I

104TH CONGRESS

1ST SESSION H. R. 2234

To reduce delinquencies and to improve debt-collection activities Governmentwide, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 4, 1995

Mr. HORN (for himself, Mrs. MALONEY, Mrs. MORELLA, Mr. HUTCHINSON,

Mr. FRANK of Massachusetts, Mr. JACOBS, Mr. FROST, Mr. KASICH, Mr.

KLUG, and Ms. NORTON) introduced the following bill; which was referred to the Committee on Government Reform and Oversight, and in

addition to the Committees on the Judiciary, Ways and Means, and

House Oversight, for a period to be subsequently determined by the

Speaker, in each case for consideration of such provisions as fall within

the jurisdiction of the committee concerned

A BILL

To reduce delinquencies and to improve debt-collection

activities Governmentwide, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 101. SHORT TITLE.

4 This Act may be cited as the ‘‘Debt Collection Im5 provement Act of 1995’’.
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1 SEC. 102. EFFECTIVE DATE.

2 (a) Except as provided in subsection (b), the provi3 sions of this Act and the amendments made by this Act

4 shall become effective October 1, 1995.

5 (b) The amendments made by title III of this Act

6 shall become effective for levies issued after the date of

7 enactment of this Act.

8 SEC. 103. TABLE OF CONTENTS.

TITLE I—GENERAL DEBT COLLECTION INITIATIVES

SUBCHAPTER A—GENERAL OFFSET AUTHORITY

Sec. 201. Enhancement of administrative offset authority.

Sec. 202. House of Representatives as Legislative Agency.

Sec. 203. Exemption from computer matching requirements under the Privacy

Act of 1974.

Sec. 204. Technical and conforming amendments.

SUBCHAPTER B—SALARY OFFSET AUTHORITY

Sec. 301. Enhancement of salary offset authority.

SUBCHAPTER C—TAXPAYER IDENTIFYING NUMBERS

Sec. 401. Access to taxpayer identifying numbers.

Sec. 402. Barring delinquent Federal debtors from obtaining Federal loans or

loan guarantees.

SUBCHAPTER D—EXPANDING COLLECTION AUTHORITIES AND GOVERNMENTWIDE CROSS-SERVICING

Sec. 501. Expanding collection authorities under the Debt Collection Act of

1982.

Sec. 502. Governmentwide cross-servicing.

Sec. 503. Compromise of claims.

SUBCHAPTER E—FEDERAL CIVIL MONETARY PENALTIES

Sec. 601. Adjusting Federal civil monetary penalties for inflation.

SUBCHAPTER F—GAIN SHARING

Sec. 701. Debt collection improvement account.

SUBCHAPTER G—TAX REFUND OFFSET AUTHORITY

Sec. 801. Offset of tax refund payment by disbursing officials.

Sec. 802. Expanding tax refund offset authority.

Sec. 803. Expanding authority to collect past-due support.
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SUBCHAPTER H—DEFINITIONS, DUE PROCESS RIGHTS, AND SEVERABILITY

Sec. 901. Technical amendments to definitions.

Sec. 902. Severability.

SUBCHAPTER I—REPORTING

Sec. 1001. Monitoring and reporting.

TITLE II—JUSTICE DEBT MANAGEMENT

SUBCHAPTER A—PRIVATE ATTORNEYS

Sec. 1101. Expanded use of private attorneys.

SUBCHAPTER B—NONJUDICIAL FORECLOSURE

Sec. 1201. Nonjudicial foreclosure of mortgages.

TITLE III—IRS LEVY AUTHORITY

Sec. 1301. Provision for continuous levy.

Sec. 1302. Modification of levy exemption.

Sec. 1303. Confidentiality and disclosure of returns and return information.

1 TITLE I—GENERAL DEBT

2 COLLECTION INITIATIVES

3 Subchapter A—General Offset Authority

4 SEC. 201. ENHANCEMENT OF ADMINISTRATIVE OFFSET AU5 THORITY.

6 (a) Section 3701(c) of title 31, United States Code,

7 is amended to read as follows:

8 ‘‘(c) In sections 3716 and 3717 of this title, the term

9 ‘person’ does not include an agency of the United States

10 Government, or of a unit of general local government.’’.

11 (b) Section 3716 of title 31, United States Code, is

12 amended—

13 (1) by amending subsection (b) to read as fol14 lows:
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1 ‘‘(b) Before collecting a claim by administrative off2 set, the head of an executive, legislative, or judicial agency

3 must either—

4 ‘‘(1) adopt regulations on collecting by adminis5 trative offset promulgated by the Department of

6 Justice, the General Accounting Office and/or the

7 Department of the Treasury without change; or

8 ‘‘(2) prescribe independent regulations on col9 lecting by administrative offset consistent with the

10 regulations promulgated under paragraph (1).’’;

11 (2) by amending subsection (c)(2) to read as

12 follows:

13 ‘‘(2) when a statute explicitly prohibits using

14 administrative ‘offset’ or ‘setoff’ to collect the claim

15 or type of claim involved.’’;

16 (3) by redesignating subsection (c) as sub17 section (d); and

18 (4) by inserting after subsection (b) the follow19 ing new subsection:

20 ‘‘(c)(1)(A) Except as provided in subparagraph (B)

21 or (C), a disbursing official of the Department of the

22 Treasury, the Department of Defense, the United States

23 Postal Service, or any disbursing official of the United

24 States designated by the Secretary of the Treasury, is au25 thorized to offset the amount of a payment which a pay-
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1 ment certifying agency has certified to the disbursing offi2 cial for disbursement by an amount equal to the amount

3 of a claim which a creditor agency has certified to the Sec4 retary of the Treasury pursuant to this subsection.

5 ‘‘(B) An agency that designates disbursing officials

6 pursuant to section 3321(c) of this title is not required

7 to certify claims arising out of its operations to the Sec8 retary of the Treasury before such agency’s disbursing of9 ficials offset such claims.

10 ‘‘(C) Payments certified by the Department of Edu11 cation under a program administered by the Secretary of

12 Education under title IV of the Higher Education Act of

13 1965, as amended, shall not be subject to offset under this

14 subsection.

15 ‘‘(2) Neither the disbursing official nor the payment

16 certifying agency shall be liable—

17 ‘‘(A) for the amount of the offset on the basis

18 that the underlying obligation, represented by the

19 payment before the offset was taken, was not satis20 fied; or

21 ‘‘(B) for failure to provide timely notice under

22 paragraph (8).

23 ‘‘(3)(A) Notwithstanding any other provision of law

24 (including sections 207 and 1631(d)(1) of the Act of Au25 gust 14, 1935 (42 U.S.C. 407 and 1383(d)(1)), section
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1 413(b) of Public Law 91–173 (30 U.S.C. 923(b)), and

2 section 14 of the Act of August 29, 1935 (45 U.S.C.

3 231m)), all payments due under the Social Security Act,

4 part B of the Black Lung Benefits Act, or under any law

5 administered by the Railroad Retirement Board, shall be

6 subject to offset under this section.

7 ‘‘(B) An amount of $10,000 which a debtor may re8 ceive under Federal benefit programs cited under subpara9 graph (A) within a 12-month period shall be exempt from

10 offset under this subsection. In applying the $10,000 ex11 emption, the disbursing official shall—

12 ‘‘(i) apply a prorated amount of the exemption

13 to each periodic benefit payment to be made to debt14 or during the applicable 12-month period; and

15 ‘‘(ii) consider all benefit payments made during

16 the applicable 12-month period which are exempt

17 from offset under this subsection as part of the

18 $10,000 exemption.

19 For purposes of the preceding sentence, the amount of a

20 periodic benefit payment shall be the amount after any

21 reduction or deduction required under the laws authoriz22 ing the program under which such payment is authorized

23 to be made (including any reduction or deduction to re24 cover any overpayment under such program).
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1 ‘‘(C) The Secretary of the Treasury shall exempt

2 means-tested programs when notified by the head of the

3 respective agency. The Secretary may exempt other pay4 ments from offset under this subsection upon the written

5 request of the head of a payment certifying agency. A

6 written request for exemption of other payments must pro7 vide justification for the exemption under the standards

8 prescribed by the Secretary. Such standards shall give due

9 consideration to whether offset would tend to interfere

10 substantially with or defeat the purposes of the payment

11 certifying agency’s program.

12 ‘‘(D) The provisions of sections 205(b)(1) and

13 1631(c)(1) of the Social Security Act shall not apply to

14 any offset executed pursuant to this section against bene15 fits authorized by either title II or title XVI of the Social

16 Security Act.

17 ‘‘(4) The Secretary of the Treasury is authorized to

18 charge a fee sufficient to cover the full cost of implement19 ing this subsection. The fee may be collected either by the

20 retention of a portion of amounts collected pursuant to

21 this subsection, or by billing the agency referring or trans22 ferring the claim. Fees charged to the agencies shall be

23 based only on actual offsets completed. Fees charged

24 under this subsection concerning delinquent claims may

25 be considered as costs pursuant to section 3717(e) of this
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1 title. Fees charged under this subsection shall be deposited

2 into the ‘Account’ determined by the Secretary of the

3 Treasury in accordance with section 3711(g) of this title,

4 and shall be collected and accounted for in accordance

5 with the provisions of that section.

6 ‘‘(5) The Secretary of the Treasury may disclose to

7 a creditor agency the current address of any payee and

8 any data related to certifying and authorizing such pay9 ment in accordance with section 552a of title 5, United

10 States Code, even when the payment has been exempt

11 from offset. Where payments are made electronically, the

12 Secretary is authorized to obtain the current address of

13 the debtor/payee from the institution receiving the pay14 ment. Upon request by the Secretary, the institution re15 ceiving the payment shall report the current address of

16 the debtor/payee to the Secretary.

