[Congressional Record Volume 144, Number 146 (Wednesday, October 14, 1998)]
[House]
[Pages H10850-H10855]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        GOVERNMENT WASTE, FRAUD, AND ERROR REDUCTION ACT OF 1998

  Mr. HORN. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 4243) to reduce waste, fraud, and error in government programs by 
making improvements with respect to Federal management and debt 
collection practices, Federal payment systems, Federal benefit 
programs, and for other purposes as amended.
  The Clerk read as follows:

                               H.R. 4243

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Government 
     Waste, Fraud, and Error Reduction Act of 1998''.

[[Page H10851]]

       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Definition.

                TITLE I--GENERAL MANAGEMENT IMPROVEMENTS

Sec. 101. Improving financial management.
Sec. 102. Improving travel management.

         TITLE II--IMPROVING FEDERAL DEBT COLLECTION PRACTICES

Sec. 201. Miscellaneous technical corrections to subchapter II of 
              chapter 37 of title 31, United States Code.
Sec. 202. Barring delinquent Federal debtors from obtaining Federal 
              benefits.
Sec. 203. Collection and compromise of nontax debts and claims.

             TITLE III--SALE OF DEBTS OWED TO UNITED STATES

Sec. 301. Authority to sell debts.
Sec. 302. Requirement to sell certain debts.

                TITLE IV--TREATMENT OF HIGH VALUE DEBTS

Sec. 401. Annual report on high value debts.
Sec. 402. Review by Inspectors General.
Sec. 403. Requirement to seek seizure and forfeiture of assets securing 
              high value debt.

                       TITLE V--FEDERAL PAYMENTS

Sec. 501. Transfer of responsibility to Secretary of the Treasury with 
              respect to prompt payment.
Sec. 502. Promoting electronic payments.

     SEC. 2. PURPOSES.

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

     SEC. 3. DEFINITION.

       As used in this Act--
       (1) the term ``nontax debt'' means any debt other than a 
     debt under the Internal Revenue Code of 1986 or the Tariff 
     Act of 1930; and
       (2) the term ``nontax claim'' means any claim other than a 
     claim under the Internal Revenue Code of 1986 or the Tariff 
     Act of 1930.
                TITLE I--GENERAL MANAGEMENT IMPROVEMENTS

     SEC. 101. IMPROVING FINANCIAL MANAGEMENT.

       (a) Repeal.--Section 3515 of title 31, United States Code, 
     is amended--
       (1) in subsection (a)--
       (A) by striking ``1997'' and inserting ``1999''; and
       (B) by inserting ``Congress and'' after ``submit to'';
       (2) by striking subsection (e); and
       (3) by striking subsections (f), (g), and (h).
       (b) Production of Documents.--
       (1) Authority.--Section 5114(a) of title 31, United States 
     Code, is amended--
       (A) by inserting ``(1)'' after ``(a)''; and
       (B) by adding at the end the following new paragraph:
       ``(2) The Secretary of the Treasury may, if the Secretary 
     determines that it will not interfere with engraving and 
     printing needs of the United States--
       ``(A) produce currency, postage stamps, and other security 
     documents for foreign governments, subject to a determination 
     by the Secretary of State that such production would be 
     consistent with the foreign policy of the United States; and
       ``(B) produce security documents for States and their 
     political subdivisions.''.
       (2) Reimbursement.--Section 5143 of title 31, United States 
     Code, is amended--
       (A) in the first sentence, by inserting ``, foreign 
     government, or individual State or any political subdivision 
     thereof'' after ``agency''; and
       (B) in the last sentence, by inserting ``, foreign 
     government, or individual State or any political subdivision 
     thereof'' after ``agency''.
       (d) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), this 
     section shall take effect on the date of the enactment of 
     this Act.
       (2) Secretary's waiver authority.--Subsection (a)(1) of 
     this section shall take effect March 1, 1998.

     SEC. 102. IMPROVING TRAVEL MANAGEMENT.

