1400
poses connected with that labor or birth by a person
licensed in the place it is performed as a medical
practitioner, midwife, or person in training to become
such a practitioner or midwife.
‘‘(c) In applying subsection (b)(1), no account shall
be taken of the effect on the person on whom the operation
is to be performed of any belief on the part of that or any
other person that the operation is required as a matter of
custom or ritual.
‘‘(d) Whoever knowingly denies to any person medical
care or services or otherwise discriminates against any per-
son in the provision of medical care or services, because—
‘‘(1) that person has undergone female circumci-
sion, excision, or infibulation; or
‘‘(2) that person has requested that female cir-
cumcision, excision, or infibulation be performed on
any person;
shall be fined under this title or imprisoned not more than
one year, or both.’’.
(2) The table of sections at the beginning of chapter
7 of title 18, United States Code, is amended by adding
at the end the following new item:
‘‘116. Female genital mutilation.’’.
(e)(1) The Secretary of Health and Human Services
shall do the following:
1401
(A) Compile data on the number of females liv-
ing in the United States who have been subjected to
female genital mutilation (whether in the United
States or in their countries of origin), including a
specification of the number of girls under the age of
18 who have been subjected to such mutilation.
(B) Identify communities in the United States
that practice female genital mutilation, and design
and carry out outreach activities to educate individ-
uals in the communities on the physical and psycho-
logical health effects of such practice. Such outreach
activities shall be designed and implemented in col-
laboration with representatives of the ethnic groups
practicing such mutilation and with representatives
of organizations with expertise in preventing such
practice.
(C) Develop recommendations for the education
of students of schools of medicine and osteopathic
medicine regarding female genital mutilation and
complications arising from such mutilation. Such rec-
ommendations shall be disseminated to such schools.
(2) For purposes of this subsection, the term ‘‘female
genital mutilation’’ means the removal or infibulation (or
both) of the whole or part of the clitoris, the labia minor,
or the labia major.
1402
(f) Subsection (e) shall take effect on the date of enact-
ment of this Act, and the Secretary of Health and Human
Services shall commence carrying out such section not later
than 90 days after the date of the enactment of this Act.
Subsection (d) shall take effect on the date that is 180 days
after the date of the enactment of this Act.
This title may be cited as the ‘‘Contingency Appro-
priations Act, 1996’’.
TITLE V—ENVIRONMENTAL INITIATIVES
CHAPTER 1—DEPARTMENTS OF VETERANS AF-
FAIRS AND HOUSING AND URBAN DEVELOP-
MENT, AND INDEPENDENT AGENCIES
INDEPENDENT AGENCY
ENVIRONMENTAL PROTECTION AGENCY
ENVIRONMENTAL PROGRAMS AND MANAGEMENT
In addition to funds provided elsewhere in this Act,
$75,000,000, to remain available until September 30, 1997.
BUILDINGS AND FACILITIES
In addition to funds provided elsewhere in this Act,
$50,000,000, to remain available until expended, for the
construction of a consolidated research facility at Research
Triangle Park, North Carolina: Provided, That pursuant
to the provisions of section 7(a) of the Public Buildings Act
of 1959 (40 U.S.C. 606(a)), that no funds shall be made
available for construction of such project prior to April 19,
1996, unless such project is approved by resolutions of the
1403
Senate Committee on Environment and Public Works and
the House Committee on Transportation and Infrastruc-
ture, respectively: Provided further, That in no case shall
funds be made available for construction of such project if
prior to April 19, 1996, the project has been disapproved
by either the Senate Committee on Environment and Public
Works or the House Committee on Transportation and In-
frastructure: Provided further, That notwithstanding any
other provision of this Act, the paragraph under this head-
ing in chapter 4 of title IV of this Act shall not become
effective.
STATE AND TRIBAL ASSISTANCE GRANTS
In addition to funds provided elsewhere in this Act,
$200,000,000, to remain available until expended, for cap-
italization grants for State revolving funds to support
water infrastructure financing: Provided, That of the funds
made available by this paragraph, $125,000,000 shall be
for drinking water State revolving funds, but if no drinking
water State revolving fund legislation is enacted by June
1, 1996, these funds shall immediately be available for mak-
ing capitalization grants under title VI of the Federal
Water Pollution Control Act, as amended.
HAZARDOUS SUBSTANCE SUPERFUND
In addition to funds provided elsewhere in this Act,
$50,000,000, to remain available until expended.