17 ‘‘(6) The Secretary of the Treasury is authorized to

18 prescribe such rules, regulations, and procedures as the

19 Secretary of the Treasury deems necessary to carry out

20 the purposes of this subsection. The Secretary shall con21 sult with the heads of affected agencies in the development

22 of such rules, regulations, and procedures.

23 ‘‘(7)(A) Any Federal agency that is owed by a named

24 person a past-due legally enforceable non-tax debt that is

25 over 180 days delinquent (other than any past-due sup-
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1 port), including non-tax debt administered by a third

2 party acting as an agent for the Federal Government,

3 shall notify the Secretary of the Treasury of all such non4 tax debts for purposes of offset under this subsection.

5 ‘‘(B) An agency may delay notification under sub6 paragraph (A) with respect to a debt that is secured by

7 bond or other instruments in lieu of bond, or for which

8 there is another specific repayment source, in order to

9 allow sufficient time to either collect the debt through nor10 mal collection processes (including collection by internal

11 administrative offset) or render a final decision on any

12 protest filed against the claim.

13 ‘‘(8) The disbursing official conducting the offset

14 shall notify the payee in writing of—

15 ‘‘(A) the occurrence of an offset to satisfy a

16 past-due legally enforceable debt, including a de17 scription of the type and amount of the payment

18 otherwise payable to the debtor against which the

19 offset was executed;

20 ‘‘(B) the identity of the creditor agency request21 ing the offset; and

22 ‘‘(C) a contact point within the creditor agency

23 that will handle concerns regarding the offset.’’.

24 Where the payment to be offset is a periodic benefit pay25 ment, the disbursing official shall take reasonable steps,
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1 as determined by the Secretary of the Treasury, to provide

2 the notice to the payee not later than the date on which

3 the payee is otherwise scheduled to receive the payment,

4 or as soon as practical thereafter, but no later than the

5 date of the offset. Notwithstanding the preceding sen6 tence, the failure of the debtor to receive such notice shall

7 not impair the legality of such offset.

8 ‘‘(9) A levy pursuant to the Internal Revenue Code

9 of 1986 shall take precedence over requests for offset re10 ceived from other agencies.’’.

11 (c) Section 3701(a) of title 31, United States Code,

12 is amended by adding at the end the following new para13 graph:

14 ‘‘(8) ‘non-tax claim’ means any claim from any

15 agency of the Federal Government other than a

16 claim by the Internal Revenue Service under the In17 ternal Revenue Code of 1986.’’.

18 SEC. 202. HOUSE OF REPRESENTATIVES AS LEGISLATIVE

19 AGENCY.

20 (a) Section 3701(a) of title 31, United States Code,

21 is amended by adding the following new paragraphs after

22 paragraph (7):

23 ‘‘(8) For purposes of subchapters I and II of chapter

24 37 of title 31, United States Code (relating to claims of

25 or against United States Government), the United States
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1 House of Representatives shall be considered to be a legis2 lative agency (as defined in section 3701(a)(4) of such

3 title), and the Clerk of the House of Representatives shall

4 be deemed to be the head of such legislative agency.

5 ‘‘(9) Regulations prescribed by the Clerk of the

6 House of Representatives pursuant to section 3716 of title

7 31, United States Code, shall not become effective until

8 they are approved by the Committee on Rules of the

9 House of Representatives.’’.

10 SEC. 203. EXEMPTION FROM COMPUTER MATCHING RE11 QUIREMENTS UNDER THE PRIVACY ACT OF

12 1974.

13 Section 552a(a) of title 5, United States Code, is

14 amended—

15 (1) in paragraph (2), by inserting ‘‘acting in an

16 individual, not a business capacity’’ after ‘‘resi17 dence’’;

18 (2) in paragraph (8)(B)—

19 (A) by striking ‘‘or’’ at the end of clause

20 (vi);

21 (B) by inserting ‘‘or’’ at the end of clause

22 (vii); and

23 (C) by adding after clause (vii) the follow24 ing new clause:
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1 ‘‘(viii) matches for administrative off2 set or claims collection pursuant to sub3 section 3716(c) of title 31, section 5514 of

4 this title, or any other payment intercept

5 or offset program authorized by statute;’’.

6 SEC. 204. TECHNICAL AND CONFORMING AMENDMENTS.

7 (a) Title 31, United States Code, is amended—

8 (1) in section 3322(a), by inserting ‘‘section

9 3716 and section 3720A of this title, section 6331

10 of title 26, and’’ after ‘‘Except as provided in’’;

11 (2) in section 3325(a)(3), by inserting ‘‘or pur12 suant to payment intercepts or offsets pursuant to

13 section 3716 or 3720A, or pursuant to levies exe14 cuted under section 6331 of the Internal Revenue

15 Code of 1986 (26 U.S.C. 6331),’’ after ‘‘voucher’’;

16 and

17 (3) in sections 3711, 3716, 3717, and 3718, by

18 striking ‘‘the head of an executive or legislative

19 agency’’ each place it appears and inserting instead

20 ‘‘the head of an executive, judicial, or legislative

21 agency’’.

22 (b) Subsection 6103(l)(10) of title 26, United States

23 Code, is amended—

24 (1) in subparagraph (A), by inserting ‘‘and to

25 officers and employees of the Department of the
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1 Treasury in connection with such reduction’’ adding

2 after ‘‘6402’’; and

3 (2) in subparagraph (B), by adding ‘‘and to of4 ficers and employees of the Department of the

5 Treasury in connection with such reduction’’ after

6 ‘‘agency’’.

7 Subchapter B—Salary Offset Authority

8 SEC. 301. ENHANCEMENT OF SALARY OFFSET AUTHORITY.

9 Section 5514 of title 5, United States Code, is

10 amended—

11 (1) in subsection (a)—

12 (A) by adding at the end of paragraph (1)

13 the following: ‘‘All Federal agencies to which

14 debts are owed and are delinquent in repay15 ment, shall participate in a computer match at

16 least annually of their delinquent debt records

17 with records of Federal employees to identify

18 those employees who are delinquent in repay19 ment of those debts. Matched Federal employee

20 records shall include, but shall not be limited

21 to, active Civil Service employees government22 wide, military active duty personnel, military re23 servists, United States Postal Service employ24 ees, and records of seasonal and temporary em25 ployees. The Secretary of the Treasury shall es-
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1 tablish and maintain an interagency consortium

2 to implement centralized salary offset computer

3 matching, and promulgate regulations for this

4 program. Agencies that perform centralized sal5 ary offset computer matching services under

6 this subsection are authorized to charge a fee

7 sufficient to cover the full cost for such serv8 ices.’’;

9 (B) by redesignating paragraphs (3) and

10 (4) as paragraphs (4) and (5), respectively;

11 (C) by inserting after paragraph (2) the

12 following new paragraph:

13 ‘‘(3) The provisions of paragraph (2) shall not

14 apply to routine intra-agency adjustments of pay

15 that are attributable to clerical or administrative er16 rors or delays in processing pay documents that

17 have occurred within the four pay periods preceding

18 the adjustment and to any adjustment that amounts

19 to $50 or less, provided that at the time of such ad20 justment, or as soon thereafter as practical, the indi21 vidual is provided written notice of the nature and

22 the amount of the adjustment and a point of contact

23 for contesting such adjustment.’’; and

24 (D) by amending paragraph (5)(B) (as re25 designated) to read as follows:
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1 ‘‘(B) For purposes of this section ‘agency’

2 includes executive departments and agencies,

3 the United States Postal Service, the Postal

4 Rate Commission, the United States Senate,

5 the United States House of Representatives,

6 and any court, court administrative office, or

7 instrumentality in the judicial or legislative

8 branches of government, and government cor9 porations.’’;

10 (2) by adding at the end of subsection (b) the

11 following new paragraphs:

12 ‘‘(3) For purposes of this section, the Clerk of

13 the House of Representatives shall be deemed to be

14 the head of the agency. Regulations prescribed by

15 the Clerk of the House of Representatives pursuant

16 to subsection (b)(1) shall be subject to the approval

17 of the Committee on Rules of the House of Rep18 resentatives.

19 ‘‘(4) For purposes of this section, the Secretary

20 of the Senate shall be deemed to be the head of the

21 agency. Regulations prescribed by the Secretary of

22 the Senate pursuant to subsection (b)(1) shall be

23 subject to the approval of the Committee on Rules

24 and Administration of the Senate.’’; and
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1 (3) by adding after subsection (c) the following

2 new subsection:

3 ‘‘(d) A levy pursuant to the Internal Revenue Code

4 of 1986 shall take precedence over requests for offset re5 ceived from other agencies.’’.

6 Subchapter C—Taxpayer Identifying

7 Numbers

8 SEC. 401. ACCESS TO TAXPAYER IDENTIFYING NUMBERS;

9 BARRING DELINQUENT DEBTORS FROM

10 CREDIT ASSISTANCE.

11 Section 4 of the Debt Collection Act of 1982 (Public

12 Law 97–365, 96 Stat. 1749, 26 U.S.C. 6103 note) is

13 amended—

14 (1) in subsection (b), by striking ‘‘For purposes

15 of this section’’ and inserting instead ‘‘For purposes

16 of subsection (a)’’; and

17 (2) by adding at the end thereof the following

18 new subsections:

19 ‘‘(c) FEDERAL AGENCIES.—Each Federal agency

20 shall require each person doing business with that agency

21 to furnish to that agency such person’s taxpayer identify22 ing number.