       (a) Limited Exclusion From Requirement Regarding Occupation 
     of Quarters.--Section 5911(e) of title 5, United States Code, 
     is amended by adding at the end the following new sentence: 
     ``The preceding sentence shall not apply with respect to 
     lodging provided under chapter 57 of this title.''.
       (b) Use of Travel Management Centers, Agents, and 
     Electronic Payment Systems.--
       (1) Requirement to encourage use.--The head of each 
     executive agency shall, with respect to travel by employees 
     of the agency in the performance of the employment duties by 
     the employee, require, to the extent practicable, the use by 
     such employees of travel management centers, travel agents 
     authorized for use by such employees, and electronic 
     reservation and payment systems for the purpose of improving 
     efficiency and economy regarding travel by employees of the 
     agency.
       (2) Plan for implementation.--(A) The Administrator of 
     General Services shall develop a plan regarding the 
     implementation of this subsection and shall, after 
     consultation with the heads of executive agencies, submit to 
     Congress a report describing such plan and the means by which 
     such agency heads plan to ensure that employees use travel 
     management centers, travel agents, and electronic reservation 
     and payment systems as required by this subsection.
       (B) The Administrator shall submit the plan required under 
     subparagraph (A) not later than March 31, 1999.
         TITLE II--IMPROVING FEDERAL DEBT COLLECTION PRACTICES

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

       (a) Child Support Enforcement.--Section 3716(h)(3) of title 
     31, United States Code, is amended to read as follows:
       ``(3) In applying this subsection with respect to any debt 
     owed to a State, other than past due support being enforced 
     by the State, subsection (c)(3)(A) shall not apply.''.
       (b) Charges by Debt Collection Contractors.--
       (1) Collection by secretary of the treasury.--Section 
     3711(g) of title 31, United States Code, is amended by adding 
     at the end the following:
       ``(11) The amount received by a person for performance of 
     collection services under this section shall not be limited 
     by State law, and reasonable collection costs may be charged 
     to the debtor notwithstanding any provision of State law. The 
     preceding sentence shall not apply to the collection of child 
     support debt by any person.''.
       (2) Collection by program agency.--Section 3718 of title 
     31, United States Code, is amended by adding at the end the 
     following:
       ``(h) The amount received by a person for performance of 
     collection services under this section or section 3711(g) of 
     this title shall not be limited by State law.''.
       (c) Debt Sales.--Section 3711 of title 31, United States 
     Code, is amended by striking subsection (i).
       (d) Gainsharing.--Section 3720C(b)(2)(D) of title 31, 
     United States Code, is amended by striking ``delinquent 
     loans'' and inserting ``debts''.
       (e) Provisions Relating to Private Collection 
     Contractors.--
       (1) Collection by secretary of the treasury.--Section 
     3711(g) of title 31, United States Code, is further amended 
     by adding at the end the following:
       ``(12) In attempting to collect under this subsection 
     through the use of garnishment any debt owed to the United 
     States, a private collection contractor shall not be 
     precluded from verifying the debtor's current employer, the 
     location of the payroll office of the debtor's current 
     employer, the period the debtor has been employed by the 
     current employer of the debtor, and the compensation received 
     by the debtor from the current employer of the debtor.
       ``(13)(A) The Secretary of the Treasury shall provide that 
     any contract with a private collection contractor under this 
     subsection shall include a provision that the contractor 
     shall be subject to penalties under the contract--
       ``(i) if the contractor fails to comply with any 
     restrictions under applicable law regarding the collection 
     activities of debt collectors; or
       ``(ii) if the contractor engages in unreasonable or abusive 
     debt collection practices in connection with the collection 
     of debt under the contract.
       ``(B) Notwithstanding any other provision of law, a private 
     collection contractor under this subsection--
       ``(i) shall not be subject to any liability or contract 
     penalties in connection with efforts to collect a debt 
     pursuant to a contract under this subsection by reason of 
     actions that are required by the contract or by applicable 
     law or regulations; and
       ``(ii) shall not be subject to payment of statutory damages 
     or attorney's fees by reason of any action in connection with 
     efforts to collect such debt, except in a case of bad faith 
     or intentional misconduct by the contractor.
       ``(14) Performance of a contractor under any contract 
     entered into under this subsection, including without 
     limitation any contract in effect on the date of enactment of 
     the Government Waste, Fraud, and Error Reduction Act of 1998, 
     shall be measured, and allocation of account placements and 
     bonus compensation shall be determined, solely through an 
     evaluation methodology that bases not less than 50 percent of 
     the contractor's score under such evaluation on the 
     contractor's gross collections net of commissions (as a 
     percentage of account amounts placed with the contractor) 
     under the contract. The frequency of valid borrower 
     complaints shall be considered in the evaluation criteria.
       ``(15) In selecting contractors for performance of 
     collection services, the Secretary of the Treasury shall 
     evaluate bids received through a methodology that bases not 
     less than 50 percent of the bidder's score in such evaluation 
     on the bidder's prior performance in terms of net amounts 
     collected under government collection contracts of similar 
     size. The frequency of valid borrower complaints shall be 
     considered in the evaluation criteria.''.
       (2) Collection by program agency.--Section 3718 of title 
     31, United States Code, is further amended by adding at the 
     end the following:
       ``(i) In attempting to collect under this subsection 
     through the use of garnishment

