I

103D CONGRESS

1ST SESSION H. R. 22

To make certain changes to improve the administration of the medicare

program, to reform customs overtime pay practices, to prevent the payment of Federal benefits to deceased individuals, to require reports

on employers with underfunded pension plans, to provide for increased

taxpayer procedural protections, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 5, 1993

Mr. PICKLE (for himself, Mr. ROSTENKOWSKI, Mr. STARK, Mr. RANGEL, Mr.

JACOBS, Mr. FORD of Tennessee, Mr. THOMAS of California, Mr. SUNDQUIST, and Mr. SHAW) introduced the following bill; which was referred

jointly to the Committees on Ways and Means, Energy and Commerce,

and Post Office and Civil Service

SEPTEMBER 14, 1993

Additional sponsors: Ms. EDDIE BERNICE JOHNSON of Texas, Mr. SWIFT, Mr.

BARLOW, Mr. CRAMER, Mr. RICHARDSON, Mrs. LLOYD, Mr. GORDON,

and Mr. STRICKLAND

A BILL

To make certain changes to improve the administration of

the medicare program, to reform customs overtime pay

practices, to prevent the payment of Federal benefits

to deceased individuals, to require reports on employers

with underfunded pension plans, to provide for increased

taxpayer procedural protections, 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,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Federal Program Im3 provement Act of 1993’’.

4 TITLE I—PROVISIONS RELATING

5 TO THE MEDICARE PROGRAM

6 SEC. 1000. REFERENCES IN TITLE.

7 (a) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex8 cept as otherwise specifically provided, whenever in this

9 title an amendment is expressed in terms of an amend10 ment to or repeal of a section or other provision, the ref11 erence shall be considered to be made to that section or

12 other provision of the Social Security Act.

13 (b) REFERENCES TO OBRA.—In this Act, the terms

14 ‘‘OBRA–1989’’ and ‘‘OBRA–1990’’ refer to the Omnibus

15 Budget Reconciliation Act of 1989 (Public Law 101–239)

16 and the Omnibus Budget Reconciliation Act of 1990 (Pub17 lic Law 101–508), respectively.

18 Subtitle A—Durable Medical

19 Equipment

20 SEC. 1001. CERTIFICATION OF SUPPLIERS.

21 (a) REQUIREMENTS.—

22 (1) IN GENERAL.—Section 1834 (42 U.S.C.

23 1395m) is amended by adding at the end the follow24 ing new subsection:

25 ‘‘(i) REQUIREMENTS FOR SUPPLIERS OF MEDICAL

26 EQUIPMENT AND SUPPLIES.—
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1 ‘‘(1) ISSUANCE AND RENEWAL OF SUPPLIER

2 NUMBER.—

3 ‘‘(A) PAYMENT.—Except as provided in

4 subparagraph (C), no payment may be made

5 under this part after October 1, 1993, for items

6 furnished by a supplier of medical equipment

7 and supplies unless such supplier obtains (and

8 renews at such intervals as the Secretary may

9 require) a supplier number.

10 ‘‘(B) STANDARDS FOR POSSESSING A SUP11 PLIER NUMBER.—A supplier may not obtain a

12 supplier number unless—

13 ‘‘(i) for medical equipment and sup14 plies furnished on or after October 1,

15 1993, and on or before December 31,

16 1994, the supplier meets standards pre17 scribed by the Secretary; and

18 ‘‘(ii) for medical equipment and sup19 plies furnished on or after January 1,

20 1995, the supplier meets revised standards

21 prescribed by the Secretary (in consulta22 tion with representatives of suppliers of

23 medical equipment and supplies, carriers,

24 and consumers) that shall include require25 ments that the supplier—
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1 ‘‘(I) comply with all applicable

2 State and Federal licensure and regu3 latory requirements;

4 ‘‘(II) maintain a physical facility

5 on an appropriate site;

6 ‘‘(III) have proof of appropriate

7 liability insurance; and

8 ‘‘(IV) meet such other require9 ments as the Secretary may specify.

10 ‘‘(C) EXCEPTION FOR ITEMS FURNISHED

11 AS INCIDENT TO A PHYSICIAN’S SERVICE.—

12 Subparagraph (A) shall not apply with respect

13 to medical equipment and supplies furnished as

14 an incident to a physician’s service.

15 ‘‘(D) PROHIBITION AGAINST MULTIPLE

16 SUPPLIER NUMBERS.—The Secretary may not

17 issue more than one supplier number to any

18 supplier of medical equipment and supplies un19 less the issuance of more than one number is

20 appropriate to identify subsidiary or regional

21 entities under the supplier’s ownership or con22 trol.

23 ‘‘(E) PROHIBITION AGAINST DELEGATION

24 OF SUPPLIER DETERMINATIONS.—The Sec25 retary may not delegate (other than by contract
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1 under section 1842) the responsibility to deter2 mine whether suppliers meet the standards nec3 essary to obtain a supplier number.

4 ‘‘(2) CERTIFICATES OF MEDICAL NECESSITY.—

5 ‘‘(A) STANDARDIZED CERTIFICATES.—Not

6 later than October 1, 1993, the Secretary shall,

7 in consultation with carriers under this part,

8 develop one or more standardized certificates of

9 medical necessity (as defined in subparagraph

10 (C)) for medical equipment and supplies for

11 which the Secretary determines that such a cer12 tificate is necessary.

13 ‘‘(B) PROHIBITION AGAINST DISTRIBUTION

14 BY SUPPLIERS OF CERTIFICATES OF MEDICAL

15 NECESSITY.—

16 ‘‘(i) IN GENERAL.—Except as pro17 vided in clause (ii), a supplier of medical

18 equipment and supplies may not distribute

19 to physicians or to individuals entitled to

20 benefits under this part for commercial

21 purposes any completed or partially com22 pleted certificates of medical necessity on

23 or after October 1, 1993.

24 ‘‘(ii) EXCEPTION FOR CERTAIN BILL25 ING INFORMATION.—Clause (i) shall not
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1 apply with respect to a certificate of medi2 cal necessity for any item that is not con3 tained on the list of potentially overused

4 items developed by the Secretary under

5 subsection (a)(15)(A) to the extent that

6 such certificate contains only information

7 completed by the supplier of medical equip8 ment and supplies identifying such supplier

9 and the beneficiary to whom such medical

10 equipment and supplies are furnished, a

11 description of such medical equipment and

12 supplies, any product code identifying such

13 medical equipment and supplies, and any

14 other administrative information (other

15 than information relating to the bene16 ficiary’s medical condition) identified by

17 the Secretary. In the event a supplier pro18 vides a certificate of medical necessity con19 taining information permitted under this

20 clause, such certificate shall also contain

21 the fee schedule amount and the supplier’s

22 charge for the medical equipment or sup23 plies being furnished prior to distribution

24 of such certificate to the physician.
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1 ‘‘(iii) PENALTY.—Any supplier of

2 medical equipment and supplies who know3 ingly and willfully distributes a certificate

4 of medical necessity in violation of clause

5 (i) is subject to a civil money penalty in an

6 amount not to exceed $1,000 for each such

7 certificate of medical necessity so distrib8 uted. The provisions of section 1128A

9 (other than subsections (a) and (b)) shall

10 apply to civil money penalties under this

11 subparagraph in the same manner as they

12 apply to a penalty or proceeding under sec13 tion 1128A(a).

14 ‘‘(C) DEFINITION.—For purposes of this

15 paragraph, the term ‘certificate of medical ne16 cessity’ means a form or other document con17 taining information required by the Secretary to

18 be submitted to show that a covered item is

19 reasonable and necessary for the diagnosis or

20 treatment of illness or injury or to improve the

21 functioning of a malformed body member.

22 ‘‘(3) COVERAGE AND REVIEW CRITERIA.—

23 ‘‘(A) DEVELOPMENT AND ESTABLISH24 MENT.—Not later than January 1, 1995, the

25 Secretary, in consultation with representatives
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1 of suppliers of medical equipment and supplies,

2 individuals enrolled under this part, and appro3 priate medical specialty societies, shall develop

4 and establish uniform national coverage and

5 utilization review criteria for 200 items of medi6 cal equipment and supplies selected in accord7 ance with the standards described in subpara8 graph (B). The Secretary shall publish the cri9 teria as part of the instructions provided to fis10 cal intermediaries and carriers under this part

11 and no further publication, including publica12 tion in the Federal Register, shall be required.

13 ‘‘(B) STANDARDS FOR SELECTING ITEMS

14 SUBJECT TO CRITERIA.—The Secretary may se15 lect an item for coverage under the criteria de16 veloped and established under subparagraph

17 (A) if the Secretary finds that—

18 ‘‘(i) the item is frequently purchased

19 or rented by beneficiaries;

20 ‘‘(ii) the item is frequently subject to

21 a determination that such item is not

22 medically necessary; or

23 ‘‘(iii) the coverage or utilization cri24 teria applied to the item (as of the date of
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1 the enactment of this subsection) is not

2 consistent among carriers.

3 ‘‘(C) ANNUAL REVIEW AND EXPANSION OF

4 ITEMS SUBJECT TO CRITERIA.—The Secretary

5 shall annually review the coverage and utiliza6 tion of items of medical equipment and supplies

7 to determine whether items not included among

8 the items selected under subparagraph (A)

9 should be made subject to uniform national cov10 erage and utilization review criteria, and, if ap11 propriate, shall develop and apply such criteria

12 to such additional items.

13 ‘‘(4) DEFINITION.—The term ‘medical equip14 ment and supplies’’ means—

15 ‘‘(A) durable medical equipment (as de16 fined in section 1861(n));

17 ‘‘(B) prosthetic devices (as described in

18 section 1861(s)(8));

19 ‘‘(C) orthotics and prosthetics (as de20 scribed in section 1861(s)(9));

21 ‘‘(D) surgical dressings (as described in

22 section 1861(s)(5));

23 ‘‘(E) such other items as the Secretary

24 may determine; and
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1 ‘‘(F) for purposes of paragraphs (1) and

2 (3)—

3 ‘‘(i) home dialysis supplies and equip4 ment (as described in section

5 1861(s)(2)(F)), and

6 ‘‘(ii) immunosuppressive drugs (as de7 scribed in section 1861(s)(2)(J)).’’.

8 (2) CONFORMING AMENDMENT.—Effective October

9 1, 1993, paragraph (16) of section 1834(a) (42 U.S.C.

10 1395m(a)) is repealed.

11 (b) REPORT ON EFFECT OF UNIFORM CRITERIA ON

12 UTILIZATION OF ITEMS.—Not later than July 1, 1995, the

13 Secretary shall submit a report to the Committee on Ways

14 and Means and the Committee on Energy and Commerce

15 of the House of Representatives and the Committee on

16 Finance of the Senate analyzing the impact of the uniform

17 criteria established under section 1834(i)(3)(A) of the So18 cial Security Act (as added by subsection (a)) on the utili19 zation of items of medical equipment and supplies by indi20 viduals enrolled under part B of the medicare program.

21 (c) USE OF COVERED ITEMS BY DISABLED BENE22 FICIARIES.—

23 (1) IN GENERAL.—The Secretary of Health and

24 Human Services, in consultation with representa25 tives of suppliers of durable medical equipment
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1 under part B of the medicare program and individ2 uals entitled to benefits under such program on the

3 basis of disability, shall conduct a study of the ef4 fects of the methodology for determining payments

5 for items of such equipment under such part on the

6 ability of such individuals to obtain items of such

7 equipment, including customized items.

8 (2) REPORT.—Not later than May 1, 1994, the

9 Secretary shall submit a report to Congress on the

10 study conducted under paragraph (1), and shall in11 clude in the report such recommendations as the

12 Secretary considers appropriate to assure that dis13 abled medicare beneficiaries have access to items of

14 durable medical equipment.

15 (d) CRITERIA FOR TREATMENT OF ITEMS AS PROS16 THETICS DEVICES OR ORTHOTICS AND PROSTHETICS.—

17 Not later than July 1, 1994, the Secretary of Health and

18 Human Services shall submit a report to the Committees

19 on Ways and Means and Energy and Commerce of the

20 House of Representatives and the Committee on Finance

21 of the Senate describing prosthetic devices or orthotics

22 and prosthetics covered under part B of the medicare pro23 gram that do not require individualized or custom fitting

24 and adjustment to be used by a patient. Such report shall

25 include recommendations for an appropriate methodology
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1 for determining the amount of payment for such items

2 under such program.

3 SEC. 1002. PROHIBITION AGAINST CARRIER FORUM SHOP4 PING.

5 (a) IN GENERAL.—Section 1834(a)(12) (42 U.S.C.

6 1395m(a)(12)) is amended to read as follows:

7 ‘‘(12) USE OF CARRIERS TO PROCESS

8 CLAIMS.—

9 ‘‘(A) DESIGNATION OF REGIONAL CAR10 RIERS.—The Secretary may designate, by regu11 lation under section 1842, one carrier for one

12 or more entire regions to process all claims

13 within the region for covered items under this

14 section.

15 ‘‘(B) PROHIBITION AGAINST CARRIER

16 SHOPPING.—(i) No supplier of a covered item

17 may present or cause to be presented a claim

18 for payment under this part unless such claim

19 is presented to the appropriate regional carrier

20 (as designated by the Secretary).

21 ‘‘(ii) For purposes of clause (i), the term

22 ‘appropriate regional carrier’ means the carrier

23 having jurisdiction over the geographic area

24 that includes the permanent residence of the

25 patient to whom the item is furnished.’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply to items furnished on or after

3 October 1, 1993.

4 (c) CLARIFICATION OF AUTHORITY TO DESIGNATE

5 CARRIERS FOR OTHER ITEMS AND SERVICES.—Nothing

6 in this subsection or the amendment made by this sub7 section may be construed to restrict the authority of the

8 Secretary of Health and Human Services to designate re9 gional carriers or modify claims jurisdiction rules with re10 spect to items or services under part B of the medicare

11 program that are not covered items under section 1834(a)

12 of the Social Security Act or prosthetic devices or orthotics

13 and prosthetics under section 1834(h) of such Act.

14 SEC. 1003. RESTRICTIONS ON CERTAIN MARKETING AND

15 SALES ACTIVITIES.

16 (a) PROHIBITING UNSOLICITED TELEPHONE CON17 TACTS FROM SUPPLIERS OF DURABLE MEDICAL EQUIP18 MENT TO MEDICARE BENEFICIARIES.—

19 (1) IN GENERAL.—Section 1834(a) (42 U.S.C.

20 1395m(a)) is amended by adding at the end the fol21 lowing new paragraph:

22 ‘‘(17) PROHIBITION AGAINST UNSOLICITED

23 TELEPHONE CONTACTS BY SUPPLIERS.—

24 ‘‘(A) IN GENERAL.—A supplier of a cov25 ered item under this subsection may not contact
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1 an individual enrolled under this part by tele2 phone regarding the furnishing of a covered

3 item to the individual (other than a covered

4 item the supplier has already furnished to the

5 individual) unless—

6 ‘‘(i) the individual gives permission to

7 the supplier to make contact by telephone

8 for such purpose; or

9 ‘‘(ii) the supplier has furnished a cov10 ered item under this subsection to the indi11 vidual during the 15-month period preced12 ing the date on which the supplier contacts

13 the individual for such purpose.

14 ‘‘(B) PROHIBITING PAYMENT FOR ITEMS

15 FURNISHED SUBSEQUENT TO UNSOLICITED

16 CONTACTS.—If a supplier knowingly contacts

17 an individual in violation of subparagraph (A),

18 no payment may be made under this part for

19 any item subsequently furnished to the individ20 ual by the supplier.

21 ‘‘(C) EXCLUSION FROM PROGRAM FOR

22 SUPPLIERS ENGAGING IN PATTERN OF UNSO23 LICITED CONTACTS.—If a supplier knowingly

24 contacts individuals in violation of subpara25 graph (A) to such an extent that the supplier’s
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1 conduct establishes a pattern of contacts in vio2 lation of such subparagraph, the Secretary shall

3 exclude the supplier from participation in the

4 programs under this Act, in accordance with

5 the procedures set forth in subsections (c), (f),

6 and (g) of section 1128.’’.

7 (2) REQUIRING REFUND OF AMOUNTS COL8 LECTED FOR DISALLOWED ITEMS.—Section 1834(a)

9 (42 U.S.C. 1395m(a)), as amended by paragraph

10 (1), is amended by adding at the end the following

11 new paragraph:

12 ‘‘(18) REFUND OF AMOUNTS COLLECTED FOR

13 CERTAIN DISALLOWED ITEMS.—

14 ‘‘(A) IN GENERAL.—If a nonparticipating

15 supplier furnishes to an individual enrolled

16 under this part a covered item for which no

17 payment may be made under this part by rea18 son of paragraph (17)(B), the supplier shall re19 fund on a timely basis to the patient (and shall

20 be liable to the patient for) any amounts col21 lected from the patient for the item, unless—

22 ‘‘(i) the supplier establishes that the

23 supplier did not know and could not rea24 sonably have been expected to know that
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1 payment may not be made for the item by

2 reason of paragraph (17)(B), or

3 ‘‘(ii) before the item was furnished,

4 the patient was informed that payment

5 under this part may not be made for that

6 item and the patient has agreed to pay for

7 that item.

