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103D CONGRESS

1ST SESSION H. R. 3163

To improve the ability of the United States Government to collect debts

owed to it, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 28, 1993

Mr. PALLONE (for himself, Mr. GORDON, Mr. DEAL, Mr. CANADY, Mr.

HUGHES, and Mr. PORTER) introduced the following bill; which was referred jointly to the Committees on Ways and Means and the Judiciary

A BILL

To improve the ability of the United States Government

to collect debts owed to it, 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 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Debt Collection Act

5 Amendments of 1993’’.

6 SEC. 2. IMPROVED DEBT COLLECTION PRACTICES.

7 (a) USE OF COLLECTION AGENCIES.—Section

8 3718(a) of title 31, United States Code, is amended by

9 striking ‘‘Under conditions’’ and all that follows through
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1 ‘‘make’’ and inserting ‘‘The head of an executive or legis2 lative agency shall make’’.

3 (b) SALARY OFFSET.—Subsection (a)(1) of section

4 5514 of title 5, United States Code, is amended by strik5 ing ‘‘may be collected’’ and inserting ‘‘shall be collected’’.

6 (c) DISCLOSURE TO CONSUMER REPORTING AGEN7 CIES.—Subsection (f)(1) of section 3711 of title 31, Unit8 ed States Code, is amended by striking ‘‘may disclose’’

9 and inserting ‘‘shall disclose’’.

10 (d) ADMINISTRATIVE OFFSETS.—Subsection (a) of

11 section 3716 of title 31, United States Code, is amended

12 by striking ‘‘may’’ the first place it appears and inserting

13 ‘‘shall’’.

14 (e) REPORT TO THE INTERNAL REVENUE SERVICE

15 OF DEBTS PAID IN FULL.—Subchapter II of chapter 37

16 of title 31, United States Code, is amended by adding at

17 the end the following new section:

18 ‘‘§ 3720B. Report to the Internal Revenue Service of

19 Debts Paid in Full

20 ‘‘The head of a Federal agency shall report any debt

21 that has been paid in full to the Internal Revenue Service

22 promptly after the agency has determined that the debt

23 has been paid in full.’’.

24 (f) DISCLOSURE BY INTERNAL REVENUE SERVICE

25 OF ADDRESS INFORMATION.—Section 6103(m)(2)(A) of
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1 the Internal Revenue Code of 1986 is amended by insert2 ing before the period ‘‘, or any other law granting a Fed3 eral agency the authority to collect or compromise a Fed4 eral claim against the taxpayer.’’.

5 (g) AUDITS AND REPORT OF AUDIT.—

6 (1) AUDITS OF FEDERAL AGENCIES.—The

7 Comptroller General of the United States shall an8 nually conduct audits of each Federal agency to de9 termine—

10 (A) the amount of debt owed to the agen11 cy;

12 (B) the amount of debt owed to the agency

13 that is delinquent; and

14 (C) any action taken by the agency to re15 cover the delinquent debt.

16 (2) REPORTS TO CONGRESS.—The Comptroller

17 General shall submit annually to the Congress a re18 port containing the information obtained through

19 the audits prepared pursuant to paragraph (1).

20 (h) EXTENSION OF PILOT DEBT COLLECTION

21 PROJECT.—

22 (1) EXTENSION OF PILOT PROJECT.—Section 5

23 of Public Law 99–578 (31 U.S.C. 3718 note) is re24 pealed.
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1 (2) ADDITIONAL REPORTING REQUIREMENTS.—

2 Section 3718(c) of title 31, United States Code, is

3 amended—

4 (A) in paragraph (2), by striking ‘‘and’’ at

5 the end thereof; and

6 (B) in paragraph (3)—

7 (i) in subparagraph (C), by striking

8 the period and adding at the end ‘‘; and’’;

9 and

10 (ii) by adding after subparagraph (C)

11 the following new subparagraph:

12 ‘‘(D) the total cost of the pilot program es13 tablished by Public Law 99–578 (100 Stat.

