of this section, the term `person' 
     means--
       ``(1) an individual; or
       ``(2) any sole proprietorship, partnership, corportation, 
     nonprofit organization, or other form of business 
     association.''.
       (b) Clerical Amendments.--The table of sections for 
     subchapter II of chapter 37 of title 31, United States Code, 
     is amended by inserting after the item relating to section 
     3720A the following new item:

``3720B. Barring delinquent Federal debtors from obtaining Federal 
              loans or loan guarantees.''.

     Subpart D--Expansion and Enhancement of Collection Authorities

     SEC. 5241. REPEAL OF LIMITATIONS ON COLLECTION AUTHORITIES.

       (a) Debt Collection Act of 1982.--Section 8(e) of the Debt 
     Collection Act of 1982 (5 U.S.C. 5514 note) is repealed. 
     Section 3701(d) of title 31, United States Code, is amended 
     to read as follows:
       ``(d) Sections 3711(f) and 3716 through 3719 of this title 
     do not apply to a claim or debt under, or to amounts payable 
     under, the Internal Revenue Code of 1986 (26 U.S.C. 1 et 
     seq.) unless the Internal Revenue Service has ceased active 
     collection efforts and the claim or debt is considered by the 
     Secretary of the Treasury to be currently not collectible.''.
       (b) Social Security Domestic Employment Reform Act of 
     1994.--Section 5 of the Social Security Domestic Employment 
     Reform Act of 1994 (Public Law 103-387) is repealed.

     SEC. 5242. DISCLOSURE TO CONSUMER REPORTING AGENCIES AND 
                   COMMERCIAL REPORTING AGENCIES.

       Section 3711(f) of title 31, United States Code, is 
     amended--
       (1) by striking ``may'' the first place it appears and 
     inserting ``shall'';
       (2) by striking ``an individual'' each place it appears and 
     inserting ``a covered person'';
       (3) by striking ``the individual'' each place it appears 
     and inserting ``the covered person''; and
       (4) by adding at the end the following new paragraphs:
       ``(4) The head of each executive agency shall require, as a 
     condition for guaranteeing any loan, financing, or other 
     extension of credit under any law to a covered person, that 
     the lender provide information relating to the extension of 
     credit to consumer reporting agencies or commercial reporting 
     agencies, as appropriate.
       ``(5) The head of each executive agency may provide to a 
     consumer reporting agency or commercial reporting agency 
     information from a system of records that a covered person is 
     responsible for a claim which is current, if notice required 
     by section 552a(e)(4) of title 5 indicates that information 
     in the system may be disclosed to a consumer reporting agency 
     or commercial reporting agency, respectively.
       ``(6) In this subsection, the term `covered person' means 
     an individual, a sole proprietorship, a corporation 
     (including a nonprofit corporation), or any other form of 
     business association.''.

     SEC. 5243. CONTRACTS FOR COLLECTION SERVICES.

       Section 3718 of title 31, United States Code, is amended--
       (1) in subsection (a), by striking the first sentence and 
     inserting the following: ``Under conditions the head of an 
     executive, judicial, or legislative agency considers 
     appropriate, the head of the agency may enter into a contract 
     with a person for collection service to recover indebtedness 
     owed, or to locate or recover assets of, the United States 
     Government. The head of an agency may not enter into a 
     contract under the preceding sentence to locate or recover 
     assets of the United States held by a State government or 
     financial institution unless that agency has established 
     procedures approved by the Secretary of the Treasury to 
     identify and recover such assets.'';
       (2) in subsection (d), by inserting ``, or to locate or 
     recover assets of,'' after ``owed'';
       (3) by amending subsection (f) to read as follows:
       ``(f)(1) The head of each Federal agency that administers a 
     program that gives rise to a delinquent debt or is 
     responsible for collecting delinquent debt shall enter into 
     contracts on a competitive basis with 3 or more persons for 
     the collection of any such debt that is past-due and legally 
     enforceable and on which the agency has ceased active 
     collection efforts. Contracts under this subsection shall be 
     awarded on a competitive basis.
       ``(2) The performance of contractors in carrying out such 
     contracts shall be evaluated upon, and incentives shall be 
     provided and sanctions imposed under such contracts, as 
     appropriate, based upon--
       ``(A) collection success;
       ``(B) compliance with all applicable laws, including the 
     Fair Debt Collection Practices Act (16 U.S.C. 1692 et seq.), 
     the Omnibus Taxpayer Bill of Rights (102 Stat. 3720), and 
     section 6103 of the Internal Revenue code of 1986 (26 U.S.C. 
     6103); and
       ``(C) incidence of valid debtor complaints.
       ``(3) The head of each agency referred to in paragraph (1) 
     shall--
       ``(A) within 3 years after the date of enactment of the 
     Debt Collection Improvement Act of 1995, refer for collection 
     to persons with contracts under this subsection not less than 
     50 percent of the amount of delinquent debts upon which the 
     agency has ceased active collection efforts;
       ``(B) begin referring debts not later than 180 days after 
     the date of enactment of the Debt Collection Improvement Act 
     of 1995 and require that collection efforts pursuant to such 
     a referral begin by not later than 90 days after the date of 
     referral; and

[[Page H 10741]]

       ``(C) report to the Congress on debts referred by each 
     Federal agency and amounts received by the United States 
     pursuant to that referral.
       ``(4) For purposes of this subsection, an agency shall be 
     considered to have ceased active collection efforts if--
       ``(A) the debt is not the subject of litigation and has not 
     in the preceding 90 days been the subject of a payment, an 
     execution of a written promise to pay, or an affirmative 
     attempt to locate or contact the debtor, or
       ``(B) in the case of debt owed under the Internal Revenue 
     Code of 1986 (26 U.S.C. 1 et seq.), if the Internal Revenue 
     Service has classified the debt as `currently not 
     collectible' or a similar classification in accordance with 
     criteria and procedures substantially similar to those in 
     effect for such classifications on September 20, 1995.
       ``(5) Each contract for collection services under this 
     subsection shall--
       ``(A) include safeguards against unauthorized disclosure of 
     confidential information;
       ``(B) provide that the Federal agency shall not disclose to 
     a contractor any information concerning the debtor other 
     than--
       ``(i) information necessary to locate and contact the 
     debtor, such as name, address, telephone number, employer 
     address and telephone number, and Social Security Number; and
       ``(ii) the nature and amount of the debt;
       ``(C) prohibit the release by the contractor of 
     confidential information regarding a debtor obtained as a 
     result of a contract under this subsection to any third 
     person without the debtor's written consent;
       ``(D) limit the contractor's activities to--
       ``(i) contacting debtors by mail;
       ``(ii) contacting debtors by phone to remind taxpayers of a 
     delinquency, provide information on payment options, and 
     secure taxpayer intentions of repayment;
       ``(iii) providing skiptracing services and asset and 
     employment location services to establish a mailing address 
     or phone number for delinquent debtors;
       ``(iv) providing lockbox services for receipt and 
     processing of payments; and
       ``(v) providing data processing services in conjunction 
     with collection activities;
       ``(E) preclude the contractor from determining the amount 
     of a debt, compromising a debt, receiving or processing 
     collection proceeds, or mailing standard collection notices 
     and billing statements; and
       ``(F) require the contractor to comply with section 552a of 
     title 5 (popularly known as the `Privacy Act'), the Fair Debt 
     Collection Practices Act, and the Taxpayers Bill of Rights.
       ``(6) The Secretary of the Treasury may exempt from the 
     application of this subsection any class of nontax claims as 
     necessary to protect the interests of the United States.''; 
     and
       (4) by adding at the end the following new subsection:
       ``(h) The Secretary of the Treasury may enter into 
     contracts for Governmentwide collection of debts and recovery 
     of assets consistent with subsections (a) and (f). The head 
     of a Federal agency may enter into an agreement with the 
     Secretary of the Treasury to obtain services under these 
     contracts, and, if such agreement results in the performance 
     of the required services for debt collection services for 
     debt collection under subsection (f), the head of a Federal 
     agency shall be deemed to be in compliance with subsection 
     (f).''.

     SEC. 5244. CROSS-SERVICING PARTNERSHIPS AND CENTRALIZATION OF 
                   DEBT COLLECTION ACTIVITIES IN THE DEPARTMENT OF 
                   THE TREASURY.

