[Congressional Record Volume 144, Number 150 (Tuesday, October 20, 1998)]
[House]
[Pages H11672-H11679]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        GOVERNMENT WASTE, FRAUD, AND ERROR REDUCTION ACT OF 1998

  Mr. DAVIS of Virginia. Mr. Speaker, I ask unanimous consent that the 
Committee on Government Reform and Oversight and the Committee on the 
Judiciary be discharged from further consideration of the bill (H.R. 
4857) 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, and ask for its immediate 
consideration.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Virginia?

[[Page H11673]]

  Mr. WAXMAN. Mr. Speaker, reserving the right to object, and I will 
not object, but I wanted to take this time to commend my colleagues, 
the gentleman from Virginia (Mr. Davis) and the gentleman from 
California (Mr. Horn) for the work in crafting a bipartisan bill. I 
applaud their devotion to ensuring that Federal debts are fully paid. 
This bill is a revised version of H.R. 4243, and we will support this 
bill and urge our colleagues to do so.
  I want to commend my colleague, the gentleman from California (Mr. 
Horn), chairman of the Subcommittee on Government Management for his 
recent efforts to craft a bipartisan bill. I applaud his devotion to 
ensuring that federal debts are fully paid.
  This bill, H.R. 4857, is a revised version of H.R. 4243. Chairman 
Horn has been receptive to comments and suggestions raised by the 
Administration and our colleagues in the other body. In light of their 
recommendations, he has revised the bill and improved it in a variety 
of ways. I support this bill and urge my colleagues to do so also.
  H.R. 4857 is intended to increase collections on delinquent nontax 
debt owed to the federal government; improve federal payment systems 
and travel management; and decrease high value nontax debt totaling 
over $1 million. This legislation will provide the federal government 
with new tools to collect nontax debt over $1 million. 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.
  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. It will 
also insure that federal employees are not inappropriately charged 
taxes on travel expense.
  Second, the bill makes improvement to the Federal Debt Collection 
Improvement Act of 1996. It clarifies that Social Security payments can 
be offset for the collection of child support debt owed to states. 
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 again 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 U.S. in order to reduce delinquent nontax 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 assets of delinquent nontax debtors who 
owe the U.S. more than $1 million.
  And finally, this legislation improves financial management by 
authorizing agencies to accept electronic payments to satisfy a nontax 
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.
  (Mr. WAXMAN asked and was given permission to revise and extend his 
remarks.)
  Mr. WAXMAN. Mr. Speaker, I withdraw my reservation of objection.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Virginia?
  There was no objection.
  The Clerk read the bill, as follows:
       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Definition.
Sec. 4. Application of Act.

                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. 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, the term ``nontax debt'' means any 
     debt (within the meaning of that term as used in chapter 37 
     of title 31, United States Code) other than a debt under the 
     Internal Revenue Code of 1986 or the Tariff Act of 1930.

     SEC. 4. APPLICATION OF ACT.

       No provision of this Act shall apply to the Department of 
     the Treasury or the Internal Revenue Service to the extent 
     that such provision--
       (1) involves the administration of the internal revenue 
     laws; or
       (2) conflicts with the Internal Revenue Service 
     Restructuring and Reform Act of 1998, 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) 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,

[[Page H11674]]

     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.
       (c) Payment of State and Local Taxes on Travel Expenses.--
       (1) In general.--The Administrator of General Services 
     shall ensure that employees of executive agencies are not 
     inappropriately charged State and local taxes on travel 
     expenses, including transportation, lodging, automobile 
     rental, and other miscellaneous travel expenses.
       (2) Report.--Not later than March 31, 1999, the 
     Administrator shall, after consultation with the heads of 
     executive agencies, submit to Congress a report describing 
     the steps taken, and proposed to be taken, to carry out this 
     subsection.
         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) Debt Sales.--Section 3711 of title 31, United States 
     Code, is amended by striking subsection (i).
       (c) Gainsharing.--Section 3720C(b)(2)(D) of title 31, 
     United States Code, is amended by striking ``delinquent 
     loans'' and inserting ``debts''.
       (d) 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:
       ``(11) 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.
       ``(12)(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 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.
       ``(13) In evaluating the performance of a contractor under 
     any contract entered into under this subsection, the 
     Secretary of the Treasury shall consider 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 debtor complaints shall also 
     be considered in the evaluation criteria.
       ``(14) In selecting contractors for performance of 
     collection services, the Secretary of the Treasury shall 
     evaluate bids received through a methodology that considers 
     the bidder's prior performance in terms of net amounts 
     collected under government collection contracts of similar 
     size, if applicable. The frequency of valid debtor complaints 
     shall also 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:
       ``(h) 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 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.
       ``(i)(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 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.
       ``(j) In evaluating the performance of a contractor under 
     any contract for the performance of debt collection services 
     entered into by an executive, judicial, or legislative 
     agency, the head of the agency shall consider 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 debtor complaints 
     shall also be considered in the evaluation criteria.
       ``(k) 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 considers the bidder's prior performance in 
     terms of net amounts collected under government collection 
     contracts of similar size, if applicable. The frequency of 
     valid debtor complaints shall also 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 or 
     section 6103 of the Internal Revenue Code of 1986.
       (e) 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.''.
       (f) 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''.
       (g) 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.
       (h) 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) 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.
       ``(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.