8 ‘‘(B) SANCTIONS.—If a supplier knowingly

9 and willfully fails to make refunds in violation

10 of subparagraph (A), the Secretary may apply

11 sanctions against the supplier in accordance

12 with section 1842(j)(2).

13 ‘‘(C) NOTICE.—Each carrier with a con14 tract in effect under this part with respect to

15 suppliers of covered items shall send any notice

16 of denial of payment for covered items by rea17 son of paragraph (17)(B) and for which pay18 ment is not requested on an assignment-related

19 basis to the supplier and the patient involved.

20 ‘‘(D) TIMELY BASIS DEFINED.—A refund

21 under subparagraph (A) is considered to be on

22 a timely basis only if—

23 ‘‘(i) in the case of a supplier who does

24 not request reconsideration or seek appeal

25 on a timely basis, the refund is made with-
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1 in 30 days after the date the supplier re2 ceives a denial notice under subparagraph

3 (C), or

4 ‘‘(ii) in the case in which such a re5 consideration or appeal is taken, the re6 fund is made within 15 days after the date

7 the supplier receives notice of an adverse

8 determination on reconsideration or ap9 peal.’’.

10 (b) CONFORMING AMENDMENT.—Section 1834(h)(3)

11 (42 U.S.C. 1395m(h)(3)) is amended by striking ‘‘Para12 graph (12)’’ and inserting ‘‘Paragraphs (12) and (17)’’.

13 (c) EFFECTIVE DATE.—The amendments made by

14 subsections (a) and (b) shall apply to items furnished after

15 the expiration of the 60-day period that begins on the date

16 of the enactment of this Act.

17 SEC. 1004. BENEFICIARY LIABILITY FOR NONCOVERED

18 SERVICES.

19 (a) IN GENERAL.—Section 1879 (42 U.S.C. 1395pp)

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

22 ‘‘(h) If a supplier of medical equipment and supplies

23 (as defined in section 1834(i)(4))—
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1 ‘‘(1) furnishes an item or service to a bene2 ficiary for which no payment may be made by reason

3 of section 1834(i)(1);

4 ‘‘(2) furnishes an item or service to a bene5 ficiary for which payment is denied in advance under

6 section 1834(a)(15); or

7 ‘‘(3) furnishes an item or service to a bene8 ficiary for which payment is denied under section

9 1862(a)(1);

10 any expenses incurred for items and services furnished to

11 an individual by such a supplier on an unassigned basis

12 shall be the responsibility of such supplier. The individual

13 shall have no financial responsibility for such expenses and

14 the supplier shall refund on a timely basis to the individual

15 (and shall be liable to the individual for) any amounts col16 lected from the individual for such items or services. The

17 provisions of section 1834(a)(18) shall apply to refunds

18 required under the previous sentence in the same manner

19 as such provisions apply to refunds under such section.’’.

20 (b) EFFECTIVE DATE.—The amendment made by

21 subsection (a) shall apply to items or services furnished

22 on or after October 1, 1993.
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1 SEC. 1005. ADJUSTMENTS FOR INHERENT REASONABLE2 NESS.

3 (a) ADJUSTMENTS MADE TO FINAL PAYMENT

4 AMOUNTS.—

5 (1) IN GENERAL.—Section 1834(a)(10)(B) (42

6 U.S.C. 1395m(a)(10)(B)) is amended by adding at

7 the end the following: ‘‘In applying such provisions

8 to payments for an item under this subsection, the

9 Secretary shall make adjustments to the payment

10 basis for the item described in paragraph (1)(B) if

11 the Secretary determines (in accordance with such

12 provisions and on the basis of prices and costs appli13 cable at the time the item is furnished) that such

14 payment basis is not inherently reasonable.’’.

15 (2) EFFECTIVE DATE.—The amendment made

16 by paragraph (1) shall take effect on the date of the

17 enactment of this Act.

18 (b) ADJUSTMENT REQUIRED FOR CERTAIN ITEMS.—

19 (1) IN GENERAL.—In accordance with section

20 1834(a)(10)(B) of the Social Security Act (as

21 amended by subsection (a)), the Secretary of Health

22 and Human Services shall determine whether the

23 payment amounts for the items described in para24 graph (2) are not inherently reasonable, and shall

25 adjust such amounts in accordance with such section

26 if the amounts are not inherently reasonable.
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1 (2) ITEMS DESCRIBED.—The items referred to

2 in paragraph (1) are decubitus care equipment,

3 transcutaneous electrical nerve stimulators, and any

4 other items considered appropriate by the Secretary.

5 SEC. 1006. PAYMENT FOR OSTOMY SUPPLIES, TRACHE6 OSTOMY SUPPLIES, UROLOGICALS, AND SUR7 GICAL DRESSINGS.

8 (a) OSTOMY SUPPLIES, TRACHEOSTOMY SUPPLIES,

9 AND UROLOGICALS.—

10 (1) IN GENERAL.—Section 1834(h)(1) (42

11 U.S.C. 1395m(h)(1)) is amended by adding at the

12 end the following new subparagraph:

13 ‘‘(E) EXCEPTION FOR CERTAIN ITEMS.—

14 Payment for ostomy supplies, tracheostomy

15 supplies, and urologicals shall be made in ac16 cordance with subparagraphs (B) and (C) of

17 section 1834(a)(2).’’.

18 (2) CONFORMING AMENDMENT.—Section

19 1834(h)(1)(B) (42 U.S.C. 1395m(h)(1)(B)) is

20 amended by striking ‘‘subparagraph (C),’’ and in21 serting ‘‘subparagraphs (C) and (E),’’.

22 (3) EFFECTIVE DATE.—The amendments made

23 by this subsection shall apply to items furnished on

24 or after January 1, 1994.

25 (b) SURGICAL DRESSINGS.—
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1 (1) IN GENERAL.—Section 1834 (42 U.S.C.

2 1395m), as amended by section 1001(a), is amended

3 by adding at the end the following new subsection:

4 ‘‘(j) PAYMENT FOR SURGICAL DRESSINGS.—

5 ‘‘(1) IN GENERAL.—Payment under this sub6 section for surgical dressings (described in section

7 1861(s)(5)) shall be made in a lump sum amount

8 for the purchase of the item in an amount equal to

9 80 percent of the lesser of—

10 ‘‘(A) the actual charge for the item; or

11 ‘‘(B) a payment amount determined in ac12 cordance with the methodology described in

13 subparagraphs (B) and (C) of subsection (a)(2)

14 (except that in applying such methodology, the

15 national limited payment amount referred to in

16 such subparagraphs shall be initially computed

17 based on local payment amounts using average

18 reasonable charges for the 12-month period

19 ending December 31, 1992, increased by the

20 covered item updates described in such sub21 section for 1993 and 1994)

22 ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not

23 apply to surgical dressings that are—

24 ‘‘(A) furnished as an incident to a physi25 cian’s professional service; or
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1 ‘‘(B) furnished by a home health agency.’’.

2 (2) CONFORMING AMENDMENT.—Section

3 1833(a)(1) (42 U.S.C. 1395l(a)(1)) is amended—

4 (A) by striking ‘‘and’’ before ‘‘(N)’’;

5 (B) with respect to the matter inserted by

6 section 4155(b)(2)(B) of OBRA–1990—

7 (i) by striking ‘‘(M)’’ and inserting ‘‘,

8 and (O)’’, and

9 (ii) by transferring and inserting it

10 (as amended) immediately before the semi11 colon at the end;

12 (C) by striking ‘‘and’’ before ‘‘(O)’’; and

13 (D) by inserting before the semicolon at

14 the end the following: ‘‘, and (P) with respect

15 to surgical dressings, the amounts paid shall be

16 the amounts determined under section

17 1834(j)’’.

18 (3) EFFECTIVE DATE.—The amendments made

19 by this subsection shall apply to items furnished on

20 or after January 1, 1994.

21 SEC. 1007. PAYMENTS FOR TENS DEVICES.

22 (a) IN GENERAL.—Section 1834(a)(1)(D) (42 U.S.C.

23 1395m(a)(1)(D)) is amended by striking ‘‘15 percent’’ the

24 second place it appears and inserting ‘‘45 percent’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply to items furnished on or after

3 January 1, 1994.

4 SEC. 1008. MISCELLANEOUS AND TECHNICAL CORREC5 TIONS.

6 (a) UPDATES TO PAYMENT AMOUNTS.—Subpara7 graph (A) of section 1834(a)(14) (42 U.S.C.

8 1395m(a)(14)) is amended to read as follows:

9 ‘‘(A) for 1991 and 1992, the percentage

10 increase in the consumer price index for all

11 urban consumers (U.S. city average) for the 12-

12 month period ending with June of the previous

13 year reduced by 1 percentage point; and’’.

14 (b) TREATMENT OF POTENTIALLY OVERUSED ITEMS

15 AND ADVANCED DETERMINATIONS OF COVERAGE.—(1)

16 Effective on the date of the enactment of this Act, section

17 1834(a)(15) (42 U.S.C. 1395m(a)(15)) is amended to

18 read as follows:

19 ‘‘(15) SPECIAL TREATMENT FOR POTENTIALLY

20 OVERUSED ITEMS.—

21 ‘‘(A) DEVELOPMENT OF LIST OF ITEMS BY

22 SECRETARY.—The Secretary shall develop and

23 periodically update a list of items for which

24 payment may be made under this subsection

25 that are potentially overused, and shall include
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1 in such list seat-lift mechanisms, transcutane2 ous electrical nerve stimulators, motorized

3 scooters, decubitus care mattresses, and any

4 such other item determined by the Secretary to

5 be potentially overused on the basis of any of

6 the following criteria—

7 ‘‘(i) the item is marketed directly to

8 potential patients;

9 ‘‘(ii) the item is marketed with an

10 offer to potential patients to waive the

11 costs of coinsurance associated with the

12 item or is marketed as being available at

13 no cost to policyholders of a medicare sup14 plemental policy (as defined in section

15 1882(g)(1));

16 ‘‘(iii) the item has been subject to a

17 consistent pattern of overutilization; or

18 ‘‘(iv) a high proportion of claims for

19 payment for such item under this part may

20 not be made because of the application of

21 section 1862(a)(1).

22 ‘‘(B) ITEMS SUBJECT TO SPECIAL CARRIER

23 SCRUTINY.—Payment may not be made under

24 this part for any item contained in the list de25 veloped by the Secretary under subparagraph
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1 (A) unless the carrier has subjected the claim

2 for payment for the item to special scrutiny or

3 has followed the procedures described in para4 graph (11)(C) with respect to the item.’’.

5 (2) Effective January 1, 1994, section 1834(a)(11)

6 (42 U.S.C. 1395m(a)) is amended by adding at the end

7 the following new subparagraph:

8 ‘‘(C) CARRIER DETERMINATIONS FOR CER9 TAIN ITEMS IN ADVANCE.—A carrier shall de10 termine in advance whether payment for an

11 item may not be made under this subsection be12 cause of the application of section 1862(a)(1)

13 if—

14 ‘‘(i) the item is a customized item

15 (other than inexpensive items specified by

16 the Secretary); or

17 ‘‘(ii) the item is a specified covered

18 item under subparagraph (B).’’.

19 (3) Effective for standards applied for contract years

20 beginning after the date of the enactment of this Act, sec21 tion 1842(c) (42 U.S.C. 1395u(c)) is amended by adding

22 at the end the following new paragraph:

23 ‘‘(4) Each contract under this section which provides

24 for the disbursement of funds, as described in subsection

25 (a)(1)(B), shall require the carrier to meet criteria devel-
26

•HR 22 SC

1 oped by the Secretary to measure the timeliness of carrier

2 responses to requests for payment of items described in

3 section 1834(a)(11)(C).’’.

4 (4) Section 1834(h)(3) (42 U.S.C. 1395m(h)(3)) is

5 amended by striking ‘‘paragraph (10) and paragraph

6 (11)’’ and inserting ‘‘paragraphs (10) and (11)’’.

7 (c) STUDY OF VARIATIONS IN DURABLE MEDICAL

8 EQUIPMENT SUPPLIER COSTS.—

9 (1) COLLECTION AND ANALYSIS OF SUPPLIER

10 COST DATA.—The Administration of the Health

11 Care Financing Administration shall, in consultation

12 with appropriate organizations, collect data on sup13 plier costs of durable medical equipment for which

14 payment may be made under part B of the medicare

15 program, and shall analyze such data to determine

16 the proportions of such costs attributable to the

17 service and product components of furnishing such

18 equipment and the extent to which such proportions

19 vary by type of equipment and by the geographic re20 gion in which the supplier is located.

21 (2) DEVELOPMENT OF GEOGRAPHIC ADJUST22 MENT INDEX; REPORTS.—Not later than January 1,

23 1995—

24 (A) the Administrator shall submit a re25 port to the Committees on Energy and Com-
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•HR 22 SC

1 merce and Ways and Means of the House of

2 Representatives and the Committee on Finance

3 of the Senate on the data collected and the

4 analysis conducted under paragraph (1), and

5 shall include in such report the Administrator’s

6 recommendations for a geographic cost adjust7 ment index for suppliers of durable medical

8 equipment under the medicare program and an

9 analysis of the impact of such proposed index

10 on payments under the medicare program; and

11 (B) the Comptroller General shall submit a

12 report to the Committees on Energy and Com13 merce and Ways and Means of the House of

14 Representatives and the Committee on Finance

15 of the Senate analyzing on a geographic basis

16 the supplier costs of durable medical equipment

17 under the medicare program.

18 (d) OXYGEN RETESTING.—Section 1834(a)(5)(E)

19 (42 U.S.C. 1395m(a)(5)(E)) is amended by striking ‘‘55’’

20 and inserting ‘‘56’’.

21 (e) OTHER MISCELLANEOUS AND TECHNICAL

22 AMENDMENTS.—(1) Section 4152(a)(3) of OBRA–1990

23 is amended by striking ‘‘amendment made by subsection

24 (a)’’ and inserting ‘‘amendments made by this sub25 section’’.
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•HR 22 SC

1 (2) Section 4152(c)(2) of OBRA–1990 is amended

2 by striking ‘‘1395m(a)(7)(A)’’ and inserting

3 ‘‘1395m(a)(7)’’.

4 (3) Section 1834(a)(7)(A)(iii)(II) (42 U.S.C.

5 1395m(a)(7)(A)(iii)(II)) is amended by striking ‘‘clause

6 (v)’’ and inserting ‘‘clause (vi)’’.

7 (4) Section 1834(a)(7)(C)(i) (42 U.S.C.

8 1395m(a)(7)(C)(i)) is amended by striking ‘‘or paragraph

9 (3)’’.

10 (5) Section 1834(a)(3) (42 U.S.C. 1395m(a)(3)) is

11 amended by striking subparagraph (D).

12 (6) Section 4153(c)(1) of OBRA–1990 is amended

13 by striking ‘‘1834(a)’’ and inserting ‘‘1834(h)’’.

14 (7) Section 4153(d)(2) of OBRA–1990 is amended

15 by striking ‘‘Reconiliation’’ and inserting ‘‘Reconcili16 ation’’.

17 (8)(A) Section 1834(a) (42 U.S.C. 1395m(a)) is

18 amended by striking paragraph (6).

19 (B) Section 1834(a) (42 U.S.C. 1395m(a)) is amend20 ed—

21 (i) in subparagraphs (A) and (B) of paragraph

22 (1), by striking ‘‘(2) through (7)’’ each place it ap23 pears and inserting ‘‘(2) through (5) and (7)’’;

24 (ii) in paragraph (7), by striking ‘‘(2) through

25 (6)’’ and inserting ‘‘(2) through (5)’’;
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•HR 22 SC

1 (iii) in paragraph (8), by striking ‘‘paragraphs

2 (6) and (7)’’ each place it appears in the matter pre3 ceding subparagraph (A) and in subparagraph (C)

4 and inserting ‘‘paragraph (7)’’; and

5 (iv) in paragraph (8)(A)(i), by striking ‘‘de6 scribed—’’ and all that follows and inserting ‘‘de7 scribed in paragraph (7) equal to the average of the

8 purchase prices on the claims submitted on an as9 signment-related basis for the unused item supplied

10 during the 6-month period ending with December

11 1986.’’.

12 (9) The amendments made by this subsection shall

13 take effect as if included in the enactment of OBRA–1990.