       Section 3711 of title 31, United States Code, is amended by 
     adding at the end the following new subsections:
       ``(g)(1) If a nontax debt or claim owed to the United 
     States has been delinquent for a period of 180 days--
       ``(A) the head of the executive, judicial, or legislative 
     agency that administers the program that gave rise to the 
     debt or claim shall transfer the debt or claim to the 
     Secretary of the Treasury; and
       ``(B) upon such transfer the Secretary of the Treasury 
     shall take appropriate action to collect or terminate 
     collection actions on the debt or claim.
       ``(2) Paragraph (1) shall not apply--
       ``(A) to any debt or claim that--
       ``(i) is in litigation or foreclosure;
       ``(ii) will be disposed of under an asset sales program 
     within 1 year after the date the debt or claim is first 
     delinquent, or a greater period of time if a delay would be 
     in the best interests of the United States, as determined by 
     the Secretary of the Treasury;
       ``(iii) has been referred to a private collection 
     contractor for collection for a period of time determined by 
     the Secretary of the Treasury;
       ``(iv) has been referred by, or with the consent of, the 
     Secretary of the Treasury to a debt collection center for a 
     period of time determined by the Secretary of the Treasury; 
     or
       ``(v) will be collected under internal offset, if such 
     offset is sufficient to collect the claim within 3 years 
     after the date the debt or claim is first delinquent; and
       ``(B) to any other specific class of debt or claim, as 
     determined by the Secretary of the Treasury at the request of 
     the head of an executive, judicial, or legislative agency or 
     otherwise.
       ``(3) For purposes of this section, the Secretary of the 
     Treasury may designate, and withdraw such designation of debt 
     collection centers operated by other Federal agencies. The 
     Secretary of the Treasury shall designate such centers on the 
     basis of their performance in collecting delinquent claims 
     owed to the Government.
       ``(4) At the discretion of the Secretary of the Treasury, 
     referral of a nontax claim may be made to--
       ``(A) any executive department or agency operating a debt 
     collection center for servicing, collection, compromise, or 
     suspension or termination of collection action;
       ``(B) a contractor operating under a contract for servicing 
     or collection action; or
       ``(C) the Department of Justice for litigation.
       ``(5) nontax claims referred or transferred under this 
     section shall be serviced, collected, or compromised, or 
     collection action thereon suspended or terminated, in 
     accordance with otherwise applicable statutory requirements 
     and authorities. Executive departments and agencies operating 
     debt collection centers may enter into agreements with the 
     Secretary of the Treasury to carry out the purposes of this 
     subsection. The Secretary of the Treasury shall--
       ``(A) maintain competition in carrying out this subsection;
       ``(B) maximize collections of delinquent debts by placing 
     delinquent debts quickly;
       ``(C) maintain a schedule of contractors and debt 
     collection centers eligible for referral of claims; and
       ``(D) refer delinquent debts to the person most appropriate 
     to collect the type or amount of claim involved.
       ``(6) Any agency operating a debt collection center to 
     which nontax claims are referred or transferred under this 
     subsection may charge a fee sufficient to cover the full cost 
     of implementing this subsection. The agency transferring or 
     referring the nontax claim shall be charged the fee, and the 
     agency charging the fee shall collect such fee by retaining 
     the amount of the fee from amounts collected pursuant to this 
     subsection. Agencies may agree to pay through a different 
     method, or to fund an activity from another account or from 
     revenue received from the procedure described under section 
     3720C of this title. Amounts charged under this subsection 
     concerning delinquent claims may be considered as costs 
     pursuant to section 3717(e) of this title.
       ``(7) Notwithstanding any other law concerning the 
     depositing and collection of Federal payments, including 
     section 3302(b) of this title, agencies collecting fees may 
     retain the fees from amounts collected. Any fee charged 
     pursuant to this subsection shall be deposited into an 
     account to be determined by the executive department or 
     agency operating the debt collection center charging the fee 
     (in this subsection referred to in this section as the 
     `Account'). Amounts deposited in the Account shall be 
     available until expended to cover costs associated with the 
     implementation and operation of Governmentwide debt 
     collection activities. Costs properly chargeable to the 
     Account include--
       ``(A) the costs of computer hardware and software, word 
     processing and telecommunications equipment, and other 
     equipment, supplies, and furniture;
       ``(B) personnel training and travel costs;
       ``(C) other personnel and administrative costs;
       ``(D) the costs of any contract for identification, 
     billing, or collection services; and
       ``(E) reasonable costs incurred by the Secretary of the 
     Treasury, including services and utilities provided by the 
     Secretary, and administration of the Account.
       ``(8) Not later than January 1 of each year, there shall be 
     deposited into the Treasury as miscellaneous receipts an 
     amount equal to the amount of unobligated balances remaining 
     in the Account at the close of business on September 30 of 
     the preceding year, minus any part of such balance that the 
     executive department or agency operating the debt collection 
     center determines is necessary to cover or defray the costs 
     under this subsection for the fiscal year in which the 
     deposit is made.
       ``(9) At the end of each calendar year, the head of an 
     executive, judicial, or legislative agency which, regarding a 
     claim owed to the agency, is required to report a discharge 
     of indebtedness as income under the 6050P of the Internal 
     Revenue Code of 1984 (26 U.S.C. 6050P) shall either complete 
     the appropriate form 1099 or submit to the Secretary of the 
     Treasury such information as is necessary for the Secretary 
     of the Treasury to complete the appropriate form 1099. The 
     Secretary may exempt specific classes of claims from this 
     requirement, at the request of the head of an agency. The 
     Secretary of the Treasury shall incorporate this information 
     into the appropriate form and submit the information to the 
     taxpayer and the Internal Revenue Service. Before completing 
     a discharge of indebtedness, the head of an executive, 
     judicial, or legislative agency shall certify that all 
     appropriate steps have been taken with respect to a 
     delinquent debt, including (as applicable)--
       ``(A) administrative offset,
       ``(B) tax refund offset,
       ``(C) Federal salary offset,
       ``(D) referral to private debt collection agencies,
       ``(E) referral to agencies operating a debt collection 
     center,
       ``(F) reporting delinquencies to credit reporting bureaus,
       ``(G) garnishing the wages of delinquent debtors, and
       ``(H) litigation or foreclosure.
       ``(10) To carry out the purpose of this subsection, the 
     Secretary of the Treasury may prescribe such rules, 
     regulations, and procedures as the Secretary considers 
     necessary. 

[[Page H 10742]]

       ``(h)(1) The head of an executive, judicial, or legislative 
     agency acting under subsection (a) (1), (2), or (3) of this 
     section to collect a claim, compromise a claim, or terminate 
     collection action on a claim may obtain a consumer report (as 
     that term is defined in section 603 of the Fair Credit 
     Reporting Act (15 U.S.C. 1681a)) or comparable credit 
     information on any person who is liable for the claim.
       ``(2) The obtaining of a consumer report under this 
     subsection is deemed to be a circumstance or purpose 
     authorized or listed under section 604 of the Fair Credit 
     Reporting Act (15 U.S.C. 1681b).''.

     SEC. 5245. COMPROMISE OF CLAIMS.

       Section 11 of the Administrative Dispute Resolution Act 
     (Public Law 101-552, 104 Stat. 2736, 5 U.S.C. 571 note) is 
     amended by adding at the end the following sentence: ``This 
     section shall not apply to section 8(b) of this Act.''.

     SEC. 5246. WAGE GARNISHMENT REQUIREMENT.

       (a) In General.--Chapter 37 of title 31, United States 
     Code, is amended in subchapter II by adding after section 
     3720C, as added by section 5261 of this subtitle, the 
     following new section:

     ``Sec. 3720D. Garnishment

       ``(a) Notwithstanding any provision of State law, the head 
     of an executive, judicial, or legislative agency that 
     administers a program that gives rise to a delinquent nontax 
     debt owed to the United States by an individual may in 
     accordance with this section garnish the disposable pay of 
     the individual to collect the amount owed, if the individual 
     is not currently making required repayment in accordance with 
     any agreement between the agency head and the individual.
       ``(b) In carrying out any garnishment of disposable pay of 
     an individual under subsection (a), the head of an executive, 
     judicial, or legislative agency shall comply with the 
     following requirements:
       ``(1) The amount deducted under this section for any pay 
     period may not exceed 15 percent of disposable pay, except 
     that a greater percentage may be deducted with the written 
     consent of the individual.
       ``(2) The individual shall be provided written notice, sent 
     by mail to the individual's last known address, a minimum of 
     30 days prior to the initiation of proceedings, from the head 
     of the executive, judicial, or legislative agency, informing 
     the individual of--
       ``(A) the nature and amount of the debt to be collected;
       ``(B) the intention of the agency to initiate proceedings 
     to collect the debt through deductions from pay; and
       ``(C) an explanation of the rights of the individual under 
     this section.
       ``(3) The individual shall provide an opportunity to 
     inspect and copy records relating to the debt.
       ``(4) The individual shall be provided an opportunity to 
     enter into a written agreement with the executive, judicial, 
     or legislative agency, under terms agreeable to the head of 
     the agency, to establish a schedule for repayment of the 
     debt.
       ``(5) The individual shall be provided an opportunity for a 
     hearing in accordance with subsection (c) on the 
     determination of the head of the executive, judicial, or 
     legislative agency concerning--
       ``(A) the existence or the amount of the debt, and
       ``(B) in the case of an individual whose repayment schedule 
     is established other than by a written agreement pursuant to 
     paragraph (4), the terms of the repayment schedule.
       ``(6) If the individual has been reemployed within 12 
     months after having been involuntarily separated from 
     employment, no amount may be deducted from the disposable pay 
     of the individual until the individual has been reemployed 
     continuously for at least 12 months.
       ``(c)(1) A hearing under subsection (b)(5) shall be 
     provided prior to issuance of a garnishment order if the 
     individual, on or before the 15th day following the mailing 
     of the notice described in subsection (b)(2), and in 
     accordance with such procedures as the head of the executive, 
     judicial, or legislative agency may prescribe, files a 
     petition requesting such a hearing.
       ``(2) If the individual does not file a petition requesting 
     a hearing prior to such date, the head of the agency shall 
     provide the individual a hearing under subsection (a)(5) upon 
     request, but such hearing need not be provided prior to 
     issuance of a garnishment order.
       ``(3) The hearing official shall issue a final decision at 
     the earliest practicable date, but not later than 60 days 
     after the filing of the petition requesting the hearing.
       ``(d) The notice to the employer of the withholding order 
     shall contain only such information as may be necessary for 
     the employer to comply with the withholding order.
       ``(e)(1) An employer may not discharge from employment, 
     refuse to employ, or take disciplinary action against an 
     individual subject to wage withholding in accordance with 
     this section by reason of the fact that the individual's 
     wages have been subject to garnishment under this section, 
     and such individual may sue in a State or Federal court of 
     competent jurisdiction any employer who takes such action.
       ``(2) The court shall award attorneys' fees to a prevailing 
     employee and, in its discretion, may order reinstatement of 
     the individual, award punitive damages and back pay to the 
     employee, or order such other remedy as may be reasonably 
     necessary.
       ``(f)(1) The employer of an individual--
       ``(A) shall pay to the head of an executive, judicial, or 
     legislative agency as directed in a withholding order issued 
     in an action under this section with respect to the 
     individual, and
       ``(B) shall be liable for any amount that the employer 
     fails to withhold from wages due an employee following 
     receipt by such employer of notice of the withholding order, 
     plus attorneys' fees, costs, and, in the court's discretion, 
     punitive damages.
       ``(2)(A) The head of an executive, judicial, or legislative 
     agency may sue an employer in a State or Federal court of 
     competent jurisdiction to recover amounts for which the 
     employer is liable under paragraph (1)(B).
       ``(B) A suit under this paragraph may not be filed before 
     the termination of the collection action, unless earlier 
     filing is necessary to avoid expiration of any applicable 
     statute of limitations period.
       ``(3) Notwithstanding paragraphs (1) and (2), an employer 
     shall not be required to vary its normal pay and disbursement 
     cycles in order to comply with this subsection.
       ``(g) For the purpose of this section, the term `disposable 
     pay' means that part of the compensation of any individual 
     from an employer remaining after the deduction of any amounts 
     required by any other law to be withheld.
       ``(h) The Secretary of the Treasury shall issue regulations 
     to implement this section.''.
       (b) Clerical Amendment.--The table of sections for 
     subchapter II of chapter 37 of title 31, United States code, 
     is amended by inserting after the item relating to section 
     3720C (as added by section 5261 of this subtitle) the 
     following new item:

