* Public Law 104-134
104th Congress

                                 An Act
 
Making appropriations for fiscal year 1996 to make a further downpayment 
   toward a balanced budget, and for other purposes. <<NOTE: Apr. 26, 
                         1996 -  [H.R. 3019]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress 
assembled, <<NOTE: Omnibus Consolidated Rescissions 
and Appropriations Act of 1996.>> 

    Section 101. For programs, projects or activities in the Departments 
of Commerce, Justice, and State, the Judiciary, and Related Agencies 
Appropriations Act, 1996, provided as follows, to be effective as if it 
had been enacted into law as the regular appropriations Act:
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    * Note: This is a typeset print of the original hand 
enrollment as signed by the President on April 26, 1996. The text 
is printed without corrections. Footnotes indicate missing or 
illegible text in the original.
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 AN <<NOTE: Departments of Commerce, Justice, and State, the Judiciary, 
and Related Agencies Appropriation Act, 1996.>> ACT

    Making appropriations for the Departments of Commerce, Justice, and 
State, the Judiciary, and related agencies for the fiscal year ending 
September 30, 1996, and for other purposes


                               CHAPTER 10

                      DEBT COLLECTION IMPROVEMENTS

SEC. 31001. <<NOTE: Debt Collection Improvement Act of 1996.>>  DEBT 
            COLLECTION IMPROVEMENT ACT OF 1996.

    (a)(1) <<NOTE: 31 USC 3701 note.>>  This section may be cited as the 
``Debt Collection Improvement Act of 1996''.

    (2)(A) <<NOTE: Effective date. 31 USC 3322 note.>>  In General.--The 
provisions of this section and the amendments made by this section shall 
take effect on the date of the enactment of this Act.

    (B) <<NOTE: Applicability. 31 USC 3716 note.>>  Offsets From Social 
Security Payments, Etc.--Subparagraph (A) of section 3716(c)(3) of title 
31, United States Code (as added by subsection (d)(2) of this section), 
shall apply only to payments made after the date which is 4 months after 
the date of the enactment of this Act.

    (b) <<NOTE: 31 USC 3701 note.>>  The purposes of this section are 
the following:
            (1) To maximize collections of delinquent debts owed to the 
        Government by ensuring quick action to enforce recovery of debts 
        and the use of all appropriate collection tools.
            (2) To minimize the costs of debt collection by 
        consolidating related functions and activities and utilizing 
        interagency teams.
            (3) To reduce losses arising from debt management activities 
        by requiring proper screening of potential borrowers, aggressive 
        monitoring of all accounts, and sharing of information within 
        and among Federal agencies.
            (4) To ensure that the public is fully informed of the 
        Federal Government's debt collection policies and that debtors 
        are cog

[[Page 110 STAT. 1321-359]]

        nizant of their financial obligations to repay amounts owed to 
        the Federal Government.
            (5) To ensure that debtors have all appropriate due process 
        rights, including the ability to verify, challenge, and 
        compromise claims, and access to administrative appeals 
        procedures which are both reasonable and protect the interests 
        of the United States.
            (6) To encourage agencies, when appropriate, to sell 
        delinquent debt, particularly debts with underlying collateral.
            (7) To rely on the experience and expertise of private 
        sector professionals to provide debt collection services to 
        Federal agencies.

    (c) Chapter 37 of title 31, United States Code, is amended--
            (1) in each of sections 3711, 3716, 3717, and 3718, by 
        striking ``the head of an executive or legislative agency'' each 
        place it appears and inserting ``the head of an executive, 
        judicial, or legislative agency''; and
            (2) by amending section 3701(a)(4) to read as follows:
            ``(4) `executive, judicial, or legislative agency' means a 
        department, agency, court, court administrative office, or 
        instrumentality in the executive, judicial, or legislative 
        branch of Government, including government corporations.''.

    (d)(1) Persons Subject to Administrative Offset.--Section 3701(c) of 
title 31, United States Code, is amended to read as follows:
    ``(c) In sections 3716 and 3717 of this title, the term `person' 
does not include an agency of the United States Government.''.
    (2) Requirements and Procedures.--Section 3716 of title 31, United 
States Code, is amended--
            (A) by amending subsection (b) to read as follows:

    ``(b) Before collecting a claim by administrative offset, the head 
of an executive, judicial, or legislative agency must either--
            ``(1) adopt, without change, regulations on collecting by 
        administrative offset promulgated by the Department of Justice, 
        the General Accounting Office, or the Department of the 
        Treasury; or
            ``(2) prescribe regulations on collecting by administrative 
        offset consistent with the regulations referred to in paragraph 
        (1).'';
            (B) by amending subsection (c)(2) to read as follows:
            ``(2) when a statute explicitly prohibits using 
        administrative offset or setoff to collect the claim or type of 
        claim involved.'';
            (C) by redesignating subsection (c) as subsection (e); and
            (D) by inserting after subsection (b) the following new 
        subsections:

    ``(c)(1)(A) Except as otherwise provided in this subsection, a 
disbursing official of the Department of the Treasury, the Department of 
Defense, the United States Postal Service, or any other government 
corporation, or any disbursing official of the United States designated 
by the Secretary of the Treasury, shall offset at least annually the 
amount of a payment which a payment certifying agency has certified to 
the disbursing official for disbursement, by an amount equal to the 
amount of a claim which a creditor agency has certified to the Secretary 
of the Treasury pursuant to this subsection.

    ``(B) An agency that designates disbursing officials pursuant to 
section 3321(c) of this title is not required to certify claims

[[Page 110 STAT. 1321-360]]

arising out of its operations to the Secretary of the Treasury before 
such agency's disbursing officials offset such claims.
    ``(C) Payments certified by the Department of Education under a 
program administered by the Secretary of Education under title IV of the 
Higher Education Act of 1965 shall not be subject to administrative 
offset under this subsection.
    ``(2) Neither the disbursing official nor the payment certifying 
agency shall be liable--
            ``(A) for the amount of the administrative offset on the 
        basis that the underlying obligation, represented by the payment 
        before the administrative offset was taken, was not satisfied; 
        or
            ``(B) for failure to provide timely notice under paragraph 
        (8).

    ``(3)(A)(i) Notwithstanding any other provision of law (including 
sections 207 and 1631(d)(1) of the Social Security Act (42 U.S.C. 407 
and 1383(d)(1)), section 413(b) of Public Law 91-173 (30 U.S.C. 923(b)), 
and section 14 of the Act of August 29, 1935 (45 U.S.C. 231m)), except 
as provided in clause (ii), all payments due to an individual under--
            ``(I) the Social Security Act,
            ``(II) part B of the Black Lung Benefits Act, or
            ``(III) any law administered by the Railroad Retirement 
        Board (other than payments that such Board determines to be tier 
        2 benefits),

shall be subject to offset under this section.
    ``(ii) An amount of $9,000 which a debtor may receive under Federal 
benefit programs cited under clause (i) within a 12-month period shall 
be exempt from offset under this subsection. In applying the $9,000 
exemption, the disbursing official shall--
            ``(I) reduce the $9,000 exemption amount for the 12-month 
        period by the amount of all Federal benefit payments made during 
        such 12-month period which are not subject to offset under this 
        subsection; and
            ``(II) apply a prorated amount of the exemption to each 
        periodic benefit payment to be made to the debtor during the 
        applicable 12-month period.

For purposes of the preceding sentence, the amount of a periodic benefit 
payment shall be the amount after any reduction or deduction required 
under the laws authorizing the program under which such payment is 
authorized to be made (including any reduction or deduction to recover 
any overpayment under such program).
    ``(B) The Secretary of the Treasury shall exempt from administrative 
offset under this subsection payments under means-tested programs when 
requested by the head of the respective agency. The Secretary may exempt 
other payments from administrative offset under this subsection upon the 
written request of the head of a payment certifying agency. A written 
request for exemption of other payments must provide justification for 
the exemption under standards prescribed by the Secretary. Such 
standards shall give due consideration to whether administrative offset 
would tend to interfere substantially with or defeat the purposes of the 
payment certifying agency's program. <<NOTE: Reports.>>  The Secretary 
shall report to the Congress annually on exemptions granted under this 
section.