[[Page H11675]]

       ``(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, the term `nontax debt' means 
     any debt other than a debt 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 nontax debts by 
     referring delinquent nontax debts promptly;
       ``(iii) maintain competition between private collection 
     contractors;
       ``(iv) ensure, to the maximum extent practicable, that a 
     private collection contractor to which a nontax 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, the term `nontax debt' 
     means any debt other than a debt 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
       (4) by adding at the end the following:
       ``(B)(i) The head of an executive, judicial, or legislative 
     agency may not discharge a nontax debt or terminate 
     collection action on a nontax 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 head of an executive, judicial, or legislative 
     agency may waive the application of clause (i) to any nontax 
     debt, or class of nontax debts if the head of the agency 
     determines that the waiver is in the best interest of the 
     United States.
       ``(iii) As used in this subparagraph, the term `nontax 
     debt' means any debt other than a debt under the Internal 
     Revenue Code of 1986 or the Tariff Act of 1930.''.
         TITLE III--SALE OF NONTAX DEBTS OWED TO UNITED STATES

     SEC. 301. AUTHORITY TO SELL NONTAX 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 nontax debt sales in 
     order to--
       (1) minimize the loan and nontax debt portfolios of the 
     agency;
       (2) improve credit management while serving public needs;
       (3) reduce delinquent nontax debts held by the agency;
       (4) obtain the maximum value for loan and nontax 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 nontax 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 any contract for identification, billing, 
     or collection services;
       (B) the costs of contractors assisting in the sale of 
     nontax debt;
       (C) the fees of appraisers, auctioneers, and realty 
     brokers;
       (D) the costs of advertising and surveying; and
       (E) other reasonable costs incurred by the agency.
       (3) Sales of nontax 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 nontax 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, 
     nontax debts, or other assets.

     SEC. 302. REQUIREMENT TO SELL CERTAIN NONTAX 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 nontax debt becomes 24 months 
     delinquent; or
       (2) 24 months after referral of the nontax 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 Nontax 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 nontax 
     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 nontax 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 nontax 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 nontax 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 section:
       (1) Agency.--The term ``agency'' 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

[[Page H11676]]

     debt having an outstanding value (including principal, 
     interest, and penalties) that exceeds $1,000,000.

     SEC. 402. REVIEW BY INSPECTORS GENERAL.

       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 nontax 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.

     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. 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
       ``(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 Director of the Office of 
     Management and Budget 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 
     Director of the Office of Management and Budget, the head of 
     such agency may accept an electronic payment, including debit 
     and credit cards, to satisfy a nontax debt owed to the 
     agency.
       (2) Guidelines for agreements regarding payment.--The 
     Director of the Office of Management and Budget shall develop 
     guidelines regarding agreements between agencies and 
     financial institutions under paragraph (1).


    Amendment in the Nature of a Substitute Offered By Mr. Davis of 
                                Virginia

  Mr. DAVIS of Virginia. Mr. Speaker, I offer an amendment in the 
nature of a substitute.
  The Clerk read as follows:

       Amendment in the nature of a substitute offered by Mr. 
     Davis of Virginia:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Definition.
Sec. 4. Application of Act.

                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 NONTAX DEBTS OWED TO UNITED STATES

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

             TITLE IV--TREATMENT OF HIGH VALUE NONTAX DEBTS

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

                       TITLE V--FEDERAL PAYMENTS

Sec. 501. 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, the term ``nontax debt'' means any 
     debt (within the meaning of that term as used in chapter 37 
     of title 31, United States Code) other than a debt under the 
     Internal Revenue Code of 1986 or the Tariff Act of 1930.

     SEC. 4. APPLICATION OF ACT.

       No provision of this Act shall apply to the Department of 
     the Treasury or the Internal Revenue Service to the extent 
     that such provision--
       (1) involves the administration of the internal revenue 
     laws; or
       (2) conflicts with the Internal Revenue Service 
     Restructuring and Reform Act of 1998, 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) 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.
       (c) Payment of State and Local Taxes on Travel Expenses.--
       (1) In general.--The Administrator of General Services 
     shall develop a mechanism to ensure that employees of 
     executive agencies are not inappropriately charged State and 
     local taxes on travel expenses, including transportation, 
     lodging, automobile rental, and other miscellaneous travel 
     expenses.
       (2) Report.--Not later than March 31, 1999, the 
     Administrator shall, after consultation with the heads of 
     executive agencies, submit to Congress a report describing 
     the steps taken, and proposed to be taken, to carry out this 
     subsection.