14 3305) as well as the total amount of debt recov15 ered under that pilot program.’’.

16 (3) USE OF RECOVERED FUNDS TO REDUCE

17 BUDGET DEFICIT.—Section 3718 of title 31, United

18 States Code, is amended by adding at the end the

19 following new subsection:

20 ‘‘(g) Except as provided by subsection (d), any

21 amount recovered through a contract entered into under

22 subsection (b) shall be used to reduce the budget deficit

23 of the United States.’’.

24 Notwithstanding the preceding sentence, a percent25 age (which is hereafter specified by law) of the
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1 amount recovered through such a contract shall be

2 paid to the agency on whose behalf such amount was

3 recovered for use by such agency in collecting in4 debtedness owed to such agency.

5 SEC. 3. IMPROVED LOAN ORIGINATION PROCEDURES.

6 (a) IMPROVED PRESCREENING PROCEDURES.—

7 (1) Chapter 97 of title 31, United States Code,

8 is amended by adding at the end the following new

9 section:

10 ‘‘§ 9704. Improved prescreening procedures

11 ‘‘The head of a Federal agency may not make a loan

12 to a loan applicant until the applicant has been

13 prescreened to determine if the applicant is creditworthy.

14 The determination of creditworthiness shall include an

15 evaluation of the ability and willingness of the applicant

16 to repay the debt, the agency’s level of acceptable risk,

17 other agency or Federal Government obligations that

18 could jeopardize or be jeopardized by the loan under con19 sideration, and the existence of other debts owed by the

20 loan applicant to the Federal Government, including a tax

21 delinquent account with the Internal Revenue Service.’’.

22 (2) Section 6103(m)(2)(A) of the Internal Rev23 enue Code of 1986 is amended by striking ‘‘the Sec24 retary may’’ and inserting ‘‘the Secretary shall’’.
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1 (b) DENIAL OF CREDIT TO APPLICANTS WITH DE2 LINQUENT DEBTS.—Chapter 97 of title 31, United States

3 Code, as amended by subsection (a), is further amended

4 by adding at the end the following new section:

5 ‘‘§ 9705. Denial of credit to applicants with delin6 quent debts

7 ‘‘The head of a Federal agency may not make a loan

8 to a loan applicant who owes a delinquent debt to the Fed9 eral Government, including the Internal Revenue Serv10 ice.’’.

11 SEC. 4. USE OF ADMINISTRATIVE CHARGES TO IMPROVE

12 CREDIT MANAGEMENT TECHNIQUES.

13 Section 3717 of title 31, United States Code, is

14 amended by adding at the end the following new sub15 section:

16 ‘‘(i) The Secretary shall deposit in a special fund any

17 amounts received by a Federal agency to cover the cost

18 of processing and handling delinquent claims under sub19 section (e). The Secretary shall, without further appro20 priation and upon request by the agency, disburse money

21 from such fund to the agency solely for the use of improv22 ing credit management techniques, except that the access

23 of each agency to funds in the special account shall be

24 limited to the amount that the agency received to cover
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1 the cost of processing and handling delinquent claims

2 under subsection (e).’’.

3 SEC. 5. TECHNICAL AMENDMENTS.

4 (a) CHAPTER 37 AMENDMENTS.—The table of sec5 tions at the beginning of chapter 37 of title 31, United

6 States Code, is amended by inserting after the item relat7 ing to section 3720A the following new item:

‘‘3720B. Report to the Internal Revenue Service of debts paid in full.’’.

8 (b) CHAPTER 97 AMENDMENTS.—The table of sec9 tions at the beginning of chapter 97 of title 31, United

10 States Code, is amended by adding at the end the follow11 ing new items:

‘‘9704. Improved prescreening procedures.

‘‘9705. Denial of credit to applicants with delinquent debts.’’.

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