    ``(C) The provisions of sections 205(b)(1) and 1631(c)(1) of the 
Social Security Act shall not apply to any administrative offset

[[Page 110 STAT. 1321-361]]

executed pursuant to this section against benefits authorized by either 
title II or title XVI of the Social Security Act, respectively.
    ``(4) The Secretary of the Treasury may charge a fee sufficient to 
cover the full cost of implementing this subsection. The fee may be 
collected either by the retention of a portion of amounts collected 
pursuant to this subsection, or by billing the agency referring or 
transferring a claim for those amounts. Fees charged to the agencies 
shall be based on actual administrative offsets completed. Amounts 
received by the United States as fees under this subsection shall be 
deposited into the account of the Department of the Treasury under 
section 3711(g)(7) of this title, and shall be collected and accounted 
for in accordance with the provisions of that section.
    ``(5) The Secretary of the Treasury in consultation with the 
Commissioner of Social Security and the Director of the Office of 
Management and Budget, may prescribe such rules, regulations, and 
procedures as the Secretary of the Treasury considers necessary to carry 
out this subsection. <<NOTE: Rules, regulations, and procedures.>>  The 
Secretary shall consult with the heads of affected agencies in the 
development of such rules, regulations, and procedures.

    ``(6) <<NOTE: Notification.>>  Any Federal agency that is owed by a 
person a past due, legally enforceable nontax debt that is over 180 days 
delinquent, including nontax debt administered by a third party acting 
as an agent for the Federal Government, shall notify the Secretary of 
the Treasury of all such nontax debts for purposes of administrative 
offset under this subsection.

    ``(7)(A) <<NOTE: Notification.>>  The disbursing official conducting 
an administrative offset with respect to a payment to a payee shall 
notify the payee in writing of--
            ``(i) the occurrence of the administrative offset to satisfy 
        a past due legally enforceable debt, including a description of 
        the type and amount of the payment otherwise payable to the 
        payee against which the offset was executed;
            ``(ii) the identity of the creditor agency requesting the 
        offset; and
            ``(iii) a contact point within the creditor agency that will 
        handle concerns regarding the offset.

    ``(B) If the payment to be offset is a periodic benefit payment, the 
disbursing official shall take reasonable steps, as determined by the 
Secretary of the Treasury, to provide the notice to the payee not later 
than the date on which the payee is otherwise scheduled to receive the 
payment, or as soon as practical thereafter, but no later than the date 
of the administrative offset. Notwithstanding the preceding sentence, 
the failure of the debtor to receive such notice shall not impair the 
legality of such administrative offset.
    ``(8) A levy pursuant to the Internal Revenue Code of 1986 shall 
take precedence over requests for administrative offset pursuant to 
other laws.
    ``(d) Nothing in this section is intended to prohibit the use of any 
other administrative offset authority existing under statute or common 
law.''.
    (3) Nontax Debt or Claim Defined.--Section 3701 of title 31, United 
States Code, is amended in subsection (a) by adding at the end the 
following new paragraph:

[[Page 110 STAT. 1321-362]]

            ``(8) `nontax' means, with respect to any debt or claim, any 
        debt or claim other than a debt or claim under the Internal 
        Revenue Code of 1986.''.

    (4) Treasury Check Withholding.--Section 3712 of title 31, United 
States Code, is amended by adding at the end the following new 
subsection:
    ``(e) Treasury Check Offset.--
            ``(1) In general.--To facilitate collection of amounts owed 
        by presenting banks pursuant to subsection (a) or (b), upon the 
        direction of the Secretary, a Federal reserve bank shall 
        withhold credit from banks presenting Treasury checks for 
        ultimate charge to the account of the United States Treasury. By 
        presenting Treasury checks for payment a presenting bank is 
        deemed to authorize this offset.
            ``(2) Attempt to collect required.--Prior to directing 
        offset under subsection (a)(1), the Secretary shall first 
        attempt to collect amounts owed in the manner provided by 
        sections 3711 and 3716.''.

    (e) Section 3716 of title 31, United States Code, as amended by 
subsection (d)(2) of this section, is further amended by adding at the 
end the following new subsections:
    ``(f) The Secretary may waive the requirements of sections 552a(o) 
and (p) of title 5 for administrative offset or claims collection upon 
written certification by the head of a State or an executive, judicial, 
or legislative agency seeking to collect the claim that the requirements 
of subsection (a) of this section have been met.
    ``(g) The Data Integrity Board of the Department of the Treasury 
established under 552a(u) of title 5 shall review and include in reports 
under paragraph (3)(D) of that section a description of any matching 
activities conducted under this section. If the Secretary has granted a 
waiver under subsection (f) of this section, no other Data Integrity 
Board is required to take any action under section 552a(u) of title 
5.''.
    (f) Section 3716 of title 31, United States Code, as amended by 
subsections (d) and (e) of this section, is further amended by adding at 
the end the following new subsection:

    ``(h)(1) The Secretary may, in the discretion of the Secretary, 
apply subsection (a) with respect to any past-due, legally-enforceable 
debt owed to a State if--
            ``(A) the appropriate State disbursing official requests 
        that an offset be performed; and
            ``(B) a reciprocal agreement with the State is in effect 
        which contains, at a minimum--
                    ``(i) requirements substantially equivalent to 
                subsection (b) of this section; and
                    ``(ii) any other requirements which the Secretary 
                considers appropriate to facilitate the offset and 
                prevent duplicative efforts.

    ``(2) This subsection does not apply to--
            ``(A) the collection of a debt or claim on which the 
        administrative costs associated with the collection of the debt 
        or claim exceed the amount of the debt or claim;
            ``(B) any collection of any other type, class, or amount of 
        claim, as the Secretary considers necessary to protect the 
        interest of the United States; or

[[Page 110 STAT. 1321-363]]

            ``(C) the disbursement of any class or type of payment 
        exempted by the Secretary of the Treasury at the request of a 
        Federal agency.

    ``(3) In applying this section with respect to any debt owed to a 
State, subsection (c)(3)(A) shall not apply.''.
    (g)(1) Title 31.--Title 31, United States Code, is amended--
            (A) in section 3322(a), by inserting ``section 3716 and 
        section 3720A of this title and'' after ``Except as provided 
        in'';
            (B) in section 3325(a)(3), by inserting ``or pursuant to 
        payment intercepts or offsets pursuant to section 3716 or 3720A 
        of this title,'' after ``voucher''; and
            (C) in each of sections 3711(e)(2) and 3717(h) by inserting 
        ``, the Secretary of the Treasury,'' after ``Attorney General''.

    (2) Internal Revenue Code of 1986.--Subparagraph (A) of section 
6103(l)(10) of the Internal Revenue Code of 1986 (26 U.S.C. 6103(l)(10)) 
is amended by inserting ``and to officers and employees of the 
Department of the Treasury in connection with such reduction'' after 
``6402''.
    (h) Section 5514 of title 5, United States Code, is amended--
            (A) in subsection (a)--
                    (i) by adding at the end of paragraph (1) the 
                following: ``All Federal agencies to which debts are 
                owed and which have outstanding delinquent debts shall 
                participate in a computer match at least annually of 
                their delinquent debt records with records of Federal 
                employees to identify those employees who are delinquent 
                in repayment of those debts. The preceding sentence 
                shall not apply to any debt under the Internal Revenue 
                Code of 1986. <<NOTE: Records.>>  Matched Federal 
                employee records shall include, but shall not be limited 
                to, records of active Civil Service employees 
                government-wide, military active duty personnel, 
                military reservists, United States Postal Service 
                employees, employees of other government corporations, 
                and seasonal and temporary employees. The Secretary of 
                the Treasury shall establish and maintain an interagency 
                consortium to implement centralized salary offset 
                computer matching, and promulgate regulations for this 
                program. Agencies that perform centralized salary offset 
                computer matching services under this subsection are 
                authorized to charge a fee sufficient to cover the full 
                cost for such services.'';
                    (ii) by redesignating paragraphs (3) and (4) as 
                paragraphs (4) and (5), respectively;
                    (iii) by inserting after paragraph (2) the following 
                new paragraph:

    ``(3) Paragraph (2) shall not apply to routine intra-agency 
adjustments of pay that are attributable to clerical or administrative 
errors or delays in processing pay documents that have occurred within 
the four pay periods preceding the adjustment and to any adjustment that 
amounts to $50 or less, if at the time of such adjustment, or as soon 
thereafter as practical, the individual is provided written notice of 
the nature and the amount of the adjustment and a point of contact for 
contesting such adjustment.''; and
                    (iv) by amending paragraph (5)(B) (as redesignated 
                by clause (ii) of this subparagraph) to read as follows:
                    ``(B) `agency' includes executive departments and 
                agencies, the United States Postal Service, the Postal 
                Rate Commission, the United States Senate, the United 
                States