``3720D. Garnishment.''.

     SEC. 5247. DEBT SALES BY AGENCIES.

       Section 3711 of title 31, United States Code, is further 
     amended by adding at the end the following new subsection:
       ``(h)(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 and using competitive procedures, 
     any nontax debt owed to the United States that is delinquent 
     for more than 90 days. Appropriate fees charged by a 
     contractor to assist in the conduct of a sale under this 
     subsection may be payable from the proceeds of the sale.
       ``(2) After terminating collection action, the head of an 
     executive, judicial, or legislative agency shall sell, using 
     competitive procedures, any nontax debt or class of nontax 
     debts owed to the United States, if the Secretary of the 
     Treasury determines the sale is in the best interests of the 
     United States.
       ``(3) Sales of nontax debt under this subsection--
       ``(A) shall be for--
       ``(i) cash, or
       ``(ii) cash and a residuary equity or profit participation, 
     if the head of the agency reasonably determines that the 
     proceeds will be greater than sale solely for cash,
       ``(B) shall be without recourse, but may include the use of 
     guarantees if otherwise authorized, and
       ``(C) shall transfer to the purchaser all rights of the 
     Government to demand payment of the nontax debt, other than 
     with respect to a residuary equity or profit participation 
     under subparagraph (A)(ii).
       ``(4)(A) Within one year after the date of enactment of the 
     Debt Collection Improvement Act of 1995, and every year 
     thereafter, each executive agency with current and delinquent 
     collateralized debts shall report to the Congress on the 
     valuation of its existing portfolio of loans, notes and 
     guarantees, and other collateralized debts based on standards 
     developed by the Director of the Office of Management and 
     Budget, in consultation with the Secretary of the Treasury.
       ``(B) The Director of the Office of Management and Budget 
     shall determine what information is required to be reported 
     to comply with subparagraph (A). At a minimum, for each 
     financing account and for each liquidating account (as those 
     terms are defined in sections 502(7) and 502(8), 
     respectively, of the Federal Credit Reform Act of 1990) the 
     following information shall be reported:
       ``(i) The cumulative balance of current debts outstanding, 
     the estimated net present value of such debts, the annual 
     administrative expenses of those debts (including the portion 
     of salaries and expenses that are directly related thereto), 
     and the estimated net proceeds that would be received by the 
     Government if such debts were sold.
       ``(ii) The cumulative balance of delinquent debts, debts 
     outstanding, the estimated net present value of such debts, 
     the annual administrative expenses of those debts (including 
     the portion of salaries and expenses that are directly 
     related thereto), and the estimated net proceeds that would 
     be received by the Government if such debts were sold.
       ``(iii) The cumulative balance of guaranteed loans 
     outstanding, the estimated net present value of such 
     guarantees, the annual administrative expenses of such 
     guarantees (including the portion of salaries and expenses 
     that are directly related to such guaranteed loans), and the 
     estimated net proceeds that would be received by the 
     Government if such loan guarantees were sold.
       ``(iv) The cumulative balance of defaulted loans that were 
     previously guaranteed and have resulted in loans receivables, 
     the estimated net present value of such loan assets, the 
     annual administrative expenses of such loan assets (including 
     the portion of salaries 

[[Page H 10743]]
     and expenses that are directly related to such loan assets), and the 
     estimated net proceeds that would be received by the 
     Government if such loan assets were sold.
       ``(v) The marketability of all debts.
       ``(5) This subsection is not intended to limit existing 
     statutory authority of agencies to sell loans, debts, or 
     other assets.''.

     SEC. 5248. ADJUSTMENTS OF ADMINISTRATIVE DEBT.

       Section 3717 of title 31, United States Code, is amended by 
     adding at the end of subsection (h) the following new 
     subsection.
       ``(i)(1) The head of an executive, judicial, or legislative 
     agency may increase an administrative claim by the cost of 
     living adjustment in lieu of charging interest and penalties 
     under this section. Adjustments under this subsection will be 
     computed annually.
       ``(2) For the purpose of this subsection--
       ``(A) the term `cost of living adjustment' means the 
     percentage by which the Consumer Price Index for the month of 
     June of the calendar year preceding the adjustment exceeds 
     the Consumer Price Index for the month of June of the 
     calendar year in which the claim was determined or last 
     adjusted; and
       ``(B) the term `administrative claim' includes all debt 
     that is not based on an extension of government credit 
     through direct loans, loan guarantees, or insurance, 
     including fines, penalties, and overpayments.''.

     SEC. 5249. DISSEMINATION OF INFORMATION REGARDING IDENTITY OF 
                   DELINQUENT DEBTORS.

       (a) In General.--Chapter 37 of title 31, United States 
     Code, is amended in subchapter II by adding after section 
     3720D, as added by section 5246 of this subtitle, the 
     following new section:

     ``Sec. 3720E. Dissemination of information regarding identity 
       of delinquent debtors

       ``(a) The head of any agency may, with the review of the 
     Secretary of the Treasury, for the purpose of collecting any 
     delinquent nontax debt owed by any person, publish or 
     otherwise publicly disseminate information regarding the 
     identity of the person and the existence of the nontax debt.
       ``(b)(1) The Secretary of the Treasury, in consultation 
     with the Director of the Office of Management and Budget and 
     the heads of other appropriate Federal agencies, shall issue 
     regulations establishing procedures and requirements the 
     Secretary considers appropriate to carry out this section.
       ``(2) Regulations under this subsection shall include--
       ``(A) standards for disseminating information that maximize 
     collections of delinquent nontax debts, by directing actions 
     under this section toward delinquent debtors that have assets 
     or income sufficient to pay their delinquent nontax debt;
       ``(B) procedures and requirements that prevent 
     dissemination of information under this section regarding 
     persons who have not had an opportunity to verify, contest, 
     and compromise their nontax debt in accordance with this 
     subchapter; and
       ``(C) procedures to ensure that persons are not incorrectly 
     identified pursuant to this section.''.
       (b) Clerical Amendment.--The table of sections for 
     subchapter II of chapter 37 of title 31, United States Code, 
     is amended by adding after the item relating to section 3720D 
     (as added by section 5246 of this subtitle) the following new 
     item:

``3720E. Dissemination of information regarding identity of delinquent 
              debtors.''.

              Subpart E--Federal Civil Monetary Penalties

     SEC. 5251. ADJUSTING FEDERAL CIVIL MONETARY PENALTIES FOR 
                   INFLATION.

       (a) In General.--the Federal Civil Penalties Inflation 
     Adjustment Act of 1990 (Public Law 101-410, 104 Stat. 890; 28 
     U.S.C. 2461 note) is amended--
       (1) by amending section 4 to read as follows:
       ``Sec. 4. The head of each agency shall, not later than 180 
     days after the date of enactment of the Debt Collection 
     Improvement Act of 1995, and at least once every 4 years 
     thereafter--
       ``(1) by regulation adjust each civil monetary penalty 
     provided by law within the jurisdiction of the Federal 
     agency, except for any penalty under the Internal Revenue 
     Code of 1986, by the inflation adjustment described under 
     section 5 of this Act; and
       ``(2) publish each such regulation in the Federal 
     Register.'';
       (2) in section 5(a), by striking ``The adjustment described 
     under paragraphs (4) and (5)(A) of section 4'' and inserting 
     ``The inflation adjustment under section 4''; and
       (3) by adding at the end the following new section:
       ``Sec. 7. Any increase under this Act in a civil monetary 
     penalty shall apply only to violations which occur after the 
     date the increase takes effect.''.
       (b) Limitation on Initial Adjustment.--The first adjustment 
     of a civil monetary penalty made pursuant to the amendment 
     made by to subsection (a) may not exceed 10 percent of such 
     penalty.

                        Subpart F--Gain Sharing

     SEC. 5261. DEBT COLLECTION IMPROVEMENT ACCOUNT.