1404
GENERAL PROVISIONS
SEC. 5001. Notwithstanding any other provision of
this Act, amounts provided in title IV of this Act for the
Environmental Protection Agency, with the exception of
amounts appropriated under the heading ‘‘BUILDINGS AND
FACILITIES’’, shall become available immediately upon en-
actment of this Act.
CORPORATION FOR NATIONAL AND COMMUNITY SERVICE
NATIONAL AND COMMUNITY SERVICE PROGRAMS
OPERATING EXPENSES
(INCLUDING TRANSFER OF FUNDS)
For necessary expenses for the Corporation for Na-
tional and Community Service (referred to in the matter
under this heading as the ‘‘Corporation’’) in carrying out
programs, activities, and initiatives under the National
and Community Service Act of 1990 (referred to in the mat-
ter under this heading as the ‘‘Act’’) (42 U.S.C. 12501 et
seq.), $400,500,000, of which $265,000,000 shall be avail-
able for obligation from September 1, 1996, through Sep-
tember 30, 1997: Provided, That not more than $25,000,000
shall be available for administrative expenses authorized
under section 501(a)(4) of the Act (42 U.S.C. 12671(a)(4)):
Provided further, That not more than $2,500 shall be for
official reception and representation expenses: Provided fur-
ther, That not more than $59,000,000, to remain available
without fiscal year limitation, shall be transferred to the
1405
National Service Trust account for educational awards au-
thorized under subtitle D of title I of the Act (42 U.S.C.
12601 et seq.): Provided further, That not more than
$215,000,000 of the amount provided under this heading
shall be available for grants under the National Service
Trust program authorized under subtitle C of title I of the
Act (42 U.S.C. 12571 et seq.) (relating to activities includ-
ing the Americorps program), of which not more than
$40,000,000 may be used to administer, reimburse or sup-
port any national service program authorized under section
121(d)(2) of such Act (42 U.S.C. 12581(d)(2)): Provided
further, That not more than $5,500,000 of the funds made
available under this heading shall be made available for the
Points of Light Foundation for activities authorized under
title III of the Act (42 U.S.C. 12661 et seq.): Provided fur-
ther, That no funds shall be available for national service
programs run by Federal agencies authorized under section
121(b) of such Act (42 U.S.C. 12581(b)): Provided further,
That, to the maximum extent feasible, funds appropriated
in the preceding proviso shall be provided in a manner that
is consistent with the recommendations of peer review pan-
els in order to ensure that priority is given to programs
that demonstrate quality, innovation, replicability, and
sustainability: Provided further, That not more than
$18,000,000 of the funds made available under this heading
1406
shall be available for the Civilian Community Corps au-
thorized under subtitle E of title I of the Act (42 U.S.C.
12611 et seq.): Provided further, That not more than
$43,000,000 shall be available for school-based and commu-
nity-based service-learning programs authorized under sub-
title B of title I of the Act (41 U.S.C. 12521 et seq.): Pro-
vided further, That not more than $30,000,000 shall be
available for quality and innovation activities authorized
under subtitle H of title I of the Act (42 U.S.C. 12853 et
seq.): Provided further, That not more than $5,000,000 shall
be available for audits and other evaluations authorized
under section 179 of the Act (42 U.S.C. 12639), of which
up to $500,000 shall be available for a study by the Na-
tional Academy of Public Administration on the structure,
organization, and management of the Corporation and ac-
tivities supported by the Corporation, including an assess-
ment of the quality, innovation, replicability, and sustain-
ability without Federal funds of such activities, and the
Federal and non-Federal cost of supporting participants in
community service activities: Provided further, That no
funds from any other appropriation, or from funds other-
wise made available to the Corporation, shall be used to
pay for personnel compensation and benefits, travel, or any
other administrative expense for the Board of Directors, the
Office of the Chief Executive Officer, the Office of the Man-
1407
aging Director, the Office of the Chief Financial Officer,
the Office of National and Community Service Programs,
the Civilian Community Corps, or any field office or staff
of the Corporation working on the National and Commu-
nity Service or Civilian Community Corps programs: Pro-
vided further, That to the maximum extent practicable, the
Corporation shall increase significantly the level of match-
ing funds and in-kind contributions provided by the private
sector, shall expand significantly the number of educational
awards provided under subtitle D of title I, and shall reduce
the total Federal cost per participant in all programs: Pro-
vided further, That prior to September 30, 1996, the Gen-
eral Accounting Office shall report to the Congress the re-
sults of a study of State commission programs which evalu-
ates the cost per participant, the commissions’ ability to
oversee the programs, and other relevant considerations:
Provided further, That the matter under this heading in
title I of this Act shall not be effective.