[[Page 110 STAT. 1321-364]]

                House of Representatives, and any court, court 
                administrative office, or instrumentality in the 
                judicial or legislative branches of the Government, and 
                government corporations.'';
            (B) by adding after subsection (c) the following new 
        subsection:

    ``(d) A levy pursuant to the Internal Revenue Code of 1986 shall 
take precedence over other deductions under this section.''.
    (i)(1) In General.--Section 7701 of title 31, United States Code, is 
amended by adding at the end the following new subsections:
    ``(c)(1) The head of each Federal agency shall require each person 
doing business with that agency to furnish to that agency such person's 
taxpayer identifying number.
    ``(2) For purposes of this subsection, a person shall be considered 
to be doing business with a Federal agency if the person is--
            ``(A) a lender or servicer in a Federal guaranteed or 
        insured loan program administered by the agency;
            ``(B) an applicant for, or recipient of, a Federal license, 
        permit, right-of-way, grant, or benefit payment administered by 
        the agency or insurance administered by the agency;
            ``(C) a contractor of the agency;
            ``(D) assessed a fine, fee, royalty or penalty by the 
        agency; and
            ``(E) in a relationship with the agency that may give rise 
        to a receivable due to that agency, such as a partner of a 
        borrower in or a guarantor of a Federal direct or insured loan 
        administered by the agency.

    ``(3) Each agency shall disclose to a person required to furnish a 
taxpayer identifying number under this subsection its intent to use such 
number for purposes of collecting and reporting on any delinquent 
amounts arising out of such person's relationship with the Government.
    ``(4) For purposes of this subsection, a person shall not be treated 
as doing business with a Federal agency solely by reason of being a 
debtor under third party claims of the United States. The preceding 
sentence shall not apply to a debtor owing claims resulting from 
petroleum pricing violations or owing claims resulting from Federal loan 
or loan guarantee/insurance programs.
    ``(d) Notwithstanding section 552a(b) of title 5, United States 
Code, creditor agencies to which a delinquent claim is owed, and their 
agents, may match their debtor records with Department of Health and 
Human Services, and Department of Labor records to obtain names 
(including names of employees), name controls, names of employers, 
taxpayer identifying numbers, addresses (including addresses of 
employers), and dates of birth. The preceding sentence shall apply to 
the disclosure of taxpayer identifying numbers only if such disclosure 
is not otherwise prohibited by section 6103 of the Internal Revenue Code 
of 1986. The Department of Health and Human Services, and the Department 
of Labor shall release that information to creditor agencies and may 
charge reasonable fees sufficient to pay the costs associated with that 
release.''.
    (2) Included Federal Loan Program Defined.--Subparagraph (C) of 
section 6103(l)(3) of the Internal Revenue Code of 1986 <<NOTE: 26 USC 
6103.>>  (relating to disclosure that applicant for Federal loan has tax 
delinquent account) is amended to read as follows:

[[Page 110 STAT. 1321-365]]

                    ``(C) Included Federal Loan Program Defined.--For 
                purposes of this paragraph, the term `included Federal 
                loan program' means any program under which the United 
                States or a Federal agency makes, guarantees, or insures 
                loans.''.

    (3) Clerical Amendments.--
            (A) The chapter title to chapter 77 of subtitle VI of title 
        31, United States Code, is amended to read as follows:

       ``CHAPTER 77--ACCESS TO INFORMATION FOR DEBT COLLECTION''.

            (B) The table of chapters for subtitle VI of title 31, 
        United States Code, is amended by inserting before the item 
        relating to chapter 91 the following new item:

``77. Access to information for debt collection..................7701''.

    (j)(1) In General.--Title 31, United States Code, is amended by 
inserting after section 3720A the following new section:

``Sec. 3720B. Barring delinquent Federal debtors from obtaining Federal 
                        loans or loan insurance guarantees

    ``(a) <<NOTE: Standards.>>  Unless this subsection is waived by the 
head of a Federal agency, a person may not obtain any Federal financial 
assistance in the form of a loan (other than a disaster loan) or loan 
insurance or guarantee administered by the agency if the person has an 
outstanding debt (other than a debt under the Internal Revenue Code of 
1986) with any Federal agency which is in a delinquent status, as 
determined under standards prescribed by the Secretary of the Treasury. 
Such a person may obtain additional loans or loan guarantees only after 
such delinquency is resolved in accordance with those standards. The 
Secretary of the Treasury may exempt, at the request of an agency, any 
class of claims.

    ``(b) The head of a Federal agency may delegate the waiver authority 
under subsection (a) to the Chief Financial Officer of the agency. The 
waiver authority may be redelegated only to the Deputy Chief Financial 
Officer of the agency.''

    (2) Clerical Amendment.--The table of sections for subchapter II of 
chapter 37 of title 31, United States Code, is amended by inserting 
after the item relating to section 3720A the following new item:

``3720B. Barring delinquent Federal debtors from obtaining Federal loans 
           or loan insurance guarantees.''.

    (k) Section 3711(f) of title 31, United States Code, is amended--
            (1) by striking ``may'' the first place it appears and 
        inserting ``shall'';
            (2) by striking ``an individual'' each place it appears and 
        inserting ``a person'';
            (3) by striking ``the individual'' each place it appears and 
        inserting ``the person''; and
            (4) by adding at the end the following new paragraphs:

    ``(4) The head of each executive agency shall require, as a 
condition for insuring or guaranteeing any loan, financing, or other 
extension of credit under any law to a person, that the lender provide 
information relating to the extension of credit to consumer reporting 
agencies or commercial reporting agencies, as appropriate.
    ``(5) The head of each executive agency may provide to a consumer 
reporting agency or commercial reporting agency information from a 
system of records that a person is responsible for a claim which is 
current, if notice required by section 552a(e)(4)

[[Page 110 STAT. 1321-366]]

of title 5 indicates that information in the system may be disclosed to 
a consumer reporting agency or commercial reporting agency, 
respectively.''.
    (l) Section 3718 of title 31, United States Code, is amended--
            (1) in subsection (a), by striking the first sentence and 
        inserting the following: ``Under conditions the head of an 
        executive, judicial, or legislative agency considers 
        appropriate, the head of the agency may enter into a contract 
        with a person for collection service to recover indebtedness 
        owed, or to locate or recover assets of, the United States 
        Government. The head of an agency may not enter into a contract 
        under the preceding sentence to locate or recover assets of the 
        United States held by a State government or financial 
        institution unless that agency has established procedures 
        approved by the Secretary of the Treasury to identify and 
        recover such assets.''; and
            (2) in subsection (d), by inserting ``, or to locate or 
        recover assets of,'' after ``owed''.

    (m)(1) In General.--Section 3711 of title 31, United States Code, is 
amended by adding at the end the following new subsections:
    ``(g)(1) If a nontax debt or claim owed to the United States has 
been delinquent for a period of 180 days--
            ``(A) the head of the executive, judicial, or legislative 
        agency that administers the program that gave rise to the debt 
        or claim shall transfer the debt or claim to the Secretary of 
        the Treasury; and
            ``(B) upon such transfer the Secretary of the Treasury shall 
        take appropriate action to collect or terminate collection 
        actions on the debt or claim.

    ``(2) Paragraph (1) shall not apply--
            ``(A) to any debt or claim that--
                    ``(i) is in litigation or foreclosure;
                    ``(ii) will be disposed of under an asset sales 
                program within 1 year after becoming eligible for sale, 
                or later than 1 year if consistent with an asset sales 
                program and a schedule established by the agency and 
                approved by the Director of the Office of Management and 
                Budget;
                    ``(iii) has been referred to a private collection 
                contractor for collection for a period of time 
                determined by the Secretary of the Treasury;
                    ``(iv) has been referred by, or with the consent of, 
                the Secretary of the Treasury to a debt collection 
                center for a period of time determined by the Secretary 
                of the Treasury; or
                    ``(v) will be collected under internal offset, if 
                such offset is sufficient to collect the claim within 3 
                years after the date the debt or claim is first 
                delinquent; and
            ``(B) to any other specific class of debt or claim, as 
        determined by the Secretary of the Treasury at the request of 
        the head of an executive, judicial, or legislative agency or 
        otherwise.