       (a) In General.--Title 31, United States Code, is amended 
     by inserting after section 372B (as added by section 5232 of 
     this subtitle) the following new section:

     ``Sec. 3720C. Debt Collection Improvement Account

       ``(a)(1) There is hereby established in the Treasury a 
     special fund to be known as the `Debt Collection Improvement 
     Account' (hereinafter in this section referred to as the 
     `Account').
       ``(2) The Account shall be maintained and managed by the 
     Secretary of the Treasury, who shall ensure that agency 
     programs are credited with amounts transferred under 
     subsection (b)(1).
       ``(b)(1) Not later than 30 days after the end of a fiscal 
     year, an agency may transfer to the Account the amount 
     described in paragraph (3), as adjusted under paragraph (4).
       ``(2) Agency transfers to the Account may include 
     collections from--
       ``(A) salary, administrative, and tax refund offsets;
       ``(B) automated levy authority;
       ``(C) the Department of Justice;
       ``(D) private collection agencies;
       ``(E) sales of delinquent loans; and
       ``(F) contracts to locate or recover assets.
       ``(3) The amount referred to in paragraph (1) shall be 5 
     percent of the amount of delinquent debt collected by an 
     agency in a fiscal year, minus the greater of--
       ``(A) 5 percent of the amount of delinquent debt collected 
     by the agency in the previous fiscal year, or
       ``(B) 5 percent of the amount of delinquent debt collected 
     by the agency in the previous 4 fiscal years.
       ``(4) In consultation with the Secretary of the Treasury, 
     the Office of Management and Budget may adjust the amount 
     described in paragraph (3) for an agency to reflect the level 
     of effort in credit management programs by the agency. As an 
     indicator of the level of effort in credit management, the 
     Office of Management and Budget shall consider the following:
       ``(A) The number of days between the date a claim or debt 
     became delinquent and the date which an agency referred the 
     debt or claim to the Secretary of the Treasury or obtained an 
     exemption from this referral under section 3711(g)(2) of this 
     title.
       ``(B) The ratio of delinquent debts or claims to total 
     receivables for a given program, and the change in this ratio 
     over a period of time.
       ``(c)(1) The Secretary of the Treasury may make payments 
     from the Account solely to reimburse agencies for qualified 
     expenses. For agencies with franchise funds, such payments 
     may be credited to subaccounts designated for debt 
     collection.
       ``(2) For purposes of this section, the term `qualified 
     expenses' means expenditures for the improvement of tax 
     administration, credit management, debt collection, and debt 
     recovery activities, including--
       ``(A) account servicing (including cross-servicing under 
     section 3711(g) of this title),
       ``(B) automatic data processing equipment acquisitions,
       ``(C) delinquent debt collection,
       ``(D) measures to minimize delinquent debt,
       ``(E) sales of delinquent debt,
       ``(F) asset disposition, and
       ``(G) training of personnel involved in credit and debt 
     management.
       ``(3)(A) Amounts in the Account shall be available to the 
     Secretary of the Treasury for purposes of this section to the 
     extent and in amounts provided in advance in appropriation 
     Acts.
       ``(B) As soon as practicable after the end of the third 
     fiscal year after which appropriations are made pursuant to 
     this section, and every 3 years thereafter, any 
     unappropriated balance in the Account shall be transferred to 
     the general fund of the Treasury as miscellaneous receipts.
       ``(d) For direct loans and loan guarantee programs subject 
     to title V of the Congressional Budget Act of 1974, amounts 
     credited in accordance with subsection (c) shall be 
     considered administrative costs.
       ``(e) The Secretary of the Treasury shall prescribe such 
     rules, regulations, and procedures as the Secretary considers 
     necessary or appropriate to carry out the purposes of this 
     section.''.
       ``(b) Clerical Amendment.--The table of sections for 
     chapter 37 of title 31, United States Code, is amended by 
     inserting after the item relating to section 3720B (as added 
     by section 5232 of this subtitle) the following new item:

``3720C. Debt Collection Improvement Account.''.

                 Subpart G--Tax Refund Offset Authority

     SEC. 5271. OFFSET OF TAX REFUND PAYMENT BY DISBURSING 
                   OFFICIALS.

       Section 3720A(h) of title 31, United States Code, is 
     amended to read as follows:
       ``(h) The disbursing official of the Department of the 
     Treasury--
       ``(1) shall notify a taxpayer in writing of--
       ``(A) the occurrence of an offset to satisfy a past-due 
     legally enforceable nontax debt;
       ``(B) the identity of the creditor agency requesting the 
     offset; and
       ``(C) a correct point within the creditor agency that will 
     handle concerns regarding the offset;
       ``(2) shall notify the Internal Revenue Service on a weekly 
     basis of--
       ``(A) the occurrence of an offset to satisfy a past-due 
     legally enforceable nontax debt;
       ``(B) the amount of such offset; and
       ``(C) any other information required by regulations; and
       ``(3) shall match payment records with requests for offset 
     by using a name control, taxpayer identifying number (as that 
     term is used in section 6109 of the Internal Revenue Code of 
     1986), and any other necessary identifiers.''.

     SEC. 5272. EXPANDING TAX REFUND OFFSET AUTHORITY.

       (a) Discretionary Authority.--Section 3720A of title 31, 
     United States Code, is 

[[Page H 10744]]

     amended by adding after subsection (h) (as amended by section 
     5271 of this subtitle) the following new subsection:
       ``(i) An agency subject to section 9 of the Act of May 18, 
     1933, (16 U.S.C. 831h), may implement this section at its 
     discretion.''.
       (b) Federal Agency Defined.--Section 6402(f) of the 
     Internal Revenue Code of 1986 (26 U.S.C. 6402(f)), is amended 
     to read as follows:
       ``(f) Federal Agency.--For purposes of this section, the 
     term `Federal agency' means a department, agency, or 
     instrumentality of the United States, and includes a 
     Government corporation (as such term is defined in section 
     103 of title 5, United States Code).''.

     SEC. 5273. EXPANDING AUTHORITY TO COLLECT PAST-DUE SUPPORT.

       (a) Notification of Secretary of the Treasury.--Section 
     3720A(a) of title 31, United States Code, is amended to read 
     as follows:
       ``(a) Any Federal agency that is owed by a person a past-
     due, legally enforceable debt (including debt administered by 
     a third party acting as an agent for the Federal Government) 
     shall, and any agency subject to section 9 of the Act of May 
     18, 1933 (16 U.S.C. 831h), owed such a debt may, in 
     accordance with regulations issued pursuant to subsections 
     (b) and (d), notify the Secretary of the Treasury at least 
     once each year of the amount of such debt.''.
       (b) Implementation of Support Collection by Secretary of 
     the Treasury.--Section 464(a) of the Act of August 14, 1935 
     (42 U.S.C. 664(a)) is amended--
       (1) in paragraph (1), by adding at the end the following: 
     ``This subsection may be executed by the disbursing official 
     of the Department of the Treasury.''; and
       (2) in paragraph (2)(A), by adding at the end the 
     following: ``This subsection may be executed by the 
     disbursing official of the Department of the Treasury.''.

     SEC. 5274. USE OF TAX REFUND OFFSET AUTHORITY FOR DEBTS TO 
                   STATES.

       (a) In General.--Section 6402 of the Internal Revenue Code 
     of 1986 (26 U.S.C. 6402) is amended by redesignating 
     subsections (e) through (l) as subsections (f) through (j), 
     respectively, and by inserting after subsection (d) of the 
     following new subsection:
       ``(e) Collection of Past-Due, Legally Enforceable State 
     Debts.--
       ``(1) In general.--Upon receiving notice from any State 
     that a named person owes a past-due, legally enforceable 
     State debt to such State or a legally constituted subdivision 
     of the State, the Secretary shall apply this subsection with 
     respect to the past-due, legally enforceable State debt if--
       ``(A) the appropriate State official requests that an 
     offset be performed; and
       ``(B) a reciprocal agreement between the Secretary and the 
     State is in effect to offset Federal and State debts.
       ``(2) Actions to be taken.--Under such conditions as may be 
     prescribed by the Secretary, the Secretary shall--
       ``(A) reduce the amount of any overpayment payable to such 
     person by the amount of such State debt;
       ``(B) pay the amount by which such overpayment is reduced 
     under subparagraph (A) to such State and notify such State of 
     such person's name, taxpayer identification number, address, 
     and the amount collected; and
       ``(C) notify the person making such overpayment that the 
     overpayment has been reduced by an amount necessary to 
     satisfy a past-due, legally enforceable State debt.

     If an offset is made pursuant to a joint return, the notice 
     under subparagraph (B) shall include the names, taxpayer 
     identification numbers, and addresses of each person filing 
     such return.
       ``(3) Priorities for offset.--Any overpayment by a person 
     shall be reduced pursuant to this subsection--
       ``(A) after such overpayment is reduced pursuant to--
       ``(i) subsection (a) with respect to any liability for any 
     internal revenue tax on the part of the person who made the 
     overpayment,
       ``(ii) subsection (c) with respect to past-due support, and
       ``(iii) subsection (d) with respect to any past-due, 
     legally enforceable debt owed to a Federal agency, and
       ``(B) before such overpayment is credited to the future 
     liability for any Federal internal revenue tax of such person 
     pursuant to subsection (b).

     If the Secretary receives notice from 1 or more State 
     agencies of more than 1 debt subject to paragraph (1) that is 
     owed by such person to such an agency, an overpayment by such 
     person shall be applied against such debts in the order in 
     which such debts accrued.
       ``(4) Notice; consideration of evidence.--No State may take 
     action under this subsection until such State--
       ``(A) notifies the person owing the past-due State debt 
     that the State proposes to take action pursuant to this 
     section,
       ``(B) gives such person at least 60 days to present 
     evidence that all or part of such liability is not past-due 
     or not legally enforceable,
       ``(C) considers any evidence presented by such person and 
     determines that an amount of such debt is past-due and 
     legally enforceable, and
       ``(D) satisfies such other conditions as the Secretary may 
     prescribe to ensure that the determination made under 
     subparagraph (C) is valid and that the State has made 
     reasonable efforts to obtain payment of such State debt.
       ``(5) Past-due, legally enforceable state debt.--For 
     purposes of this subsection, the term `past-due, legally 
     enforceable State debt' means a debt--
       ``(A)(i) which resulted from--
       ``(I) a judgment rendered by a court of competent 
     jurisdiction which has determined an amount of debt to be 
     due, or
       ``(II) a determination after an administrative hearing 
     which has determined an amount of debt to be due, and
       ``(ii) which is no longer subject to judicial review, or
       ``(B) which resulted from a State tax which has not been 
     collected, the time for redetermination of which has expired, 
     and which has not been delinquent for more than 10 years.