23 ‘‘(1) For purposes of this subsection, a person

24 is considered to be ‘doing business’ with a Federal

25 agency if the person is—
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1 ‘‘(A) a lender or servicer in a Federal

2 guaranteed or insured loan program;

3 ‘‘(B) an applicant for, or recipient of—

4 ‘‘(i) a Federal guaranteed, insured, or

5 direct loan; or

6 ‘‘(ii) a Federal license, permit, right7 of-way, grant, benefit payment or insur8 ance;

9 ‘‘(C) a contractor of the agency;

10 ‘‘(D) assessed a fine, fee, royalty or pen11 alty by that agency;

12 ‘‘(E) in a relationship with a Federal agen13 cy that may give rise to a receivable due to that

14 agency, such as a partner of a borrower in or

15 a guarantor of a Federal direct or insured loan;

16 and

17 ‘‘(F) is a joint holder of any account to

18 which Federal benefit payments are transferred

19 electronically.

20 ‘‘(2) Each agency shall disclose to the person

21 required to furnish a taxpayer identifying number

22 under this subsection its intent to use such number

23 for purposes of collecting and reporting on any de24 linquent amounts arising out of such persons’s rela25 tionship with the government.
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1 ‘‘(3) For purposes of this subsection:

2 ‘‘(A) The term ‘taxpayer identifying num3 ber’ has the meaning given such term in section

4 6109 of title 26, United States Code.

5 ‘‘(B) The term ‘person’ means an individ6 ual, sole proprietorship, partnership, corpora7 tion, nonprofit organization, or any other form

8 of business association, but with the exception

9 of debtors owing claims resulting from petro10 leum pricing violations does not include debtors

11 under third party claims of the United States.

12 ‘‘(d) ACCESS TO SOCIAL SECURITY NUMBERS.—Not13 withstanding section 552a of title 5, United States Code,

14 creditor agencies to which a delinquent claim is owed, and

15 their agents, may match their debtor records with the So16 cial Security Administration records to verify name, name

17 control, Social Security number, address, and date of

18 birth.’’.

19 SEC. 402. BARRING DELINQUENT FEDERAL DEBTORS FROM

20 OBTAINING FEDERAL LOANS OR LOAN GUAR21 ANTEES.

22 (a) Title 31, United States Code, is amended by add23 ing after section 3720A the following new section:
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1 ‘‘§ 3720B. Barring delinquent Federal debtors from

2 obtaining Federal loans or loan guaran3 tees

4 ‘‘(a) Unless waived by the head of the agency, no per5 son may obtain any Federal financial assistance in the

6 form of a loan or a loan guarantee if such person has an

7 outstanding Federal non-tax debt which is in a delinquent

8 status, as determined under the standards prescribed by

9 the Secretary of the Treasury, with a Federal agency. Any

10 such person may obtain additional Federal financial as11 sistance only after such delinquency is resolved, pursuant

12 to these standards. This section shall not apply to loans

13 or loan guarantees where a statute specifically permits ex14 tension of Federal financial assistance to borrowers in de15 linquent status.

16 ‘‘(b) The head of the agency may delegate the waiver

17 authority described in subsection (a) to the Chief Finan18 cial Officer of the agency. The waiver authority may be

19 redelegated only to the Deputy Chief Financial Officer of

20 the agency.

21 ‘‘(c) For purposes of this section, ‘person’ means an

22 individual; or sole proprietorship, partnership, corpora23 tion, non-profit organization, or any other form of busi24 ness association.’’.

25 (b) The table of sections for subchapter II of chapter

26 37 of title 31, United States Code, is amended by inserting
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1 after the item relating to section 3720A the following new

2 item:

‘‘3720B. Barring delinquent Federal debtors from obtaining Federal loans or

loan guarantees.’’.

3 Subchapter D—Expanding Collection Au4 thorities and Governmentwide Cross5 Servicing

6 SEC. 501. EXPANDING COLLECTION AUTHORITIES UNDER

7 THE DEBT COLLECTION ACT OF 1982.

8 (a) Subsection 8(e) of the Debt Collection Act of

9 1982 (Public Law 97–365, 31 U.S.C. 3701(d) and 5

10 U.S.C. 5514 note) is repealed.

11 (b) Section 5 of the Social Security Domestic Em12 ployment Reform Act of 1994 (Public Law 103–387) is

13 repealed.

14 (c) Section 631 of the Tariff Act of 1930 (19 U.S.C.

15 1631), is repealed.

16 (d) Title 31, United States Code, is amended—

17 (1) in section 3701—

18 (A) by amending subsection (a)(4) to read

19 as follows:

20 ‘‘(4) ‘executive, judicial or legislative agency’

21 means a department, military department, agency,

22 court, court administrative office, or instrumentality

23 in the executive, judicial or legislative branches of
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1 government, including government corporations.’’;

2 and

3 (B) by adding at the end the following new

4 subsection:

5 ‘‘(d) Sections 3711(f) and 3716–3719 of this title do

6 not apply to a claim or debt under, or to an amount pay7 able under, the Internal Revenue Code of 1986.’’;

8 (2) by amending section 3711(f) to read as fol9 lows:

10 ‘‘(f)(1) When trying to collect a claim of the Govern11 ment, the head of an executive or legislative agency may

12 disclose to a consumer reporting agency information from

13 a system of records that an individual is responsible for

14 a claim if notice required by section 552a(e)(4) of title

15 5, United States Code, indicates that information in the

16 system may be disclosed to a consumer reporting agency.

17 ‘‘(2) The information disclosed to a consumer report18 ing agency shall be limited to—

19 ‘‘(A) information necessary to establish the

20 identity of the individual, including name, address

21 and taxpayer identifying number;

22 ‘‘(B) the amount, status, and history of the

23 claim; and

24 ‘‘(C) the agency or program under which the

25 claim arose.’’; and
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1 (3) in section 3718—

2 (A) in subsection (a), by striking the first

3 sentence and inserting instead the following:

4 ‘‘Under conditions the head of an executive, leg5 islative or judicial agency considers appropriate,

6 the head of an agency may make a contract

7 with a person for collection service to recover

8 indebtedness owed, or to locate or recover as9 sets of, the United States Government. No head

10 of an agency may enter into a contract to locate

11 or recover assets of the United States held by

12 a State government or financial institution un13 less that agency has established procedures ap14 proved by the Secretary of the Treasury to

15 identify and recover such assets.’’; and

16 (B) in subsection (d), by inserting ‘‘, or to

17 locate or recover assets of,’’ after ‘‘owed’’.

18 SEC. 502. GOVERNMENTWIDE CROSS-SERVICING.

19 Section 3711 of title 31, United States Code, is

20 amended by adding at the end the following new sub21 section:

22 ‘‘(g)(1) At the discretion of the head of an executive,

23 judicial or legislative agency, referral of a non-tax claim

24 may be made to any executive department or agency oper25 ating a debt collection center for servicing and collection
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1 in accordance with an agreement entered into under para2 graph (2). Referral or transfer of a claim may also be

3 made to the Secretary of the Treasury for servicing, collec4 tion, compromise, and/or suspension or termination of col5 lection action. Non-tax claims referred or transferred

6 under this section shall be serviced, collected, com7 promised, and/or collection action suspended or termi8 nated in accordance with existing statutory requirements

9 and authorities.

10 ‘‘(2) Executive departments and agencies operating

11 debt collection centers are authorized to enter into agree12 ments with the heads of executive, judicial, or legislative

13 agencies to service and/or collect nontax claims referred

14 or transferred under this subsection. The heads of other

15 executive departments and agencies are authorized to

16 enter into agreements with the Secretary of the Treasury

17 for servicing or collection of referred or transferred non18 tax claims or other Federal agencies operating debt collec19 tion centers to obtain debt collection services from those

20 agencies.

21 ‘‘(3) Any agency to which non-tax claims are referred

22 or transferred under this subsection is authorized to

23 charge a fee sufficient to cover the full cost of implement24 ing this subsection. The agency transferring or referring

25 the non-tax claim shall be charged the fee, and the agency
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1 charging the fee shall collect such fee by retaining the

2 amount of the fee from amounts collected pursuant to this

3 subsection. Agencies may agree to pay through a different

4 method, or to fund the activity from another account or

5 from revenue received from section 701. Amounts charged

6 under this subsection concerning delinquent claims may

7 be considered as costs pursuant to section 3717(e) of this

8 title.

9 ‘‘(4) Notwithstanding any other law concerning the

10 depositing and collection of Federal payments, including

11 section 3302(b) of this title, agencies collecting fees may

12 retain the fees from amounts collected. Any fee charged

13 pursuant to this subsection shall be deposited into an ac14 count to be determined by the executive department or

15 agency operating the debt collection center charging the

16 fee (hereafter referred to in this section as the ‘Account’).

17 Amounts deposited in the Account shall be available until

18 expended to cover costs associated with the implementa19 tion and operation of Governmentwide debt collection ac20 tivities. Costs properly chargeable to the Account include,

21 but are not limited to—

22 ‘‘(A) the costs of computer hardware and soft23 ware, word processing and telecommunications

24 equipment, other equipment, supplies, and furniture;

25 ‘‘(B) personnel training and travel costs;
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1 ‘‘(C) other personnel and administrative costs;

2 ‘‘(D) the costs of any contract for identification,

3 billing, or collection services; and

4 ‘‘(E) reasonable costs incurred by the Secretary

5 of the Treasury, including but not limited to, serv6 ices and utilities provided by the Secretary, and ad7 ministration of the Account.

8 ‘‘(5) Not later than January 1 of each year, there

9 shall be deposited into the Treasury as miscellaneous re10 ceipts, an amount equal to the amount of unobligated bal11 ances remaining in the Account at the close of business

12 on September 30 of the preceding year minus any part

13 of such balance that the executive department or agency

14 operating the debt collection center determines is nec15 essary to cover or defray the costs under this subsection

16 for the fiscal year in which the deposit is made.

17 ‘‘(6)(A) The head of an executive, legislative, or judi18 cial agency shall transfer to the Secretary of the Treasury

19 all non-tax claims over 180 days delinquent for additional

20 collection action and/or closeout.