SENSE OF CONGRESS
It is the sense of the Congress that accounting for tax-
payers’ funds must be a top priority for all Federal agencies
and Government corporations. The Congress is deeply con-
cerned about the findings of the recent audit of the Corpora-
tion for National and Community Service required under
the Government Corporation Control Act of 1945. The Con-
gress urges the President to expeditiously nominate a quali-
1408
fied Chief Financial Officer for the Corporation. Further,
to the maximum extent practicable and as quickly as pos-
sible, the Corporation should implement the recommenda-
tions of the independent auditors contracted for by the Cor-
poration’s Inspector General, as well as the Chief Financial
Officer, to improve the financial management of taxpayers’
funds. Should the Chief Financial Officer determine that
additional resources are needed to implement these rec-
ommendations, 
the 
Corporation 
should 
submit 
a
reprogramming proposal for up to $3,000,000 to carry out
reforms of the financial management system.
FUNDING ADJUSTMENT
The total amount appropriated under the heading
‘‘Department of Housing and Urban Development, Housing
Programs, Annual contribution for assisted housing’’, in
title I of this Act is reduced by $17,000,000, and the amount
otherwise made available under said heading for section 8
assistance and rehabilitation grants for property disposi-
tion is reduced to $192,000,000.
CHAPTER 2—SPENDING OFFSETS
SUBCHAPTER A—DEBT COLLECTION
SEC. 5101. SHORT TITLE.
This subchapter may be cited as the ‘‘Debt Collection
Improvement Act of 1996’’.
1409
SEC. 5102. EFFECTIVE DATE.
Except as otherwise provided in this subchapter, the
provisions of this subchapter and the amendments made by
this subchapter shall be effective on the date of enactment
of this Act.
PART I—GENERAL DEBT COLLECTION
INITIATIVES
Subpart A—General Offset Authority
SEC. 5201. ENHANCEMENT OF ADMINISTRATIVE OFFSET AU-
THORITY.
(a) Section 3701(c) of title 31, United States Code, is
amended to read as follows:
‘‘(c) In sections 3716 and 3717 of this title, the term
‘person’ does not include an agency of the United States
Government, or of a unit of general local government.’’.
(b) Section 3716 of title 31, United States Code, is
amended—
(1) by amending subsection (b) to read as fol-
lows:
‘‘(b) Before collecting a claim by administrative offset,
the head of an executive, legislative, or judicial agency must
either—
‘‘(1) adopt regulations on collecting by adminis-
trative offset promulgated by the Department of Jus-
tice, the General Accounting Office and/or the Depart-
ment of the Treasury without change; or
1410
‘‘(2) prescribe independent regulations on collect-
ing by administrative offset consistent with the regu-
lations promulgated under paragraph (1).’’;
(2) by amending subsection (c)(2) to read as fol-
lows:
‘‘(2) when a statute explicitly prohibits using
administrative ‘offset’ or ‘setoff’ to collect the claim or
type of claim involved.’’;
(3) by redesignating subsection (c) as subsection
(d); and
(4) by inserting after subsection (b) the following
new subsection:
‘‘(c)(1)(A) Except as provided in subparagraph (B) or
(C), a disbursing official of the Department of the Treasury,
the Department of Defense, the United States Postal Serv-
ice, or any disbursing official of the United States des-
ignated by the Secretary of the Treasury, is authorized to
offset the amount of a payment which a payment certifying
agency has certified to the disbursing official for disburse-
ment by an amount equal to the amount of a claim which
a creditor agency has certified to the Secretary of the Treas-
ury pursuant to this subsection.
‘‘(B) An agency that designates disbursing officials
pursuant to section 3321(c) of this title is not required to
certify claims arising out of its operations to the Secretary
1411
of the Treasury before such agency’s disbursing officials off-
set such claims.
‘‘(C) Payments certified by the Department of Edu-
cation under a program administered by the Secretary of
Education under title IV of the Higher Education Act of
1965, as amended, shall not be subject to offset under this
subsection.
‘‘(2) Neither the disbursing official nor the payment
certifying agency shall be liable—
‘‘(A) for the amount of the offset on the basis
that the underlying obligation, represented by the
payment before the offset was taken, was not satisfied;
or
‘‘(B) for failure to provide timely notice under
paragraph (8).