[[Page H10852]]

     any debt owed to the United States, a private collection 
     contractor shall not be precluded from verifying the current 
     place of employment of the debtor, the location of the 
     payroll office of the debtor's current employer, the period 
     the debtor has been employed by the current employer of the 
     debtor, and the compensation received by the debtor from the 
     current employer of the debtor.
       ``(j)(1) The head of an executive, judicial, or legislative 
     agency that contracts with a private collection contractor to 
     collect a debt owed to the agency, or a guaranty agency or 
     institution of higher education that contracts with a private 
     collection contractor to collect a debt owed under any loan 
     program authorized under title IV of the Higher Education Act 
     of 1965, shall include a provision in the contract that the 
     contractor--
       ``(A) shall be subject to penalties under the contract if 
     the contractor fails to comply with any restrictions imposed 
     under applicable law on the collection activities of debt 
     collectors; and
       ``(B) shall be subject to penalties under the contract if 
     the contractor engages in unreasonable or abusive debt 
     collection practices in connection with the collection of 
     debt under the contract.
       ``(2) Notwithstanding any other provision of law--
       ``(A) a private collection contractor under this section 
     shall not be subject to any liability or contract penalties 
     in connection with efforts to collect a debt owed to an 
     executive, judicial, or legislative agency, or owed under any 
     loan program authorized under title IV of the Higher 
     Education Act of 1965, by reason of actions required by the 
     contract, or by applicable law or regulations; and
       ``(B) such a contractor shall not be subject to payment of 
     statutory damages or attorney's fees by reason of any action 
     in connection with efforts to collect such a debt, except in 
     a case of bad faith or intentional misconduct by the 
     contractor.
       ``(k) Performance of a contractor under any contract for 
     the performance of debt collection services entered into by a 
     Federal agency, including without limitation any contract in 
     effect on the date of enactment of the Government Waste, 
     Fraud, and Error Reduction Act of 1998, shall be measured, 
     and allocation of account placements and bonus compensation 
     shall be determined, solely through an evaluation methodology 
     that bases not less than 50 percent of the contractor's score 
     under such evaluation on the contractor's gross collections 
     net of commissions (as a percentage of account amounts placed 
     with the contractor) under the contract. The frequency of 
     valid borrower complaints shall be considered in the 
     evaluation criteria.
       ``(3) In selecting contractors for performance of 
     collection services, the head of an executive, judicial, or 
     legislative agency shall evaluate bids received through a 
     methodology that bases not less than 50 percent of the 
     bidder's score in such evaluation on the bidder's prior 
     performance in terms of net amounts collected under 
     government collection contracts of similar size. The 
     frequency of valid borrower complaints shall be considered in 
     the evaluation criteria.''.
       (3) Construction.--None of the amendments made by this 
     subsection shall be construed as altering or superseding the 
     provisions in section 362 of title 11, United States Code.
       (f) Clerical Amendment.--Section 3720A(h) of title 31, 
     United States Code, is amended--
       (1) beginning in paragraph (3), by striking the close 
     quotation marks and all that follows through the matter 
     preceding subsection (i); and
       (2) by adding at the end the following:

     ``For purposes of this subsection, the disbursing official 
     for the Department of the Treasury is the Secretary of the 
     Treasury or his or her designee.''.
       (g) Correction of References to Federal Agency.--(1) 
     Sections 3716(c)(6) and 3720A(a), (b), (c), and (e) of title 
     31, United States Code, are each amended by striking 
     ``Federal agency'' each place it appears and inserting 
     ``executive, judicial, or legislative agency''.
       (2) Section 3716(h)(2)(C), of title 31, United States Code, 
     is amended by striking ``a Federal agency'' and inserting 
     ``an executive, judicial, or legislative agency''.
       (h) Clarification of Inapplicability of Act to Certain 
     Agencies.--Notwithstanding any other provision of law, no 
     provision in this Act, the Debt Collection Improvement Act of 
     1996 (chapter 10 of title III of Public Law 104-134; 31 
     U.S.C. 3701 note), chapter 37 or subchapter II of chapter 33 
     of title 31, United States Code, or any amendments made by 
     such Acts or any regulations issued thereunder, shall apply 
     to activities carried out pursuant to a law enacted to 
     protect, operate, and administer any deposit insurance funds, 
     including the resolution and liquidation of failed or failing 
     insured depository institutions.
       (i) Contracts for Collection Services.--Section 3718 of 
     title 31, United States Code, is amended--
       (1) in the first sentence of subsection (b)(1)(A), by 
     inserting ``, or any monetary claim, including any claims for 
     civil fines or penalties, asserted by the Attorney General'' 
     before the period;
       (2) in the third sentence of subsection (b)(1)(A)--
       (A) by inserting ``or in connection with other monetary 
     claims'' after ``collection of claims of indebtedness'';
       (B) by inserting ``or claim'' after ``the indebtedness''; 
     and
       (C) by inserting ``or other person'' after ``the debtor''; 
     and
       (3) in subsection (d), by inserting ``or any other monetary 
     claim of'' after ``indebtedness owed''.