21 ‘‘(B) Subparagraph (A) shall not apply—

22 ‘‘(i) to claims that—

23 ‘‘(I) are in litigation or foreclosure;
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1 ‘‘(II) are eligible for disposition under the

2 loan sales programs of a Federal department or

3 agency;

4 ‘‘(III) have been referred to a private col5 lection contractor for collection;

6 ‘‘(IV) are being collected under internal

7 offset procedures;

8 ‘‘(V) have been referred to the Department

9 of the Treasury, the Department of Defense,

10 the United States Postal Service, or disbursing

11 official of the United States designated by Sec12 retary of the Treasury for administrative offset;

13 ‘‘(VI) have been retained by an executive

14 agency in a debt collection center; or

15 ‘‘(VII) have been referred to another agen16 cy for collection;

17 ‘‘(ii) to claims which may be collected after the

18 180-day period in accordance with specific statutory

19 authority or procedural guidelines, provided that the

20 head of an executive, legislative, or judicial agency

21 provides notice of such claims to the Secretary of the

22 Treasury; and

23 ‘‘(iii) to other specific class of claims as deter24 mined by the Secretary of the Treasury at the re25 quest of the head of an agency or otherwise.
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1 ‘‘(C) The head of an executive, legislative, or judicial

2 agency shall transfer to the Secretary of the Treasury all

3 non-tax claims on which the agency has ceased collection

4 activity. The Secretary may exempt specific classes of

5 claims from this requirement, at the request of the head

6 of an agency, or otherwise. The Secretary shall review

7 transferred claims to determine if additional collection ac8 tion is warranted. The Secretary may, in accordance with

9 section 6050P of title 26, United States Code, report to

10 the Internal Revenue Service on behalf of the creditor

11 agency any claims that have been discharged within the

12 meaning of such section.

13 ‘‘(7) At the end of each calendar year, the head of

14 an executive, legislative, or judicial agency which, regard15 ing a claim owed to the agency, is required to report a

16 discharge of indebtedness as income under the 6050P of

17 title 26, United States Code, shall either complete the ap18 propriate form 1099 or submit to the Secretary of the

19 Treasury such information as is necessary for the Sec20 retary of the Treasury to complete the appropriate form

21 1099. The Secretary of the Treasury shall incorporate this

22 information into the appropriate form and submit the in23 formation to the taxpayer and Internal Revenue Service.

24 ‘‘(8) To carry out the purposes of this subsection, the

25 Secretary of the Treasury is authorized—
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1 ‘‘(A) to prescribe such rules, regulations, and

2 procedures as the Secretary deems necessary; and

3 ‘‘(B) to designate debt collection centers oper4 ated by other Federal agencies.’’.

5 SEC. 503. COMPROMISE OF CLAIMS.

6 Section 11 of the Administrative Dispute Resolution

7 Act (Public Law 101–552, 104 Stat. 2736, 5 U.S.C. 581

8 note) is amended by adding at the end thereof the follow9 ing sentence: ‘‘This section shall not apply to section 8(b)

10 of this Act.’’.

11 Subchapter E—Federal Civil Monetary

12 Penalties

13 SEC. 601. ADJUSTING FEDERAL CIVIL MONETARY PEN14 ALTIES FOR INFLATION.

15 (a) The Federal Civil Penalties Inflation Adjustment

16 Act of 1990 (Public Law 101–410, 104 Stat. 890; 28

17 U.S.C. 2461 note) is amended—

18 (1) by amending section 4 to read as follows:

19 ‘‘SEC. 4. The head of each agency shall, not later

20 than 180 days after the date of enactment of the Debt

21 Collection Improvement Act of 1995, and at least once

22 every 4 years thereafter, by regulation adjust each civil

23 monetary penalty provided by law within the jurisdiction

24 of the Federal agency, except for any penalty under title

25 26, United States Code, by the inflation adjustment de-
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1 scribed under section 5 of this Act and publish each such

2 regulation in the Federal Register.’’;

3 (2) in section 5(a), by striking ‘‘The adjustment

4 described under paragraphs (4) and (5)(A) of sec5 tion 4’’ and inserting ‘‘The inflation adjustment’’;

6 and

7 (3) by adding at the end the following new sec8 tion:

9 ‘‘SEC. 7. Any increase to a civil monetary penalty re10 sulting from this Act shall apply only to violations which

11 occur after the date any such increase takes effect.’’.

12 (b) The initial adjustment of a civil monetary penalty

13 made pursuant to section 4 of Federal Civil Penalties In14 flation Adjustment Act of 1990 (as amended by subsection

15 (a)) may not exceed 10 percent of such penalty.

16 Subchapter F—Gain Sharing

17 SEC. 701. DEBT COLLECTION IMPROVEMENT ACCOUNT.

18 (a) Title 31, United States Code, is amended by in19 serting after section 3720B the following new section:

20 ‘‘§ 3720C. Debt Collection Improvement Account

21 ‘‘(a)(1) There is hereby established in the Treasury

22 a special fund to be known as the ‘Debt Collection Im23 provement Account’ (hereinafter referred to as the ‘Ac24 count’).
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1 ‘‘(2) The Account shall be maintained and managed

2 by the Secretary of the Treasury, who shall ensure that

3 programs are credited with the amounts described in sub4 section (b) and with allocations described in subsection

5 (c).

6 ‘‘(b)(1) Not later than 30 days after the end of a

7 fiscal year, an agency other than the Department of Jus8 tice is authorized to transfer to the Account a dividend

9 not to exceed one percent of the debt collection improve10 ment amount as described in paragraph (3).

11 ‘‘(2) Agency transfers to the Account may include

12 collections from—

13 ‘‘(A) salary, administrative and tax referral off14 sets;

15 ‘‘(B) automated levy authority;

16 ‘‘(C) the Department of Justice; and

17 ‘‘(D) private collection agencies.

18 ‘‘(3) For purposes of this section, the term ‘debt col19 lection improvement amount’ means the amount by which

20 the collection of delinquent debt with respect to a particu21 lar program during a fiscal year exceeds the delinquent

22 debt baseline for such program for such fiscal year. The

23 Office of Management and Budget shall determine the

24 baseline from which increased collections are measured

25 over the prior fiscal year, taking into account the rec-
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1 ommendations made by the Secretary of the Treasury in

2 consultation with creditor agencies.

3 ‘‘(c)(1) The Secretary of the Treasury is authorized

4 to make payments from the Account solely to reimburse

5 agencies for qualified expenses. For agencies with fran6 chise funds, payments may be credited to subaccounts des7 ignated for debt collection.

8 ‘‘(2) For purposes of this paragraph, the term ‘quali9 fied expenses’ means expenditures for the improvement of

10 tax administration and agency debt collection and debt re11 covery activities including, but not limited to, account

12 servicing (including cross-servicing under section 502 of

13 the Debt Collection Improvement Act of 1955), automatic

14 data processing equipment acquisitions, delinquent debt

15 collection, measures to minimize delinquent debt, asset

16 disposition, and training of personnel involved in credit

17 and debt management.

18 ‘‘(3) Payments made to agencies pursuant to para19 graph (1) shall be in proportion to their contributions to

20 the Account.

21 ‘‘(4)(A) Amounts in the Account shall be available

22 to the Secretary of the Treasury to the extent and in the

23 amounts provided in advance in appropriation Acts, for

24 purposes of this section. Such amounts are authorized to

25 be appropriated without fiscal year limitation.
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1 ‘‘(B) As soon as practicable after the end of third

2 fiscal year after which appropriations are made pursuant

3 to this section, and every 3 years thereafter, any unappro4 priated balance in the account as determined by the Sec5 retary of the Treasury in consultation with agencies, shall

6 be transferred to the Treasury general fund as miscellane7 ous receipts.

8 ‘‘(d) For direct loan and loan guarantee programs

9 subject to title V of the Congressional Budget Act of 1974,

10 amounts credited in accordance with subsection (c) shall

11 be considered administrative costs and shall not be in12 cluded in the estimated payments to the Government for

13 the purpose of calculating the cost of such programs.

14 ‘‘(e) The Secretary of the Treasury shall prescribe

15 such rules, regulations, and procedures as the Secretary

16 deems necessary or appropriate to carry out the purposes

17 of this section.’’.

18 (b) The table of sections for subchapter II of chapter

19 37 of title 31, United States Code, is amended by inserting

20 after the item relating to section 3720B the following new

21 item:

‘‘3720C. Debt Collection Improvement Account.’’.
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1 Subchapter G—Tax Refund Offset Authority

2 SEC. 801. OFFSET OF TAX REFUND PAYMENT BY DISBURS3 ING OFFICIALS.

4 Section 3720A(h) of title 31, United States Code, is

5 amended to read as follows:

6 ‘‘(h)(1) The term ‘Secretary of the Treasury’ may in7 clude the disbursing official of the Department of the

8 Treasury.

9 ‘‘(2) The disbursing official of the Department of the

10 Treasury—

11 ‘‘(A) shall notify a taxpayer in writing of—

12 ‘‘(i) the occurrence of an offset to satisfy

13 a past-due legally enforceable non-tax debt;

14 ‘‘(ii) the identity of the creditor agency re15 questing the offset; and

16 ‘‘(iii) a contact point within the creditor

17 agency that will handle concerns regarding the

18 offset;

19 ‘‘(B) shall notify the Internal Revenue Service

20 on a weekly basis of—

21 ‘‘(i) the occurrence of an offset to satisfy

22 a past-due legally enforceable non-tax debt;

23 ‘‘(ii) the amount of such offset; and

24 ‘‘(iii) any other information required by

25 regulations; and
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1 ‘‘(C) shall match payment records with requests

2 for offset by using a name control, taxpayer identify3 ing number (as defined in 26 U.S.C. 6109), and any

4 other necessary identifiers.’’.