    ``(3) For purposes of this section, the Secretary of the Treasury 
may designate, and withdraw such designation of debt collection centers 
operated by other Federal agencies. The Secretary of the Treasury shall 
designate such centers on the basis of their performance in collecting 
delinquent claims owed to the Government.

[[Page 110 STAT. 1321-367]]

    ``(4) At the discretion of the Secretary of the Treasury, referral 
of a nontax claim may be made to--
            ``(A) any executive department or agency operating a debt 
        collection center for servicing, collection, compromise, or 
        suspension or termination of collection action;
            ``(B) a private collection contractor operating under a 
        contract for servicing or collection action; or
            ``(C) the Department of Justice for litigation.

    ``(5) Nontax claims referred or transferred under this section shall 
be serviced, collected, or compromised, or collection action thereon 
suspended or terminated, in accordance with otherwise applicable 
statutory requirements and authorities. Executive departments and 
agencies operating debt collection centers may enter into agreements 
with the Secretary of the Treasury to carry out the purposes of this 
subsection. The Secretary of the Treasury shall--
            ``(A) maintain competition in carrying out this subsection;
            ``(B) maximize collections of delinquent debts by placing 
        delinquent debts quickly;
            ``(C) maintain a schedule of private collection contractors 
        and debt collection centers eligible for referral of claims; and
            ``(D) refer delinquent debts to the person most appropriate 
        to collect the type or amount of claim involved.

    ``(6) Any agency operating a debt collection center to which nontax 
claims are referred or transferred under this subsection may charge a 
fee sufficient to cover the full cost of implementing this subsection. 
The agency transferring or referring the nontax claim shall be charged 
the fee, and the agency charging the fee shall collect such fee by 
retaining the amount of the fee from amounts collected pursuant to this 
subsection. Agencies may agree to pay through a different method, or to 
fund an activity from another account or from revenue received from the 
procedure described under section 3720C of this title. Amounts charged 
under this subsection concerning delinquent claims may be considered as 
costs pursuant to section 3717(e) of this title.
    ``(7) Notwithstanding any other law concerning the depositing and 
collection of Federal payments, including section 3302(b) of this title, 
agencies collecting fees may retain the fees from amounts collected. Any 
fee charged pursuant to this subsection shall be deposited into an 
account to be determined by the executive department or agency operating 
the debt collection center charging the fee (in this subsection referred 
to in this section as the `Account'). Amounts deposited in the Account 
shall be available until expended to cover costs associated with the 
implementation and operation of Governmentwide debt collection 
activities. Costs properly chargeable to the Account include--
            ``(A) the costs of computer hardware and software, word 
        processing and telecommunications equipment, and other 
        equipment, supplies, and furniture;
            ``(B) personnel training and travel costs;
            ``(C) other personnel and administrative costs;
            ``(D) the costs of any contract for identification, billing, 
        or collection services; and
            ``(E) reasonable costs incurred by the Secretary of the 
        Treasury, including services and utilities provided by the 
        Secretary, and administration of the Account.

[[Page 110 STAT. 1321-368]]

    ``(8) Not later than January 1 of each year, there shall be 
deposited into the Treasury as miscellaneous receipts an amount equal to 
the amount of unobligated balances remaining in the Account at the close 
of business on September 30 of the preceding year, minus any part of 
such balance that the executive department or agency operating the debt 
collection center determines is necessary to cover or defray the costs 
under this subsection for the fiscal year in which the deposit is made.
    ``(9) Before discharging any delinquent debt owed to any executive, 
judicial, or legislative agency, the head of such agency shall take all 
appropriate steps to collect such debt, including (as applicable)--
            ``(A) administrative offset,
            ``(B) tax refund offset,
            ``(C) Federal salary offset,
            ``(D) referral to private collection contractors,
            ``(E) referral to agencies operating a debt collection 
        center,
            ``(F) reporting delinquencies to credit reporting bureaus,
            ``(G) garnishing the wages of delinquent debtors, and
            ``(H) litigation or foreclosure.

    ``(10) To carry out the purposes of this subsection, the Secretary 
of the Treasury may prescribe such rules, regulations, and procedures as 
the Secretary considers necessary and transfer such funds from funds 
appropriated to the Department of the Treasury as may be necessary to 
meet existing liabilities and obligations incurred prior to the receipt 
of revenues that result from debt collections.
    ``(h)(1) The head of an executive, judicial, or legislative agency 
acting under subsection (a)(1), (2), or (3) of this section to collect a 
claim, compromise a claim, or terminate collection action on a claim may 
obtain a consumer report (as that term is defined in section 603 of the 
Fair Credit Reporting Act (15 U.S.C. 1681a)) or comparable credit 
information on any person who is liable for the claim.
    ``(2) The obtaining of a consumer report under this subsection is 
deemed to be a circumstance or purpose authorized or listed under 
section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b).''.
    (2) Returns Relating to Cancellation of Indebtedness by Certain 
Entities.--
            (A) In general.--Subsection (a) of section 6050P of the 
        Internal Revenue Code of 1986 <<NOTE: 26 USC 6050P.>> (relating 
        to returns relating to the cancellation of indebtedness by 
        certain financial entities) is amended by striking ``applicable 
        financial entity'' and inserting ``applicable entity''.
            (B) Entities to which requirement applies.--Subsection (c) 
        of section 6050P of such Code is amended--
                    (i) by redesignating paragraphs (1) and (2) as 
                paragraphs (2) and (3), respectively, and inserting 
                before paragraph (2) (as so redesignated) the following 
                new paragraph:
            ``(1) Applicable entity.--The term `applicable entity' 
        means--
                    ``(A) an executive, judicial, or legislative agency 
                (as defined in section 3701(a)(4) of title 31, United 
                States Code), and
                    ``(B) an applicable financial entity.'', and

[[Page 110 STAT. 1321-369]]

                    (ii) in paragraph (3), as so redesignated, by 
                striking ``(1)(B)'' and inserting ``(1)(A) or (2)(B)''.
            (C) Alternative procedure.--Section 6050P <<NOTE: 26 USC 
        6050P.>>  of such Code is amended by adding at the end the 
        following new subsection:

    ``(e) Alternative Procedure.--In lieu of making a return required 
under subsection (a), an agency described in subsection (c)(1)(A) may 
submit to the Secretary (at such time and in such form as the Secretary 
may by regulations prescribe) information sufficient for the Secretary 
to complete such a return on behalf of such agency. Upon receipt of such 
information, the Secretary shall complete such return and provide a copy 
of such return to such agency.''
            (D) Conforming amendments.--
                    (i) Subsection (d) of section 6050P of such Code is 
                amended by striking ``applicable financial entity'' and 
                inserting ``applicable entity''.
                    (ii) The heading of section 6050P of such Code is 
                amended to read as follows:

``SEC. 6050P. RETURNS RELATING TO THE CANCELLATION OF INDEBTEDNESS BY 
            CERTAIN ENTITIES.''

                    (iii) The table of sections for subpart B of part 
                III of subchapter A of chapter 61 of such Code is 
                amended by striking the item relating to section 6050P 
                and inserting the following new item:
                ``Sec. 6050P. Returns relating to the cancellation of 
                                indebtedness by certain entities.''

    (n) <<NOTE: Effective date. 31 USC 3711 note.>>  Effective October 
1, 1995, section 11 of the Administrative Dispute Resolution Act (Public 
Law 101-552, 5 U.S.C. 571 note) shall not apply to the amendment made by 
section 8(b) of such Act.