14 Subtitle B—Medicare Secondary

15 Payer

16 SEC. 1101. MEDICARE SECONDARY PAYER.

17 (a) SECONDARY PAYER EXEMPTION FOR MEMBERS

18 OF RELIGIOUS ORDERS.—Effective as if included in the

19 enactment of OBRA–1989, section 6202(e)(2) of such Act

20 is amended by adding at the end the following: ‘‘Such

21 amendment also shall apply to items and services fur22 nished before such date with respect to secondary payor

23 cases which the Secretary of Health and Human Services

24 had not identified as of such date.’’.
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•HR 22 SC

1 (b) IMPROVING IDENTIFICATION OF MEDICARE SEC2 ONDARY PAYER SITUATIONS.—

3 (1) SURVEY OF BENEFICIARIES.—

4 (A) IN GENERAL.—Section 1862(b)(5) (42

5 U.S.C. 1395y(b)(5)) is amended by adding at

6 the end the following new subparagraph:

7 ‘‘(D) OBTAINING INFORMATION FROM

8 BENEFICIARIES.—Before an individual applies

9 for benefits under part A or enrolls under part

10 B, the Administrator shall mail the individual a

11 questionnaire to obtain information on whether

12 the individual is covered under a primary plan

13 and the nature of the coverage provided under

14 the plan, including the name, address, and iden15 tifying number of the plan.’’.

16 (B) DISTRIBUTION OF QUESTIONNAIRE BY

17 CONTRACTOR.—The Secretary of Health and

18 Human Services shall enter into an agreement

19 with an entity not later than November 1,

20 1993, to distribute the questionnaire described

21 in section 1862(b)(5)(D) of the Social Security

22 Act (as added by subparagraph (A)).

23 (C) NO MEDICARE SECONDARY PAYOR DE24 NIAL BASED ON FAILURE TO COMPLETE QUES25 TIONNAIRE.—Section 1862(b)(2) (42 U.S.C.
31

•HR 22 SC

1 1395y(b)(2)) is amended by adding at the end

2 the following new subparagraph:

3 ‘‘(C) TREATMENT OF QUESTIONNAIRES.—

4 The Secretary may not fail to make payment

5 under subparagraph (A) solely on the ground

6 that an individual failed to complete a question7 naire concerning the existence of a primary

8 plan.’’.

9 (2) MANDATORY SCREENING BY PROVIDERS

10 AND SUPPLIERS UNDER PART B.—

11 (A) IN GENERAL.—Section 1862(b) (42

12 U.S.C. 1395y(b)) is amended by adding at the

13 end the following new paragraph:

14 ‘‘(6) SCREENING REQUIREMENTS FOR PROVID15 ERS AND SUPPLIERS.—

16 ‘‘(A) IN GENERAL.—Notwithstanding any

17 other provision of this title, no payment may be

18 made for any item or service furnished under

19 part B unless the entity furnishing such item or

20 service completes (to the best of its knowledge

21 and on the basis of information obtained from

22 the individual to whom the item or service is

23 furnished) the portion of the claim form relat24 ing to the availability of other health benefit

25 plans.
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•HR 22 SC

1 ‘‘(B) PENALTIES.—An entity that know2 ingly, willfully, and repeatedly fails to complete

3 a claim form in accordance with subparagraph

4 (A) or provides inaccurate information relating

5 to the availability of other health benefit plans

6 on a claim form under such subparagraph shall

7 be subject to a civil money penalty of not to ex8 ceed $2,000 for each such incident. The provi9 sions of section 1128A (other than subsections

10 (a) and (b)) shall apply to a civil money penalty

11 under the previous sentence in the same man12 ner as such provisions apply to a penalty or

13 proceeding under section 1128A(a).’’.

14 (B) EFFECTIVE DATE.—The amendment

15 made by subparagraph (A) shall apply with re16 spect to items and services furnished on or

17 after July 1, 1993.

18 (c) IMPROVEMENTS IN RECOVERY OF PAYMENTS

19 FROM PRIMARY PAYERS.—

20 (1) SUBMISSION OF REPORTS ON EFFORTS TO

21 RECOVER ERRONEOUS PAYMENTS.—

22 (A) FISCAL INTERMEDIARIES UNDER PART

23 A.—Section 1816 (42 U.S.C. 1396h) is amend24 ed by adding at the end the following new sub25 section:
33

•HR 22 SC

1 ‘‘(k) An agreement with an agency or organization

2 under this section shall require that such agency or orga3 nization submit an annual report to the Secretary describ4 ing the steps taken to recover payments made for items

5 or services for which payment has been or could be made

6 under a primary plan (as defined in section

7 1862(b)(2)(A)).’’.

8 (B) CARRIERS UNDER PART B.—Section

9 1842(b)(3) (42 U.S.C. 1395u(b)(3)) is amend10 ed—

11 (i) by striking ‘‘and’’ at the end of

12 subparagraphs (G) and (H); and

13 (ii) by inserting after subparagraph

14 (H) the following new subparagraph:

15 ‘‘(I) will submit annual reports to the Secretary

16 describing the steps taken to recover payments made

17 under this part for items or services for which pay18 ment has been or could be made under a primary

19 plan (as defined in section 1862(b)(2)(A)).’’.

20 (2) REQUIREMENTS UNDER CARRIER PERFORM21 ANCE EVALUATION PROGRAM.—

22 (A) FISCAL INTERMEDIARIES UNDER PART

23 A.—Section 1816(f)(1)(A) (42 U.S.C.

24 1396h(f)(1)(A)) is amended by striking ‘‘proc25 essing’’ and inserting ‘‘processing (including the
34

•HR 22 SC

1 agency’s or organization’s success in recovering

2 payments made under this title for services for

3 which payment has been or could be made

4 under a primary plan (as defined in section

5 1862(b)(2)(A)))’’.

6 (B) CARRIERS UNDER PART B.—Section

7 1842(b)(2) (42 U.S.C. 1395u(b)(2)) is amended

8 by adding at the end the following new sub9 paragraph:

10 ‘‘(D) In addition to any other standards and criteria

11 established by the Secretary for evaluating carrier per12 formance under this paragraph relating to avoiding erro13 neous payments, the Secretary shall establish standards

14 and criteria relating to the carrier’s success in recovering

15 payments made under this part for items or services for

16 which payment has been or could be made under a pri17 mary plan (as defined in section 1862(b)(2)(A)).’’.

18 (3) DEADLINE FOR REIMBURSEMENT BY PRI19 MARY PLANS.—

20 (A) IN GENERAL.—Section

21 1862(b)(2)(B)(i) (42 U.S.C. 1395y(b)(2)(B)(i))

22 is amended by adding at the end the following

23 sentence: ‘‘If reimbursement is not made to the

24 appropriate Trust Fund before the expiration of

25 the 60-day period that begins on the date such
35

•HR 22 SC

1 notice or other information is received, the Sec2 retary may charge interest (beginning with the

3 date on which the notice or other information

4 is received) on the amount of the reimburse5 ment until reimbursement is made (at a rate

6 determined by the Secretary in accordance with

7 regulations of the Secretary of the Treasury ap8 plicable to charges for late payments).’’.

9 (B) CONFORMING AMENDMENT.—The

10 heading of clause (i) of section 1862(b)(2)(B) is

11 amended to read as follows: ‘‘REPAYMENT RE12 QUIRED.—’’.

13 (C) EFFECTIVE DATE.—The amendments

14 made by this paragraph shall apply to payments

15 for items and services furnished on or after the

16 date of the enactment of this Act.

17 (4) EFFECTIVE DATE.—The amendments made

18 by paragraphs (1) and (2) shall apply to contracts

19 with fiscal intermediaries and carriers under title

20 XVIII of the Social Security Act for years beginning

21 with 1993.

22 (d) MISCELLANEOUS AND TECHNICAL CORREC23 TIONS.—
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•HR 22 SC

1 (1) The sentence in section 1862(b)(1)(C)

2 added by section 4203(c)(1)(B) of OBRA–1990 is

3 amended—

4 (A) by striking ‘‘on or before January 1,

5 1996,’’ and inserting ‘‘before January 1,

6 1996’’; and

7 (B) by striking ‘‘clauses (i) and (ii)’’ and

8 inserting ‘‘this subparagraph’’.

9 (2) Effective as if included in the enactment of

10 OBRA–1989, section 1862(b)(1) is amended—

11 (A) in subparagraphs (A)(v) and

12 (B)(iv)(II), by inserting ‘‘, without regard to

13 section 5000(d) of such Code’’ before the period

14 at the end of each subparagraph;

15 (B) in subparagraph (A)(iii), by striking

16 ‘‘current calendar year or the preceding cal17 endar year’’ and inserting ‘‘current calendar

18 year and the preceding calendar year’’; and

19 (C) in the matter in subparagraph (C)

20 after clause (ii), by striking ‘‘taking into ac21 count that’’ and inserting ‘‘paying benefits sec22 ondary to this title when’’.

23 (3) Section 4203(c)(2) of OBRA–1990 is

24 amended—
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•HR 22 SC

1 (A) by striking ‘‘the application of clause

2 (iii)’’ and inserting ‘‘the second sentence’’;

3 (B) by striking ‘‘on individuals’’ and all

4 that follows through ‘‘section 226A of such

5 Act’’;

6 (C) in clause (ii), by striking ‘‘clause’’ and

7 inserting ‘‘sentence’’;

8 (D) in clause (v), by adding ‘‘and’’ at the

9 end; and

10 (E) in clause (vi)—

11 (i) by inserting ‘‘of such Act’’ after

12 ‘‘1862(b)(1)(C)’’, and

13 (ii) by striking the period at the end

14 and inserting the following: ‘‘, without re15 gard to the number of employees covered

16 by such plans.’’.

17 (4) Section 4203(d) of OBRA–1990 is amended

18 by striking ‘‘this subsection’’ and inserting ‘‘this

19 section’’.

20 (5) Except as provided in paragraph (2), the

21 amendments made by this subsection shall be effec22 tive as if included in the enactment of OBRA–1990.
38

•HR 22 SC

1 TITLE II—CUSTOMS OFFICER

2 PAY REFORM

3 SEC. 2001. OVERTIME AND PREMIUM PAY FOR CUSTOMS

4 OFFICERS.

5 (a) IN GENERAL.—Section 5 of the Act of February

6 13, 1911 (19 U.S.C. 261 and 267) is amended to read

7 as follows:

8 ‘‘SEC. 5. OVERTIME AND PREMIUM PAY FOR CUSTOMS OF9 FICERS.

10 ‘‘(a) OVERTIME PAY.—

11 ‘‘(1) IN GENERAL.—Subject to paragraph (2)

12 and subsection (c), a customs officer who is officially

13 assigned to perform work in excess of 40 hours in

14 the administrative workweek of the officer or in ex15 cess of 8 hours in a day shall be compensated for

16 that work at an hourly rate of pay that is equal to

17 2 times the hourly rate of the basic pay of the offi18 cer. For purposes of this paragraph, the hourly rate

19 of basic pay for a customs officer does not include

20 any premium pay provided for under subsection (b).

21 ‘‘(2) SPECIAL PROVISIONS RELATING TO OVER22 TIME WORK ON CALLBACK BASIS.—

23 ‘‘(A) MINIMUM DURATION.—Any work for

24 which compensation is authorized under para25 graph (1) and for which the customs officer is
39

•HR 22 SC

1 required to return to the officer’s place of work

2 shall be treated as being not less than 2 hours

3 in duration; but only if such work begins at

4 least 1 hour after the end of any previous regu5 larly scheduled work assignment and ends at

6 least 1 hour before the beginning of the follow7 ing regularly scheduled work assignment.

8 ‘‘(B) COMPENSATION FOR COMMUTING

9 TIME.—

10 ‘‘(i) IN GENERAL.—Except as pro11 vided in clause (ii), in addition to the com12 pensation authorized under paragraph (1)

13 for work to which subparagraph (A) ap14 plies, the customs officer is entitled to be

15 paid, as compensation for commuting time,

16 an amount equal to 3 times the hourly rate

17 of basic pay of the officer.

18 ‘‘(ii) EXCEPTION.—Compensation for

19 commuting time is not payable under

20 clause (i) if the work for which compensa21 tion is authorized under paragraph (1)—

22 ‘‘(I) does not commence within

23 16 hours of the customs officer’s last

24 regularly scheduled work assignment,

25 or
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•HR 22 SC

1 ‘‘(II) commences within 2 hours

2 of the next regularly scheduled work

3 assignment of the customs officer.

4 ‘‘(b) PREMIUM PAY FOR CUSTOMS OFFICERS.—

5 ‘‘(1) NIGHT WORK DIFFERENTIAL.—

6 ‘‘(A) 3 P.M. TO MIDNIGHT SHIFTWORK.—If

7 the majority of the hours of regularly scheduled

8 work of a customs officer occur during the pe9 riod beginning at 3 p.m. and ending at 12 a.m.,

10 the officer is entitled to pay for work during

11 such period (except for work to which para12 graph (2) or (3) applies) at the officer’s hourly

13 rate of basic pay plus premium pay amounting

14 to 15 percent of that basic rate.

15 ‘‘(B) 11 P.M. TO 8 A.M. SHIFTWORK.—If

16 the majority of the hours of regularly scheduled

17 work of a customs officer occur during the pe18 riod beginning at 11 p.m. and ending at 8 a.m.,

19 the officer is entitled to pay for work during

20 such period (except for work to which para21 graph (2) or (3) applies) at the officer’s hourly

22 rate of basic pay plus premium pay amounting

23 to 20 percent of that basic rate.

24 ‘‘(C) 7:30 P.M. TO 3:30 A.M. SHIFTWORK.—

25 If the regularly scheduled work assignment of a
41

•HR 22 SC

1 customs officer is 7:30 p.m. to 3:30 a.m., the

2 officer is entitled to pay for work during such

3 period (except for work to which paragraph (2)

4 or (3) applies) at the officer’s hourly rate of

5 basic pay plus premium pay amounting to 15

6 percent of that basic rate for the period from

7 7:30 p.m. to 11:30 p.m. and at the officer’s

8 hourly rate of basic pay plus premium pay

9 amounting to 20 percent of that basic rate for

10 the period from 11:30 p.m. to 3:30 a.m.

11 ‘‘(2) SUNDAY DIFFERENTIAL.—A customs offi12 cer who performs any regularly scheduled work on a

13 Sunday that is not a holiday is entitled to pay for

14 that work at the officer’s hourly rate of basic pay

15 plus premium pay amounting to 50 percent of that

16 basic rate.

17 ‘‘(3) HOLIDAY DIFFERENTIAL.—A customs offi18 cer who performs any regularly scheduled work on a

19 holiday is entitled to pay for that work at the offi20 cer’s hourly rate of basic pay plus premium pay

21 amounting to 100 percent of that basic rate.

22 ‘‘(4) TREATMENT OF PREMIUM PAY.—Premium

23 pay provided for under this subsection may not be

24 treated as being overtime pay or compensation for

25 any purpose.
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•HR 22 SC

1 ‘‘(c) LIMITATIONS.—

2 ‘‘(1) FISCAL YEAR CAP.—The aggregate of

3 overtime pay under subsection (a) (including com4 muting compensation under subsection (a)(2)(B))

5 and premium pay under subsection (b) that a cus6 toms officer may be paid in any fiscal year may not

7 exceed $25,000; except that the Commissioner of

8 Customs or his designee may waive this limitation in

9 individual cases in order to prevent excessive costs

10 or to meet emergency requirements of the Customs

11 Service.

12 ‘‘(2) EXCLUSIVITY OF PAY UNDER THIS SEC13 TION.—A customs officer who receives overtime pay

14 under subsection (a) or premium pay under sub15 section (b) for time worked may not receive pay or

16 other compensation for that work under any other

17 provision of law.

18 ‘‘(d) REGULATIONS.—The Secretary of the Treasury

19 shall prescribe such regulations as are necessary or appro20 priate to carry out this section, including regulations—

21 ‘‘(1) to ensure that callback work assignments

22 are commensurate with the overtime pay authorized

23 for such work; and
43

•HR 22 SC

1 ‘‘(2) to prevent the disproportionate assignment

2 of overtime work to customs officers who are near

3 to retirement.

4 ‘‘(e) DEFINITIONS.—As used in this section:

5 ‘‘(1) The term ‘customs officer’ means an indi6 vidual performing those functions specified by regu7 lation by the Secretary of the Treasury for a cus8 toms inspector or canine enforcement officer. Such

9 functions shall be consistent with such applicable

10 standards as may be promulgated by the Office of

11 Personnel Management.

12 ‘‘(2) The term ‘holiday’ means any day des13 ignated as a holiday under a Federal statute or Ex14 ecutive order.’’.