5 SEC. 802. EXPANDING TAX REFUND OFFSET AUTHORITY.

6 (a) Section 3720A of title 31, United States Code,

7 is amended by adding after subsection (h) the following

8 new subsection:

9 ‘‘(i) An agency subject to section 9 of the Act of May

10 18, 1933 (16 U.S.C. 831h) may implement this section

11 at its discretion.’’.

12 (b) Section 6402(f) of title 26, United States Code,

13 is amended to read as follows:

14 ‘‘(f) FEDERAL AGENCY.—For purposes of this sec15 tion, the term ‘Federal agency’ means a department, agen16 cy, or instrumentality of the United States, and includes

17 a government corporation (as such term is defined in sec18 tion 103 of title 5, United States Code).’’.

19 SEC. 803. EXPANDING AUTHORITY TO COLLECT PAST-DUE

20 SUPPORT.

21 (a) Section 3720A(a) of title 31, United States Code,

22 is amended to read as follows:

23 ‘‘(a) Any Federal agency that is owed by a named

24 person a past-due, legally enforceable debt (including past25 due support and debt administered by a third party acting
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1 as an agent for the Federal Government) shall, in accord2 ance with regulations issued pursuant to subsections (b)

3 and (d), notify the Secretary of the Treasury at least once

4 a year of the amount of such debt.’’.

5 (b) Section 664(a) of the Act of August 13, 1935,

6 as amended (42 U.S.C. 664(a)) is amended—

7 (1) in paragraph (1), by adding at the end

8 thereof the following: ‘‘This subsection may be im9 plemented by the Secretary of the Treasury in ac10 cordance with section 3720A of title 31, United

11 States Code.’’; and

12 (2) in paragraph (2)(A), by adding at the end

13 thereof the following: ‘‘This subsection may be im14 plemented by the Secretary of the Treasury in ac15 cordance with section 3720A of title 31, United

16 States Code.’’.

17 Subchapter H—Definitions, Due Process

18 Rights, and Severability

19 SEC. 901. TECHNICAL AMENDMENTS TO DEFINITIONS.

20 Section 3701 of title 31, United States Code, is

21 amended—

22 (1) by amending subsection (a)(1) to read as

23 follows:

24 ‘‘(1) ‘administrative offset’ means withholding

25 money payable by the United States (including
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1 money payable by the United States on behalf of a

2 State government) to, or held by the United States

3 for, a person to satisfy a claim.’’;

4 (2) by amending subsection (a)(4) to read as

5 follows:

6 ‘‘(4) ‘executive, judicial, or legislative agency’

7 means a department, agency, court, court adminis8 trative office, or instrumentality in the executive, ju9 dicial, or legislative branches of government, includ10 ing government corporations.’’;

11 (3) by amending subsection (b) to read as fol12 lows:

13 ‘‘(b)(1) The term ‘claim’ or ‘debt’ means any amount

14 of money or property that has been determined by an ap15 propriate official of the Federal Government to be owed

16 to the United States by a person, organization, or entity

17 other than another Federal agency. A claim includes, with18 out limitation, money owed on account of loans insured

19 or guaranteed by the Government, non-appropriated

20 funds, over-payments, any amount the United States is

21 authorized by statute to collect for the benefit of any per22 son, and other amounts of money or property due the Gov23 ernment.

24 ‘‘(2) For purposes of section 3716 of this title, the

25 term ‘claim’ also includes an amount of money or property
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1 owed by a person to a State, the District of Columbia,

2 American Samoa, the United States Virgin Islands, the

3 Commonwealth of the Northern Mariana Islands, or the

4 Commonwealth of Puerto Rico.’’;

5 (4) by adding after subsection (d) the following

6 new subsection:

7 ‘‘(e) In section 3716 of this title—

8 ‘‘(1) ‘creditor agency’ means any entity owed a

9 claim that seeks to collect that claim through admin10 istrative offset; and

11 ‘‘(2) ‘payment certifying agency’ means any

12 Federal department, agency, or instrumentality and

13 government corporation, that has transmitted a

14 voucher to a disbursing official for disbursement.’’.

15 SEC. 902. SEVERABILITY.

16 If any provision of this title, or the amendments made

17 by this title, or the application of any provision to any

18 entity, person, or circumstance is for any reason adjudged

19 by a court of competent jurisdiction to be invalid, the re20 mainder of this title, and the amendments made by this

21 title, or its application shall not be affected.

22 Subchapter I—Reporting

23 SEC. 1001. MONITORING AND REPORTING.

24 (a) The Secretary of the Treasury, in consultation

25 with concerned Federal agencies, is authorized to establish
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1 guidelines, including information on outstanding debt, to

2 assist agencies in the performance and monitoring of debt

3 collection activities.

4 (b) Not later than three years after the date of enact5 ment of this Act, the Secretary of the Treasury shall re6 port to the Congress on collection services provided by

7 Federal agencies or entities collecting debt on behalf of

8 other Federal agencies under the authorities contained in

9 section 3711(g) of title 31, United States Code, as added

10 by section 502 of this Act.

11 (c) Section 3719 of title 31, United States Code, is

12 amended—

13 (1) in subsection (a)—

14 (A) by amending the first sentence to read

15 as follows: ‘‘In consultation with the Comptrol16 ler General, the Secretary of the Treasury shall

17 prescribe regulations requiring the head of each

18 agency with outstanding non-tax claims to pre19 pare and submit to the Secretary at least once

20 a year a report summarizing the status of loans

21 and accounts receivable managed by the head of

22 the agency.’’; and

23 (B) in paragraph (3), by striking ‘‘Direc24 tor’’ and inserting ‘‘Secretary’’; and
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1 (2) in subsection (b), by striking ‘‘Director’’

2 and inserting ‘‘Secretary’’.

3 (d) Notwithstanding any other provision of law, the

4 Secretary of the Treasury is authorized to consolidate all

5 reports concerning debt collection into one annual report.

6 TITLE II—JUSTICE DEBT

7 MANAGEMENT

8 Subchapter A—Private Attorneys

9 SEC. 1101. EXPANDED USE OF PRIVATE ATTORNEYS.

10 (a) Section 3718(b)(1)(A) of title 31, United States

11 Code, is amended by striking the fourth sentence.

12 (b) Sections 3 and 5 of the Federal Debt Recovery

13 Act (Public Law 99–578, 100 Stat. 3305) are hereby re14 pealed.

15 Subchapter B—Nonjudicial Foreclosure

16 SEC. 1201. NONJUDICIAL FORECLOSURE OF MORTGAGES.

17 Chapter 176 of title 28 of the United States Code

18 is amended by adding at the end thereof the following:

19 ‘‘Subchapter E—Nonjudicial Foreclosure

‘‘3401. Definitions.

‘‘3402. Rules of construction.

‘‘3403. Election of procedure.

‘‘3404. Designation of foreclosure trustee.

‘‘3405. Notice of foreclosure sale; statute of limitations.

‘‘3406. Service of notice of foreclosure sale.

‘‘3407. Cancellation of foreclosure sale.

‘‘3408. Stay.

‘‘3409. Conduct of sale; postponement.

‘‘3410. Transfer of title and possession.

‘‘3411. Record of foreclosure and sale.

‘‘3412. Effect of sale.
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‘‘3413. Disposition of sale proceeds.

‘‘3414. Deficiency judgment.

1 ‘‘§ 3401. Definitions

2 ‘‘As used in this subchapter—

3 ‘‘(1) ‘agency’ means—

4 ‘‘(A) an executive department as defined in

5 section 101 of title 5, United States Code;

6 ‘‘(B) an independent establishment as de7 fined in section 104 of title 5, United States

8 Code (except that it shall not include the Gen9 eral Accounting Office);

10 ‘‘(C) a military department as defined in

11 section 102 of title 5, United States Code; and

12 ‘‘(D) a wholly owned government corpora13 tion as defined in section 9101(3) of title 31,

14 United States Code.

15 ‘‘(2) ‘agency head’ means the head and any as16 sistant head of an agency, and may upon the des17 ignation by the head of an agency include the chief

18 official of any principal division of an agency or any

19 other employee of an agency.

20 ‘‘(3) ‘bona fide purchaser’ means a purchaser

21 for value in good faith and without notice of any ad22 verse claim who acquires the seller’s interest free of

23 any adverse claim.
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1 ‘‘(4) ‘debt instrument’ means a note, mortgage

2 bond, guaranty or other instrument creating a debt

3 or other obligation, including any instrument incor4 porated by reference therein and any instrument or

5 agreement amending or modifying a debt instru6 ment.

7 ‘‘(5) ‘file’ or ‘filing’ means docketing, indexing,

8 recording, or registering, or any other requirement

9 for perfecting a mortgage or a judgment.

10 ‘‘(6) ‘foreclosure trustee’ means an individual,

11 partnership, association, or corporation, or any em12 ployee thereof, including a successor, appointed by

13 the agency head to conduct a foreclosure sale pursu14 ant to this subchapter.

15 ‘‘(7) ‘mortgage’ means a deed of trust, deed to

16 secure debt, security agreement, or any other form

17 of instrument under which any interest in real prop18 erty, including leaseholds, life estates, reversionary

19 interests, and any other estates under applicable law

20 is conveyed in trust, mortgaged, encumbered,

21 pledged or otherwise rendered subject to a lien, for

22 the purpose of securing the payment of money or the

23 performance of any other obligation.

24 ‘‘(8) ‘of record’ means an interest recorded pur25 suant to Federal or State statutes that provide for
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1 official recording of deeds, mortgages and judg2 ments, and that establish the effect of such records

3 as notice to creditors, purchasers, and other inter4 ested persons.

5 ‘‘(9) ‘owner’ means any person who has an

6 ownership interest in property and includes heirs,

7 devisees, executors, administrators, and other per8 sonal representatives, and trustees of testamentary

9 trusts if the owner of record is deceased.