     For purposes of this paragraph, the term `State tax' includes 
     any local tax administered by the chief tax administration 
     agency of the State.
       ``(6) Regulations.--The Secretary shall issue regulations 
     prescribing the time and manner in which States must submit 
     notices of past-due, legally enforceable State debts and the 
     necessary information that must be contained in or accompany 
     such notices. The regulations--
       ``(A) shall specify the types of State debts to which the 
     reduction procedure established by paragraph (1) may be 
     applied;
       ``(B) shall specify the minimum amount of debt to which the 
     reduction procedure established by paragraph (1) may be 
     applied;
       ``(C) shall specify the requirements for reciprocal offset 
     in which participating States will participate; and
       ``(D) may require States to pay a fee to reimburse the 
     Secretary to reimburse appropriations which bore all or part 
     of the cost of applying such procedure.
       ``(7) Erroneous payment to state.--Any State receiving 
     notice from the Secretary that an erroneous payment has been 
     made to such State under paragraph (1) shall pay promptly to 
     the Secretary, in accordance with such regulations as the 
     Secretary may prescribe, an amount equal to the amount of 
     such erroneous payment (without regard to whether any other 
     amounts payable to such State under such paragraph have been 
     paid to such State).''
       (b) Disclosure of Certain Information to States Requesting 
     Refund Offsets for Past-Due, Legally Enforceable State 
     Debts.--(1) Paragraph (10) of section 6103(l) of the Internal 
     Revenue Code of 1986 (26 U.S.C. 6103(l)(10)) is amended by 
     striking ``(c) or (d)'' and inserting ``(c), (d), and (e)''.
       (2) The paragraph heading for such paragraph (10) is 
     amended by striking ``section 6402(c) or 6402(d)'' and 
     inserting ``subsection (c), (d), or (e) of section 6402''.
       (c) Conforming Amendments.--(1) Subsection (a) of section 
     6402 of the Internal Revenue Code of 1986 (26 U.S.C. 6402(a)) 
     is amended by striking ``(c) and (d)'' and inserting ``(c), 
     (d), and (e)''.
       (2) Paragraph (2) of section 6402(d) of the Internal 
     Revenue Code of 1986 (26 U.S.C. 6402(d)(2)) is amended by 
     striking ``and before such overpayment'' and inserting ``and 
     before such overpayment is reduced pursuant to subsection (e) 
     and before such overpayment''.
       (3) Subsection (f) of section 6402 of the Internal Revenue 
     Code of 1986, as redesignated by subsection (a), is amended--
       (A) by striking ``(c) or (d)'' and inserting ``(c), (d), or 
     (e)'', and
       (B) by striking ``Federal agency'' and inserting ``Federal 
     agency or State''.
       (4) Subsection (h) of section 6402 of the Internal Revenue 
     Code of 1986, as redesignated by subsection (a), is amended 
     by striking ``subsection (c)'' and inserting ``subsection (c) 
     or (e)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to refunds payable under section 6402 of the 
     Internal Revenue Code of 1986 after December 31, 1996.

                        Subpart H--Disbursements

     SEC. 5281. ELECTRONIC FUNDS TRANSFER.

       Section 3332 of title 31, United States Code, popularly 
     known as the Federal Financial Management Act of 1994, is 
     amended--
       (1) by redesignating subsection (e) as subsection (h), and 
     inserting after subsection (d) the following new subsections:
       ``(e)(1) Notwithstanding subsections (a) through (d) of 
     this section, sections 5120(a) and (d) of title 38, and any 
     other provision of law, all Federal payments to a recipient 
     who begins to receive that type of payments on or after 
     January 1, 1996, shall be made by electronic funds transfer.
       ``(2) The head of a Federal agency shall, with respect to 
     Federal payments made or authorized by the agency, waive the 
     application of paragraph (1) to a recipient of those payments 
     upon receipt of written certification from the recipient that 
     the recipient does not have an account with a financial 
     institution or an authorized payment agent.
       ``(f)(1) Notwithstanding any other provision of law 
     (including subsections (a) through (e) of this section and 
     sections 5120(a) and (d) of title 38), except as provided in 
     paragraph (2) all Federal payments made after January 1, 
     1999, shall be made by electronic funds transfer.
       ``(2)(A) The Secretary of the Treasury may waive 
     application of this subsection to payments--
       ``(i) for individuals or classes of individuals for whom 
     compliance imposes a hardship;
       ``(ii) for classification or types of checks; or

[[Page H 10745]]

       ``(iii) in other circumstances as may be necessary.
       ``(B) The Secretary of the Treasury shall make 
     determinations under subparagraph (A) based on standards 
     developed by the Secretary.
       ``(g) Each recipient of Federal payments required to be 
     made by electronic funds tranfer shall--
       ``(1) designate 1 or more financial institutions or other 
     authorized agents to which such payments shall be made; and
       ``(2) provide to the Federal agency that makes or 
     authorizes the payments information necessary for the 
     recipient to receive electronic funds transfer payments 
     through each institution or agent designated under paragraph 
     (1).''; and
       (2) by adding after subsection (h) (as so redesignated) the 
     following new subsections:
       ``(i)(1) The Secretary of the Treasury may prescribe 
     regulations that the Secretary considers necessary to carry 
     out this section.
       ``(2) Regulations under this subsection shall ensure that 
     individuals required under subsection (g) to have an account 
     at a financial institution because of the application of 
     subsection (f)(1)--
       ``(A) will have access to such an account at a reasonable 
     cost; and
       ``(B) are given the same consumer protections with respect 
     to the account as other account holders at the same financial 
     institution.
       ``(j) For purposes of this section--
       ``(1) The term `electronic funds transfer' means any 
     transfer of funds, other than a transaction originated by 
     cash, check, or similar paper instrument, that is initiated 
     through an electronic terminal, telephone, computer, or 
     magnetic tape, for the purpose of ordering, instructing, or 
     authorizing a financial institution to debit or credit an 
     account. The term includes Automated Clearing House 
     transfers, Fed Wire transfers, transfers made at automatic 
     teller machines, and point-of-sale terminals.
       ``(2) The term `Federal agency' means--
       ``(A) an agency (as defined in section 101 of this title); 
     and
       ``(B) a Government corporation (as defined in section 103 
     of title 5).
       ``(3) The term `Federal payments' includes--
       ``(A) Federal wage, salary, and retirement payments;
       ``(B) vendor and expense reimbursement payments;
       ``(C) benefit payments; and
       ``(D) tax refund payments and other miscellaneous 
     payments.''.

     SEC. 5282. REQUIREMENT TO INCLUDE TAXPAYER IDENTIFYING NUMBER 
                   WITH PAYMENT VOUCHER.

       Section 3325 of title 31, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(d) The head of an executive agency or an officer or 
     employee of an executive agency referred to in subsection 
     (a)(1)(B), as applicable, shall include with each certified 
     voucher submitted to a disbursing official pursuant to this 
     section the taxpayer identifying number of each person to 
     whom payment may be made under the voucher.''.

                        Subpart I--Miscellaneous

     SEC. 5291. MISCELLANEOUS AMENDMENTS TO DEFINITIONS.

       Section 3701 of title 31, United States Code, is amended--
       (1) by amending subsection (a)(1) to read as follows:
       ``(1) `administrative offset' means withholding funds 
     payable by the United States (including funds payable by the 
     United States on behalf of a State government) to, or held by 
     the United States for, a person to satisfy a claim.'';
       (2) by amending subsection (b) to read as follows:
       ``(b)(1) In subchapter II of this chapter, The term `claim' 
     or `debt' means any amount of funds or property that has been 
     determined by an appropriate official of the Federal 
     Government to be owed to the United States by a person, 
     organization, or entity other than another Federal agency. A 
     claim includes, without limitation--
       ``(A) funds owed on account of loans made, insured, or 
     guaranteed by the Government, including any deficiency or any 
     difference between the price obtained by the Government in 
     the sale of a property and the amount owed to the Government 
     on a mortgage on the property,
       ``(B) expenditures of nonappropriated funds,
       ``(C) over-payments, including payments disallowed by 
     audits performed by the Inspector General of the agency 
     administering the program,
       ``(D) any amount the United States is authorized by statute 
     to collect for the benefit of any person,
       ``(E) the unpaid share of any non-Federal partner in a 
     program involving a Federal payment and a matching, or cost-
     sharing, payment by the non-Federal partner,
       ``(F) any fines or penalties assessed by an agency; and
       ``(G) other amounts of money or property owed to the 
     Government.
       ``(2) For purposes of sections 3716 of this title, each of 
     the terms `claim' and `debt' includes an amount of funds or 
     property owed by a person to a State (including any past-due 
     support being enforced by the State), the District of 
     Columbia, American Samoa, Guam, the United States Virgin 
     Islands, the Commonwealth of the Northern Mariana Islands, or 
     the Commonwealth of Puerto Rico.''; and
       (3) by adding after subsection (f) (as added by section 
     5242 of this subtitle) the following new subsection:
       ``(g) In section 3716 of this title--
       ``(1) `creditor agency' means any agency owed a claim that 
     seeks to collect that claim through administrative offset; 
     and
       ``(2) `payment certifying agency' means any agency that has 
     transmitted a voucher to a disbursing official for 
     disbursement.''.