    (o)(1) In General.--Chapter 37 of title 31, United States Code, is 
amended in subchapter II by adding after section 3720C, as added by 
subsection (t) of this section, the following new section:

``Sec. 3720D. Garnishment

    ``(a) Notwithstanding any provision of State law, the head of an 
executive, judicial, or legislative agency that administers a program 
that gives rise to a delinquent nontax debt owed to the United States by 
an individual may in accordance with this section garnish the disposable 
pay of the individual to collect the amount owed, if the individual is 
not currently making required repayment in accordance with any agreement 
between the agency head and the individual.
    ``(b) In carrying out any garnishment of disposable pay of an 
individual under subsection (a), the head of an executive, judicial, or 
legislative agency shall comply with the following requirements:
            ``(1) The amount deducted under this section for any pay 
        period may not exceed 15 percent of disposable pay, except that 
        a greater percentage may be deducted with the written consent of 
        the individual.
            ``(2) <<NOTE: Notification.>>  The individual shall be 
        provided written notice, sent by mail to the individual's last 
        known address, a minimum of 30 days prior to the initiation of 
        proceedings, from the head of the executive, judicial, or 
        legislative agency, informing the individual of--
                    ``(A) the nature and amount of the debt to be 
                collected;

[[Page 110 STAT. 1321-370]]

                    ``(B) the intention of the agency to initiate 
                proceedings to collect the debt through deductions from 
                pay; and
                    ``(C) an explanation of the rights of the individual 
                under this section.
            ``(3) <<NOTE: Records.>>  The individual shall be provided 
        an opportunity to inspect and copy records relating to the debt.
            ``(4) <<NOTE: Contracts.>>  The individual shall be provided 
        an opportunity to enter into a written agreement with the 
        executive, judicial, or legislative agency, under terms 
        agreeable to the head of the agency, to establish a schedule for 
        repayment of the debt.
            ``(5) The individual shall be provided an opportunity for a 
        hearing in accordance with subsection (c) on the determination 
        of the head of the executive, judicial, or legislative agency 
        concerning--
                    ``(A) the existence or the amount of the debt, and
                    ``(B) in the case of an individual whose repayment 
                schedule is established other than by a written 
                agreement pursuant to paragraph (4), the terms of the 
                repayment schedule.
            ``(6) If the individual has been reemployed within 12 months 
        after having been involuntarily separated from employment, no 
        amount may be deducted from the disposable pay of the individual 
        until the individual has been reemployed continuously for at 
        least 12 months.

    ``(c)(1) A hearing under subsection (b)(5) shall be provided prior 
to issuance of a garnishment order if the individual, on or before the 
15th day following the mailing of the notice described in subsection 
(b)(2), and in accordance with such procedures as the head of the 
executive, judicial, or legislative agency may prescribe, files a 
petition requesting such a hearing.
    ``(2) If the individual does not file a petition requesting a 
hearing prior to such date, the head of the agency shall provide the 
individual a hearing under subsection (a)(5) upon request, but such 
hearing need not be provided prior to issuance of a garnishment order.
    ``(3) The hearing official shall issue a final decision at the 
earliest practicable date, but not later than 60 days after the filing 
of the petition requesting the hearing.
    ``(d) The notice to the employer of the withholding order shall 
contain only such information as may be necessary for the employer to 
comply with the withholding order.
    ``(e)(1) An employer may not discharge from employment, refuse to 
employ, or take disciplinary action against an individual subject to 
wage withholding in accordance with this section by reason of the fact 
that the individual's wages have been subject to garnishment under this 
section, and such individual may sue in a State or Federal court of 
competent jurisdiction any employer who takes such action.
    ``(2) <<NOTE: Courts.>>  The court shall award attorneys' fees to a 
prevailing employee and, in its discretion, may order reinstatement of 
the individual, award punitive damages and back pay to the employee, or 
order such other remedy as may be reasonably necessary.

    ``(f)(1) The employer of an individual--
            ``(A) shall pay to the head of an executive, judicial, or 
        legislative agency as directed in a withholding order issued in 
        an action under this section with respect to the individual, and

[[Page 110 STAT. 1321-371]]

            ``(B) shall be liable for any amount that the employer fails 
        to withhold from wages due an employee following receipt by such 
        employer of notice of the withholding order, plus attorneys' 
        fees, costs, and, in the court's discretion, punitive damages.

    ``(2)(A) The head of an executive, judicial, or legislative agency 
may sue an employer in a State or Federal court of competent 
jurisdiction to recover amounts for which the employer is liable under 
paragraph (1)(B).
    ``(B) A suit under this paragraph may not be filed before the 
termination of the collection action, unless earlier filing is necessary 
to avoid expiration of any applicable statute of limitations period.
    ``(3) Notwithstanding paragraphs (1) and (2), an employer shall not 
be required to vary its normal pay and disbursement cycles in order to 
comply with this subsection.

    ``(g) For the purpose of this section, the term `disposable pay' 
means that part of the compensation of any individual from an employer 
remaining after the deduction of any amounts required by any other law 
to be withheld.
    ``(h) <<NOTE: Regulations.>>  The Secretary of the Treasury shall 
issue regulations to implement this section.''.

    (2) Clerical Amendment.--The table of sections for subchapter II of 
chapter 37 of title 31, United States Code, is amended by inserting 
after the item relating to section 3720C (as added by subsection (t) of 
this section) the following new item:

``3720D. Garnishment.''.

    (p) Section 3711 of title 31, United States Code, as amended by 
subsection (m) of this section, is further amended by adding at the end 
the following new subsection:
    ``(i)(1) The head of an executive, judicial, or legislative agency 
may sell, subject to section 504(b) of the Federal Credit Reform Act of 
1990 and using competitive procedures, any nontax debt owed to the 
United States that is delinquent for more than 90 days. Appropriate fees 
charged by a contractor to assist in the conduct of a sale under this 
subsection may be payable from the proceeds of the sale.
    ``(2) After terminating collection action, the head of an executive, 
judicial, or legislative agency shall sell, using competitive 
procedures, any nontax debt or class of nontax debts owed to the United 
States, if the Secretary of the Treasury determines the sale is in the 
best interests of the United States.
    ``(3) Sales of nontax debt under this subsection--
            ``(A) shall be for--
                    ``(i) cash, or
                    ``(ii) cash and a residuary equity or profit 
                participation, if the head of the agency reasonably 
                determines that the proceeds will be greater than sale 
                solely for cash,
            ``(B) shall be without recourse, but may include the use of 
        guarantees if otherwise authorized, and
            ``(C) shall transfer to the purchaser all rights of the 
        Government to demand payment of the nontax debt, other than with 
        respect to a residuary equity or profit participation under 
        subparagraph (A)(ii).

    ``(4)(A) <<NOTE: Reports.>>  Within one year after the date of 
enactment of the Debt Collection Improvement Act of 1996, each executive 
agency with current and delinquent collateralized nontax debts shall 
report to the Congress on the valuation of its existing portfolio of 
loans,

[[Page 110 STAT. 1321-372]]

notes and guarantees, and other collateralized debts based on standards 
developed by the Director of the Office of Management and Budget, in 
consultation with the Secretary of the Treasury.

    ``(B) The Director of the Office of Management and Budget shall 
determine what information is required to be reported to comply with 
subparagraph (A). At a minimum, for each financing account and for each 
liquidating account (as those terms are defined in sections 502(7) and 
502(8), respectively, of the Federal Credit Reform Act of 1990) the 
following information shall be reported:
            ``(i) The cumulative balance of current debts outstanding, 
        the estimated net present value of such debts, the annual 
        administrative expenses of those debts (including the portion of 
        salaries and expenses that are directly related thereto), and 
        the estimated net proceeds that would be received by the 
        Government if such debts were sold.
            ``(ii) The cumulative balance of delinquent debts, debts 
        outstanding, the estimated net present value of such debts, the 
        annual administrative expenses of those debts (including the 
        portion of salaries and expenses that are directly related 
        thereto), and the estimated net proceeds that would be received 
        by the Government if such debts were sold.
            ``(iii) The cumulative balance of guaranteed loans 
        outstanding, the estimated net present value of such guarantees, 
        the annual administrative expenses of such guarantees (including 
        the portion of salaries and expenses that are directly related 
        to such guaranteed loans), and the estimated net proceeds that 
        would be received by the Government if such loan guarantees were 
        sold.
            ``(iv) The cumulative balance of defaulted loans that were 
        previously guaranteed and have resulted in loans receivables, 
        the estimated net present value of such loan assets, the annual 
        administrative expenses of such loan assets (including the 
        portion of salaries and expenses that are directly related to 
        such loan assets), and the estimated net proceeds that would be 
        received by the Government if such loan assets were sold.
            ``(v) The marketability of all debts.