10 ‘‘(10) ‘sale’ means a sale conducted pursuant to

11 this subchapter, unless the context requires other12 wise.

13 ‘‘(11) ‘security property’ means real property,

14 or any interest in real property including leaseholds,

15 life estates, reversionary interests, and any other es16 tates under applicable State law that secure a mort17 gage.

18 ‘‘§ 3402. Rules of construction

19 ‘‘(a) IN GENERAL.—If an agency head elects to pro20 ceed under this subchapter, this subchapter shall apply

21 and the provisions of this subchapter shall govern in the

22 event of a conflict with any other provision of Federal law

23 or State law.

24 ‘‘(b) LIMITATION.—This subchapter shall not be con25 strued to supersede or modify the operation of—
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1 ‘‘(1) the lease-back/buy-back provisions under

2 section 1985 of title 7, United States Code, or regu3 lations promulgated thereunder; or

4 ‘‘(2) The Multifamily Mortgage Foreclosure Act

5 of 1981 (chapter 38 of title 12, United States Code).

6 ‘‘(c) EFFECT ON OTHER LAWS.—This subchapter

7 shall not be construed to curtail or limit the rights of the

8 United States or any of its agencies—

9 ‘‘(1) to foreclose a mortgage under any other

10 provision of Federal law or State law; or

11 ‘‘(2) to enforce any right under Federal law or

12 State law in lieu of or in addition to foreclosure, in13 cluding any right to obtain a monetary judgment.

14 ‘‘(d) APPLICATION TO MORTGAGES.—The provisions

15 of this subchapter may be used to foreclose any mortgage,

16 whether executed prior or subsequent to the effective date

17 of this subchapter.

18 ‘‘§ 3403. Election of procedure

19 ‘‘(a) SECURITY PROPERTY SUBJECT TO FORE20 CLOSURE.—An agency head may foreclose a mortgage

21 upon the breach of a covenant or condition in a debt in22 strument or mortgage for which acceleration or foreclosure

23 is authorized. An agency head may not institute fore24 closure proceedings on the mortgage under any other pro25 vision of law, or refer such mortgage for litigation, during
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1 the pendency of foreclosure proceedings pursuant to this

2 subchapter.

3 ‘‘(b) EFFECT OF CANCELLATION OF SALE.—If a

4 foreclosure sale is canceled pursuant to section 3407, the

5 agency head may thereafter foreclose on the security prop6 erty in any manner authorized by law.

7 ‘‘§ 3404. Designation of foreclosure trustee

8 ‘‘(a) IN GENERAL.—An agency head shall designate

9 a foreclosure trustee who shall supersede any trustee des10 ignated in the mortgage. A foreclosure trustee designated

11 under this section shall have a nonjudicial power of sale

12 pursuant to this subchapter.

13 ‘‘(b) DESIGNATION OF FORECLOSURE TRUSTEE.—

14 ‘‘(1) An agency head may designate as fore15 closure trustee—

16 ‘‘(A) an officer or employee of the agency;

17 ‘‘(B) an individual who is a resident of the

18 State in which the security property is located;

19 or

20 ‘‘(C) a partnership, association, or corpora21 tion, provided such entity is authorized to

22 transact business under the laws of the State in

23 which the security property is located.
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1 ‘‘(2) The agency head is authorized to enter

2 into personal services and other contracts not incon3 sistent with this subchapter.

4 ‘‘(c) METHOD OF DESIGNATION.—An agency head

5 shall designate the foreclosure trustee in writing. The fore6 closure trustee may be designated by name, title, or posi7 tion. An agency head may designate one or more fore8 closure trustees for the purpose of proceeding with mul9 tiple foreclosures or a class of foreclosures.

10 ‘‘(d) AVAILABILITY OF DESIGNATION.—An agency

11 head may designate such foreclosure trustees as the agen12 cy head deems necessary to carry out the purposes of this

13 subchapter.

14 ‘‘(e) MULTIPLE FORECLOSURE TRUSTEES AUTHOR15 IZED.—An agency head may designate multiple fore16 closure trustees for different tracts of a secured property.

17 ‘‘(f) REMOVAL OF FORECLOSURE TRUSTEES; SUC18 CESSOR FORECLOSURE TRUSTEES.—An agency head

19 may, with or without cause or notice, remove a foreclosure

20 trustee and designate a successor trustee as provided in

21 this section. The foreclosure sale shall continue without

22 prejudice notwithstanding the removal of the foreclosure

23 trustee and designation of a successor foreclosure trustee.

24 Nothing in this section shall be construed to prohibit a
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1 successor foreclosure trustee from postponing the fore2 closure sale in accordance with this subchapter.

3 ‘‘§ 3405. Notice of foreclosure sale; statute of limita4 tions

5 ‘‘(a) IN GENERAL.—

6 ‘‘(1) Not earlier than 21 days nor later than

7 ten years after acceleration of a debt instrument or

8 demand on a guaranty, the foreclosure trustee shall

9 serve a notice of foreclosure sale in accordance with

10 this subchapter.

11 ‘‘(2) For purposes of computing the time period

12 under paragraph (1), there shall be excluded all pe13 riods during which there is in effect—

14 ‘‘(A) a judicially imposed stay of fore15 closure; or

16 ‘‘(B) a stay imposed by section 362 of title

17 11, United States Code.

18 ‘‘(3) In the event of partial payment or written

19 acknowledgement of the debt after acceleration of

20 the debt instrument, the right to forecloseure shall

21 be deemed to accrue again at the time of each such

22 payment or acknowledgement.

23 ‘‘(b) NOTICE OF FORECLOSURE SALE.—The notice

24 of foreclosure sale shall include the following:
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1 ‘‘(1) the name, title, and business address of

2 the foreclosure trustee as of the date of the notice;

3 ‘‘(2) the names of the original parties to the

4 debt instrument and the mortgage, and any assign5 ees of the mortgagor of record;

6 ‘‘(3) the street address or location of the secu7 rity property, and a generally accepted designation

8 used to describe the security property, or so much

9 thereof as is to be offered for sale, sufficient to iden10 tify the property to be sold;

11 ‘‘(4) the date of the mortgage, the office in

12 which the mortgage is filed, and the location of the

13 filing of the mortgage;

14 ‘‘(5) the default or defaults upon which fore15 closure is based, and the date of the acceleration of

16 the debt instrument;

17 ‘‘(6) the date, time, and place of the foreclosure

18 sale;

19 ‘‘(7) a statement that the foreclosure is being

20 conducted in accordance with this subchapter;

21 ‘‘(8) the types of costs, if any, to be paid by the

22 purchaser upon transfer of title; and

23 ‘‘(9) the terms and conditions of sale, including

24 the method and time of payment of the foreclosure

25 purchase price.
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1 ‘‘§ 3406. Service of notice of foreclosure sale

2 ‘‘(a) RECORD NOTICE.—At least 21 days prior to the

3 date of the foreclosure sale, the notice of foreclosure sale

4 required by section 3405 shall be filed in the manner au5 thorized for filing a notice of an action concerning real

6 property according to the law of the State where the secu7 rity property is located or, if none, in the manner author8 ized by section 3201 of this chapter.

9 ‘‘(b) NOTICE BY MAIL.—

10 ‘‘(1) At least 21 days prior to the date of the

11 foreclosure sale, the notice set forth in section 3405

12 shall be sent by registered or certified mail, return

13 receipt requested—

14 ‘‘(A) to the current owner of record of the

15 security property as the record appears on the

16 date that the notice of foreclosure sale is re17 corded pursuant to subsection (a);

18 ‘‘(B) to all debtors, including the mortga19 gor, assignees of the mortgagor and guarantors

20 of the debt instrument;

21 ‘‘(C) to all persons having liens, interests

22 or encumbrances of record upon the security

23 property, as the record appears on the date that

24 the notice of foreclosure sale is recorded pursu25 ant to subsection (a); and
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1 ‘‘(D) to any occupants of the security

2 property. If the names of the occupants of the

3 security property are not known to the agency,

4 or the security property has more than one

5 dwelling unit, the notice shall be posted at the

6 security property.

7 ‘‘(2) The notice shall be sent to the debtor at

8 the address, if any, set forth in the debt instrument

9 or mortgage as the place to which notice is to be

10 sent, and if different, to the debtor’s last known ad11 dress as shown in the mortgage record of the agen12 cy. The notice shall be sent to any person other than

13 the debtor to that person’s address of record or, if

14 there is no address of record, to any address at

15 which the agency in good faith believes the notice is

16 likely to come to that person’s attention.

17 ‘‘(3) Notice by mail pursuant to this subsection

18 shall be effective upon mailing.

19 ‘‘(c) NOTICE BY PUBLICATION.—The notice of the

20 foreclosure sale shall be published at least once a week

21 for each of three successive weeks prior to the sale in at

22 least one newspaper of general circulation in any county

23 or counties in which the security property is located. If

24 there is no newspaper published at least weekly that has

25 a general circulation in at least one county in which the
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1 security property is located, copies of the notice of fore2 closure sale shall instead be posted at least 21 days prior

3 to the sale at the courthouse of any county or counties

4 in which the property is located and the place where the

5 sale is to be held.

6 ‘‘§ 3407. Cancellation of foreclosure sale

7 ‘‘(a) IN GENERAL.—At any time prior to the fore8 closure sale, the foreclosure trustee shall cancel the sale—

9 ‘‘(1) if the debtor or the holder of any subordi10 nate interest in the security property tenders the

11 performance due under the debt instrument and

12 mortgage, including any amounts due because of the

13 exercise of the right to accelerate, and the expenses

14 of proceeding to foreclosure incurred to the time of

15 tender; or

16 ‘‘(2) if the security property is a dwelling of

17 four units or fewer, and the debtor:

18 ‘‘(A) pays or tenders all sums which would

19 have been due at the time of tender in the ab20 sence of any acceleration;

21 ‘‘(B) performs any other obligation which

22 would have been required in the absence of any

23 acceleration; and
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1 ‘‘(C) pays or tenders all costs of fore2 closure incurred for which payment from the

3 proceeds of the sale would be allowed; or

4 ‘‘(3) for any reason approved by the agency

5 head.