15 (b) CONFORMING AMENDMENTS.—

16 (1) Section 2 of the Act of June 3, 1944 (19

17 U.S.C. 1451a), is repealed.

18 (2) Section 450 of the Tariff Act of 1930 (19

19 U.S.C. 1450) is amended—

20 (A) by striking out ‘‘at night’’ in the sec21 tion heading and inserting ‘‘during overtime

22 hours’’;

23 (B) by striking out ‘‘at night’’ and insert24 ing ‘‘during overtime hours’’; and
44

•HR 22 SC

1 (C) by inserting ‘‘aircraft,’’ immediately

2 before ‘‘vessel’’.

3 (c) EFFECTIVE DATE.—The amendments made by

4 subsections (a) and (b) apply to customs inspectional serv5 ices provided on or after October 1, 1993.

6 SEC. 2002. FOREIGN LANGUAGE PROFICIENCY AWARDS

7 FOR CUSTOMS OFFICERS.

8 Cash awards for foreign language proficiency may,

9 under regulations prescribed by the Secretary of the

10 Treasury, be paid to customs officers (as referred to in

11 section 5(e)(1) of the Act of February 13, 1911) to the

12 same extent and in the same manner as would be allowable

13 under subchapter III of chapter 45 of title 5, United

14 States Code, with respect to law enforcement officers (as

15 defined by section 4521 of such title).

16 SEC. 2003. APPROPRIATIONS REIMBURSEMENTS FROM

17 THE CUSTOMS USER FEE ACCOUNT.

18 Section 13031(f)(3) of the Consolidated Omnibus

19 Budget Reconciliation Act of 1985 (19 U.S.C. 58c(f)(3))

20 is amended—

21 (1) by amending clause (i) of subparagraph (A)

22 to read as follows: ‘‘(i) in—

23 ‘‘(I) paying overtime compensation and

24 premium pay under section 5 (a) and (b) of the

25 Act of February 13, 1911,
45

•HR 22 SC

1 ‘‘(II) paying agency contributions to the

2 Civil Service Retirement and Disability Fund to

3 match deductions from the overtime compensa4 tion paid under subclause (I), and

5 ‘‘(III) providing all preclearance services

6 for which the recipients of such services are not

7 required to reimburse the Secretary of the

8 Treasury, and’’; and

9 (2) by striking out ‘‘except for costs described

10 in subparagraph (A)(i) (I) and (II),’’ in subpara11 graph (B)(i).

12 SEC. 2004. TREATMENT OF CERTAIN PAY OF CUSTOMS OF13 FICERS FOR RETIREMENT PURPOSES.

14 (a) IN GENERAL.—Section 8331(3) of title 5, United

15 States Code, is amended—

16 (1) by striking out ‘‘and’’ at the end of sub17 paragraph (C);

18 (2) by striking out the semicolon at the end of

19 subparagraph (D) and inserting ‘‘; and’’;

20 (3) by adding after subparagraph (D) the fol21 lowing:

22 ‘‘(E) with respect to a customs officer (re23 ferred to in subsection (e)(1) of section 5 of the

24 Act of February 13, 1911), compensation for

25 overtime inspectional services provided for
46

•HR 22 SC

1 under subsection (a) of such section 5, but not

2 to exceed 50 percent of any statutory maximum

3 in overtime pay for customs officers which is in

4 effect for the year involved;’’; and

5 (4) by striking out ‘‘subparagraphs (B), (C),

6 and (D) of this paragraph,’’ and inserting ‘‘subpara7 graphs (B), (C), (D), and (E) of this paragraph’’.

8 (b) EFFECTIVE DATE.—The amendments made by

9 subsection (a) take effect on the date of the enactment

10 of this Act and apply only with respect to service per11 formed on or after such date.

12 SEC. 2005. REPORTS.

13 (a) CUSTOMS USER FEE ACCOUNT REPORTS.—Sub14 paragraph (D) of section 13031(f)(3) of the Consolidated

15 Omnibus Budget Reconciliation Act of 1985 (19 U.S.C.

16 58c(f)(3)(D)) is amended to read as follows:

17 ‘‘(D) At the close of each fiscal year, the

18 Secretary of the Treasury shall submit a report

19 to the Committee on Finance of the Senate and

20 the Committee on Ways and Means of the

21 House of Representatives—

22 ‘‘(i) containing a detailed accounting

23 of all expenditures from the Customs User

24 Fee Account during such year, including a

25 summary of the expenditures, on a port-by-
47

•HR 22 SC

1 port basis, for which reimbursement has

2 been provided under subparagraph (A)(ii);

3 ‘‘(ii) containing a listing of all call4 back assignments of customs officers for

5 which overtime compensation was paid

6 under section 5(a) of the Act of February

7 13, 1911, and that were less than 1 hour

8 in duration; and

9 ‘‘(iii) containing a listing of all cus10 toms officers who were paid $25,000 or

11 more under subsections 5(a) and 5(b) of

12 the Act of February 13, 1911, including a

13 listing of the total compensation paid to

14 each of those customs officers under all

15 other statutory authority.’’.

16 (b) OTHER REPORTS.—

17 (1) GAO REPORT.—The Comptroller General of

18 the United States shall undertake—

19 (A) an evaluation of the appropriateness

20 and efficiency of the customs user fee laws for

21 financing the provision of customs inspectional

22 services; and

23 (B) a study to determine whether cost sav24 ings in the provision of overtime inspectional

25 services could be realized by the United States
48

•HR 22 SC

1 Customs Service through the use of additional

2 inspectors as opposed to continuing the current

3 practice of relying on overtime pay.

4 The Comptroller General shall submit a report on

5 the evaluation and study required under this sub6 section to the Committees by no later than the 1st

7 anniversary of the date of the enactment of this Act.

8 (2) TREASURY RECOMMENDATION.—On the day

9 that the President submits the budget for the Unit10 ed States Government for fiscal year 1995 to the

11 Congress under section 1105(a) of title 31, United

12 States Code, the Secretary of the Treasury shall

13 submit to the Committees recommended legislative

14 proposals for improving the operation of customs

15 user fee laws in financing the provision of customs

16 inspectional services.

17 (3) DEFINITION OF COMMITTEES.—For pur18 poses of this subsection, the term ‘‘Committees’’

19 means the Committee on Ways and Means of the

20 House of Representatives and the Committee on Fi21 nance of the Senate.
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•HR 22 SC

1 TITLE III—AVAILABILITY AND

2 USE OF DEATH INFORMATION

3 UNDER THE OLD-AGE, SURVI4 VORS, AND DISABILITY IN5 SURANCE PROGRAM

6 SEC. 3001. AVAILABILITY AND USE OF DEATH INFORMA7 TION UNDER THE OLD-AGE, SURVIVORS, AND

8 DISABILITY INSURANCE PROGRAM.

9 (a) IMPROVEMENTS IN PROGRAM FOR USE OF

10 DEATH CERTIFICATES TO CORRECT PROGRAM INFORMA11 TION.—

12 (1) ELIMINATION OF STATE RESTRICTIONS ON

13 USE OF INFORMATION.—Section 205(r)(1) of the So14 cial Security Act (42 U.S.C. 405(r)(1)) is amended

15 by adding at the end, after and below subparagraph

16 (B), the following new sentence:

17 ‘‘Any contract entered into pursuant to subparagraph (A)

18 shall not include any restriction on the use of information

19 obtained by the Secretary pursuant to such contract, ex20 cept to the extent that such use may be restricted under

21 paragraph (6).’’.

22 (2) INFORMATION PROVIDED TO STATE AGEN23 CIES FREE OF CHARGE.—
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1 (A) IN GENERAL.—Section 205(r)(4) of

2 such Act (42 U.S.C. 405(r)(4)) is amended to

3 read as follows:

4 ‘‘(4)(A) In the case of individuals with respect to

5 whom federally funded benefits are provided by (or

6 through) a State agency other than under this Act, the

7 Secretary shall to the extent feasible provide such informa8 tion free of charge through a cooperative arrangement

9 with such agency, for ensuring proper payment of those

10 benefits with respect to such individuals, if such arrange11 ment does not conflict with the duties of the Secretary

12 under paragraph (1).

13 ‘‘(B) The Secretary may enter into similar agree14 ments with States to provide information free of charge

15 for their use in programs wholly funded by the States if

16 such arrangement does not conflict with the duties of the

17 Secretary under paragraph (1).’’.

18 (B) CONFORMING AMENDMENT.—Section

19 205(r)(3) of such Act (42 U.S.C. 405(r)(3)) is

20 amended by striking ‘‘or State’’.

21 (3) USE BY STATES OF SOCIAL SECURITY AC22 COUNT NUMBERS CONTINGENT UPON PARTICIPATION

23 IN PROGRAM.—Section 205(r)(2) of such Act (42

24 U.S.C. 405(r)(2)) is amended—

25 (A) by inserting ‘‘(A)’’ after ‘‘(2)’’; and
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•HR 22 SC

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

2 subparagraph:

3 ‘‘(B) Notwithstanding section 7(a)(2)(B) of the Pri4 vacy Act of 1974 and clauses (i) and (v) of subsection

5 (c)(2)(C) of this section, any State which is not a party

6 to a contract with the Secretary meeting the requirements

7 of paragraph (1) (and any political subdivision thereof)

8 may not utilize an individual’s social security account

9 number in the administration of any driver’s license or

10 motor vehicle registration law.’’.

11 (b) STUDY REGARDING IMPROVEMENTS IN GATHER12 ING AND REPORTING OF DEATH INFORMATION.

13 (1) IN GENERAL.—As soon as practicable after

14 the date of the enactment of this Act, the Secretary

15 of Health and Human Services shall conduct a study

16 of possible improvements in the current methods of

17 gathering and reporting death information by the

18 Federal, State, and local governments which would

19 result in more efficient and expeditious handling of

20 such information.

21 (2) SPECIFIC MATTERS TO BE STUDIED.—In

22 carrying out the study required under this sub23 section, the Secretary shall—

24 (A) ascertain the delays in the receipt of

25 death information which are currently encoun-
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1 tered by the Social Security Administration and

2 other agencies in need of such information on

3 a regular basis,

4 (B) analyze the causes of such delays,

5 (C) develop alternative options for improv6 ing Federal, State, and local agency cooperation

7 in reducing such delays, and

8 (D) evaluate the costs and benefits associ9 ated with the options referred to in subpara10 graph (C).

11 (3) REPORT.—Not later than June 1, 1994, the

12 Secretary shall submit a written report to the Com13 mittee on Ways and Means of the House of Rep14 resentatives and the Committee on Finance of the

15 Senate setting forth the results of the study con16 ducted pursuant to this subsection, together with

17 such administrative and legislative recommendations

18 as the Secretary may consider appropriate.

19 (c) EFFECTIVE DATE.—

20 (1) IN GENERAL.—The amendments made by

21 subsection (a) shall take effect 1 year after the date

22 of the enactment of this Act.

23 (2) PROMOTION OF ENTRY INTO NEW CON24 TRACTS.—As soon as practicable after the date of

25 the enactment of this Act, the Secretary of Health
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1 and Human Services shall take such actions as are

2 necessary and appropriate to promote entry into

3 contracts under section 205(r) of the Social Security

4 Act which are in compliance with the requirements

5 of the amendments made by subsection (a).

6 TITLE IV—PBGC REPORT ON EM7 PLOYERS WITH UNDER8 FUNDED PLANS

9 SEC. 4001. REPORT ON EMPLOYERS WITH UNDERFUNDED

10 PLANS.

11 (a) GENERAL RULE.—The Pension Benefit Guaranty

12 Corporation shall, on January 31 of each calendar year

13 after 1993, submit a report to the Congress setting

14 forth—

15 (1) the name of each contributing sponsor of 1

16 or more applicable plans having unfunded liabilities

17 aggregating $25,000,000 or more, and

18 (2) the name of each contributing sponsor with

19 an applicable plan which has an unfunded liability in

20 excess of $5,000,000 and with respect to which a

21 minimum funding waiver in excess of $1,000,000

22 has been granted.

23 Information may be included in such report only if such

24 information may be publicly disclosed by the Pension Ben25 efit Guaranty Corporation.
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1 (b) DETERMINATIONS OF UNFUNDED LIABILITY.—

2 For purposes of subsection (a), determinations of the un3 funded liability of any plan shall be made by the Pension

4 Benefit Guaranty Corporation on the basis of the most

5 recent information available to it.

6 (c) APPLICABLE PLAN.—For purposes of subsection

7 (a), the term ‘‘applicable plan’’ means any employee pen8 sion benefit plan (as defined in paragraph (2) of section

9 3 of the Employee Retirement Income Security Act of

10 1974) covered under subtitle B of title IV of such Act;

11 except that such term shall not include a multiemployer

12 plan (as defined in section 4001(a)(3) of such Act).

13 (d) CONTRIBUTING SPONSOR.—For purposes of this

14 section, the term ‘‘contributing sponsor’’ has the meaning

15 given to such term by section 4001(a)(13) of such Act.

16 TITLE V—TAXPAYER BILL OF

17 RIGHTS 2

18 SEC. 5000. SHORT TITLE; AMENDMENT OF 1986 CODE.

19 (a) SHORT TITLE.—This title may be cited as the

20 ‘‘Taxpayer Bill of Rights 2’’.

21 (b) AMENDMENT OF 1986 CODE.—Except as other22 wise expressly provided, whenever in this title or title VI

23 an amendment or repeal is expressed in terms of an

24 amendment to, or repeal of, a section or other provision,
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1 the reference shall be considered to be made to a section

2 or other provision of the Internal Revenue Code of 1986.

3 Subtitle A—Taxpayer Advocate

4 SEC. 5001. ESTABLISHMENT OF POSITION OF TAXPAYER

5 ADVOCATE WITHIN INTERNAL REVENUE

6 SERVICE.

7 (a) GENERAL RULE.—Section 7802 (relating to

8 Commissioner of Internal Revenue; Assistant Commis9 sioner (Employee Plans and Exempt Organizations)) is

10 amended by adding at the end thereof the following new

11 subsection:

12 ‘‘(d) OFFICE OF TAXPAYER ADVOCATE.—

13 ‘‘(1) IN GENERAL.—There is established in the

14 Internal Revenue Service an office to be known as

15 the ‘Office of the Taxpayer Advocate’. Such office,

16 including all problem resolution officers, shall be

17 under the supervision and direction of an official to

18 be known as the ‘Taxpayer Advocate’ who shall be

19 appointed by the President by and with the advice

20 and consent of the Senate, and who shall report di21 rectly to the Commissioner of Internal Revenue. The

22 Taxpayer Advocate shall be entitled to compensation

23 at the same rate as the Chief Counsel for the Inter24 nal Revenue Service.

25 ‘‘(2) FUNCTIONS OF OFFICE.—
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1 ‘‘(A) IN GENERAL.—It shall be the func2 tion of the Office of Taxpayer Advocate to—

3 ‘‘(i) assist taxpayers in resolving prob4 lems with the Internal Revenue Service,

5 ‘‘(ii) identify areas in which taxpayers

6 have problems in dealings with the Internal

7 Revenue Service,

8 ‘‘(iii) to the extent possible, propose

9 changes in the administrative practices of

10 the Internal Revenue Service to mitigate

11 problems identified under clause (ii), and

12 ‘‘(iv) identify potential legislative

13 changes which may be appropriate to miti14 gate such problems.

15 ‘‘(B) ANNUAL REPORTS.—

16 ‘‘(i) OBJECTIVES.—Not later than Oc17 tober 31 of each calendar year after 1993,

18 the Taxpayer Advocate shall report to the

19 Committee on Ways and Means of the

20 House of Representatives and the Commit21 tee on Finance of the Senate on the objec22 tives of the Taxpayer Advocate for the fol23 lowing calendar year. Any such report shall

24 contain full and substantive analysis, in

25 addition to statistical information.
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1 ‘‘(ii) ACTIVITIES.—Not later than

2 June 30 of each calendar year after 1993,

3 the Taxpayer Advocate shall report to the

4 Committee on Ways and Means of the

5 House of Representatives and the Commit6 tee on Finance of the Senate on the activi7 ties of the Taxpayer Advocate during the

8 fiscal year ending during such calendar

9 year. Any such report shall contain full

10 and substantive analysis, in addition to

11 statistical information, and shall—

12 ‘‘(I) identify the initiatives the

13 Taxpayer Advocate has taken on im14 proving taxpayer services and Internal

15 Revenue Service responsiveness,

16 ‘‘(II) contain recommendations

17 received from individuals with the au18 thority to issue taxpayer assistance

19 orders under section 7811,

20 ‘‘(III) contain a summary of at

21 least 20 of the most serious problems

22 encountered by taxpayers, including a

23 description of the nature of such prob24 lems,
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1 ‘‘(IV) contain an inventory of the

2 items described in subclauses (I), (II),

3 and (III) for which action has been

4 taken and the result of such action,

5 ‘‘(V) contain an inventory of the

6 items described in subclauses (I), (II),

7 and (III) for which action remains to

8 be completed and the period during

9 which each item has remained on such

10 inventory,

11 ‘‘(VI) contain an inventory of the

12 items described in subclauses (II) and

13 (III) for which no action has been

14 taken, the period during which each

15 item has remained on such inventory,

16 the reasons for the inaction, and iden17 tify any Internal Revenue Service offi18 cial who is responsible for such inac19 tion,

20 ‘‘(VII) identify any Taxpayer As21 sistance Order which was not honored

22 by the Internal Revenue Service in a

23 timely manner, as specified under sec24 tion 7811(b),
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•HR 22 SC

1 ‘‘(VIII) contain recommendations

2 for such administrative and legislative

3 action as may be appropriate to re4 solve problems encountered by tax5 payers, and

6 ‘‘(IX) include such other infor7 mation as the Taxpayer Advocate may

8 deem advisable.