‘‘(3)(A) Notwithstanding any other provision of law
(including sections 207 and 1631(d)(1) of the Act of August
14, 1935 (42 U.S.C. 407 and 1383(d)(1)), section 413(b)
of Public Law 91–173 (30 U.S.C. 923(b)), and section 14
of the Act of August 29, 1935 (45 U.S.C. 231m)), all pay-
ments due under the Social Security Act, Part B of the
Black Lung Benefits Act, or under any law administered
by the Railroad Retirement Board shall be subject to offset
under this section.
1412
‘‘(B) An amount of $10,000 which a debtor may re-
ceive under Federal benefit programs cited under subpara-
graph (A) within a 12-month period shall be exempt from
offset under this subsection. In applying the $10,000 exemp-
tion, the disbursing official shall—
‘‘(i) apply a prorated amount of the exemption
to each periodic benefit payment to be made to the
debtor during the applicable 12-month period; and
‘‘(ii) consider all benefit payments made during
the applicable 12-month period which are exempt
from offset under this subsection as part of the
$10,000 exemption.
For purposes of the preceding sentence, the amount of a
periodic benefit payment shall be the amount after any re-
duction or deduction required under the laws authorizing
the program under which such payment is authorized to
be made (including any reduction or deduction to recover
any overpayment under such program).
‘‘(C) The Secretary of the Treasury shall exempt
means-tested programs when notified by the head of the re-
spective agency. The Secretary may exempt other payments
from offset under this subsection upon the written request
of the head of a payment certifying agency. A written re-
quest for exemption of other payments must provide jus-
tification for the exemption under thestandards prescribed
1413
by the Secretary. Such standards shall give due consider-
ation to whether offset would tend to interfere substantially
with or defeat the purposes of the payment certifying agen-
cy’s program.
‘‘(D) The provisions of sections 205(b)(1) and
1631(c)(1) of the Social Security Act shall not apply to any
offset executed pursuant to this section against benefits au-
thorized by either title II or title XVI of the Social Security
Act.
‘‘(4) The Secretary of the Treasury is authorized to
charge a fee sufficient to cover the full cost of implementing
this subsection. The fee may be collected either by the reten-
tion of a portion of amounts collected pursuant to this sub-
section, or by billing the agency referring or transferring
the claim. Fees charged to the agencies shall be based only
on actual offsets completed. Fees charged under this sub-
section concerning delinquent claims may be considered as
costs pursuant to section 3717(e) of this title. Fees charged
under this subsection shall be deposited into the ‘Account’
determined by the Secretary of the Treasury in accordance
with section 3711(g) of this title, and shall be collected and
accounted for in accordance with the provisions of that sec-
tion.
‘‘(5) The Secretary of the Treasury may disclose to a
creditor agency the current address of any payee and any
1414
data related to certifying and authorizing such payment
in accordance with section 552a of title 5, United States
Code, even when the payment has been exempt from offset.
Where payments are made electronically, the Secretary is
authorized to obtain the current address of the debtor/payee
from the institution receiving the payment. Upon request
by the Secretary, the institution receiving the payment shall
report the current address of the debtor/payee to the Sec-
retary.
‘‘(6) The Secretary of the Treasury is authorized to
prescribe such rules, regulations, and procedures as the Sec-
retary of the Treasury deems necessary to carry out the pur-
poses of this subsection. The Secretary shall consult with
the heads of affected agencies in the development of such
rules, regulations, and procedures.
‘‘(7)(A) Any Federal agency that is owed by a named
person a past-due legally enforceable non-tax debt that is
over 180 days delinquent (other than any past-due sup-
port), including non-tax debt administered by a third party
acting as an agent for the Federal Government, shall notify
the Secretary of the Treasury of all such non-tax debts for
purposes of offset under this subsection.
‘‘(B) An agency may delay notification under sub-
paragraph (A) with respect to a debt that is secured by bond
or other instruments in lieu of bond, or for which there is
1415
another specific repayment source, in order to allow suffi-
cient time to either collect the debt through normal collec-
tion processes (including collection by internal administra-
tive offset) or render a final decision on any protest filed
against the claim.
‘‘(8) The disbursing official conducting the offset shall
notify the payee in writing of—
‘‘(A) the occurrence of an offset to satisfy a past-
due legally enforceable debt, including a description of
the type and amount of the payment otherwise pay-
able to the debtor against which the offset was exe-
cuted;
‘‘(B) the identity of the creditor agency request-
ing the offset; and
‘‘(C) a contact point within the creditor agency
that will handle concerns regarding the offset.’’.