    ``(5) This subsection is not intended to limit existing statutory 
authority of agencies to sell loans, debts, or other assets.''.
    (q) Section 3717 of title 31, United States Code, is amended by 
adding at the end of subsection (h) the following new subsection:
    ``(i)(1) The head of an executive, judicial, or legislative agency 
may increase an administrative claim by the cost of living adjustment in 
lieu of charging interest and penalties under this section. Adjustments 
under this subsection will be computed annually.
    ``(2) For the purpose of this subsection--
            ``(A) the term `cost of living adjustment' means the 
        percentage by which the Consumer Price Index for the month of 
        June of the calendar year preceding the adjustment exceeds the 
        Consumer Price Index for the month of June of the calendar year 
        in which the claim was determined or last adjusted; and
            ``(B) the term `administrative claim' includes all debt that 
        is not based on an extension of Government credit through direct 
        loans, loan guarantees, or insurance, including fines, 
        penalties, and overpayments.''.

    (r)(1) In General.--Chapter 37 of title 31, United States Code, is 
amended in subchapter II by adding after section 3720D, as added by 
subsection (o) of this section, the following new section:

[[Page 110 STAT. 1321-373]]

``Sec. 3720E. Dissemination of information regarding identity of 
                        delinquent debtors

    ``(a) The head of any agency may, with the review of the Secretary 
of the Treasury, for the purpose of collecting any delinquent nontax 
debt owed by any person, publish or otherwise publicly disseminate 
information regarding the identity of the person and the existence of 
the nontax debt.
    ``(b)(1) <<NOTE: Regulations.>>  The Secretary of the Treasury, in 
consultation with the Director of the Office of Management and Budget 
and the heads of other appropriate Federal agencies, shall issue 
regulations establishing procedures and requirements the Secretary 
considers appropriate to carry out this section.

    ``(2) Regulations under this subsection shall include--
            ``(A) standards for disseminating information that maximize 
        collections of delinquent nontax debts, by directing actions 
        under this section toward delinquent debtors that have assets or 
        income sufficient to pay their delinquent nontax debt;
            ``(B) procedures and requirements that prevent dissemination 
        of information under this section regarding persons who have not 
        had an opportunity to verify, contest, and compromise their 
        nontax debt in accordance with this subchapter; and
            ``(C) procedures to ensure that persons are not incorrectly 
        identified pursuant to this section.''.

    (2) Clerical Amendment.--The table of sections for subchapter II of 
chapter 37 of title 31, United States Code, is amended by adding after 
the item relating to section 3720D (as added by subsection (o) of this 
section) the following new item:

``3720E. Dissemination of information regarding identity of delinquent 
           debtors.''.

    (s)(1) In General.--The Federal Civil Penalties Inflation Adjustment 
Act of 1990 (Public Law 101-410, 104 Stat. 890; 28 U.S.C. 2461 note) is 
amended--
            (A) by amending section 4 to read as follows:

    ``Sec. 4. The head of each agency shall, not later than 180 days 
after the date of enactment of the Debt Collection Improvement Act of 
1996, and at least once every 4 years thereafter--
            ``(1) <<NOTE: Regulations.>>  by regulation adjust each 
        civil monetary penalty provided by law within the jurisdiction 
        of the Federal agency, except for any penalty (including any 
        addition to tax and additional amount) under the Internal 
        Revenue Code of 1986, the Tariff Act of 1930, the Occupational 
        Safety and Health Act of 1970, or the Social Security Act, by 
        the inflation adjustment described under section 5 of this Act; 
        and
            ``(2) <<NOTE: Federal Register, Publication.>>  publish each 
        such regulation in the Federal Register.'';
            (B) in section 5(a), by striking ``The adjustment described 
        under paragraphs (4) and (5)(A) of section 4'' and inserting 
        ``The inflation adjustment under section 4''; and
            (C) by adding at the end the following new section:

    ``Sec. 7. Any increase under this Act in a civil monetary penalty 
shall apply only to violations which occur after the date the increase 
takes effect.''.
    (2) <<NOTE: 28 USC 2461 note.>>  Limitation on Initial Adjustment.--
The first adjustment of a civil monetary penalty made pursuant to the 
amendment made by paragraph (1) may not exceed 10 percent of such 
penalty.

    (t)(1) In General.--Title 31, United States Code, is amended by 
inserting after section 3720B (as added by subsection (j) of this 
section) the following new section:

[[Page 110 STAT. 1321-374]]

``Sec. 3720C. Debt Collection Improvement Account

    ``(a)(1) <<NOTE: Nomenclature.>> There is hereby established in the 
Treasury a special fund to be known as the `Debt Collection Improvement 
Account' (hereinafter in this section referred to as the `Account').

    ``(2) The Account shall be maintained and managed by the Secretary 
of the Treasury, who shall ensure that agency programs are credited with 
amounts transferred under subsection (b)(1).
    ``(b)(1) Not later than 30 days after the end of a fiscal year, an 
agency may transfer to the Account the amount described in paragraph 
(3), as adjusted under paragraph (4).
    ``(2) Agency transfers to the Account may include collections from--
            ``(A) salary, administrative, and tax refund offsets;
            ``(B) the Department of Justice;
            ``(C) private collection agencies;
            ``(D) sales of delinquent loans; and
            ``(E) contracts to locate or recover assets.

    ``(3) The amount referred to in paragraph (1) shall be 5 percent of 
the amount of delinquent debt collected by an agency in a fiscal year, 
minus the greater of--
            ``(A) 5 percent of the amount of delinquent nontax debt 
        collected by the agency in the previous fiscal year, or
            ``(B) 5 percent of the average annual amount of delinquent 
        nontax debt collected by the agency in the previous 4 fiscal 
        years.

    ``(4) In consultation with the Secretary of the Treasury, the Office 
of Management and Budget may adjust the amount described in paragraph 
(3) for an agency to reflect the level of effort in credit management 
programs by the agency. As an indicator of the level of effort in credit 
management, the Office of Management and Budget shall consider the 
following:
            ``(A) The number of days between the date a claim or debt 
        became delinquent and the date which an agency referred the debt 
        or claim to the Secretary of the Treasury or obtained an 
        exemption from this referral under section 3711(g)(2) of this 
        title.
            ``(B) The ratio of delinquent debts or claims to total 
        receivables for a given program, and the change in this ratio 
        over a period of time.

    ``(c)(1) The Secretary of the Treasury may make payments from the 
Account solely to reimburse agencies for qualified expenses. For 
agencies with franchise funds, such payments may be credited to 
subaccounts designated for debt collection.
    ``(2) For purposes of this section, the term `qualified expenses' 
means expenditures for the improvement of credit management, debt 
collection, and debt recovery activities, including--
            ``(A) account servicing (including cross-servicing under 
        section 3711(g) of this title),
            ``(B) automatic data processing equipment acquisitions,
            ``(C) delinquent debt collection,
            ``(D) measures to minimize delinquent debt,
            ``(E) sales of delinquent debt,
            ``(F) asset disposition, and
            ``(G) training of personnel involved in credit and debt 
        management.

    ``(3)(A) Amounts transferred to the Account shall be available to 
the Secretary of the Treasury for purposes of this section to

[[Page 110 STAT. 1321-375]]

the extent and in amounts provided in advance in appropriations Acts.
    ``(B) As soon as practicable after the end of the third fiscal year 
after which amounts transferred are first available pursuant to this 
section, and every 3 years thereafter, any uncommitted balance in the 
Account shall be transferred to the general fund of the Treasury as 
miscellaneous receipts.

    ``(d) For direct loans and loan guarantee programs subject to title 
V of the Congressional Budget Act of 1974, amounts credited in 
accordance with subsection (c) shall be considered administrative costs.
    ``(e) <<NOTE: Rules, regulations, and procedures.>>  The Secretary 
of the Treasury shall prescribe such rules, regulations, and procedures 
as the Secretary considers necessary or appropriate to carry out the 
purposes of this section.''.

    (2) Clerical Amendment.--The table of sections for chapter 37 of 
title 31, United States Code, is amended by inserting after the item 
relating to section 3720B (as added by subsection (j) of this section) 
the following new item:

``3720C. Debt Collection Improvement Account.''.