6 ‘‘(b) LIMITATION.—The debtor may not, without the

7 approval of the agency head, cure the default under sub8 section (a)(2) if, within the preceding 12 months, the debt9 or has cured a default after being served with a notice

10 of foreclosure sale pursuant to this subchapter.

11 ‘‘(c) NOTICE OF CANCELLATION.—The foreclosure

12 trustee shall file a notice of the cancellation in the same

13 place and manner provided for the filing of the notice of

14 foreclosure sale under section 3406(a).

15 ‘‘§ 3408. Stay

16 ‘‘If, prior to the time of sale, foreclosure proceedings

17 under this subchapter are stayed in any manner, including

18 the filing of bankruptcy, no person may thereafter cure

19 the default under the provisions of section 3407(a)(2). If

20 the default is not cured at the time a stay is terminated,

21 the foreclosure trustee shall proceed to sell the security

22 property as provided in this subchapter.

23 ‘‘§ 3409. Conduct of sale; postponement

24 ‘‘(a) SALE PROCEDURES.—Foreclosure sale pursuant

25 to this subchapter shall be at public auction and shall be
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1 scheduled to begin at a time between the hours of 9:00

2 a.m. and 4:00 p.m. local time. The foreclosure sale shall

3 be held at the location specified in the notice of foreclosure

4 sale, which shall be a location where real estate foreclosure

5 auctions are customarily held in the county or one of the

6 counties in which the property to be sold is located or at

7 a courthouse therein, or upon the property to be sold. Sale

8 of security property situated in two or more counties may

9 be held in any one of the counties in which any part of

10 the security property is situated. The foreclosure trustee

11 may designate the order in which multiple tracts of secu12 rity property are sold.

13 ‘‘(b) BIDDING REQUIREMENTS.—Written one-price

14 sealed bids shall be accepted by the foreclosure trustee,

15 if submitted by the agency head or other persons for entry

16 by announcement by the foreclosure trustee at the sale.

17 The sealed bids shall be submitted in accordance with the

18 terms set forth in the notice of foreclosure sale. The agen19 cy head or any other person may bid at the foreclosure

20 sale, even if the agency head or other person previously

21 submitted a written one-price bid. The agency head may

22 bid a credit against the debt due without the tender or

23 payment of cash. The foreclosure trustee may serve as

24 auctioneer, or may employ an auctioneer who may be paid

25 from the sale proceeds. If an auctioneer is employed, the
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1 foreclosure trustee is not required to attend the sale. The

2 foreclosure trustee or an auctioneer may bid as directed

3 by the agency head.

4 ‘‘(c) POSTPONEMENT OF SALE.—The foreclosure

5 trustee shall have discretion, prior to or at the time of

6 sale, to postpone the foreclosure sale. The foreclosure

7 trustee may postpone a sale to a later hour the same day

8 by announcing or posting the new time and place of the

9 foreclosure sale at the time and place originally scheduled

10 for the foreclosure sale. The foreclosure trustee may in11 stead postpone the foreclosure sale for not fewer than 9

12 nor more than 31 days, by serving notice that the fore13 closure sale has been postponed to a specified date, and

14 the notice may include any revisions the foreclosure trust15 ee deems appropriate. The notice shall be served by publi16 cation, mailing, and posting in accordance with section

17 3406 (b) and (c), except that publication may be made

18 on any of three separate days prior to the new date of

19 the foreclosure sale, and mailing may be made at any time

20 at least 7 days prior to the new date of the foreclosure

21 sale.

22 ‘‘(d) LIABILITY OF SUCCESSFUL BIDDER WHO FAILS

23 TO COMPLY.—The foreclosure trustee may require a bid24 der to make a cash deposit before the bid is accepted. The

25 amount or percentage of the cash deposit shall be stated
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1 by the foreclosure trustee in the notice of foreclosure sale.

2 A successful bidder at the foreclosure sale who fails to

3 comply with the terms of the sale shall forfeit the cash

4 deposit or, at the election of the foreclosure trustee, shall

5 be liable to the agency on a subsequent sale of the prop6 erty for all net losses incurred by the agency as a result

7 of such failure.

8 ‘‘(e) EFFECT OF SALE.—Any foreclosure sale held in

9 accordance with this subchapter shall be conclusively pre10 sumed to have been conducted in a legal, fair, and com11 mercially reasonable manner. The sale price shall be con12 clusively presumed to constitute the reasonably equivalent

13 value of the security property.

14 ‘‘§ 3410. Transfer of title and possession

15 ‘‘(a) DEED.—After receipt of the purchase price in

16 accordance with the terms of the sale as provided in the

17 notice of foreclosure sale, the foreclosure trustee shall exe18 cute and deliver to the purchaser a deed conveying the

19 security property to the purchaser that grants and conveys

20 title to the security property without warranty or cov21 enants to the purchaser. The execution of the foreclosure

22 trustee’s deed shall have the effect of conveying all of the

23 right, title, and interest in the security property covered

24 by the mortgage. Notwithstanding any other law to the

25 contrary, the foreclosure trustee’s deed shall be a convey-
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1 ance of the security property and not a quitclaim. No judi2 cial proceeding shall be required ancillary or supple3 mentary to the procedures provided in this subchapter to

4 establish the validity of the conveyance.

5 ‘‘(b) DEATH OF PURCHASER PRIOR TO CONSUMMA6 TION OF SALE.—If a purchaser dies before execution and

7 delivery of the deed conveying the security property to the

8 purchaser, the foreclosure trustee shall execute and deliver

9 the deed to the representative of the purchaser’s estate

10 upon payment of the purchase price in accordance with

11 the terms of sale. Such delivery to the representative of

12 the purchaser’s estate shall have the same effect as if ac13 complished during the lifetime of the purchaser.

14 ‘‘(c) PURCHASER CONSIDERED BONA FIDE PUR15 CHASER WITHOUT NOTICE.—The purchaser of property

16 under this subchapter shall be presumed to be a bona fide

17 purchaser without notice of defects, if any, in the title con18 veyed to the purchaser.

19 ‘‘(d) POSSESSION BY PURCHASER; CONTINUING IN20 TERESTS.—A purchaser at a foreclosure sale conducted

21 pursuant to this subchapter shall be entitled to possession

22 upon passage of title to the security property, subject to

23 any interest or interests senior to that of the mortgage.

24 The right to possession of any person without an interest

25 senior to the mortgage who is in possession of the property
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1 shall terminate immediately upon the passage of title to

2 the security property, and the person shall vacate the secu3 rity property immediately. The purchaser shall be entitled

4 to take any steps available under Federal law or State law

5 to obtain possession.

6 ‘‘(e) RIGHT OF REDEMPTION; RIGHT OF POSSES7 SION.—This subchapter shall preempt all Federal and

8 State rights of redemption, statutory, or common law.

9 Upon conclusion of the public auction of the security prop10 erty, no person shall have a right of redemption.

11 ‘‘(f) PROHIBITION OF IMPOSITION OF TAX ON CON12 VEYANCE BY THE UNITED STATES OR AGENCY THERE13 OF.—No tax, or fee in the nature of a tax, for the transfer

14 of title to the security property by the foreclosure trustee’s

15 deed shall be imposed upon or collected from the fore16 closure trustee or the purchaser by any State or political

17 subdivision thereof.

18 ‘‘§ 3411. Record of foreclosure and sale

19 ‘‘(a) RECITAL REQUIREMENTS.—The foreclosure

20 trustee shall recite in the deed to the purchaser, or in an

21 addendum to the foreclosure trustee’s deed, or shall pre22 pare an affidavit stating—

23 ‘‘(1) the date, time, and place of sale;
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1 ‘‘(2) the date of the mortgage, the office in

2 which the mortgage is filed, and the location of the

3 filing of the mortgage;

4 ‘‘(3) the persons served with the notice of fore5 closure sale;

6 ‘‘(4) the date and place of filing of the notice

7 of foreclosure sale under section 3406(a);

8 ‘‘(5) that the foreclosure was conducted in ac9 cordance with the provisions of this subchapter; and

10 ‘‘(6) the sale amount.

11 ‘‘(b) EFFECT OF RECITALS.—The recitals set forth

12 in subsection (a) shall be prima facie evidence of the truth

13 of such recitals. Compliance with the requirements of sub14 section (a) shall create a conclusive presumption of the

15 validity of the sale in favor of bona fide purchasers and

16 encumbrancers for value without notice.