         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) Debt Sales.--Section 3711 of title 31, United States 
     Code, is amended by striking subsection (i).
       (c) Gainsharing.--Section 3720C(b)(2)(D) of title 31, 
     United States Code, is amended by striking ``delinquent 
     loans'' and inserting ``debts''.
       (d) 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:
       ``(11) 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

[[Page H11677]]

     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.
       ``(12)(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 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.
       ``(13) In evaluating the performance of a contractor under 
     any contract entered into under this subsection, the 
     Secretary of the Treasury shall consider 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 debtor complaints shall also 
     be considered in the evaluation criteria.
       ``(14) In selecting contractors for performance of 
     collection services, the Secretary of the Treasury shall 
     evaluate bids received through a methodology that considers 
     the bidder's prior performance in terms of net amounts 
     collected under government collection contracts of similar 
     size, if applicable. The frequency of valid debtor complaints 
     shall also 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:
       ``(h) 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 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.
       ``(i)(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 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.
       ``(j) In evaluating the performance of a contractor under 
     any contract for the performance of debt collection services 
     entered into by an executive, judicial, or legislative 
     agency, the head of the agency shall consider 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 debtor complaints 
     shall also be considered in the evaluation criteria.
       ``(k) 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 considers the bidder's prior performance in 
     terms of net amounts collected under government collection 
     contracts of similar size, if applicable. The frequency of 
     valid debtor complaints shall also 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 of title 11, United States Code, or section 6103 
     of the Internal Revenue Code of 1986.
       (e) 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.''.
       (f) 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''.
       (g) 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.
       (h) 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) 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.
       ``(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, the term `nontax debt' means 
     any debt other than a debt 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 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 nontax debts by 
     referring delinquent nontax debts promptly;

[[Page H11678]]

       ``(iii) maintain competition between private collection 
     contractors;
       ``(iv) ensure, to the maximum extent practicable, that a 
     private collection contractor to which a nontax 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, the term `nontax debt' 
     means any debt other than a debt 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
       (4) by adding at the end the following:
       ``(B)(i) The head of an executive, judicial, or legislative 
     agency may not discharge a nontax debt or terminate 
     collection action on a nontax 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 head of an executive, judicial, or legislative 
     agency may waive the application of clause (i) to any nontax 
     debt, or class of nontax debts if the head of the agency 
     determines that the waiver is in the best interest of the 
     United States.
       ``(iii) As used in this subparagraph, the term `nontax 
     debt' means any debt other than a debt under the Internal 
     Revenue Code of 1986 or the Tariff Act of 1930.''.

         TITLE III--SALE OF NONTAX DEBTS OWED TO UNITED STATES

     SEC. 301. AUTHORITY TO SELL NONTAX 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 nontax debt sales in 
     order to--
       (1) minimize the loan and nontax debt portfolios of the 
     agency;
       (2) improve credit management while serving public needs;
       (3) reduce delinquent nontax debts held by the agency;
       (4) obtain the maximum value for loan and nontax 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 nontax 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 any contract for identification, billing, 
     or collection services;
       (B) the costs of contractors assisting in the sale of 
     nontax debt;
       (C) the fees of appraisers, auctioneers, and realty 
     brokers;
       (D) the costs of advertising and surveying; and
       (E) other reasonable costs incurred by the agency.
       (3) Sales of nontax 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 nontax 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, 
     nontax debts, or other assets.

     SEC. 302. REQUIREMENT TO SELL CERTAIN NONTAX 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 nontax debt becomes 24 months 
     delinquent; or
       (2) 24 months after referral of the nontax 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 Nontax 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 nontax 
     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 nontax 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 nontax 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 nontax 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 title:
       (1) Agency.--The term ``agency'' 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.

       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 nontax 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.

     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. 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
       ``(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 Director of the Office of 
     Management and Budget may waive the application of 
     requirements under paragraph

[[Page H11679]]

     (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 nontax 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).

  Mr. DAVIS of Virginia (during the reading). Mr. Speaker, I ask 
unanimous consent that the amendment in the nature of a substitute be 
considered as read and printed in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Virginia?
  There was no objection.
  Mr. DAVIS of Virginia. Mr. Speaker, this is a bipartisan piece of 
legislation that passed the House on the suspension calendar last week. 
The version before us now has been modified to reflect the views of the 
relevant Senate committees of jurisdiction as well as those of the 
administration. The bill is necessary as uncollected debt owed the 
Federal Government continues to be a major problem. According to the 
Department of Treasury, delinquent nontax debts owed to the Federal 
Government totaled $51 billion at the end of Fiscal Year 1997.

                              {time}  2000

  Of this amount, $47.2 billion was delinquent for more than 180 days.
  This bill will prove improve the efficiency and economy of Federal 
debt collection practices. It builds on other debt collection 
initiatives and provides the Federal Government with important debt 
collection tools.
  The bill requires agencies to report to Congress on uncollected 
delinquent non-tax debts over $1 million. The bill also authorizes 
agencies to sell non-tax loans and bar delinquent debtors from 
obtaining a Federal permit or license, Federal contract, or other award 
or renewal of a Federal benefit. H.R. 4857 contains these important 
provisions and many others designed to improve the efficiency and 
effectiveness of the debt collection.
  The SPEAKER pro tempore. The question is on the amendment in the 
nature of a substitute offered by the gentleman from Virginia (Mr. 
Davis).
  The amendment in the nature of a substitute was agreed to.
  The bill was ordered to be engrossed and read a third time, was read 
the third time, and passed, and a motion to reconsider was laid on the 
table.

                          ____________________