     SEC. 202. BARRING DELINQUENT FEDERAL DEBTORS FROM OBTAINING 
                   FEDERAL BENEFITS.

       (a) In General.--Section 3720B of title 31, United States 
     Code, is amended to read as follows:

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

       ``(a)(1) A person shall not be eligible for the award or 
     renewal of any Federal benefit described in paragraph (2) if 
     the person has an outstanding nontax debt that is in a 
     delinquent status with any executive, judicial, or 
     legislative agency, as determined under standards prescribed 
     by the Secretary of the Treasury. Such a person may obtain 
     additional Federal benefits described in paragraph (2) only 
     after such delinquency is resolved in accordance with those 
     standards.
       ``(2) The Federal benefits referred to in paragraph (1) are 
     the following:
       ``(A) Financial assistance in the form of a loan (other 
     than a disaster loan) or loan insurance or guarantee.
       ``(B) Any Federal permit or license otherwise required by 
     law.
       ``(b)(1) The Secretary of the Treasury may exempt any class 
     of claims from the application of subsection (a) at the 
     request of an executive, judicial, or legislative agency.
       ``(2) The Secretary of the Treasury may waive the 
     application of subsection (a) with respect to any Federal 
     permit or license otherwise required by law.
       ``(c)(1) The head of any executive, judicial, or 
     legislative agency may waive the application of subsection 
     (a) to any Federal benefit that is administered by the agency 
     based on standards promulgated by the Secretary of the 
     Treasury.
       ``(2) The head of an executive, judicial, or legislative 
     agency may delegate the waiver authority under paragraph (1) 
     to the chief financial officer of the agency.
       ``(3) The chief financial officer of an agency to whom 
     waiver authority is delegated under paragraph (2) may 
     redelegate that authority only to the deputy chief financial 
     officer of the agency. The deputy chief financial officer may 
     not redelegate such authority.
       ``(d) As used in this section--
       ``(1) the term `nontax debt' means any debt other than a 
     debt under the Internal Revenue Code of 1986 or the Tariff 
     Act of 1930; and
       ``(2) the term `nontax claim' means any claim other than a 
     claim under the Internal Revenue Code of 1986 or the Tariff 
     Act of 1930.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 37 of title 31, United States Code, is 
     amended by striking the item relating to section 3720B and 
     inserting the following:

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

       (c) Construction.--The amendment made by this section shall 
     not be construed as altering or superseding the provisions in 
     section 525 of title 11, United States Code.

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

       (a) Use of Private Collection Contractors and Federal Debt 
     Collection Centers.--Paragraph (5) of section 3711(g) of 
     title 31, United States Code, is amended to read as follows:
       ``(5)(A) Nontax debts referred or transferred under this 
     subsection shall be serviced, collected, or compromised, or 
     collection action thereon suspended or terminated, in 
     accordance with otherwise applicable statutory requirements 
     and authorities.
       ``(B) The head of each executive agency that operates a 
     debt collection center may enter into an agreement with the 
     Secretary of the Treasury to carry out the purposes of this 
     subsection.
       ``(C) The Secretary of the Treasury shall--
       ``(i) maintain a schedule of private collection contractors 
     and debt collection centers operated by agencies that are 
     eligible for referral of claims under this subsection;
       ``(ii) maximize collections of delinquent debts by 
     referring delinquent debts promptly;
       ``(iii) maintain competition between private collection 
     contractors;
       ``(iv) ensure, to the maximum extent practicable, that a 
     private collection contractor to which a debt is referred is 
     responsible for any administrative costs associated with the 
     contract under which the referral is made.
       ``(D) As used in this paragraph--
       ``(i) the term `nontax debt' means any debt other than a 
     debt under the Internal Revenue Code of 1986 or the Tariff 
     Act of 1930; and
       ``(ii) the term `nontax claim' means any claim other than a 
     claim under the Internal Revenue Code of 1986 or the Tariff 
     Act of 1930.''.
       (b) Limitation on Discharge Before Use of Private 
     Collection Contractor or Debt Collection Center.--Paragraph 
     (9) of section 3711(g) of title 31, United States Code, is 
     amended--
       (1) by redesignating subparagraphs (A) through (H) as 
     clauses (i) through (viii);
       (2) by inserting ``(A)'' after ``(9)'';
       (3) in subparagraph (A) (as designated by paragraph (2) of 
     this subsection) in the matter preceding clause (i) (as 
     designated by paragraph (1) of this subsection), by inserting 
     ``and subject to subparagraph (B)'' after ``as applicable''; 
     and