     SEC. 5292. MONITORING AND REPORTING.

       (a) Guidelines.--The Secretary of the Treasury, in 
     consultation with concerned Federal agencies, may establish 
     guidelines, including information on outstanding debt, to 
     assist agencies in the performance and monitoring of debt 
     collection activities.
       (b) Report.--Not later than 3 years after the date of 
     enactment of this subtitle, the Secretary of the Treasury 
     shall report to the Congress on collection services provided 
     by Federal agencies or entities collecting debt on behalf of 
     other Federal agencies under the authorities contained in 
     section 3711(g) of title 31, United States Code, as added by 
     section 5244 of this subtitle.
       (c) Agency Reports.--Section 3719 of title 31, United 
     States Code, is amended--
       (1) in subsection (a)--
       (A) by amending the first sentence to read as follows: ``In 
     consultation with the Comptroller General of the United 
     States, the Secretary of the Treasury shall prescribe 
     regulations requiring the head of each agency with 
     outstanding nontax claims to prepare and submit to the 
     Secretary at least once each year a report summarizing the 
     status of loans and accounts receivable that are managed by 
     the head of the agency.''; and
       (B) in paragraph (3), by striking ``Director'' and 
     inserting ``Secretary''; and
       (2) in subsection (b), by striking ``Director'' and 
     inserting ``Secretary''.
       (d) Consolidation of Reports.--Notwithstanding any other 
     provision of law, the Secretary of the Treasury may 
     consolidate reports concerning debt collection otherwise 
     required to be submitted by the Secretary into one annual 
     report.

     SEC. 5293. REVIEW OF STANDARDS AND POLICIES FOR COMPROMISE OR 
                   WRITE-DOWN OF DELINQUENT DEBTS.

       The Director of the Office of Management and Budget shall--
       (1) review the standards and policies of each Federal 
     agency for compromising, writing-down, forgiving, or 
     discharging indebtedness arising from programs of the agency;
       (2) determine whether those standards and policies are 
     consistent and protect the interests of the United States;
       (3) in the case of any Federal agency standard or policy 
     that the Secretary determines is not consistent or does not 
     protect the interests of the United States, direct the head 
     of the agency to make appropriate modifications to the 
     standard or policy; and
       (4) report annually to the Congress on--
       (A) deficiencies in the standards and policies of Federal 
     agencies for compromising, writing-down, forgiving, or 
     discharging indebtedness; and
       (B) progress made in improving those standards and 
     policies.

                    PART II--JUSTICE DEBT MANAGEMENT

     SEC. 5301. EXPANDED USE OF PRIVATE ATTORNEYS.

       (a) Elimination of Limitation on Fees.--Section 
     3718(b)(1)(A) of title 31, United States Code, is amended by 
     striking the fourth sentence.
       (b) Repeal.--Sections 3 and 5 of the Act of October 28, 
     1986 (popularly known as the Federal Debt Recovery Act; 
     Public Law 99-578, 100 Stat. 3305) are hereby repealed.

     SEC. 5302. NONJUDICIAL FORECLOSURE OF MORTGAGES.

       Chapter 176 of title 28, United States Code, is amended--
       (1) in the table of subchapters at the beginning of the 
     chapter by adding at the end the following new item:

``E. Nonjudicial foreclosure................................3401''; and

       (2) by adding at the end of the chapter the following new 
     subchapter:

                ``SUBCHAPTER E--NONJUDICIAL FORECLOSURE

``Sec.
``3401. Definitions.
``3402. Rules of construction.
``3403. Election of procedure.
``3404. Designation of foreclosure trustee.
``3405. Notice of foreclosure sale; statute of limitations.
``3406. Service of notice of foreclosure sale.
``3407. Cancellation of foreclosure sale.
``3408. Stay.
``3409. Conduct sale; postponement.
``3410. Transfer of title and possession.
``3411. Record of foreclosure and sale.
``3412. Effect of sale.
``3413. Disposition of sale proceeds.
``3414. Deficiency judgment.

     ``Sec. 3401. Definitions

       ``As used in this subchapter--
       ``(1) `agency' means--
       ``(A) an Executive department, as set forth in section 101 
     of title 5, United States Code;
       ``(B) an independent establishment, as defined in section 
     104 of title 5, United States Code (except that it shall not 
     include the General Accounting Office);
       ``(C) a military department, as set forth in section 102 of 
     title 5, United States Code; and
       ``(D) a wholly owned government corporation, as defined in 
     section 9101(3) of title 31, United States Code;
       ``(2) `agency head' means the head and any assistant head 
     of an agency, and may upon 

[[Page H 10746]]

     the designation by the head of an agency include the chief 
     official of any principal division of an agency or any other 
     employee of an agency;
       ``(3) `bona fide purchaser' means a purchaser for value in 
     good faith and without notice of any adverse claim who 
     acquires the seller's interest free of any adverse claim;
       ``(4) `debt instrument' means a note, mortgage bond, 
     guaranty, or other instrument creating a debt or other 
     obligation, including any instrument incorporated by 
     reference therein and any instrument or agreement amending or 
     modifying a debt instrument;
       ``(5) `file' or `filing' means docketing, indexing, 
     recording, or registering, or any other requirement for 
     perfecting a mortgage or a judgment;
       ``(6) `foreclosure trustee' means an individual, 
     partnership, association, or corporation, or any employee 
     thereof, including a successor, appointed by the agency head 
     to conduct a foreclosure sale pursuant to this subchapter;
       ``(7) `mortgage' means a deed of trust, deed to secure 
     debt, security agreement, or any other form of instrument 
     under which any interest in real property, including 
     leaseholds, life estates, reversionary interests, and any 
     other estates under applicable law is conveyed in trust, 
     mortgaged, encumbered, pledged, or otherwise rendered subject 
     to a lien, for the purpose of securing the payment of money 
     or the performance of any other obligation;
       ``(8) `of record' means an interest recorded pursuant to 
     Federal or State statutes that provide for official recording 
     of deeds, mortgages, and judgments, and that establish the 
     effect of such records as notice to creditors, purchasers, 
     and other interested persons;
       ``(9) `owner' means any person who has an ownership 
     interest in property and includes heirs, devisees, executors, 
     administrators, and other personal representatives, and 
     trustees of testamentary trusts if the owner of record is 
     deceased;
       ``(10) `sale' means a sale conducted pursuant to this 
     subchapter, unless the context requires otherwise; and
       ``(11) `security property' means real property, or any 
     interest in real property including leaseholds, life estates, 
     reversionary interests, and any other estates under 
     applicable State law that secure a mortgage.

     ``Sec. 3402. Rules of construction

       ``(a) In General.--If an agency head elects to proceed 
     under this subchapter, this subchapter shall apply and the 
     provisions of this subchapter shall govern in the event of a 
     conflict with any other provision of Federal law or State 
     law.
       ``(b) Limitation.--This subchapter shall not be construed 
     to supersede or modify the operation of--
       ``(1) the lease-back/buy-back provisions under section 335 
     of the Consolidated Farm and Rural Development Act, or 
     regulations promulgated thereunder; or
       ``(2) The Multifamily Mortgage Foreclosure Act of 1981.
       ``(c) Effect on Other Laws.--This subchapter shall not be 
     construed to curtail or limit the rights of the United States 
     or any of its agencies--
       ``(1) to foreclose a mortgage under any other provision of 
     Federal law or State law; or
       ``(2) to enforce any right under Federal law or State law 
     in lieu of or in addition to foreclosure, including any right 
     to obtain a monetary judgment.
       ``(d) Application to Mortgages.--The provisions of this 
     subchapter may be used to foreclose any mortgage, whether 
     executed prior or subsequent to the effective date of this 
     subchapter.

     ``Sec. 3403. Election of procedure

       ``(a) Security Property Subject to Foreclosure.--An agency 
     head may foreclose a mortgage upon the breach of a covenant 
     or condition in a debt instrument or mortgage for which 
     acceleration or foreclosure is authorized. An agency head may 
     not institute foreclosure proceedings on the mortgage under 
     any other provision of law, or refer such mortgage for 
     litigation, during the pendency of foreclosure proceedings 
     pursuant to this subchapter.
       ``(b) Effect of Cancellation of Sale.--If a foreclosure 
     sale is canceled pursuant to section 3407, the agency head 
     may thereafter foreclose on the security property in any 
     manner authorized by law.

     ``Sec. 3404. Designation of foreclosure trustee

       ``(a) In General.--An agency head shall designate a 
     foreclosure trustee who shall supersede any trustee 
     designated in the mortgage. A foreclosure trustee designated 
     under this section shall have a nonjudicial power of sale 
     pursuant to this subchapter.
       ``(b) Designation of Foreclosure Trustee.--
       ``(1) An agency head may designate as foreclosure trustee--
       ``(A) an officer or employee of the agency;
       ``(B) an individual who is a resident of the State in which 
     the security property is located; or
       ``(C) a partnership, association, or corporation, if such 
     entity is authorized to transact business under the laws of 
     the State in which the security property is located.
       ``(2) The agency head is authorized to enter into personal 
     services and other contracts not inconsistent with this 
     subchapter.
       ``(c) Method of Designation.--An agency head shall 
     designate the foreclosure trustee in writing. The foreclosure 
     trustee may be designated by name, title, or position. An 
     agency head may designate one or more foreclosure trustees 
     for the purpose of proceedings with multiple foreclosures or 
     a class of foreclosures.
       ``(d) Availability of Designation.--An agency head may 
     designate such foreclosure trustees as the agency head deems 
     necessary to carry out the purposes of this subchapter.
       ``(e) Multiple Foreclosure Trustees Authorized.--An agency 
     head may designate multiple foreclosure trustees for 
     different tracts of a secured property.
       ``(f) Removal of Foreclosure Trustees; Successor 
     Foreclosure Trustees.--An agency head may, with or without 
     cause or notice, remove a foreclosure trustee and designate a 
     successor trustee as provided in this section. The 
     foreclosure sale shall continue without prejudice 
     notwithstanding the removal of the foreclosure trustee and 
     designation of a successor foreclosure trustee. Nothing in 
     this section shall be construed to prohibit a successor 
     foreclosure trustee from postponing the foreclosure sale in 
     accordance with this subchapter.