9 ‘‘(iii) REPORT TO BE SUBMITTED DI10 RECTLY.—Each report required under this

11 subparagraph shall be provided directly to

12 the Committees referred to in clauses (i)

13 and (ii) without any prior review or com14 ment from the Commissioner of the Inter15 nal Revenue Service, the Secretary of the

16 Treasury, any other officer or employee of

17 the Department of the Treasury, or the

18 Office of Management and Budget.

19 ‘‘(3) RESPONSIBILITIES OF COMMISSIONER OF

20 INTERNAL REVENUE SERVICE.—The Commissioner

21 of Internal Revenue shall establish procedures re22 quiring a formal response to all recommendations

23 submitted to the Commissioner by the Taxpayer Ad24 vocate.’’

25 (b) CONFORMING AMENDMENTS.—
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•HR 22 SC

1 (1) Section 7811 (relating to taxpayer assist2 ance orders) is amended—

3 (A) by striking ‘‘the Office of Ombuds4 man’’ in subsection (a) and inserting ‘‘the Of5 fice of the Taxpayer Advocate’’, and

6 (B) by striking ‘‘Ombudsman’’ each place

7 it appears (including in the headings of sub8 sections (e) and (f)) and inserting ‘‘Taxpayer

9 Advocate’’.

10 (2) The heading for section 7802 is amended to

11 read as follows:

12 ‘‘SEC. 7802. COMMISSIONER OF INTERNAL REVENUE; AS13 SISTANT COMMISSIONERS; TAXPAYER ADVO14 CATE.’’

15 (3) The table of sections for subchapter A of

16 chapter 80 of subtitle F is amended by striking the

17 item relating to section 7802 and inserting the fol18 lowing new item:

‘‘Sec. 7802. Commissioner of Internal Revenue; Assistant Commissioners; Taxpayer Advocate.’’

19 (c) EFFECTIVE DATE.—The amendments made by

20 this section shall take effect on the date of the enactment

21 of this Act.
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1 SEC. 5002. EXPANSION OF AUTHORITY TO ISSUE TAX2 PAYER ASSISTANCE ORDERS.

3 (a) TERMS OF ORDERS.—Subsection (b) of section

4 7811 (relating to terms of taxpayer assistance orders) is

5 amended—

6 (1) by inserting ‘‘within a specified time pe7 riod’’ after ‘‘the Secretary’’, and

8 (2) by inserting ‘‘take any action as permitted

9 by law,’’ after ‘‘cease any action,’’.

10 (b) LIMITATION ON AUTHORITY TO MODIFY OR RE11 SCIND.—Section 7811(c) (relating to authority to modify

12 or rescind) is amended to read as follows:

13 ‘‘(c) AUTHORITY TO MODIFY OR RESCIND.—Any

14 Taxpayer Assistance Order issued by the Taxpayer Advo15 cate under this section may be modified or rescinded only

16 by the Taxpayer Advocate, the Commissioner, or any supe17 rior of either.’’

18 (c) EFFECTIVE DATE.—The amendments made by

19 this section shall take effect on the date of the enactment

20 of this Act.

21 Subtitle B—Modifications to

22 Installment Agreement Provisions

23 SEC. 5101. NOTIFICATION OF REASONS FOR TERMINATION

24 OR DENIAL OF INSTALLMENT AGREEMENTS.

25 (a) TERMINATIONS.—Subsection (b) of section 6159

26 (relating to extent to which agreements remain in effect)
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•HR 22 SC

1 is amended by adding at the end thereof the following new

2 paragraph:

3 ‘‘(5) NOTICE REQUIREMENTS.—The Secretary

4 may not take any action under paragraph (2), (3),

5 or (4) unless—

6 ‘‘(A) a notice of such action is provided to

7 the taxpayer not later than the day 30 days be8 fore the date of such action, and

9 ‘‘(B) such notice includes an explanation

10 why the Secretary intends to take such action.

11 The preceding sentence shall not apply in any case

12 in which the Secretary believes that collection of any

13 tax to which an agreement under this section relates

14 is in jeopardy.’’

15 (b) DENIALS.—Section 6159 (relating to agreements

16 for payment of tax liability in installments) is amended

17 by adding at the end thereof the following new subsection:

18 ‘‘(c) NOTICE REQUIREMENTS FOR DENIALS.—The

19 Secretary may not deny any request for an installment

20 agreement under this section unless—

21 ‘‘(1) a notice of the proposed denial is provided

22 to the taxpayer not later than the day 30 days be23 fore the date of such denial, and

24 ‘‘(2) such notice includes an explanation why

25 the Secretary intends to deny such request.
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1 The preceding sentence shall not apply in any case in

2 which the Secretary believes that collection of any tax to

3 which a request for an agreement under this section re4 lates is in jeopardy.’’

5 (c) CONFORMING AMENDMENT.—Paragraph (3) of

6 section 6159(b) is amended to read as follows:

7 ‘‘(3) SUBSEQUENT CHANGE IN FINANCIAL CON8 DITIONS.—If the Secretary makes a determination

9 that the financial condition of a taxpayer with whom

10 the Secretary has entered into an agreement under

11 subsection (a) has significantly changed, the Sec12 retary may alter, modify, or terminate such agree13 ment.’’

14 (d) EFFECTIVE DATE.—The amendments made by

15 this section shall take effect on the date 6 months after

16 the date of the enactment of this Act.

17 SEC. 5102. ADMINISTRATIVE REVIEW OF DENIAL OF RE18 QUEST FOR, OR TERMINATION OF, INSTALL19 MENT AGREEMENT.

20 (a) GENERAL RULE.—Section 6159 (relating to

21 agreements for payment of tax liability in installments),

22 as amended by section 1101, is amended by adding at the

23 end thereof the following new subsection:

24 ‘‘(d) ADMINISTRATIVE REVIEW.—The Secretary shall

25 establish procedures for an independent administrative re-
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1 view of denials of requests for, or terminations of, install2 ment agreements under this section.’’

3 (b) EFFECTIVE DATE.—The amendment made by

4 subsection (a) shall take effect on January 1, 1994.

5 Subtitle C—Interest

6 SEC. 5201. EXPANSION OF AUTHORITY TO ABATE INTEREST.

7 (a) GENERAL RULE.—Paragraph (1) of section

8 6404(e) (relating to abatement of interest in certain cases)

9 is amended—

10 (1) by inserting ‘‘unreasonable’’ before ‘‘error’’

11 each place it appears in subparagraphs (A) and (B),

12 and

13 (2) by striking ‘‘ministerial act’’ each place it

14 appears and inserting ‘‘ministerial or managerial

15 act’’.

16 (b) CLERICAL AMENDMENT.—The subsection head17 ing for subsection (e) of section 6404 is amended by strik18 ing ‘‘Assessments’’ and inserting ‘‘Abatement’’.

19 (c) EFFECTIVE DATE.—The amendments made by

20 this section shall apply to interest accruing with respect

21 to deficiencies or payments for taxable years beginning

22 after the date of the enactment of this Act.
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1 SEC. 5202. EXTENSION OF INTEREST-FREE PERIOD FOR

2 PAYMENT OF TAX AFTER NOTICE AND DE3 MAND.

4 (a) GENERAL RULE.—Paragraph (3) of section

5 6601(e) (relating to payments made within 10 days after

6 notice and demand) is amended to read as follows:

7 ‘‘(3) PAYMENTS MADE WITHIN SPECIFIED PE8 RIOD AFTER NOTICE AND DEMAND.—If notice and

9 demand is made for payment of any amount and if

10 such amount is paid within 21 days (10 days if the

11 amount for which such notice and demand is made

12 equals or exceeds $100,000) after the date of such

13 notice and demand, interest under this section on

14 the amount so paid shall not be imposed for the pe15 riod after the date of such notice and demand.’’

16 (b) CONFORMING AMENDMENT.—Paragraph (3) of

17 section 6651(a) (relating to addition to tax for failure to

18 file tax return or pay tax) is amended by striking ‘‘10

19 days’’ and inserting ‘‘21 days (10 days if the amount for

20 which such notice and demand is made equals or exceed

21 $100,000)’’.

22 (c) EFFECTIVE DATE.—The amendments made by

23 this section shall apply in the case of any notice and de24 mand given after June 30, 1994.
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1 Subtitle D—Joint Returns

2 SEC. 5301. DISCLOSURE OF COLLECTION ACTIVITIES.

3 (a) GENERAL RULE.—Subsection (e) of section 6103

4 (relating to disclosure to persons having material interest)

5 is amended by adding at the end thereof the following new

6 paragraph:

7 ‘‘(8) DISCLOSURE OF COLLECTION ACTIVITIES

8 WITH RESPECT TO JOINT RETURN.—If any defi9 ciency of tax with respect to a joint return is as10 sessed and the individuals filing such return are no

11 longer married or no longer reside in the same

12 household, upon request in writing of either of such

13 individuals, the Secretary may disclose in writing to

14 the individual making the request whether the Sec15 retary has attempted to collect such deficiency from

16 such other individual, the general nature of such col17 lection activities, and the amount collected.’’

18 (b) EFFECTIVE DATE.—The amendment made by

19 subsection (a) shall take effect on the date of the enact20 ment of this Act.

21 SEC. 5302. JOINT RETURN MAY BE MADE AFTER SEPARATE

22 RETURNS WITHOUT FULL PAYMENT OF TAX.

23 (a) GENERAL RULE.—Paragraph (2) of section

24 6013(b) (relating to limitations on filing of joint return

25 after filing separate returns) is amended by striking sub-
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1 paragraph (A) and redesignating the following subpara2 graphs accordingly.

3 (b) EFFECTIVE DATE.—The amendment made by

4 subsection (a) shall apply to taxable years beginning after

5 the date of the enactment of this Act.

6 Subtitle E—Collection Activities

7 SEC. 5401. MODIFICATIONS TO LIEN AND LEVY PROVI8 SIONS.

9 (a) WITHDRAWAL OF CERTAIN NOTICES.—Section

10 6323 (relating to validity and priority against certain per11 sons) is amended by adding at the end thereof the follow12 ing new subsection:

13 ‘‘(j) WITHDRAWAL OF NOTICE IN CERTAIN CIR14 CUMSTANCES.—

15 ‘‘(1) IN GENERAL.—The Secretary may with16 draw a notice of a lien filed under this section and

17 this chapter shall be applied as if the withdrawn no18 tice had not been filed, if the Secretary determines

19 that—

20 ‘‘(A) the filing of such notice was pre21 mature or otherwise not in accordance with ad22 ministrative procedures of the Secretary,

23 ‘‘(B) the taxpayer has entered into an

24 agreement under section 6159 to satisfy the tax

25 liability for which the lien was imposed by
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1 means of installment payments, unless such

2 agreement provides otherwise,

3 ‘‘(C) the withdrawal of such notice will fa4 cilitate the collection of the tax liability, or

5 ‘‘(D) with the consent of the taxpayer or

6 the Taxpayer Advocate, the withdrawal of such

7 notice would be in the best interests of the tax8 payer (as determined by the Taxpayer Advo9 cate) and the United States.

10 Any such withdrawal shall be made by filing notice

11 thereof at the same office as the withdrawn notice.

12 A copy of such notice of withdrawal shall be pro13 vided to the taxpayer.

14 ‘‘(2) NOTICE TO CREDIT AGENCIES, ETC.—

15 Upon written request by the taxpayer with respect

16 to whom a notice of a lien was withdrawn under

17 paragraph (1), the Secretary shall promptly make

18 reasonable efforts to notify credit reporting agencies,

19 and any financial institution or creditor whose name

20 and address is specified in such request, of the with21 drawal of such notice. Any such request shall be in

22 such form as the Secretary may prescribe.’’

23 (b) RETURN OF LEVIED PROPERTY IN CERTAIN

24 CASES.—Section 6343 (relating to authority to release
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1 levy and return property) is amended by adding at the

2 end thereof the following new subsection:

3 ‘‘(d) RETURN OF PROPERTY IN CERTAIN CASES.—

4 If—

5 ‘‘(1) any property has been levied upon, and

6 ‘‘(2) the Secretary determines that—

7 ‘‘(A) the levy on such property was pre8 mature or otherwise not in accordance with ad9 ministrative procedures of the Secretary,

10 ‘‘(B) the taxpayer has entered into an

11 agreement under section 6159 to satisfy the tax

12 liability for which the levy was imposed by

13 means of installment payments, unless such

14 agreement provides otherwise,

15 ‘‘(C) the return of such property will facili16 tate the collection of the tax liability, or

17 ‘‘(D) with the consent of the taxpayer or

18 the Taxpayer Advocate, the return of such

19 property would be in the best interests of the

20 taxpayer (as determined by the Taxpayer Advo21 cate) and the United States,

22 the provisions of subsection (b) shall apply in the same

23 manner as if such property had been wrongly levied upon,

24 except that no interest shall be allowed under subsection

25 (c).’’
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1 (c) MODIFICATIONS IN CERTAIN LEVY EXEMPTION

2 AMOUNTS.—

3 (1) FUEL, ETC.—Paragraph (2) of section

4 6334(a) (relating to fuel, provisions, furniture, and

5 personal effects exempt from levy) is amended—

6 (A) by striking ‘‘If the taxpayer is the

7 head of a family, so’’ and inserting ‘‘So’’, and

8 (B) by striking ‘‘$1,650 ($1,550 in the

9 case of levies issued during 1989)’’ and insert10 ing ‘‘$1,700’’.

11 (2) BOOKS, ETC.—Paragraph (3) of section

12 6334(a) (relating to books and tools of a trade, busi13 ness, or profession exempt from levy) is amended by

14 striking ‘‘$1,100 ($1,050 in the case of levies issued

15 during 1989)’’ and inserting ‘‘$1,200’’.

16 (3) INDEXED FOR INFLATION.—Section 6334

17 (relating to property exempt from levy) is amended

18 by adding at the end thereof the following new sub19 section:

20 ‘‘(f) INFLATION ADJUSTMENTS.—

21 ‘‘(1) IN GENERAL.—In the case of any calendar

22 year beginning after 1994, each dollar amount re23 ferred to in paragraphs (2) and (3) of subsection (a)

24 shall be increased by an amount equal to—

25 ‘‘(A) such dollar amount, multiplied by
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•HR 22 SC

1 ‘‘(B) the cost-of-living adjustment deter2 mined under section 1(f)(3) for such calendar

3 year, by substituting ‘calendar year 1993’ for

4 ‘calendar year 1989’ in subparagraph (B)

5 thereof.

6 ‘‘(2) ROUNDING.—If any dollar amount after

7 being increased under paragraph (1) is not a mul8 tiple of $10, such dollar amount shall be rounded to

9 the nearest multiple of $10 (or, if such dollar

10 amount is a multiple of $5, such dollar amount shall

11 be increased to the next higher multiple of $10).’’

12 (d) EFFECTIVE DATES.—

13 (1) IN GENERAL.—Except as provided in para14 graph (2), the amendments made by this section

15 shall take effect on the date of the enactment of this

16 Act.

17 (2) EXEMPT AMOUNTS.—The amendments

18 made by subsection (c) shall take effect with respect

19 to levies issued after December 31, 1993.

20 SEC. 5402. OFFERS-IN-COMPROMISE.

21 (a) GENERAL RULE.—Subsection (a) of section 7122

22 (relating to compromises) is amended by adding at the end

23 thereof the following new sentence: ‘‘The Secretary may

24 make such a compromise in any case where the Secretary
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1 determines that such compromise would be in the best in2 terests of the United States.’’.

3 (b) REVIEW REQUIREMENTS.—Subsection (b) of sec4 tion 7122 (relating to records) is amended by striking

5 ‘‘$500.’’ and inserting ‘‘$50,000. However, such com6 promise shall be subject to continuing quality review by

7 the Secretary.’’.

8 (c) EFFECTIVE DATE.—The amendments made by

9 this section shall take effect on the date of the enactment

10 of this Act.