[[Page H10853]]

       (4) by adding at the end the following:
       ``(B)(i) The head of an executive, judicial, or legislative 
     agency may not discharge a debt or terminate collection 
     action on a debt unless the debt has been referred to a 
     private collection contractor or a debt collection center, 
     referred to the Attorney General for litigation, sold without 
     recourse, administrative wage garnishment has been 
     undertaken, or in the event of bankruptcy, death, or 
     disability.
       ``(ii) The Secretary of the Treasury may, at the request of 
     an agency, waive the application of clause (i) to any debt, 
     or class of debts, if the Secretary of the Treasury 
     determines that the waiver is in the best interest of the 
     United States.''.
             TITLE III--SALE OF DEBTS OWED TO UNITED STATES

     SEC. 301. AUTHORITY TO SELL DEBTS.

       (a) Purpose.--The purpose of this section is to provide 
     that the head of each executive, judicial, or legislative 
     agency shall establish a program of debt sales in order to--
       (1) minimize the loan and debt portfolios of the agency;
       (2) improve credit management while serving public needs;
       (3) reduce delinquent debts held by the agency;
       (4) obtain the maximum value for loan and debt assets; and
       (5) obtain valid data on the amount of the Federal subsidy 
     inherent in loan programs conducted pursuant to the Federal 
     Credit Reform Act of 1990 (Public Law 93-344).
       (b) Sales Authorized.--(1) The head of an executive, 
     judicial, or legislative agency may sell, subject to section 
     504(b) of the Federal Credit Reform Act of 1990 (2 U.S.C. 
     661c(b)) and using competitive procedures, any nontax debt 
     owed to the United States that is administered by the agency.
       (2) Costs the agency incurs in selling debt pursuant to 
     this section may be deducted from the proceeds received from 
     the sale. Such costs may include, but are not limited to--
       (A) the costs of computer hardware and software, processing 
     and telecommunications equipment, other equipment, supplies, 
     and furniture;
       (B) personnel training and travel costs;
       (C) other personnel and administrative costs;
       (D) the costs of any contract for identification, billing, 
     or collection services;
       (E) the costs of contractors assisting in the sale of debt;
       (F) the fees of appraisers, auctioneers, and realty 
     brokers;
       (G) the costs of advertising and surveying; and
       (H) other reasonable costs incurred by the agency.
       (3) Sales of debt under this section--
       (A) shall be for--
       (i) cash; or
       (ii) cash and a residuary equity, joint venture, or profit 
     participation, if the head of the agency, in consultation 
     with the Director of the Office of Management and Budget and 
     the Secretary of the Treasury, determines that the proceeds 
     will be greater than the proceeds from a sale solely for 
     cash;
       (B) shall be without recourse against the United States, 
     but may include the use of guarantees if otherwise authorized 
     by law; and
       (C) shall transfer to the purchaser all rights of the 
     United States to demand payment of the debt, other than with 
     respect to a residuary equity, joint venture, or profit 
     participation under subparagraph (A)(ii).
       (c) Existing Authority Not Affected.--This section is not 
     intended to limit existing statutory authority of the head of 
     an executive, judicial, or legislative agency to sell loans, 
     debts, or other assets.

     SEC. 302. REQUIREMENT TO SELL CERTAIN DEBTS.