     ``Sec. 3405. Notice of foreclosure sale; statute of 
       limitations

       ``(a) In General.--
       ``(1) Not earlier than 21 days nor later than ten years 
     after acceleration of a debt instrument or demand on a 
     guaranty, the foreclosure trustee shall serve a notice of 
     foreclosure sale in accordance with this subchapter.
       ``(2) For purposes of computing the time period under 
     paragraph (1), there shall be excluded all periods during 
     which there is in effect--
       ``(A) a judicially imposed stay of foreclosure; or
       ``(B) a stay imposed by section 362 of title 11, United 
     States Code.
       ``(3) In the event of partial payment or written 
     acknowledgement of the debt after acceleration of the debt 
     instrument, the right to foreclose shall be deemed to accrue 
     again at the time of each such payment or acknowledgement.
       ``(b) Notice of Foreclosure Sale.--The notice of 
     foreclosure sale shall include--
       ``(1) the name, title, and business address of the 
     foreclosure trustee as of the date of the notice;
       ``(2) the names of the original parties to the debt 
     instrument and the mortgage, and any assignees of the 
     mortgagor of record;
       ``(3) the street address or location of the security 
     property, and a generally accepted designation used to 
     describe the security property, or so much thereof as is to 
     be offered for sale, sufficient to identify the property to 
     be sold;
       ``(4) the date of the mortgage, the office in which the 
     mortgage is filed, and the location of the filing of the 
     mortgage;
       ``(5) the default or defaults upon which foreclosure is 
     based, and the date of the acceleration of the debt 
     instrument;
       ``(6) the date, time, and place of the foreclosure sale;
       ``(7) a statement that the foreclosure is being conducted 
     in accordance with this subchapter;
       ``(8) the types of costs, if any, to be paid by the 
     purchaser upon transfer of title; and
       ``(9) the terms and conditions of sale, including the 
     method and time of payment of the foreclosure purchase price.

     ``Sec. 3406. Service of notice of foreclosure sale

       ``(a) Record Notice.--At least 21 days prior to the date of 
     the foreclosure sale, the notice of foreclosure sale required 
     by section 3405 shall be filed in the manner authorized for 
     filing a notice of an action concerning real property 
     according to the law of the State where the security property 
     is located or, if none, in the manner authorized by section 
     3201 of this chapter.
       ``(b) Notice by Mail.--
       ``(1) At least 21 days prior to the date of the forecloure 
     sale, the notice set forth in section 3405 shall be sent by 
     registered or certified mail, return receipt requested--
       ``(A) to the current owner of record of the security 
     property as the record appears on the date that the notice of 
     foreclosure sale is recorded pursuant to subsection (a);
       ``(B) to all debtors, including the mortgagor, assignees of 
     the mortgagor and guarantors of the debt instrument;
       ``(C) to all persons having liens, interests or 
     encumbrances of record upon the security property, as the 
     record appears on the date that the notice of foreclosure 
     sale is recorded pursuant to subseciton (a); and
       ``(D) to any occupants of the security property.

     If the names of the occupants of the security property are 
     not known to the agency, or the security property has more 
     than one dwelling unit, the notice shall be posted at the 
     security property.
       ``(2) The notice shall be sent to the debtor at the 
     address, if any, set forth in the debt instrument or mortgage 
     as the place to which notice is to be sent, and if different, 
     to the debtor's last known address as shown in the mortgage 
     record of the agency. The notice shall be sent to any person 
     other than the debtor to that person's address of record or, 
     if there is no address of record, to any address at which the 
     agency in good faith believes the notice is likely to come to 
     that person's attention.
       ``(3) Notice by mail pursuant to this subsection shall be 
     effective upon mailing.
       ``(c) Notice By Publication.--The notice of the foreclosure 
     sale shall be published at least once a week for each of 
     three successive weeks prior to the sale in at least one 
     newspaper of general circulation in any 

[[Page H 10747]]
     county or counties in which the security property is located. If there 
     is no newspaper published at least weekly that has a general 
     circulation in at least one county in which the security 
     property is located, copies of the notice of foreclosure sale 
     shall instead be posted at least 21 days prior to the sale at 
     the courthouse of any county or counties in which the 
     property is located and the place where the sale is to be 
     held.

     ``Sec. 3407. Cancellation of foreclosure sale

       ``(a) In General.--At any time prior to the foreclosure 
     sale, the foreclosure trustee shall cancel the sale--
       ``(1) if the debtor or the holder of any subordinate 
     interest in the security property tenders the performance due 
     under the debt instrument and mortgage, including any amounts 
     due because of the exercise of the right to accelerate, and 
     the expenses of proceeding to foreclosure incurred to the 
     time of tender; or
       ``(2) if the security property is a dwelling of four units 
     or fewer, and the debtor--
       ``(A) pays or tenders all sums which would have been due at 
     the time of tender in the absence of any acceleration;
       ``(B) performs any other obligation which would have been 
     required in the absence of any acceleration; and
       ``(C) pays or tenders all costs of foreclosure incurred for 
     which payment from the proceeds of the sale would be allowed; 
     or
       ``(3) for any reason approved by the agency head.
       ``(b) Limitation.--The debtor may not, without the approval 
     of the agency head, cure the default under subsection (a)(2) 
     if, within the preceding 12 months, the debtor has cured a 
     default after being served with a notice of foreclosure sale 
     pursuant to this subchapter.
       ``(c) Notice of Cancellation.--The foreclosure trustee 
     shall file a notice of the cancellation in the same place and 
     manner provided for the filing of the notice of foreclosure 
     sale under section 3406(a).

     ``Sec. 3408. Stay

       ``If, prior to the time of sale, foreclosure proceedings 
     under this subchapter are stayed in any manner, including the 
     filing of bankruptcy, no person may thereafter cure the 
     default under the provisions of section 3407(a)(2). If the 
     default is not cured at the time a stay is terminated, the 
     foreclosure trustee shall proceed to sell the security 
     property as provided in this subchapter.

     ``Sec. 3409. Conduct of sale; postponement

       ``(a) Sale Procedures.--Foreclosure shall pursuant to this 
     subchapter shall be at public auction and shall be scheduled 
     to begin at a time between the hours of 9:00 a.m. and 4:00 
     p.m. local time. The foreclosure sale shall be held at the 
     location specified in the notice of foreclosure sale, which 
     shall be a location where real estate foreclosure auctions 
     are customarily held in the county or one of the counties in 
     which the property to be sold is located or at a courthouse 
     therein, or upon the property to be sold. Sale of security 
     property situated in two or more counties may be held in any 
     one of the counties in which any part of the security 
     property is situated. The foreclosure trustee may designate 
     the order in which multiple tracts of security property are 
     sold.
       ``(b) Bidding Requirements.--Written one-price sealed bids 
     shall be accepted by the foreclosure trustee, if submitted by 
     the agency head or other persons for entry by announcement by 
     the foreclosure trustee at the sale. The sealed bids shall be 
     submitted in accordance with the terms set forth in the 
     notice of foreclosure sale. The agency head or any other 
     person may bid at the foreclosure sale, even if the agency 
     head or other person previously submitted a written one-price 
     bid. The agency head may bid a credit against the debt due 
     without the tender or payment of cash. The foreclosure 
     trustee may serve as auctioneer, or may employ an auctioneer 
     who may be paid from the sale proceeds. If an auctioneer is 
     employed, the foreclosure trustee is not required to attend 
     the sale. The foreclosure trustee or an auctioneer may bid as 
     directed by the agency head.
       ``(c) Postponement of Sale.--The foreclosure trustee shall 
     have discretion, prior to or at the time of sale, to postpone 
     the foreclosure sale. The foreclosure trustee may postpone a 
     sale to a later hour the same day by announcing or posting 
     the new time and place of the foreclosure sale at the time 
     and place originally scheduled for the foreclosure sale. The 
     foreclosure trustee may instead postpone the foreclosure sale 
     for not fewer than 9 nor more than 31 days, by serving notice 
     that the foreclosure sale has been postponed to a specified 
     date, and the notice may include any revisions the 
     foreclosure trustee deems appropriate. The notice shall be 
     served by publication, mailing, and posting in accordance 
     with section 3406(b) and (c), except that publication may be 
     made on any of three separate days prior to the new date of 
     the foreclosure sale, and mailing may be made at any time at 
     least 7 days prior to the new date of the foreclosure sale.
       ``(d) Liability of Successful Bidder Who Fails To Comply.--
     The foreclosure trustee may require a bidder to make a cash 
     deposit before the bid is accepted. The amount or percentage 
     of the cash deposit shall be stated by the foreclosure 
     trustee in the notice of foreclosure sale. A successful 
     bidder at the foreclosure sale who fails to comply with the 
     terms of the sale shall forfeit the cash deposit or, at the 
     election of the foreclosure trustee, shall be liable to the 
     agency on a subsequent sale of the property for all net 
     losses incurred by the agency as a result of such failure.
       ``(e) Effect of Sale.--Any foreclosure sale held in 
     accordance with this subchapter shall be conclusively 
     presumed to have been conducted in a legal, fair, and 
     commercially reasonable manner. The sale price shall be 
     conclusively presumed to constitute the reasonably equivalent 
     value of the security property.