17 ‘‘(c) DEED TO BE ACCEPTED FOR FILING.—The

18 register of deeds or other appropriate official of the county

19 or counties where real estate deeds are regularly filed shall

20 accept for filing and shall file the foreclosure trustee’s

21 deed and affidavit, if any, and any other instruments sub22 mitted for filing in relation to the foreclosure of the secu23 rity property under this subchapter.
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1 ‘‘§ 3412. Effect of sale

2 ‘‘A sale conducted under this subchapter to a bona

3 fide purchaser shall bar all claims upon the security prop4 erty by—

5 ‘‘(1) any person to whom the notice of fore6 closure sale was mailed as provided in this sub7 chapter who claims an interest in the property sub8 ordinate to that of the mortgage, and the heir, devi9 see, executor, administrator, successor, or assignee

10 claiming under any such person;

11 ‘‘(2) any person claiming any interest in the

12 property subordinate to that of the mortgage, if such

13 person had actual knowledge of the sale;

14 ‘‘(3) any person so claiming, whose assignment,

15 mortgage, or other conveyance was not filed in the

16 proper place for filing, or whose judgment or decree

17 was not filed in the proper place for filing, prior to

18 the date of filing of the notice of foreclosure sale as

19 required by section 3406(a), and the heir, devisee,

20 executor, administrator, successor, or assignee of

21 such a person; or

22 ‘‘(4) any other person claiming under a statu23 tory lien or encumbrance not required to be filed

24 and attaching to the title or interest of any person

25 designated in any of the foregoing subsections of

26 this section.
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1 ‘‘§ 3413. Disposition of sale proceeds

2 ‘‘(a) DISTRIBUTION OF SALE PROCEEDS.—The fore3 closure trustee shall distribute the proceeds of the fore4 closure sale in the following order—

5 ‘‘(1)(A) to pay the commission of the fore6 closure trustee, other than an agency employee, the

7 greater of—

8 ‘‘(i) the sum of—

9 ‘‘(I) 3 percent of the first $1,000 col10 lected, plus

11 ‘‘(II) 1.5 percent on the excess of any

12 sum collected over $1,000; or

13 ‘‘(ii) $250; and

14 ‘‘(B) the amounts described in subparagraph

15 (A)(i) shall be computed on the gross proceeds of all

16 security property sold at a single sale;

17 ‘‘(2) to pay the expense of any auctioneer em18 ployed by the foreclosure trustee, if any, except that

19 the commission payable to the foreclosure trustee

20 pursuant to paragraph (1) shall be reduced by the

21 amount paid to an auctioneer, unless the agency

22 head determines that such reduction would adversely

23 affect the ability of the agency head to retain quali24 fied foreclosure trustees or auctioneers;

25 ‘‘(3) to pay for the costs of foreclosure, includ26 ing—
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1 ‘‘(A) reasonable and necessary advertising

2 costs and postage incurred in giving notice pur3 suant to section 3406;

4 ‘‘(B) mileage for posting notices and for

5 the foreclosure trustee’s or auctioneer’s attend6 ance at the sale at the rate provided in section

7 1921 of title 28, United States Code, for mile8 age by the most reasonable road distance;

9 ‘‘(C) reasonable and necessary costs actu10 ally incurred in connection with any search of

11 title and lien records; and

12 ‘‘(D) necessary costs incurred by the fore13 closure trustee to file documents;

14 ‘‘(4) to pay valid real property tax liens or as15 sessments, if required by the notice of foreclosure

16 sale;

17 ‘‘(5) to pay any liens senior to the mortgage, if

18 required by the notice of foreclosure sale;

19 ‘‘(6) to pay service charges and advancements

20 for taxes, assessments, and property insurance pre21 miums; and

22 ‘‘(7) to pay late charges and other administra23 tive costs and the principal and interest balances se24 cured by the mortgage, including expenditures for

25 the necessary protection, preservation, and repair of
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1 the security property as authorized under the debt

2 instrument or mortgage and interest thereon if pro3 vided for in the debt instrument or mortgage, pursu4 ant to the agency’s procedure.

5 ‘‘(b) INSUFFICIENT PROCEEDS.—In the event there

6 are no proceeds of sale or the proceeds are insufficient

7 to pay the costs and expenses set forth in subsection (a),

8 the agency head shall pay such costs and expenses as au9 thorized by applicable law.

10 ‘‘(c) SURPLUS MONIES.—

11 ‘‘(1) After making the payments required by

12 subsection (a), the foreclosure trustee shall—

13 ‘‘(A) distribute any surplus to pay liens in

14 the order of priority under Federal law or the

15 law of the State where the security property is

16 located; and

17 ‘‘(B) pay to the person who was the owner

18 of record on the date the notice of foreclosure

19 sale was filed the balance, if any, after any pay20 ments made pursuant to paragraph (1).

21 ‘‘(2) If the person to whom such surplus is to

22 be paid cannot be located, or if the surplus available

23 is insufficient to pay all claimants and the claimants

24 cannot agree on the distribution of the surplus, that

25 portion of the sale proceeds may be deposited by the
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1 foreclosure trustee with an appropriate official au2 thorized under law to receive funds under such cir3 cumstances. If such a procedure for the deposit of

4 disputed funds is not available, and the foreclosure

5 trustee files a bill of interpleader or is sued as a

6 stakeholder to determine entitlement to such funds,

7 the foreclosure trustee’s necessary costs in taking or

8 defending such action shall be deducted first from

9 the disputed funds.

10 ‘‘§ 3414. Deficiency judgment

11 ‘‘(a) IN GENERAL.—If after deducting the disburse12 ments described in section 3413, the price at which the

13 security property is sold at a foreclosure sale is insufficient

14 to pay the unpaid balance of the debt secured by the secu15 rity property, counsel for the United States may com16 mence an action or actions against any or all debtors to

17 recover the deficiency, unless specifically prohibited by the

18 mortgage. The United States is also entitled to recover

19 any amount authorized by section 3011 and costs of the

20 action.

21 ‘‘(b) LIMITATION.—Any action commenced to recover

22 the deficiency shall be brought within 6 years of the last

23 sale of security property.

24 ‘‘(c) CREDITS.—The amount payable by a private

25 mortgage guaranty insurer shall be credited to the account
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1 of the debtor prior to the commencement of an action for

2 any deficiency owed by the debtor. Nothing in this sub3 section shall curtail or limit the subrogation rights of a

4 private mortgage guaranty insurer.’’.

5 TITLE III—IRS LEVY AUTHORITY

6 Subchapter A—Amendments To The Internal

7 Revenue Code of 1986

8 SEC. 1301. PROVISION FOR CONTINUOUS LEVY.

9 Section 6331 of the Internal Revenue Code of 1986

10 (26 U.S.C. 6331) is amended—

11 (1) by redesignating subsection (h) as sub12 section (i); and

13 (2) by inserting after subsection (g) the follow14 ing new subsection:

15 ‘‘(h) CONTINUING LEVY ON NON-MEANS TESTED

16 FEDERAL PAYMENTS.—The effect of a levy on non-means

17 tested Federal payments to or received by a taxpayer shall

18 be continuous from the date such levy is first made until

19 such levy is released. Notwithstanding section 6334, such

20 levy shall attach up to 15 percent of any salary or pension

21 payment due to the taxpayer. For the purposes of this

22 subsection, the term ‘non-means tested Federal payment’

23 refers to a Federal payment for which eligibility is not

24 based on the income and/or assets of a payee.’’.
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1 SEC. 1302. MODIFICATION OF LEVY EXEMPTION.

2 Section 6334 of the Internal Revenue Code of 1986

3 (26 U.S.C. 6334) is amended by adding at the end the

4 following new subsection:

5 ‘‘(f) LEVY ALLOWED ON CERTAIN NON-MEANS

6 TESTED FEDERAL PAYMENTS.—Non-means tested

7 amounts—

8 ‘‘(1) described in subsections (a)(7) and (a)(9)

9 of this section; and

10 ‘‘(2) annuity or pension payments under the

11 Railroad Retirement Act and benefits under the

12 Railroad Unemployment Insurance Act described in

13 subsection (a)(6) of this section,

14 shall not be exempt from levy if the Secretary approves

15 the levy of such property.’’.

16 SEC. 1303. CONFIDENTIALITY AND DISCLOSURE OF RE17 TURNS AND RETURN INFORMATION.

18 (a) Section 6103 of the Internal Revenue Code of

19 1986 (26 U.S.C. 6103) is amended by adding at the end

20 of subsection (k) the following new paragraph:

21 ‘‘(8) LEVIES ON CERTAIN GOVERNMENT PAY22 MENTS.—

23 ‘‘(A) DISCLOSURE OF RETURN INFORMA24 TION IN LEVIES ON FINANCIAL MANAGEMENT

25 SERVICE.—The Secretary may disclose to offi26 cers and employees of the Financial Manage-
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1 ment Service return information, including tax2 payer identity information, the amount of any

3 unpaid liability under this title (including pen4 alties and interest), and the type of tax and tax

5 period to which such unpaid liability relates, in

6 serving a notice of levy, or release of such levy,

7 with respect to any applicable government pay8 ment.

9 ‘‘(B) RESTRICTION ON USE OF DISCLOSED

10 INFORMATION.—Return information disclosed

11 under subparagraph (A) may be used by offi12 cers and employees of the Financial Manage13 ment Service only for the purpose of, and to the

14 extent necessary in, transferring levied funds in

15 satisfaction of the levy, maintaining appropriate

16 agency records in regard to such levy or the re17 lease thereof, notifying the taxpayer and the

18 agency certifying such payment that the levy

19 has been honored, or in the defense of any liti20 gation ensuing from the honor of such levy.

21 ‘‘(C) APPLICABLE GOVERNMENT PAY22 MENT.—For purposes of this paragraph, the

23 term ‘applicable government payment’ means

24 any non-means tested Federal payment, as de25 fined in section 6331(h) certified to the Finan-
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1 cial Management Service for disbursement and

2 any other payment certified to the Financial

3 Management Service for disbursement and

4 which the Commissioner designates by pub5 lished notice.’’.

6 (b) Section 6301(p) of the Internal Revenue Code of

7 1986 (26 U.S.C. 6301(p)), is amended—

8 (1) in paragraph (3)(A), by inserting ‘‘(8)’’

9 after ‘‘(6),’’; and

10 (2) in paragraph (4), by inserting ‘‘(k)(8),’’

11 after ‘‘(j) (1) or (2),’’.

12 (c) Section 552a(a)(8)(B) of title 5, United States

13 Code, is amended by adding at the end the following new

14 clause:

15 ‘‘(ix) matches performed incident to a

16 levy described in section 6103(k)(8) of the

17 Internal Revenue Code of 1986.’’.

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