       (a) Sale of Delinquent Loans.--The head of each executive, 
     judicial, or legislative agency shall sell any nontax loan 
     owed to the United States by the later of--
       (1) the date on which the debt becomes 24 months 
     delinquent; or
       (2) 24 months after referral of the debt to the Secretary 
     of the Treasury pursuant to section 3711(g)(1) of title 31, 
     United States Code. Sales under this subsection shall be 
     conducted under the authority in section 301.
       (b) Sale of New Loans.--The head of each executive, 
     judicial, or legislative agency shall sell each loan 
     obligation arising from a program administered by the agency, 
     not later than 6 months after the loan is disbursed, unless 
     the head of the agency determines that the sale would 
     interfere with the mission of the agency administering the 
     program under which the loan was disbursed, or the head of 
     the agency, in consultation with the Director of the Office 
     of Management and Budget and the Secretary of the Treasury, 
     determines that a longer period is necessary to protect the 
     financial interests of the United States. Such loan 
     obligations shall be audited annually in accordance with 
     generally accepted audit standards. Sales under this 
     subsection shall be conducted under the authority in section 
     301.
       (c) Sale of Debts After Termination of Collection Action.--
     After terminating collection action, the head of an 
     executive, judicial, or legislative agency shall sell, using 
     competitive procedures, any nontax debt or class of debts 
     owed to the United States unless the head of the agency, in 
     consultation with the Director of the Office of Management 
     and Budget and the Secretary of the Treasury, determines that 
     the sale is not in the best financial interests of the United 
     States. Such debts shall be audited annually in accordance 
     with generally accepted audit standards.
       (d) Limitations.--(1) The head of an executive, judicial, 
     or legislative agency shall not, without the approval of the 
     Attorney General, sell any debt that is the subject of an 
     allegation of or investigation for fraud, or that has been 
     referred to the Department of Justice for litigation.
       (2) The head of an executive, judicial, or legislative 
     agency may exempt from sale any class of debts if the head of 
     the agency determines that the sale would interfere with the 
     mission of the agency administering the program under which 
     the indebtedness was incurred.
             TITLE IV--TREATMENT OF HIGH VALUE NONTAX DEBTS

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

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

     SEC. 402. REVIEW BY INSPECTORS GENERAL.

       (a) Inspector General Reports.--The Inspector General of 
     each agency shall review the annual report to Congress 
     required in section 401 and make such recommendations as 
     necessary to improve performance of the agency. Each 
     Inspector General shall periodically review and report to 
     Congress on the agency's debt collection management 
     practices. As part of such reviews, the Inspector General 
     shall examine agency efforts to reduce the aggregate amount 
     of high value nontax debts that are resolved in whole or in 
     part by compromise, default, or bankruptcy.
       (b) Report by the President's Council on Integrity and 
     Efficiency.--Not later than 270 days after the end of each 
     fiscal year, the President's Council on Integrity and 
     Efficiency shall submit a report to the Committee on 
     Government Reform and Oversight of the House of 
     Representatives and the Committee on Governmental Affairs of 
     the Senate which summarizes the reviews conducted by the 
     inspector general under this section. Notwithstanding the 
     preceding sentence, the Chairman of the President's Council 
     on Integrity and Efficiency may submit such report in 
     conjunction with an annual report on the collection of debts 
     owed to the United States.

     SEC. 403. REQUIREMENT TO SEEK SEIZURE AND FORFEITURE OF 
                   ASSETS SECURING HIGH VALUE NONTAX DEBT.

       The head of an agency authorized to collect a high value 
     nontax debt that is delinquent shall, when appropriate, 
     promptly seek seizure and forfeiture of assets pledged to the 
     United States in any transaction giving rise to the nontax 
     debt. When an agency determines that seizure or forfeiture is 
     not appropriate, the agency shall include a justification for 
     such determination in the report under section 401.
                       TITLE V--FEDERAL PAYMENTS

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

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

     SEC. 502. PROMOTING ELECTRONIC PAYMENTS.

       (a) Early Release of Electronic Payments.--Section 3903(a) 
     of title 31, United States Code, is amended--
       (1) by amending paragraph (1) to read as follows:
       ``(1) provide that the required payment date is--
       ``(A) the date payment is due under the contract for the 
     item of property or service provided; or

[[Page H10854]]

       ``(B) no later than 30 days after a proper invoice for the 
     amount due is received if a specific payment date is not 
     established by contract;''; and
       (2) by striking ``and'' after the semicolon at the end of 
     paragraph (8), by striking the period at the end of paragraph 
     (9) and inserting ``; and'', and by adding at the end the 
     following:
       ``(10) provide that the Secretary of the Treasury may waive 
     the application of requirements under paragraph (1) to 
     provide for early payment of vendors in cases where an agency 
     will implement an electronic payment technology which 
     improves agency cash management and business practice.''.
       (b) Authority To Accept Electronic Payment.--
       (1) In general.--Subject to an agreement between the head 
     of an executive agency and the applicable financial 
     institution or institutions based on terms acceptable to the 
     Secretary of the Treasury, the head of such agency may accept 
     an electronic payment, including debit and credit cards, to 
     satisfy a debt owed to the agency.
       (2) Guidelines for agreements regarding payment.--The 
     Secretary of the Treasury shall develop guidelines regarding 
     agreements between agencies and financial institutions under 
     paragraph (1).