     ``Sec. 3410. Transfer of title and possession

       ``(a) Deed.--After receipt of the purchase price in 
     accordance with the terms of the sale as provided in the 
     notice of foreclosure sale, the foreclosure trustee shall 
     execute and deliver to the purchaser a deed conveying the 
     security property to the purchaser that grants and conveys 
     title to the security property without warranty or covenants 
     to the purchaser. The execution of the foreclosure trustee's 
     deed shall have the effect of conveying all of the right, 
     title, and interest in the security property covered by the 
     mortgage. Notwithstanding any other law to the contrary, 
     the foreclosure trustee's deed shall be a conveyance of 
     the security property and not a quitclaim. No judicial 
     proceeding shall be required ancillary or supplementary to 
     the procedures provided in this subchapter to establish 
     the validity of the conveyance.
       ``(b) Death of Purchaser Prior to Consummation of Sale.--If 
     a purchaser dies before execution and delivery of the deed 
     conveying the security property to the purchaser, the 
     foreclosure trustee shall execute and deliver the deed to the 
     representative of the purchaser's estate upon payment of the 
     purchase price in accordance with the terms of sale. Such 
     delivery to the representative of the purchaser's estate 
     shall have the same effect as if accomplished during the 
     lifetime of the purchaser.
       ``(c) Purchaser Considered Bona Fide Purchaser Without 
     Notice.--The purchaser of property under this subchapter 
     shall be presumed to be a bona fide purchaser without notice 
     of defects, if any, in the title conveyed to the purchaser.
       ``(d) Possession by Purchaser; Continuing Interests.--A 
     purchaser at a foreclosure sale conducted pursuant to this 
     subchapter shall be entitled to possession upon passage of 
     title to the security property, subject to any interest or 
     interests senior to that of the mortgage. The right to 
     possession of any person without an interest senior to the 
     mortgage who is in possession of the property shall terminate 
     immediately upon the passage of title to the security 
     property, and the person shall vacate the security property 
     immediately. The purchaser shall be entitled to take any 
     steps available under Federal law or State law to obtain 
     possession.
       ``(e) Right of Redemption; Right of Possession.--This 
     subchapter shall preempt all Federal and State rights of 
     redemption, statutory, or common law. Upon conclusion of the 
     public auction of the security property, no person shall have 
     a right of redemption.
       ``(f) Prohibition of Imposition of Tax on Conveyance by the 
     United States or Agency Thereof.--No tax, or fee in the 
     nature of a tax, for the transfer of title to the security 
     property by the foreclosure trustee's deed shall be imposed 
     upon or collected from the foreclosure trustee or the 
     purchaser by any State or political subdivision thereof.

     ``Sec. 3411. Record of foreclosure and sale

       ``(a) Recital Requirements.--The foreclosure trustee shall 
     recite in the deed to the purchaser, or in an addendum to the 
     foreclosure trustee's deed, or shall prepare an affidavit 
     stating--
       ``(1) the date, time, and place of sale;
       ``(2) the date of the mortgage, the office in which the 
     mortgage is filed, and the location of the filing of the 
     mortgage;
       ``(3) the persons served with the notice of foreclosure 
     sale;
       ``(4) the date and place of filing of the notice of 
     foreclosure sale under section 3406(a);
       ``(5) that the foreclosure was conducted in accordance with 
     the provisions of this subchapter; and
       ``(6) the sale amount.
       ``(b) Effect of Recitals.--The recitals set forth in 
     subsection (a) shall be prima facie evidence of the truth of 
     such recitals. Compliance with the requirements of subsection 
     (a) shall create a conclusive presumption of the validity of 
     the sale in favor of bona fide purchasers and encumbrancers 
     for value without notice.
       ``(c) Deed To Be Accepted for Filing.--The register of 
     deeds or other appropriate official of the county or counties 
     where real estate deeds are regularly filed shall accept for 
     filing and shall file the foreclosure trustee's deed and 
     affidavit, if any, and any other instruments submitted for 
     filing in relation to the foreclosure of the security 
     property under this subchapter.

     Sec. 3412. Effect of sale

       ``A sale conducted under this subchapter to a bona fide 
     purchaser shall bar all claims upon the security property 
     by--
       ``(1) any person to whom the notice of foreclosure sale was 
     mailed as provided in this subchapter who claims an interest 
     in the property subordinate to that of the mortgage, and 
     their heir, devisee, executor, administrator, successor, or 
     assignee claiming under any such person;
       ``(2) any person claiming any interest in the property 
     subordinate to that of the mortgage, if such person had 
     actual knowledge of the sale;
       ``(3) any person so claiming, whose assignment, mortgage, 
     or other conveyance was 

[[Page H 10748]]
     not filed in the proper place for filing, or whose judgment or decree 
     was not filed in the proper place for filing, prior to the 
     date of filing of the notice of foreclosure sale as required 
     by section 3406(a), and the heir, devisee, executor, 
     administrator, successor, or assignee of such a person; or
       ``(4) any other person claiming under a statutory lien or 
     encumbrance not required to be filed and attaching to the 
     title or interest of any person designated in any of the 
     foregoing subsections of this section.

     Sec. 3413. Disposition of sale proceeds

       ``(a) Distribution of Sale Proceeds.--The foreclosure 
     trustee shall distribute the proceeds of the foreclosure sale 
     in the following order:
       ``(1)(A) First, to pay the commission of the foreclosure 
     trustee, other than an agency employee, the greater of--
       ``(i) the sum of--
       ``(I) 3 percent of the first $1,000 collected, plus
       ``(I) 1.5 percent on the excess of any sum collected over 
     $1,000; or
       ``(ii) $250.
       ``(B) The amounts described in subparagraph (A)(i) shall be 
     computed on the gross proceeds of all security property sold 
     at a single sale.
       ``(2) Thereafter, to pay the expense of any auctioneer 
     employed by the foreclosure trustee, if any, except that the 
     commission payable to the foreclosure trustee pursuant to 
     paragraph (1) shall be reduced by the amount paid to an 
     auctioneer, unless the agency head determines that such 
     reduction would adversely affect the ability of the agency 
     head to retain qualified foreclosure trustees or auctioneers.
       ``(3) Thereafter, to pay for the costs of foreclosure, 
     including--
       ``(A) reasonable and necessary advertising costs and 
     postage incurred in giving notice pursuant to section 3406;
       ``(B) mileage for posting notices and for the foreclosure 
     trustee's or auctioneer's attendance at the sale of the rate 
     provided in section 1921 of title 28, United States Code, for 
     mileage by the most reasonable road distance;
       ``(C) reasonable and necessary costs actually incurred in 
     connection with any search of title and lien records; and
       ``(D) necessary costs incurred by the foreclosure trustee 
     to file documents.
       ``(4) Thereafter, to pay valid real property tax liens or 
     assessments, if required by the notice of foreclosure sale.
       ``(5) Thereafter, to pay any liens senior to the mortgage, 
     if required by the notice of foreclosure sale.
       ``(6) Thereafter, to pay service charges and advancement 
     for taxes, assessments, and property insurance premiums.
       ``(7) Thereafter, to pay late charges and other 
     administrative costs and the principal and interest balances 
     secured by the mortgage, including expenditures for the 
     necessary protection, preservation, and repair of the 
     security property as authorized under the debt instrument or 
     mortgage and interest thereon if provided for in the debt 
     instrument or mortgage, pursuant to the agency's procedure.
       ``(b) Insufficient Proceeds.--In the event there are no 
     proceeds of sale or the proceeds are insufficient to pay the 
     costs and expenses set forth in subsection (a), the agency 
     head shall pay such costs and expenses as authorized by 
     applicable law.
       ``(c) Surplus Monies.--
       ``(1) After making the payments required by subsection (a), 
     the foreclosure trustee shall--
       ``(A) distribute any surplus to pay liens in the order of 
     priority under Federal law or the law of the State where the 
     security property is located; and
       ``(B) pay to the person who was the owner of record on the 
     date the notice of foreclosure sale was filed the balance, if 
     any, after any payments made pursuant to paragraph (1).
       ``(2) If the person to whom such surplus is to be paid 
     cannot be located, or if the surplus available is 
     insufficient to pay all claimants and the claimants cannot 
     agree on the distribution of the surplus, that portion of the 
     sale proceeds may be deposited by the foreclosure trustee 
     with an appropriate official authorized under law to receive 
     funds under such circumstances. If such a procedure for the 
     deposit of disputed funds is not available, and the 
     foreclosure trustee files a bill of interpleader or is sued 
     as a stakeholder to determine entitlement to such funds, the 
     foreclosure trustee's necessary costs in taking or defending 
     such action shall be deducted first from the disputed funds.

     Sec. 3414. Deficiency judgment

       ``(a) In General.--If after deducting the disbursements 
     described in section 3413, the price at which the security 
     property is sold at a foreclosure sale in insufficient to pay 
     the unpaid balance of the debt secured by the security 
     property, counsel for the United States may commence an 
     action or actions against any or all debtors to recover the 
     deficiency, unless specifically prohibited by the mortgage. 
     The United States is also entitled to recover any amount 
     authorized by section 3011 and costs of the action.
       ``(b) Limitation.--Any action commenced to recover the 
     deficiency shall be brought within 6 years of the last sale 
     of security property.
       ``(c) Credits.--The amount payable by a private mortgage 
     guaranty insurer shall be credited to the account of the 
     debtor prior to the commencement of an action for any 
     deficiency owed by the debtor. Nothing in this subsection 
     shall curtail or limit the subrogation rights of a private 
     mortgage guaranty insurer.''.