11 SEC. 5403. NOTIFICATION OF EXAMINATION.

12 (a) IN GENERAL.—Section 7605 (relating to restric13 tions on examination of taxpayer) is amended by redesig14 nating subsection (c) as subsection (d) and by inserting

15 after subsection (b) the following new subsection:

16 ‘‘(c) NOTIFICATION REQUIREMENT.—No examina17 tion described in subsection (a) shall be made unless the

18 Secretary notifies the taxpayer in writing by mail to an

19 address determined under section 6212(b) that the tax20 payer is under examination and provides the taxpayer with

21 an explanation of the process as described in section

22 7521(b)(1). The preceding sentence shall not apply in the

23 case of any examination if the Secretary determines

24 that—
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1 ‘‘(1) such examination is in connection with a

2 criminal investigation or is with respect to a tax the

3 collection of which is in jeopardy, or

4 ‘‘(2) the application of the preceding sentence

5 would be inconsistent with national security needs or

6 would interfere with the effective conduct of a con7 fidential law enforcement or foreign counterintel8 ligence activity.’’

9 (b) CONFORMING AMENDMENT.—Paragraph (1) of

10 section 7521(b) (relating to safeguards) is amended by

11 striking ‘‘or at’’.

12 (c) EFFECTIVE DATE.—The amendments made by

13 this section shall take effect on the date of the enactment

14 of this Act.

15 SEC. 5404. INCREASE IN LIMIT ON RECOVERY OF CIVIL

16 DAMAGES FOR UNAUTHORIZED COLLECTION

17 ACTIONS.

18 (a) GENERAL RULE.—Subsection (b) of section 7433

19 (relating to damages) is amended by striking ‘‘$100,000’’

20 and inserting ‘‘$1,000,000’’.

21 (b) EFFECTIVE DATE.—The amendment made by

22 subsection (a) shall apply to actions by officers or employ23 ees of the Internal Revenue Service after the date of the

24 enactment of this Act.
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1 SEC. 5405. SAFEGUARDS RELATING TO DESIGNATED SUM2 MONS.

3 (a) STANDARD OF REVIEW.—Subparagraph (A) of

4 section 6503(k)(2) (defining designated summons) is

5 amended by redesignating clauses (i) and (ii) as clauses

6 (ii) and (iii), respectively, and by inserting before clause

7 (ii) (as so redesignated) the following new clause:

8 ‘‘(i) the issuance of such summons is

9 preceded by a review of such issuance by

10 the regional counsel of the Office of Chief

11 Counsel for the region in which the exam12 ination of the corporation is being con13 ducted,’’.

14 (b) NOTICE REQUIREMENTS FOR ISSUANCE.—Sec15 tion 6503(k) is amended by adding at the end thereof the

16 following new paragraph:

17 ‘‘(4) NOTICE REQUIREMENTS.—With respect to

18 any summons referred to in paragraph (1)(A) issued

19 to any person other than the corporation, the Sec20 retary shall promptly notify the corporation, in writ21 ing, that such summons has been issued with respect

22 to such corporation’s return of tax.’’

23 (c) EFFECTIVE DATE.—The amendments made by

24 this section shall apply to summons issued after the date

25 of the enactment of this Act.
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1 Subtitle F—Information Returns

2 SEC. 5501. PHONE NUMBER OF PERSON PROVIDING PAYEE

3 STATEMENTS REQUIRED TO BE SHOWN ON

4 SUCH STATEMENT.

5 (a) GENERAL RULE.—The following provisions are

6 each amended by striking ‘‘name and address’’ and insert7 ing ‘‘name, address, and phone number of the information

8 contact’’:

9 (1) Section 6041(d)(1).

10 (2) Section 6041A(e)(1).

11 (3) Section 6042(c)(1).

12 (4) Section 6044(e)(1).

13 (5) Section 6045(b)(1).

14 (6) Section 6049(c)(1)(A).

15 (7) Section 6050B(b)(1).

16 (8) Section 6050H(d)(1).

17 (9) Section 6050I(e)(1).

18 (10) Section 6050J(e).

19 (11) Section 6050K(b)(1).

20 (12) Section 6050N(b)(1).

21 (b) EFFECTIVE DATE.—The amendments made by

22 subsection (a) shall apply to statements required to be fur23 nished after December 31, 1994 (determined without re24 gard to any extension).
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1 SEC. 5502. CIVIL DAMAGES FOR FRAUDULENT FILING OF

2 INFORMATION RETURNS.

3 (a) GENERAL RULE.—Subchapter B of chapter 76

4 (relating to proceedings by taxpayers and third parties)

5 is amended by redesignating section 7434 as section 7435

6 and by inserting after section 7433 the following new sec7 tion:

8 ‘‘SEC. 7434. CIVIL DAMAGES FOR FRAUDULENT FILING OF

9 INFORMATION RETURNS.

10 ‘‘(a) IN GENERAL.—If any person willfully files a

11 false or fraudulent information return with respect to pay12 ments purported to be made to any other person, such

13 other person may bring a civil action for damages against

14 the person so filing such return.

15 ‘‘(b) DAMAGES.—In any action brought under sub16 section (a), upon a finding of liability on the part of the

17 defendant, the defendant shall be liable to the plaintiff in

18 an amount equal to the greater of $5,000 or the sum of—

19 ‘‘(1) any actual damages sustained by the plain20 tiff as a proximate result of the filing of the false

21 or fraudulent information return (including any

22 costs attributable to resolving deficiencies asserted

23 as a result of such filing), and

24 ‘‘(2) the costs of the action.

25 ‘‘(c) PERIOD FOR BRINGING ACTION.—Notwith26 standing any other provision of law, an action to enforce
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1 the liability created under this section may be brought

2 without regard to the amount in controversy and may be

3 brought only within the later of—

4 ‘‘(1) 4 years after the date of the filing of the

5 false or fraudulent information return, or

6 ‘‘(2) 1 year after the date such false or fraudu7 lent information return would have been discovered

8 by exercise of reasonable care.

9 ‘‘(d) COPY OF COMPLAINT FILED WITH IRS.—Any

10 person bringing an action under subsection (a) shall pro11 vide a copy of the complaint to the Internal Revenue Serv12 ice upon the filing of such complaint with the court.

13 ‘‘(e) FINDING OF COURT TO INCLUDE CORRECT

14 AMOUNT OF PAYMENT.—The judgment of the court in an

15 action brought under subsection (a) shall include a finding

16 of the correct amount which should have been reported

17 in the information return.

18 ‘‘(f) INFORMATION RETURN.—For purposes of this

19 section, the term ‘information return’ means any state20 ment described in section 6724(d)(1)(A).’’

21 (b) CLERICAL AMENDMENT.—The table of sections

22 for subchapter B of chapter 76 is amended by striking

23 the item relating to section 7434 and inserting the follow24 ing:

‘‘Sec. 7434. Civil damages for fraudulent filing of information returns.

‘‘Sec. 7435. Cross references.’’
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to false or fraudulent information

3 returns filed after the date of the enactment of this Act.

4 SEC. 5503. REQUIREMENT TO VERIFY ACCURACY OF IN5 FORMATION RETURNS.

6 (a) GENERAL RULE.—Section 6201 (relating to as7 sessment authority) is amended by redesignating sub8 section (d) as subsection (e) and by inserting after sub9 section (c) the following new subsection:

10 ‘‘(d) REQUIRED REASONABLE VERIFICATION OF IN11 FORMATION RETURNS.—In any court proceeding, if a tax12 payer asserts a reasonable dispute with respect to any

13 item of income reported on an information return filed

14 with the Secretary under subpart B of part III of sub15 chapter A of chapter 61 by a third party and the taxpayer

16 has fully cooperated with the Secretary (including provid17 ing, within a reasonable period of time, access to and in18 spection of all witnesses, information, and documents

19 within the control of the taxpayer as reasonably requested

20 by the Secretary), the Secretary shall present reasonable

21 and probative information concerning such deficiency in

22 addition to such information return.’’

23 (b) EFFECTIVE DATE.—The amendment made by

24 subsection (a) shall take effect on the date of the enact25 ment of this Act.
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1 Subtitle G—Modifications to Pen2 alty for Failure to Collect and

3 Pay Over Tax

4 SEC. 5601. PRELIMINARY NOTICE REQUIREMENT.

5 (a) IN GENERAL.—Section 6672 (relating to failure

6 to collect and pay over tax, or attempt to evade or defeat

7 tax) is amended by redesignating subsection (b) as sub8 section (c) and by inserting after subsection (a) the follow9 ing new subsection:

10 ‘‘(b) PRELIMINARY NOTICE REQUIREMENT.—

11 ‘‘(1) IN GENERAL.—No penalty shall be im12 posed under subsection (a) unless the Secretary noti13 fies the taxpayer in writing by mail to an address as

14 determined under section 6212(b) that the taxpayer

15 shall be subject to an assessment of such penalty.

16 ‘‘(2) TIMING OF NOTICE.—The mailing of the

17 notice described in paragraph (1) shall precede any

18 notice and demand of any penalty under subsection

19 (a) by at least 60 days.

20 ‘‘(3) STATUTE OF LIMITATIONS.—If a notice

21 described in paragraph (1) with respect to any pen22 alty is mailed before the expiration of the period

23 provided by section 6501 for the assessment of such

24 penalty (determined without regard to this para25 graph), the period provided by such section for the
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1 assessment of such penalty shall not expire before

2 the date 90 days after the date on which such notice

3 was mailed.

4 ‘‘(4) EXCEPTION FOR JEOPARDY.—This sub5 section shall not apply if the Secretary finds that the

6 collection of the penalty is in jeopardy.’’

7 (b) EFFECTIVE DATE.—The amendment made by

8 subsection (a) shall apply to assessments made after June

9 30, 1994.

10 SEC. 5602. NO PENALTY IF PROMPT NOTIFICATION OF THE

11 SECRETARY.

12 (a) IN GENERAL.—Section 6672 (relating to failure

13 to collect and pay over tax, or attempt to evade or defeat

14 tax) is amended by adding at the end thereof the following

15 new subsection:

16 ‘‘(d) PENALTY NOT APPLICABLE WHERE PROMPT

17 NOTIFICATION OF FAILURE.—

18 ‘‘(1) IN GENERAL.—A person shall not be liable

19 for any penalty under subsection (a) by reason of

20 any failure referred to in subsection (a) if—

21 ‘‘(A) such person is not a significant

22 owner, or highly compensated employee, of the

23 trade or business with respect to which such

24 failure occurred,
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1 ‘‘(B) such person notifies the Secretary (in

2 such manner as he may prescribe) that such

3 failure has occurred within 10 days after the

4 date of such failure,

5 ‘‘(C) such notification was before any no6 tice by the Secretary to any person with respect

7 to such failure, and

8 ‘‘(D) such failure is not a part of a plan

9 to defraud the Federal Government.

10 ‘‘(2) DEFINITIONS.—For purposes of paragraph

11 (1)—

12 ‘‘(A) SIGNIFICANT OWNER.—The term

13 ‘significant owner’ means—

14 ‘‘(i) any person holding an interest as

15 a proprietor in a trade or business carried

16 on as a proprietorship, and

17 ‘‘(ii) in the case of a trade or business

18 conducted by a corporation or partnership,

19 any person who is a 5-percent owner (as

20 defined in section 416(i)(1)) in such cor21 poration or partnership, as the case may

22 be.

23 ‘‘(B) HIGHLY COMPENSATED EM24 PLOYEE.—The term ‘highly compensated em25 ployee’ means any employee who receives com-
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1 pensation from the employer at an annual rate

2 in excess of $75,000.

3 ‘‘(3) SPECIAL RULES.—

4 ‘‘(A) ONE-TIME RELIEF.—This subsection

5 shall apply only once with respect to—

6 ‘‘(i) any person, and

7 ‘‘(ii) any trade or business with re8 spect to which the failure described in sub9 section (a) occurred.

10 ‘‘(B) APPLICATION OF SUBSECTION.—This

11 subsection shall not apply if it results in no per12 son being held liable for the penalty described

13 in subsection (a).’’

14 (b) EFFECTIVE DATE.—The amendment made by

15 subsection (a) shall apply in the case of failures after the

16 date of the enactment of this Act.

17 SEC. 5603. DISCLOSURE OF CERTAIN INFORMATION

18 WHERE MORE THAN 1 PERSON SUBJECT TO

19 PENALTY.

20 (a) IN GENERAL.—Subsection (e) of section 6103

21 (relating to disclosure to persons having material interest),

22 as amended by section 5301, is amended by adding at the

23 end thereof the following new paragraph:

24 ‘‘(9) DISCLOSURE OF CERTAIN INFORMATION

25 WHERE MORE THAN 1 PERSON SUBJECT TO PEN-
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1 ALTY UNDER SECTION 6672.—If the Secretary deter2 mines that a person is liable for a penalty under sec3 tion 6672(a) with respect to any failure, upon re4 quest in writing of such person, the Secretary shall

5 disclose in writing to such person—

6 ‘‘(A) the name of any other person whom

7 the Secretary has determined to be liable for

8 such penalty with respect to such failure, and

9 ‘‘(B) whether the Secretary has attempted

10 to collect such penalty from such other person,

11 the general nature of such collection activities,

12 and the amount collected.’’

13 (b) EFFECTIVE DATE.—The amendment made by

14 subsection (a) shall take effect on the date of the enact15 ment of this Act.

16 SEC. 5604. PENALTIES UNDER SECTION 6672.

17 (a) PUBLIC INFORMATION REQUIREMENTS.—The

18 Secretary of the Treasury or the Secretary’s delegate

19 (hereafter in this section referred to as the ‘‘Secretary’’)

20 shall take such actions as may be appropriate to ensure

21 that employees are aware of their responsibilities under

22 the Federal tax depository system, the circumstances

23 under which employees may be liable for the penalty im24 posed by section 6672 of the Internal Revenue Code of

25 1986, and the responsibility to promptly report to the In-
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1 ternal Revenue Service any failure referred to in sub2 section (a) of such section 6672. Such actions shall in3 clude—

4 (1) printing of a warning on deposit coupon

5 booklets and the appropriate tax returns that certain

6 employees may be liable for the penalty imposed by

7 such section 6672, and

8 (2) the development of a special information

9 packet.

10 (b) BOARD MEMBERS OF TAX-EXEMPT ORGANIZA11 TIONS.—

12 (1) VOLUNTARY BOARD MEMBERS.—

13 (A) IN GENERAL.—The penalty under sec14 tion 6672 of the Internal Revenue Code of 1986

15 shall not be imposed on unpaid, volunteer mem16 bers of any board of trustees or directors of an

17 organization referred to in section 501 of such

18 Code to the extent such members are solely

19 serving in an honorary capacity, do not partici20 pate in the day-to-day or financial operations of

21 the organization, and do not have actual knowl22 edge of the failure on which such penalty is im23 posed.

24 (B) APPLICATION OF PARAGRAPH.—This

25 paragraph shall not apply if it results in no per-
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1 son being held liable for the penalty described

2 in section 6672(a) of the Internal Revenue

3 Code of 1986.

4 (2) DEVELOPMENT OF EXPLANATORY MATE5 RIALS.—The Secretary shall develop materials ex6 plaining the circumstances under which board mem7 bers of tax-exempt organizations (including vol8 untary and honorary members) may be subject to

9 penalty under section 6672 of such Code. Such ma10 terials shall be made available to tax-exempt organi11 zations.

12 (3) IRS INSTRUCTIONS.—The Secretary shall

13 clarify the instructions to Internal Revenue Service

14 employees on the application of the penalty under

15 section 6672 of such Code with regard to voluntary

16 members of boards of trustees or directors of tax-ex17 empt organizations.

18 (c) PROMPT NOTIFICATION.—To the maximum ex19 tent practicable, the Secretary shall notify all persons who

20 have failed to make timely and complete deposit of any

21 taxes described in section 6672 of the Internal Revenue

22 Code of 1986 of such failure within 30 days after the re23 turn was filed reflecting such failure or after the date on

24 which the Secretary is first aware of such failure. If the

25 person failing to make the deposit is not an individual,
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•HR 22 SC

1 the Secretary shall notify the entity subject to such deposit

2 requirement and that entity shall notify, within 15 days

3 of the notification by the Secretary, all officers, general

4 partners, trustees, or other managers of the failure.