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
California (Mr. Horn) and the gentleman from California (Mr. Waxman) 
each will control 20 minutes.
  The Chair recognizes the gentleman from California (Mr. Horn).
  Mr. HORN. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, according to the Department of the Treasury delinquent 
nontax debts owed to the Federal Government totaled $51 billion at the 
end of fiscal year 1997. Of this amount $47.2 billion was delinquent 
for more than 180 days. In addition, the Federal Government also writes 
off about $10 billion per year. In short, Madam Speaker, collection of 
Federal debt is a major problem.
  The bill before this House, H.R. 4243, the Government Waste, Fraud 
and Error Reduction Act of 1998 would improve the efficiency and 
economy of Federal debt collection practices. It builds on other debt 
collection initiatives such as the Debt Collection Improvement Act of 
1996 which the gentlewoman from New York (Mrs. Maloney) and myself 
brought to this Chamber and is now law, and it provides the Federal 
Government with additional tools to improve debt collection.
  H.R. 4243 allows States to collect past due child support by 
offsetting the amount owed by a debtor from Federal benefits paid to 
that person. In other words, if an individual receives a payment from 
the Federal Government and yet has not met his or her child support 
obligation, the amount owed can be deducted from the payment received 
from the Federal Government.
  The bill also authorizes private collection agencies to verify the 
employment information of a Federal debtor for the purpose of 
collecting debts owed to the Federal Government.
  The bill authorizes agencies to bar delinquent debtors from obtaining 
a Federal permit or license, Federal contractor or other award or 
renewal of a Federal benefit. H.R. 4243 also requires agencies to refer 
debts to a private collection agency or an agency-operated debt 
collection center prior to the termination of a collection action.
  The bill focuses its attention on large debts. It authorizes each 
agency to prepare a report on high value delinquent debts; that is, 
debts greater than $1 million within 90 days after the end of the 
fiscal year. Agencies are authorized by this legislation to seize any 
pledged asset if the high value debt is not repaid. H.R. 4243 contains 
these important provisions and many others designed to improve the 
efficiency and effectiveness of Federal debt collection.
  This measure, along with the Debt Collection Improvement Act of 1996, 
is a bipartisan piece of legislation. My thanks to the ranking member, 
the gentleman from Ohio (Mr. Kucinich), and the former ranking member 
the gentlewoman from New York (Mrs. Maloney) for all their help. I also 
wish to give thanks to a former member of the staff, Mark Brasher, for 
the great effort that he made on behalf of this legislation in the 1996 
law as well as this bill which is before us.
  Madam Speaker, H.R. 4243 is a significant step forward. I urge my 
colleagues to support it.
  Madam Speaker, I reserve the balance of my time.
  Mr. WAXMAN. Madam Speaker, I yield myself such time as I may consume.
  (Mr. WAXMAN asked and was given permission to revise and extend his 
remarks.)
  Mr. WAXMAN. Madam Speaker, I want to commend my colleagues the 
gentleman from California (Mr. Horn), chairman of the Subcommittee on 
Government Management, and the gentlewoman from New York (Mrs. Maloney) 
for their recent efforts to craft a bipartisan bill, and I also want to 
acknowledge the work done by the gentleman from Ohio (Mr. Kucinich). I 
applaud their devotion to assuring that Federal debts are fully paid. 
Chairman Horn has been receptive to the administration's concerns with 
this bill. The administration is not opposed. I am hopeful that this 
bill will provide the government with helpful new options to recover 
substantial amounts of Federal taxpayer money.
  I support H.R. 4243. This bill is intended to increase collections on 
delinquent debt owed to the Federal Government, improve federal payment 
systems and travel management and decrease high value debt totaling 
over $1 million. This legislation will provide the Federal Government 
with new tools to collect debt over a million dollars. The bill would 
strengthen the Federal government's ability to recover substantial 
amounts of taxpayer money. It also enhances the ability of the 
Department of Justice to pursue civil actions seeking monetary damages, 
fines or penalties.
  We urge all Members to support this bill. It is a noncontroversial 
piece of legislation.
  More specifically, this legislation will provide additional tools for 
the government to improve government operations:
  First, the bill contains general management improvements. It will 
ensure that Congress continues to receive agency audited financial 
statements and repeals obsolete provisions of the law. The bill will 
improve travel management by requiring agencies to use, to the maximum 
extent possible, travel management centers and electronic reservation 
and payment systems in order to improve efficiency and economy.
  Second, the bill makes improvement to the Federal Debt Collection 
Improvement Act of 1996. It corrects an error which has prevented 
Social Security payments from being offset for the collection of child 
support. These debts, since they are being enforced by a State, were 
ineligible for offset, as State debts were specifically excluded from 
Social Security offset. With this correction, States will be able to 
move forward with implementation of this provision.
  Third, I am pleased that Representative Horn has agreed to add a 
provision that the minority requested that authorizes the Department of 
Justice to obtain the assistance of outside counsel in the Department's 
pursuit of monetary claims, including civil fines or penalties. Due to 
the growing complexity of litigation, many lawsuits now require highly 
specialized expertise. These cases range from intricate antitrust cases 
involving software companies to labyrinthine fraud cases involving home 
health care or other types of complex consumer fraud. Outside firms 
have acquired substantial expertise that the Department of Justice may 
lack. To address this concern, section 201 of this bill amends section 
3718 of title 31 to allow the Department of Justice to retain outside 
counsel to assist the Department in litigation seeking monetary 
damages, fines, or penalties.
  Fourth, this bill will authorize agencies to sell nontax debts owed 
to the United States in order to reduce delinquent debts held by 
agencies. This will allow Federal agencies to obtain the maximum value 
for loans and debt assets. In addition, this legislation will provide 
agencies with increased leverage to collect debt from certain self-
employed professionals. Under the bill, agencies will have the 
authority to deny Federal permits or licenses to delinquent Federal 
debtors.
  Fifth, this legislation will dictate greater disclosure of high value 
nontax debts by requiring annual reports to Congress. It will also 
authorize agencies to seize the asserts of delinquent debtors who owe 
the United States more than $1 million.
  And finally, this legislation improves financial management by 
authorizing agencies to accept electronic payments to satisfy a debt 
owed to the agency.
  It is our goal in passing this legislation to improve the efficiency 
of our Government and to protect the financial interest of the 
taxpayers by collecting what is rightfully owed. This bill makes 
constructive changes to improve the performance of the Federal 
Government. It makes good sense and is good government. I urge your 
support for this measure.
  Madam Speaker, I yield back the balance of my time.