    (u)(1) Discretionary Authority.--Section 3720A of title 31, United 
States Code, is amended by adding after subsection (h) the following new 
subsection:
    ``(i) An agency subject to section 9 of the Act of May 18, 1933 (16 
U.S.C. 831h), may implement this section at its discretion.''.
    (2) Federal Agency Defined.--Section 6402(f) of the Internal Revenue 
Code of 1986 (26 U.S.C. 6402(f)) is amended to read as follows:
    ``(f) Federal Agency.--For purposes of this section, the term 
`Federal agency' means a department, agency, or instrumentality of the 
United States, and includes a Government corporation (as such term is 
defined in section 103 of title 5, United States Code).''.
    (v)(1) Notification of Secretary of the Treasury.--Section 3720A(a) 
of title 31, United States Code, is amended to read as follows:
    ``(a) <<NOTE: Notification.>>  Any Federal agency that is owed by a 
person a past-due, legally enforceable debt (including debt administered 
by a third party acting as an agent for the Federal Government) shall, 
and any agency subject to section 9 of the Act of May 18, 1933 (16 
U.S.C. 831h), owed such a debt may, in accordance with regulations 
issued pursuant to subsections (b) and (d), notify the Secretary of the 
Treasury at least once each year of the amount of such debt.''.

    (2) Implementation of Support Collection by Secretary of the 
Treasury.--Section 464(a) of the Social Security Act (42 U.S.C. 664(a)) 
is amended--
            (1) in paragraph (1), by adding at the end the following: 
        ``This subsection may be executed by the disbursing official of 
        the Department of the Treasury.''; and
            (2) in paragraph (2)(A), by adding at the end the following: 
        ``This subsection may be executed by the Secretary of the 
        Department of the Treasury or his designee.''.

    (w) Section 3720A(h) of title 31, United States Code, is amended to 
read as follows:
    ``(h)(1) The disbursing official of the Department of the Treasury--
            ``(1) <<NOTE: Notification.>>  shall notify a taxpayer in 
        writing of--

[[Page 110 STAT. 1321-376]]

                    ``(A) the occurrence of an offset to satisfy a past-
                due legally enforceable nontax debt;
                    ``(B) the identity of the creditor agency requesting 
                the offset; and
                    ``(C) a contact point within the creditor agency 
                that will handle concerns regarding the offset;
            ``(2) <<NOTE: Notification.>>  shall notify the Internal 
        Revenue Service on a weekly basis of--
                    ``(A) the occurrence of an offset to satisfy a past-
                due legally enforceable non-tax debt;
                    ``(B) the amount of such offset; and
                    ``(C) any other information required by regulations; 
                and
            ``(3) <<NOTE: Records.>>  shall match payment records with 
        requests for offset by using a name control, taxpayer 
        identifying number (as that term is used in section 6109 of the 
        Internal Revenue Code of 1986), and any other necessary 
        identifiers.''.

    ``(h)(2) The term `disbursing official' of the Department of the 
Treasury means the Secretary or his designee.''
    (x)(1) Amendments Relating to Electronic Funds Transfer.--Section 
3332 of title 31, United States Code, popularly known as the Federal 
Financial Management Act of 1994, is amended--
            (A) by redesignating subsection (e) as subsection (h), and 
 inserting after subsection (d) the following new subsections:

    ``(e)(1) Notwithstanding subsections (a) through (d) of this 
section, sections 5120 (a) and (d) of title 38, and any other provision 
of law, all Federal payments to a recipient who becomes eligible for 
that type of payment after 90 days after the date of the enactment of 
the Debt Collection Improvement Act of 1996 shall be made by electronic 
funds transfer.
    ``(2) The head of a Federal agency shall, with respect to Federal 
payments made or authorized by the agency, waive the application of 
paragraph (1) to a recipient of those payments upon receipt of written 
certification from the recipient that the recipient does not have an 
account with a financial institution or an authorized payment agent.
    ``(f)(1) Notwithstanding any other provision of law (including 
subsections (a) through (e) of this section and sections 5120 (a) and 
(d) of title 38), except as provided in paragraph (2) all Federal 
payments made after January 1, 1999, shall be made by electronic funds 
transfer.
    ``(2)(A) The Secretary of the Treasury may waive application of this 
subsection to payments--
            ``(i) for individuals or classes of individuals for whom 
        compliance imposes a hardship;
            ``(ii) for classifications or types of checks; or
            ``(iii) in other circumstances as may be necessary.

    ``(B) The Secretary of the Treasury shall make determinations under 
subparagraph (A) based on standards developed by the Secretary.
    ``(g) Each recipient of Federal payments required to be made by 
electronic funds transfer shall--
            ``(1) designate 1 or more financial institutions or other 
        authorized agents to which such payments shall be made; and
            ``(2) provide to the Federal agency that makes or authorizes 
        the payments information necessary for the recipient to receive

[[Page 110 STAT. 1321-377]]

        electronic funds transfer payments through each institution or 
        agent designated under paragraph (1).''; and
            (B) by adding after subsection (h) (as so redesignated) the 
        following new subsections:

    ``(i)(1) The Secretary of the Treasury may prescribe regulations 
that the Secretary considers necessary to carry out this section.

    ``(2) Regulations under this subsection shall ensure that 
individuals required under subsection (g) to have an account at a 
financial institution because of the application of subsection (f)(1)--
            ``(A) will have access to such an account at a reasonable 
        cost; and
            ``(B) are given the same consumer protections with respect 
        to the account as other account holders at the same financial 
        institution.

    ``(j) For purposes of this section--
            ``(1) The term `electronic funds transfer' means any 
        transfer of funds, other than a transaction originated by cash, 
        check, or similar paper instrument, that is initiated through an 
        electronic terminal, telephone, computer, or magnetic tape, for 
        the purpose of ordering, instructing, or authorizing a financial 
        institution to debit or credit an account. The term includes 
        Automated Clearing House transfers, Fed Wire transfers, 
        transfers made at automatic teller machines, and point-of-sale 
        terminals.
            ``(2) The term `Federal agency' means--
                    ``(A) an agency (as defined in section 101 of this 
                title); and
                    ``(B) a Government corporation (as defined in 
                section 103 of title 5).
            ``(3) The term `Federal payments' includes--
                    ``(A) Federal wage, salary, and retirement payments;
                    ``(B) vendor and expense reimbursement payments; and
                    ``(C) benefit payments.
        Such term shall not include any payment under the Internal 
        Revenue Code of 1986.''

    (2) Amendments Relating to Substitute Checks.--Section 3331 of title 
31, United States Code, is amended--
            (A) in subsection (b), by striking ``subsection (c)'' and 
        inserting ``subsection (c) or (f)'';
            (B) by redesignating subsection (f) as subsection (g); and
            (C) by inserting after subsection (e) the following new 
        subsection:

    ``(f) The Secretary may waive any provision of this section as may 
be necessary to ensure that claimants receive timely payments.''.
    (3) Permanent Funding of the Check Forgery Insurance Fund.--Section 
3343 of title 31, United States Code, is amended--
            (A) in subsection (a), by amending the second sentence to 
        read as follows: ``Necessary amounts are hereafter appropriated 
        to the Fund out of any moneys in the Treasury not otherwise 
        appropriated, and shall remain available until expended to make 
        the payments required or authorized under this section.'';
            (B) in subsection (b)--
                    (i) by inserting ``in the determination of the 
                Secretary the payee or special endorse establishes 
                that'' after ``without interest if'';

[[Page 110 STAT. 1321-378]]

                    (ii) in paragraph (2), by inserting ``and'' after 
                the semicolon;
                    (iii) in paragraph (3), by striking ``; and'' and 
                inserting a period; and
                    (iv) by striking paragraph (4);
            (C) in subsection (d), by inserting after the first sentence 
        the following new sentence: ``The Secretary may use amounts in 
        the Fund to reimburse payment certifying or authorizing agencies 
        for any payment that the Secretary determines would otherwise 
        have been payable from the Fund, and may reimburse certifying or 
        authorizing agencies with amounts recovered because of payee 
        nonentitlement.'';
            (D) by redesignating subsection (e) as subsection (g); and
            (E) by inserting after subsection (d) the following new 
        subsections:

    ``(e) The Secretary may waive any provision of this section as may 
be necessary to ensure that claimants receive timely payments.
    ``(f) Under such conditions as the Secretary may prescribe, the 
Secretary may delegate duties and powers of the Secretary under this 
section to the head of an agency. Consistent with a delegation from the 
Secretary under this subsection, the head of an agency may redelegate 
those duties and powers to officers or employees of the agency.''.
    (y) Section 3325 of title 31, United States Code, is amended by 
adding at the end the following new subsection:
    ``(d) The head of an executive agency or an officer or employee of 
an executive agency referred to in subsection (a)(1)(B), as applicable, 
shall include with each certified voucher submitted to a disbursing 
official pursuant to this section the taxpayer identifying number of 
each person to whom payment may be made under the voucher.''.
    (z)(1) In general.--Section 3701 of title 31, United States Code, is 
amended--
            (A) by amending subsection (a)(1) to read as follows:
            ``(1) `administrative offset' means withholding funds 
        payable by the United States (including funds payable by the 
        United States on behalf of a State government) to, or held by 
        the United States for, a person to satisfy a claim.'';
            (B) by amending subsection (b) to read as follows:

    ``(b)(1) In subchapter II of this chapter and subsection (a)(8) of 
this section, the term `claim' or `debt' means any amount of funds or 
property that has been determined by an appropriate official of the 
Federal Government to be owed to the United States by a person, 
organization, or entity other than another Federal agency. A claim 
includes, without limitation--
            ``(A) funds owed on account of loans made, insured, or 
        guaranteed by the Government, including any deficiency or any 
        difference between the price obtained by the Government in the 
        sale of a property and the amount owed to the Government on a 
        mortgage on the property,
            ``(B) expenditures of nonappropriated funds,
            ``(C) over-payments, including payments disallowed by audits 
        performed by the Inspector General of the agency administering 
        the program,
            ``(D) any amount the United States is authorized by statute 
        to collect for the benefit of any person,

[[Page 110 STAT. 1321-379]]

            ``(E) the unpaid share of any non-Federal partner in a 
        program involving a Federal payment and a matching, or cost-
        sharing, payment by the non-Federal partner,
            ``(F) any fines or penalties assessed by an agency; and
            ``(G) other amounts of money or property owed to the 
        Government.

    ``(2) For purposes of section 3716 of this title, each of the terms 
`claim' and `debt' includes an amount of funds or property owed by a 
person to a State (including any past-due support being enforced by the 
State), the District of Columbia, American Samoa, Guam, the United 
States Virgin Islands, the Commonwealth of the Northern Mariana Islands, 
or the Commonwealth of Puerto Rico.'';
            (C) by adding after subsection (d) the following new 
        subsection:

    ``(e) In section 3716 of this title--
            ``(1) `creditor agency' means any agency owed a claim that 
        seeks to collect that claim through administrative offset; and
            ``(2) `payment certifying agency' means any agency that has 
        transmitted a voucher to a disbursing official for disbursement.

    ``(f) In section 3711 of this title, `private collection contractor' 
means private debt collectors under contract with an agency to collect a 
nontax debt or claim owed the United States. The term includes private 
debt collectors, collection agencies, and commercial attorneys.''; and
            (D) by amending subsection (d) to read as follows:

    ``(d) Sections 3711(f) and 3716-3719 of this title do not apply to a 
claim or debt under, or to an amount payable under--
            ``(1) the Internal Revenue Code of 1986 (26 U.S.C. 1 et 
        seq.),
            ``(2) the Social Security Act (42 U.S.C. 301 et seq.), 
        except to the extent provided under section 204(f) of such Act 
        and section 3716(c) of this title, or
            ``(3) the tariff laws of the United States.''.

    (2) Social Security.--
            (A) Application of amendments made by this act.--Subsection 
        (f) of section 204 of the Social Security Act (42 U.S.C. 404) is 
        amended to read as follows:
            ``(f)(1) With respect to any deliquent amount, the 
        Commissioner of Social Security may use the collection practices 
        described in sections 3711(f), 3716, 3717, and 3718 of title 31, 
        United States Code and in section 5514 of title 5, United States 
        Code, as in effect immediately after the enactment of the Debt 
        Collection Improvement Act of 1996.''
            (B) Permanent application.--Subsection (c) of section 5 of 
        the Social Security Domestic Reform Act of 1994 (Public Law 103-
        387) <<NOTE: 31 USC 3701 note.>>  is amended by striking ``and 
        before'' and all that follows and inserting a period.

    (aa)(1) <<NOTE: 31 USC 3711 note.>>  Guidelines.--The Secretary of 
the Treasury, in consultation with concerned Federal agencies, may 
establish guidelines, including information on outstanding debt, to 
assist agencies in the performance and monitoring of debt collection 
activities.

    (2) <<NOTE: 31 USC 3711 note.>>  Report.--Not later than 3 years 
after the date of enactment of this Act, the Secretary of the Treasury 
shall report to the Congress on collection services provided by Federal 
agencies or entities collecting debt on behalf of other Federal agencies 
under the

[[Page 110 STAT. 1321-380]]

authorities contained in section 3711(g) of title 31, United States 
Code, as added by subsection (m) of this section.

    (3) Agency Reports.--Section 3719 of title 31, United States Code, 
is amended--
            (A) in subsection (a)--
                    (i) <<NOTE: Regulations.>>  by amending the first 
                sentence to read as follows: ``In consultation with the 
                Comptroller General of the United States, the Secretary 
                of the Treasury shall prescribe regulations requiring 
                the head of each agency with outstanding nontax claims 
                to prepare and submit to the Secretary at least once 
                each year a report summarizing the status of loans and 
                accounts receivable that are managed by the head of the 
                agency.''; and
                    (ii) in paragraph (3), by striking ``Director'' and 
                inserting ``Secretary''; and
            (B) in subsection (b), by striking ``Director'' and 
        inserting ``Secretary''.

    (4) <<NOTE: 31 USC 3719 note.>>  Consolidation of Reports.--
Notwithstanding any other provision of law, the Secretary of the 
Treasury may consolidate reports concerning debt collection otherwise 
required to be submitted by the Secretary into one annual report.

    (bb) <<NOTE: 31 USC 3711 note.>>  The Director of the Office of 
Management and Budget shall--
            (1) review the standards and policies of each Federal agency 
        for compromising, writing-down, forgiving, or discharging 
        indebtedness arising from programs of the agency;
            (2) determine whether those standards and policies are 
        consistent and protect the interests of the United States;
            (3) in the case of any Federal agency standard or policy 
        that the Director determines is not consistent or does not 
        protect the interests of the United States, direct the head of 
        the agency to make appropriate modifications to the standard or 
        policy; and
            (4) report annually to the Congress on--
                    (A) deficiencies in the standards and policies of 
                Federal agencies for compromising, writing-down, 
                forgiving, or discharging indebtedness; and
                    (B) progress made in improving those standards and 
                policies.

    (cc)(1) Elimination of Minimum Number of Contracts.--Section 
3718(b)(1)(A) of title 31, United States Code, is amended by striking 
the fourth sentence.
    (2) Repeal.--Sections 3 and 5 of the Act of October 28, 1986 
(popularly known as the Federal Debt Recovery Act; Public Law 99-578, 
100 Stat. 3305) <<NOTE: 31 USC 3718 notes.>>  are hereby repealed.

          FEDERAL ADMINISTRATIVE AND PERSONAL SERVICES EXPENSES

                              (recissions)

    Sec. 31002. (a) Of the funds available to the agencies of the 
Federal Government, $500,000,000 are hereby rescinded: Provided, That 
rescissions pursuant to this paragraph shall be taken only from 
administrative and personal services and contractual services and 
supplies accounts: Provided further, That rescissions shall be taken on 
a pro rata basis from funds available to every Federal

[[Page 110 STAT. 1321-381]]

agency, department, and office in the Executive Branch, including the 
Office of the President.
    (b) <<NOTE: Records.>>  Within 30 days of enactment of this Act, the 
Director of the Office of Management and Budget shall submit to the 
Committees on Appropriations of the House and Senate a listing of the 
amounts by account of the reductions made pursuant to the provisions of 
subsections (a) and (b) of this section.

    This Act may be cited as the ``Omnibus Consolidated Rescissions and 
Appropriations Act of 1996''.

    Approved April 26, 1996.

LEGISLATIVE HISTORY--H.R. 3019 (S. 1594):
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HOUSE REPORTS: ?No. 104-537 (Comm. of Conference).
SENATE REPORTS: ?No. 104-236 accompanying S. 1594 (Comm. on 
Appropriations).
CONGRESSIONAL RECORD, Vol. 142 (1996):
            Mar. 7, considered and passed House.
            Mar. 11-15, 18, 19, considered and passed Senate, amended.
            Apr. 25, House and Senate agreed to conference report.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 32 (1996):
            Apr. 26, Presidential statement.