5 Subtitle H—Awarding of Costs and

6 Certain Fees

7 SEC. 5701. MOTION FOR DISCLOSURE OF INFORMATION.

8 Paragraph (4) of section 7430(c) (defining prevailing

9 party) is amended by adding at the end thereof the follow10 ing new subparagraph:

11 ‘‘(C) MOTION FOR DISCLOSURE OF INFOR12 MATION.—Once a taxpayer substantially pre13 vails as described in subparagraph (A)(ii), the

14 taxpayer may file a motion for an order requir15 ing the disclosure (within a reasonable period of

16 time specified by the court) of all information

17 and copies of relevant records in the possession

18 of the Internal Revenue Service with respect to

19 such taxpayer’s case and the substantial jus20 tification for the position taken by the Internal

21 Revenue Service.’’

22 SEC. 5702. INCREASED LIMIT ON ATTORNEY FEES.

23 Paragraph (1) of section 7430(c) (defining reason24 able litigation costs) is amended—
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1 (1) by striking ‘‘$75’’ in clause (iii) of subpara2 graph (B) and inserting ‘‘$110’’,

3 (2) by striking ‘‘an increase in the cost of living

4 or’’ in clause (iii) of subparagraph (B), and

5 (3) by adding after clause (iii) the following:

6 ‘‘In the case of any calendar year beginning after

7 1993, the dollar amount referred to in clause (iii)

8 shall be increased by an amount equal to such dollar

9 amount multiplied by the cost-of-living adjustment

10 determined under section 1(f)(3) for such calendar

11 year, by substituting ‘calendar year 1992’ for ‘cal12 endar year 1989’ in subparagraph (B) thereof. If

13 any dollar amount after being increased under the

14 preceding sentence is not a multiple of $10, such

15 dollar amount shall be rounded to the nearest mul16 tiple of $10 (or, if such dollar amount is a multiple

17 of $5, such dollar amount shall be increased to the

18 next higher multiple of $10).’’

19 SEC. 5703. FAILURE TO AGREE TO EXTENSION NOT TAKEN

20 INTO ACCOUNT.

21 Paragraph (1) of section 7430(b) (relating to require22 ment that administrative remedies be exhausted) is

23 amended by adding at the end thereof the following new

24 sentence: ‘‘Any failure to agree to an extension of the time

25 for the assessment of any tax shall not be taken into ac-
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1 count for purposes of determining whether the prevailing

2 party meets the requirements of the preceding sentence.’’

3 SEC. 5704. EFFECTIVE DATE.

4 The amendments made by this subtitle shall apply in

5 the case of proceedings commenced after the date of the

6 enactment of this Act.

7 Subtitle I—Other Provisions

8 SEC. 5801. REQUIRED CONTENT OF CERTAIN NOTICES.

9 (a) GENERAL RULE.—Subsection (a) of section 7522

10 (relating to content of tax due, deficiency, and other no11 tices) is amended by striking ‘‘shall describe the basis for,

12 and identify’’ and inserting ‘‘shall set forth the adjust13 ments which are the basis for, and shall identify’’.

14 (b) EFFECTIVE DATE.—The amendment made by

15 subsection (a) shall apply to notices sent after the date

16 6 months after the date of the enactment of this Act.

17 SEC. 5802. TREATMENT OF SUBSTITUTE RETURNS UNDER

18 SECTION 6651.

19 (a) GENERAL RULE.—Section 6651 (relating to fail20 ure to file tax return or to pay tax) is amended by adding

21 at the end thereof the following new subsection:

22 ‘‘(h) TREATMENT OF RETURNS PREPARED BY SEC23 RETARY UNDER SECTION 6020(b).—In the case of any

24 return made by the Secretary under section 6020(b)—
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1 ‘‘(1) such return shall be disregarded for pur2 poses of determining the amount of the addition

3 under paragraph (1) of subsection (a), but

4 ‘‘(2) such return shall be treated as the return

5 filed by the taxpayer for purposes of determining the

6 amount of the addition under paragraphs (2) and

7 (3) of subsection (a).’’

8 (b) EFFECTIVE DATE.—The amendment made by

9 subsection (a) shall apply in the case of any return the

10 due date for which (determined without regard to exten11 sions) is after the date of the enactment of this Act.

12 SEC. 5803. RELIEF FROM RETROACTIVE APPLICATION OF

13 TREASURY DEPARTMENT REGULATIONS.

14 (a) IN GENERAL.—Subsection (b) of section 7805

15 (relating to rules and regulations) is amended to read as

16 follows:

17 ‘‘(b) RETROACTIVITY OF REGULATIONS.—

18 ‘‘(1) IN GENERAL.—Except as otherwise pro19 vided in this subsection, no temporary, proposed, or

20 final regulation relating to the internal revenue laws

21 shall apply to any taxable period ending before the

22 earliest of the following dates:

23 ‘‘(A) The date on which such regulation is

24 filed with the Federal Register.
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1 ‘‘(B) In the case of any final regulation,

2 the date on which any proposed or temporary

3 regulation to which such final regulation relates

4 was filed with the Federal Register.

5 ‘‘(C) The date on which any notice sub6 stantially describing the expected contents of

7 any temporary, proposed, or final regulation is

8 issued to the public.

9 ‘‘(2) EXCEPTION FOR PROMPTLY ISSUED REGU10 LATIONS.—Paragraph (1) shall not apply to regula11 tions issued within 12 months of the date of the en12 actment of the statutory provision to which the regu13 lation relates.

14 ‘‘(3) PREVENTION OF ABUSE.—The Secretary

15 may provide that any regulation may take effect or

16 apply retroactively to prevent abuse of a statute to

17 which the regulation relates.

18 ‘‘(4) CORRECTION OF PROCEDURAL DE19 FECTS.—The Secretary may provide that any regu20 lation may apply retroactively to correct a proce21 dural defect in the issuance of any prior regulation.

22 ‘‘(5) INTERNAL REGULATIONS.—The limitations

23 of paragraph (1) shall not apply to any regulation

24 relating to internal Treasury Department policies,

25 practices or procedures.
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1 ‘‘(6) CONGRESSIONAL AUTHORIZATION.—The

2 limitation of paragraph (1) may be superseded by a

3 legislative grant from Congress authorizing the Sec4 retary to prescribe the effective date with respect to

5 any regulation.

6 ‘‘(7) ELECTION TO APPLY RETROACTIVELY.—

7 The Secretary may provide for any taxpayer to elect

8 to apply any regulation before the dates specified in

9 paragraph (1).

10 ‘‘(8) APPLICATION TO RULINGS.—The Sec11 retary may prescribe the extent, if any, to which any

12 ruling (including any judicial decision or any admin13 istrative determination other than by regulation) re14 lating to the internal revenue laws shall be applied

15 without retroactive effect.’’

16 (b) EFFECTIVE DATE.—

17 (1) IN GENERAL.—Except as provided in para18 graphs (2) and (3), the amendment made by sub19 section (a) shall apply with respect to—

20 (A) any temporary or proposed regulation

21 filed on or after January 5, 1993, and

22 (B) any temporary or proposed regulation

23 filed before January 5, 1993, and filed as a

24 final regulation after such date.
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1 (2) SPECIAL RULE.—Section 7805(b)(2) of the

2 Internal Revenue Code of 1986 (as added by sub3 section (a)) shall apply only to statutes enacted on

4 or after the date of the enactment of this Act.

5 SEC. 5804. REQUIRED NOTICE OF CERTAIN PAYMENTS.

6 If any payment is received by the Secretary of the

7 Treasury or the Secretary’s delegate (hereafter in the sec8 tion referred to as the ‘‘Secretary’’) from any taxpayer

9 and the Secretary cannot associate such payment with any

10 outstanding tax liability of such taxpayer, the Secretary

11 shall make reasonable efforts to notify the taxpayer of

12 such inability within 60 days after the receipt of such pay13 ment.

14 SEC. 5805. UNAUTHORIZED ENTICEMENT OF INFORMATION

15 DISCLOSURE.

16 (a) IN GENERAL.—Subchapter B of chapter 76 (re17 lating to proceedings by taxpayers and third parties) is

18 amended by redesignating section 7434 as section 7435

19 and by inserting after section 7433 the following new sec20 tion:

21 ‘‘SEC. 7434. CIVIL DAMAGES FOR UNAUTHORIZED ENTICE22 MENT OF INFORMATION DISCLOSURE.

23 ‘‘(a) IN GENERAL.—If any officer or employee of the

24 United States intentionally compromises the determina25 tion or collection of any tax due from an attorney, certified
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1 public accountant, or enrolled agent representing a tax2 payer in exchange for information conveyed by the tax3 payer to the attorney, certified public accountant, or en4 rolled agent for purposes of obtaining advice concerning

5 the taxpayer’s tax liability, such taxpayer may bring a civil

6 action for damages against the United States in a district

7 court of the United States. Such civil action shall be the

8 exclusive remedy for recovering damages resulting from

9 such actions.

10 ‘‘(b) DAMAGES.—In any action brought under sub11 section (a), upon a finding of liability on the part of the

12 defendant, the defendant shall be liable to the plaintiff in

13 an amount equal to the lesser of $500,000 or the sum

14 of—

15 ‘‘(1) actual, direct economic damages sustained

16 by the plaintiff as a proximate result of the informa17 tion disclosure, and

18 ‘‘(2) the costs of the action.

19 Damages shall not include the taxpayer’s liability for any

20 civil or criminal penalties, or other losses attributable to

21 incarceration or the imposition of other criminal sanctions.

22 ‘‘(c) PAYMENT AUTHORITY.—Claims pursuant to

23 this section shall be payable out of funds appropriated

24 under section 1304 of title 31, United States Code.
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1 ‘‘(d) PERIOD FOR BRINGING ACTION.—Notwith2 standing any other provision of law, an action to enforce

3 liability created under this section may be brought without

4 regard to the amount in controversy and may be brought

5 only within 2 years after the date the actions creating such

6 liability would have been discovered by exercise of reason7 able care.

8 ‘‘(e) MANDATORY STAY.—Upon a certification by the

9 Commissioner or the Commissioner’s delegate that there

10 is an ongoing investigation or prosecution of the taxpayer,

11 the district court before which an action under this section

12 is pending, shall stay all proceedings with respect to such

13 action pending the conclusion of the investigation or pros14 ecution.

15 ‘‘(f) CRIME-FRAUD EXCEPTION.—Subsection (a)

16 shall not apply to information conveyed to an attorney,

17 certified public accountant, or enrolled agent for the pur18 pose of perpetrating a fraud or crime.’’

19 (b) CLERICAL AMENDMENT.—The table of sections

20 for subchapter B of chapter 76 is amended by striking

21 the item relating to section 7434 and by adding at the

22 end thereof the following new items:

‘‘Sec. 7434. Civil damages for unauthorized enticement of information disclosure.

‘‘Sec. 7435. Cross references.’’
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to actions after the date of the

3 enactment of this Act.

4 Subtitle J—Form Modifications;

5 Studies

6 SEC. 5900. DEFINITIONS.

7 For purposes of this subtitle:

8 (1) SECRETARY.—The term ‘‘Secretary’’ means

9 the Secretary of the Treasury or his delegate.

10 (2) 1986 CODE.—The term ‘‘1986 Code’’

11 means the Internal Revenue Code of 1986.

12 (3) TAX-WRITING COMMITTEES.—The term

13 ‘‘tax-writing Committees’’ means the Committee on

14 Ways and Means of the House of Representatives

15 and the Committee on Finance of the Senate.

16 PART I—FORM MODIFICATIONS

17 SEC. 5901. EXPLANATION OF CERTAIN PROVISIONS.

18 (a) GENERAL RULE.—The Secretary shall take such

19 actions as may be appropriate to ensure that taxpayers

20 are aware of the provisions of the 1986 Code permitting

21 payment of tax in installments, extensions of time for pay22 ment of tax, and compromises of tax liability. Such actions

23 shall include revising the instructions for filing income tax

24 returns so that such instructions include an explanation

25 of—
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1 (1) the procedures for requesting the benefits of

2 such provisions, and

3 (2) the terms and conditions under which the

4 benefits of such provisions are available.

5 (b) COLLECTION NOTICES.—In any notice of an

6 underpayment of tax or proposed underpayment of tax

7 sent by the Secretary to any taxpayer, the Secretary shall

8 include a notification of the availability of the provisions

9 of sections 6159, 6161, and 7122 of the 1986 Code.

10 SEC. 5902. IMPROVED PROCEDURES FOR NOTIFYING SERV11 ICE OF CHANGE OF ADDRESS OR NAME.

12 The Secretary shall provide improved procedures for

13 taxpayers to notify the Secretary of changes in names and

14 addresses. Not later than June 30, 1994, the Secretary

15 shall institute procedures for timely updating all Internal

16 Revenue Service records with change-of-address informa17 tion provided to the Secretary by taxpayers.

18 SEC. 5903. RIGHTS AND RESPONSIBILITIES OF DIVORCED

19 INDIVIDUALS.

20 The Secretary shall include in the Internal Revenue

21 Service publication entitled ‘‘Your Rights As A Taxpayer’’

22 a section on the rights and responsibilities of divorced in23 dividuals.
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1 PART II—STUDIES

2 SEC. 5911. PILOT PROGRAM FOR APPEAL OF ENFORCE3 MENT ACTIONS.

4 (a) GENERAL RULE.—The Secretary shall establish

5 a 1-year pilot program for appeals of enforcement actions

6 (including lien, levy, and seizure actions) to the Appeals

7 Division of the Internal Revenue Service—

8 (1) where the deficiency was assessed without

9 actual knowledge of the taxpayer,

10 (2) where the deficiency was assessed without

11 an opportunity for administrative appeal, and

12 (3) in other appropriate circumstances.

13 (b) REPORT.—Not later than June 30, 1994, the

14 Secretary shall submit to the tax-writing Committees a re15 port on the pilot program established under subsection (a),

16 together with such recommendations as he may deem ad17 visable.

18 SEC. 5912. STUDY ON TAXPAYERS WITH SPECIAL NEEDS.

19 (a) GENERAL RULE.—The Secretary shall conduct a

20 study on ways to assist the elderly, physically impaired,

21 foreign-language speaking, and other taxpayers with spe22 cial needs to comply with the internal revenue laws.

23 (b) REPORT.—Not later than June 30, 1994, the

24 Secretary shall submit to the tax-writing Committees a re25 port on the study conducted under subsection (a), together

26 with such recommendations as he may deem advisable.
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1 SEC. 5913. REPORTS ON TAXPAYER-RIGHTS EDUCATION

2 PROGRAM.

3 Not later than April 1, 1994, the Secretary shall sub4 mit a report to the tax-writing Committees on the scope

5 and content of the Internal Revenue Service’s taxpayer6 rights education program for its officers and employees.

7 Not later than June 30, 1994, the Secretary shall submit

8 a report to the tax-writing Committees on the effectiveness

9 of the program referred to in the preceding sentence.

10 SEC. 5914. BIENNIAL REPORTS ON MISCONDUCT BY INTER11 NAL REVENUE SERVICE EMPLOYEES.

12 During June 30, 1994 and during June of each sec13 ond calendar year thereafter, the Secretary shall report

14 to the tax-writing Committees on all cases involving com15 plaints about misconduct of Internal Revenue Service em16 ployees and the disposition of such complaints.

17 SEC. 5915. STUDY OF NOTICES OF DEFICIENCY.

18 (a) GENERAL RULE.—The Comptroller General shall

19 conduct a study on—

20 (1) the effectiveness of current Internal Reve21 nue Service efforts to notify taxpayers with regard

22 to tax deficiencies under section 6212 of the 1986

23 Code,

24 (2) the number of registered or certified letters

25 and other notices returned to the Internal Revenue

26 Service as undeliverable,
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1 (3) any follow-up action taken by the Internal

2 Revenue Service to locate taxpayers who did not re3 ceive actual notice,

4 (4) the effect that failures to receive notice of

5 such deficiencies have on taxpayers, and

6 (5) recommendations to improve Internal Reve7 nue Service notification of taxpayers.

8 (b) REPORT.—Not later than June 30, 1994, the

9 Comptroller General shall submit to the tax-writing Com10 mittees a report on the study conducted under subsection

11 (a), together with such recommendations as he may deem

12 advisable.

13 SEC. 5916. NOTICE AND FORM ACCURACY STUDY.

14 (a) GENERAL RULE.—The Comptroller General shall

15 conduct annual studies of the accuracy of 25 of the most

16 commonly used Internal Revenue Service forms, notices,

17 and publications. In conducting any such study, the Comp18 troller General shall examine the suitability and usefulness

19 of Internal Revenue Service telephone numbers on Inter20 nal Revenue Service notices and shall solicit and consider

21 the comments of organizations representing taxpayers,

22 employers, and tax professionals.

23 (b) REPORTS.—The Comptroller General shall sub24 mit to the tax-writing Committees a report on each study

25 conducted under subsection (a), together with such rec-
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1 ommendations as he may deem advisable. The first such

2 report shall be submitted not later than June 30, 1994.