[[Page H10855]]

  Mr. HORN. Madam Speaker I yield, such time as he may consume to the 
gentleman from New York (Mr. Gilman), my good friend and one of the 
ranking members of the Committee on Government Reform and Oversight.
  (Mr. GILMAN asked and was given permission to revise and extend his 
remarks.)
  Mr. GILMAN. Madam Speaker, I want to commend the gentleman from 
California (Mr. Horn), a senior member of our Committee on Government 
Oversight and Reform, for bringing this measure to the floor and for 
sponsoring this measure along with the gentlewoman from New York (Mrs. 
Maloney), the gentleman from Texas (Mr. Sessions) the gentleman from 
New Hampshire (Mr. Sununu) and the gentleman from Pennsylvania (Mr. 
Kanjorski), a bipartisan measure out of our Committee on Government 
Reform. It is amazing to hear the statistics that the gentleman from 
California (Mr. Horn) related of over $100 million in bad debts, and 
$10 million being wiped out each year, and many of those debts over 180 
days due and delinquent. This is the kind of attention we should be 
giving in Federal management.
  I remember the Grace Commission during my earlier days in the 
Congress, and I was pleased to follow some of his recommendations. I 
was the first one to insist that checks received by our government be 
deposited within 30 days, a very simple business like method, and I am 
pleased to see that the gentleman from California (Mr. Horn) is 
carrying on that tradition of trying to get rid of some of the waste 
and mismanagement in our vast bureaucracy, the Federal Government. I 
commend him and the sponsors, and I thank the gentleman from California 
(Mr. Waxman) for pursuing this matter as well, and I want to urge our 
colleagues to fully support this measure.
  Mr. HORN. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, I thank the gentleman from New York (Mr. Gilman) for 
his kind remarks on a number of us.
  Madam Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from California (Mr. Horn) that the House suspend the rules 
and pass the bill, H.R. 4243, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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