3 TITLE VI—OTHER INTERNAL

4 REVENUE CODE PROVISIONS

5 Subtitle A—Extension of Authority

6 for Undercover Operations;

7 Cash-Transaction Reports

8 SEC. 6001. EXTENSION OF AUTHORITY FOR UNDERCOVER

9 OPERATIONS.

10 (a) 3-YEAR EXTENSION.—

11 (1) IN GENERAL.—Subsection (c) of section

12 7608 (relating to undercover operations) is amended

13 by adding at the end thereof the following new para14 graph:

15 ‘‘(6) TERMINATION.—The provisions of this

16 subsection shall cease to apply on and after Septem17 ber 1, 1995; and all amounts expended pursuant to

18 this subsection shall be recovered to the extent pos19 sible, and deposited in the Treasury of the United

20 States as miscellaneous receipts, before such date.’’

21 (2) CONFORMING AMENDMENT.—Paragraph (3)

22 of section 7601(c) of the Anti-Drug Abuse Act of

23 1988 is amended by striking all that follows ‘‘this

24 Act’’ and inserting a period.
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1 (3) EFFECTIVE DATE.—The amendments made

2 by this subsection shall take effect on January 1,

3 1992.

4 (b) ENHANCED OVERSIGHT.—

5 (1) ADDITIONAL INFORMATION REQUIRED IN

6 REPORTS TO CONGRESS.—Subparagraph (B) of sec7 tion 7608(c)(4) is amended—

8 (A) by striking ‘‘preceding the period’’ in

9 clause (ii),

10 (B) by striking ‘‘and’’ at the end of clause

11 (ii), and

12 (C) by striking clause (iii) and inserting

13 the following:

14 ‘‘(iii) the number, by programs, of un15 dercover investigative operations closed in

16 the 1-year period for which such report is

17 submitted, and

18 ‘‘(iv) the following information with

19 respect to each undercover investigative op20 eration pending as of the end of the 1-year

21 period for which such report is submitted

22 or closed during such 1-year period—

23 ‘‘(I) the date the operation began

24 and the date of the certification re-
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1 ferred to in the last sentence of para2 graph (1),

3 ‘‘(II) the total expenditures

4 under the operation and the amount

5 and use of the proceeds from the op6 eration,

7 ‘‘(III) a detailed description of

8 the operation including the potential

9 violation being investigated and

10 whether the operation is being con11 ducted under grand jury auspices, and

12 ‘‘(IV) the results of the operation

13 including the results of criminal pro14 ceedings.’’

15 (2) AUDITS REQUIRED WITHOUT REGARD TO

16 AMOUNTS INVOLVED.—Subparagraph (C) of section

17 7608(c)(5) is amended to read as follows:

18 ‘‘(C) UNDERCOVER INVESTIGATIVE OPER19 ATION.—The term ‘undercover investigative op20 eration’ means any undercover investigative op21 eration of the Service; except that, for purposes

22 of subparagraphs (A) and (C) of paragraph (4),

23 such term only includes an operation which is

24 exempt from section 3302 or 9102 of title 31,

25 United States Code.’’
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1 (3) EFFECTIVE DATE.—The amendments made

2 by this subsection shall take effect on the date of the

3 enactment of this Act.

4 SEC. 6002. DISCLOSURE OF RETURNS ON CASH TRANS5 ACTIONS.

6 (a) GENERAL RULE.—Subsection (l) of section 6103

7 (relating to disclosure of returns and return information

8 for purposes other than tax administration) is amended

9 by adding at the end thereof the following new paragraph:

10 ‘‘(13) DISCLOSURE OF RETURNS FILED UNDER

11 SECTION 6050I.—The Secretary may, upon written

12 request, disclose to officers and employees of—

13 ‘‘(A) any Federal agency,

14 ‘‘(B) any agency of a State or local govern15 ment, or

16 ‘‘(C) any agency of the government of a

17 foreign country,

18 information contained on returns filed under section

19 6050I. Any such disclosure shall be made on the

20 same basis, and subject to the same conditions, as

21 apply to disclosures of information on reports filed

22 under section 5313 of title 31, United States Code;

23 except that no disclosure under this paragraph shall

24 be made for purposes of the administration of any

25 tax law.’’
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1 (b) CONFORMING AMENDMENTS.—

2 (1) Subsection (i) of section 6103 is amended

3 by striking paragraph (8).

4 (2) Subparagraph (A) of section 6103(p)(3) is

5 amended—

6 (A) by striking ‘‘(7)(A)(ii), or (8)’’ and in7 serting ‘‘or (7)(A)(ii)’’, and

8 (B) by striking ‘‘or (12)’’ and inserting

9 ‘‘(12), or (13)’’.

10 (3) The material preceding subparagraph (A) of

11 section 6103(p)(4) is amended—

12 (A) by striking ‘‘(5), or (8)’’ and inserting

13 ‘‘or (5)’’,

14 (B) by striking ‘‘(i)(3)(B)(i) or (8)’’ and

15 inserting ‘‘(i)(3)(B)(i)’’, and

16 (C) by striking ‘‘or (12)’’ and inserting

17 ‘‘(12), or (13)’’.

18 (4) Clause (ii) of section 6103(p)(4)(F) is

19 amended—

20 (A) by striking ‘‘(5), or (8)’’ and inserting

21 ‘‘or (5)’’, and

22 (B) by striking ‘‘or (12) and inserting

23 ‘‘(12), or (13)’’.
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1 (5) Paragraph (2) of section 7213(a) is amend2 ed by striking ‘‘or (12)’’ and inserting ‘‘(12), or

3 (13)’’.

4 (c) EFFECTIVE DATE.—The amendments made by

5 this section shall take effect on the date of the enactment

6 of this Act.

7 Subtitle B—Provisions Relating to

8 Exempt Organizations

9 SEC. 6101. CERTAIN ORGANIZATIONS REQUIRED TO DIS10 CLOSE NONEXEMPT STATUS.

11 (a) GENERAL RULE.—Subchapter B of chapter 61

12 (relating to miscellaneous provisions) is amended by redes13 ignating section 6115 as section 6116 and by inserting

14 after section 6114 the following new section:

15 ‘‘SEC. 6115. CERTAIN ORGANIZATIONS REQUIRED TO DIS16 CLOSE NONEXEMPT STATUS.

17 ‘‘(a) IN GENERAL.—If—

18 ‘‘(1) in an advertisement or solicitation by (or

19 on behalf of) an organization, such organization is

20 referred to as being nonprofit, and

21 ‘‘(2) such organization is not exempt from tax

22 under subtitle A,

23 such advertisement or solicitation shall contain an express

24 statement (in a conspicuous and easily recognizable for-
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1 mat) that such organization is not exempt from Federal

2 income taxes.

3 ‘‘(b) CROSS REFERENCE.—

‘‘For penalties for violation of subsection (a), see

section 6714.’’

4 (b) PENALTY.—Part I of subchapter B of chapter 68

5 is amended by adding at the end thereof the following new

6 section:

7 ‘‘SEC. 6714. FAILURE TO DISCLOSE NONEXEMPT STATUS.

8 ‘‘(a) IMPOSITION OF PENALTY.—If there is a failure

9 to meet the requirements of section 6115 with respect to

10 any advertisement or solicitation by (or on behalf of) an

11 organization, such organization shall pay a penalty of

12 $1,000 for each day on which such a failure occurred. The

13 maximum penalty imposed under this subsection on fail14 ures by any organization during any calendar year shall

15 not exceed $10,000.

16 ‘‘(b) REASONABLE CAUSE EXEMPTION.—No penalty

17 shall be imposed under this section with respect to any

18 failure if it is shown that such failure is due to reasonable

19 cause.

20 ‘‘(c) $10,000 LIMITATION NOT TO APPLY WHERE

21 INTENTIONAL DISREGARD.—If any failure to which sub22 section (a) applies is due to intentional disregard of the

23 requirements of section 6115—
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1 ‘‘(1) the penalty under subsection (a) for the

2 day on which failure occurred shall be the greater

3 of—

4 ‘‘(A) $1,000, or

5 ‘‘(B) 50 percent of the aggregate cost of

6 the advertisements and solicitations which oc7 curred on such day and with respect to which

8 there was such failure,

9 ‘‘(2) the $10,000 limitation of subsection (a)

10 shall not apply to any penalty under subsection (a)

11 for the day on which such failure occurred, and

12 ‘‘(3) such penalty shall not be taken into ac13 count in applying such limitation to other penalties

14 under subsection (a).

15 ‘‘(d) DAY ON WHICH FAILURE OCCURS.—For pur16 poses of this section, rules similar to the rules of section

17 6710(d) shall apply in determining the day on which any

18 failure occurs.’’

19 (c) CLERICAL AMENDMENTS.—

20 (1) The table of sections for subchapter B of

21 chapter 61 is amended by striking the item relating

22 to section 6115 and inserting the following:

‘‘Sec. 6115. Certain organizations required to disclose

nonexempt status.

‘‘Sec. 6116. Cross reference.’’
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1 (2) The table of sections of part I of subchapter

2 B of chapter 68 is amended by adding at the end

3 thereof the following new item:

‘‘Sec. 6714. Failure to disclose nonexempt status.’’

4 (d) EFFECTIVE DATE.—The amendments made by

5 this section shall take effect on January 1, 1994.

6 SEC. 6102. EXEMPT ORGANIZATIONS REQUIRED TO PRO7 VIDE COPY OF RETURN.

8 (a) GENERAL RULE.—

9 (1) Subparagraph (A) of section 6104(e)(1) (re10 lating to public inspection of annual returns) is

11 amended to read as follows:

12 ‘‘(A) IN GENERAL.—During the 3-year pe13 riod beginning on the filing date—

14 ‘‘(i) a copy of the annual return filed

15 under section 6033 (relating to returns by

16 exempt organizations) by any organization

17 to which this paragraph applies shall be

18 made available by such organization for in19 spection during regular business hours by

20 any individual at the principal office of

21 such organization and, if such organization

22 regularly maintains 1 or more regional or

23 district offices having 3 or more employees,

24 at each such regional or district office, and
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1 ‘‘(ii) upon request of an individual

2 made at such principal office or such a re3 gional or district office, a copy of such an4 nual return shall be provided to such indi5 vidual without charge other than a reason6 able fee for the cost of reproduction.

7 If the request under clause (ii) is made in per8 son, such copy shall be provided immediately

9 and, if made other than in person, shall be pro10 vided within 30 days.’’

11 (2) Clause (ii) of section 6104(e)(2)(A) is

12 amended by inserting before the period at the end

13 thereof the following: ‘‘(and, upon request of an in14 dividual made at such principal office or such a re15 gional or district office, a copy of the material re16 quired to be available for inspection under this sub17 paragraph shall be provided (in accordance with the

18 last sentence of paragraph (1)(A)) to such individual

19 without charge other than a reasonable fee for the

20 cost of reproduction)’’.

21 (b) ADVERTISEMENTS ETC., REQUIRED TO DIS22 CLOSE AVAILABILITY OF ANNUAL RETURN.—

23 (1) Paragraph (1) of section 6104(e) is amend24 ed by adding at the end thereof the following new

25 subparagraph:
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1 ‘‘(E) ADVERTISEMENTS ETC., REQUIRED

2 TO DISCLOSE AVAILABILITY OF ANNUAL RE3 TURN.—In the case of an organization required

4 by subparagraph (A) to provide a copy of its

5 annual return under section 6033 upon request

6 to individuals, each advertisement or solicitation

7 by (or on behalf of) such organization shall con8 tain an express statement (in a conspicuous and

9 easily recognizable format) that such return

10 shall be provided to individuals upon request.’’

11 (2) Section 6714 is amended—

12 (A) by striking ‘‘section 6115’’ each place

13 it appears and inserting ‘‘section 6115 or sec14 tion 6104(e)(1)(E)’’,

15 (B) by striking ‘‘$1,000’’ in subsection (a)

16 and inserting ‘‘$1,000 ($100 in the case of a

17 failure to meet the requirements of

18 6104(e)(1)(E))’’, and

19 (C) by inserting before the period at the

20 end of the section heading ‘‘; FAILURE OF

21 CERTAIN EXEMPT ORGANIZATIONS TO DIS22 CLOSE AVAILABILITY OF ANNUAL RE23 TURN’’.

24 (3) Subparagraph (C) of section 6652(c)(1) is

25 amended by striking ‘‘(e)(1)’’ and inserting ‘‘(e)(1)
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1 (other than subparagraph (E))’’, and by striking

2 ‘‘$10’’ and inserting ‘‘$50’’.

3 (4) Subparagraph (D) of section 6652(c)(1) is

4 amended by striking ‘‘$10’’ and inserting ‘‘$50’’.

5 (5) The item relating to section 6714 in the

6 table of sections for part I of subchapter B of chap7 ter 68 is amended by inserting before the period ‘‘;

8 failure of certain exempt organizations to disclose

9 availability of annual return’’.

10 (c) EFFECTIVE DATE.—The amendments made by

11 this section shall take effect on January 1, 1994.

12 TITLE VII—PROHIBITION OF

13 MISUSE OF DEPARTMENT OF

14 THE TREASURY NAMES, SYM15 BOLS, ETC

16 SEC. 7001. PROHIBITION OF MISUSE OF DEPARTMENT OF

17 THE TREASURY NAMES, SYMBOLS, ETC.

18 (a) GENERAL RULE.—Subchapter II of chapter 3 of

19 title 31, United States Code, is amended by adding at the

20 end thereof the following new section:

21 ‘‘§ 333. Prohibition of misuse of Department of the

22 Treasury names, symbols, etc.

23 ‘‘(a) GENERAL RULE.—No person may use, in con24 nection with, or as a part of, any advertisement, solicita-
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1 tion, business activity, or product, whether alone or with

2 other words, letters, symbols, or emblems—

3 ‘‘(1) the words ‘Department of the Treasury’,

4 or the name of any service, bureau, office, or other

5 subdivision of the Department of the Treasury,

6 ‘‘(2) the titles ‘Secretary of the Treasury’ or

7 ‘Treasurer of the United States’ or the title of any

8 other officer or employee of the Department of the

9 Treasury,

10 ‘‘(3) the abbreviations or initials of any entity

11 referred to in paragraph (1),

12 ‘‘(4) the words ‘United States Savings Bond’ or

13 the name of any other obligation issued by the De14 partment of the Treasury,

15 ‘‘(5) any symbol or emblem of an entity re16 ferred to in paragraph (1) (including the design of

17 any envelope or stationary used by such an entity),

18 and

19 ‘‘(6) any colorable imitation of any such words,

20 titles, abbreviations, initials, symbols, or emblems,

21 in a manner which could reasonably be interpreted or con22 strued as conveying the false impression that such adver23 tisement, solicitation, business activity, or product is in

24 any manner approved, endorsed, sponsored, or authorized

25 by, or associated with, the Department of the Treasury
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1 or any entity referred to in paragraph (1) or any officer

2 or employee thereof.

3 ‘‘(b) TREATMENT OF WAIVERS.—Any determination

4 of whether a person has violated the provisions of sub5 section (a) shall be made without regard to any use of

6 a disclaimer of affiliation with the United States Govern7 ment or any particular agency or instrumentality thereof.

8 ‘‘(c) CIVIL PENALTY.—

9 ‘‘(1) IN GENERAL.—The Secretary of the

10 Treasury may impose a civil penalty on any person

11 who violates the provisions of subsection (a).

12 ‘‘(2) AMOUNT OF PENALTY.—The amount of

13 the civil penalty imposed by paragraph (1) shall not

14 exceed $5,000 for each use of any material in viola15 tion of subsection (a). If such use is in a broadcast

16 or telecast, the preceding sentence shall be applied

17 by substituting ‘$25,000’ for ‘$5,000’.

18 ‘‘(3) TIME LIMITATIONS.—

19 ‘‘(A) ASSESSMENTS.—The Secretary of the

20 Treasury may assess any civil penalty under

21 paragraph (1) at any time before the end of the

22 3-year period beginning on the date of the vio23 lation with respect to which such penalty is im24 posed.
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1 ‘‘(B) CIVIL ACTION.—The Secretary of the

2 Treasury may commence a civil action to re3 cover any penalty imposed under this subsection

4 at any time before the end of the 2-year period

5 beginning on the date on which such penalty

6 was assessed.’’.

7 (b) CLERICAL AMENDMENT.—The analysis for chap8 ter 3 of title 31, United States Code, is amended by add9 ing after the item relating to section 332 the following

10 new item:

‘‘333. Prohibition of misuse of Department of the Treasury names, symbols,

etc.’’.

11 (c) EFFECTIVE DATE.—The amendments made by

12 this section shall take effect on the date of the enactment

13 of this Act.

14 (d) REPORT.—Not later than May 1, 1995, the Sec15 retary of the Treasury shall submit a report to the Com16 mittee on Ways and Means of the House of Representa17 tives and the Committee on Finance of the Senate on the

18 implementation of the amendments made by this section.

19 Such report shall include the number of cases in which

20 the Secretary has notified persons of violations of section

21 333 of title 31, United States Code (as added by sub22 section (a)), the number and amount of civil penalties as23 sessed under such section, and the total amount of such

24 penalties collected.
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