Where the payment to be offset is a periodic benefit pay-
ment, the disbursing official shall take reasonable steps, as
determined by the Secretary of the Treasury, to provide the
notice to the payee not later than the date on which the
payee is otherwise scheduled to receive the payment, or as
soon as practical thereafter, but no later than the date of
the offset. Notwithstanding the preceding sentence, the fail-
ure of the debtor to receive such notice shall not impair
the legality of such offset.
1416
‘‘(9) A levy pursuant to the Internal Revenue Code of
1986 shall take precedence over requests for offset received
from other agencies.’’.
(c) Section 3701(a) of title 31, United States Code, is
amended by adding at the end the following new paragraph:
‘‘(8) ‘non-tax claim’ means any claim from any
agency of the Federal Government other than a claim
by the Internal Revenue Service under the Internal
Revenue Code of 1986.’’.
SEC. 5202. HOUSE OF REPRESENTATIVES AS LEGISLATIVE
AGENCY.
(a) Section 3701 of title 31, United States Code, is
amended by adding at the end the following new sub-
sections:
‘‘(e) For purposes of subchapters I and II of chapter
37 of title 31, United States Code (relating to claims of
or against United States Government), the United States
House of Representatives shall be considered to be a legisla-
tive agency (as defined in section 3701(a)(4) of such title),
and the Clerk of the House of Representatives shall be
deemed to be the head of such legislative agency.
‘‘(f) Regulations prescribed by the Clerk of the House
of Representatives pursuant to section 3716 of title 31,
United States Code, shall not become effective until they are
1417
approved by the Committee on Rules of the House of Rep-
resentatives.’’.
SEC. 5203. EXEMPTION FROM COMPUTER MATCHING RE-
QUIREMENTS UNDER THE PRIVACY ACT OF
1974.
Section 552a(a) of title 5, United States Code, is
amended in paragraph (8)(B)—
(1) by striking ‘‘or’’ at the end of clause (vi);
(2) by inserting ‘‘or’’ at the end of clause (vii);
and
(3) by adding after clause (vii) the following new
clause:
‘‘(viii) matches for administrative off-
set or claims collection pursuant to sub-
section 3716(c) of title 31, section 5514 of
this title, or any other payment intercept or
offset program authorized by statute;’’.
SEC. 5204. TECHNICAL AND CONFORMING AMENDMENTS.
(a) Title 31, United States Code, is amended—
(1) in section 3322(a), by inserting ‘‘section
3716 and section 3720A of this title, section 6331 of
title 26, and’’ after ‘‘Except as provided in’’;
(2) in section 3325(a)(3), by inserting ‘‘or pur-
suant to payment intercepts or offsets pursuant to
section 3716 or 3720A, or pursuant to levies executed
1418
under section 6331 of the Internal Revenue Code of
1986 (26 U.S.C. 6331),’’ after ‘‘voucher’’; and
(3) in sections 3711, 3716, 3717, and 3718, by
striking ‘‘the head of an executive or legislative agen-
cy’’ each place it appears and inserting instead ‘‘the
head of an executive, judicial, or legislative agency’’.
(b) Subsection 6103(l)(10) of title 26, United States
Code, is amended—
(1) in subparagraph (A), by inserting ‘‘and to
officers and employees of the Department of the Treas-
ury in connection with such reduction’’ adding after
‘‘6402’’; and
(2) in subparagraph (B), by adding ‘‘and to offi-
cers and employees of the Department of the Treasury
in connection with such reduction’’ after ‘‘agency’’.
Subpart B—Salary Offset Authority
SEC. 5221. ENHANCEMENT OF SALARY OFFSET AUTHORITY.
Section 5514 of title 5, United States Code, is amend-
ed—
(1) in subsection (a)—
(A) by adding at the end of paragraph (1)
the following: ‘‘All Federal agencies to which
debts are owed and are delinquent in repayment,
shall participate in a computer match at least
annually of their delinquent debt records with
1419
records of Federal employees to identify those
employees who are delinquent in repayment of
those debts. Matched Federal employee records
shall include, but shall not be limited to, active
Civil Service employees government-wide, mili-
tary active duty personnel, military reservists,
United States Postal Service employees, and
records of seasonal and temporary employees.
The Secretary of the Treasury shall establish and
maintain an interagency consortium to imple-
ment centralized salary offset computer match-
ing, and promulgate regulations for this pro-
gram. Agencies that perform centralized salary
offset computer matching services under this sub-
section are authorized to charge a fee sufficient
to cover the full cost for such services.’’;
(B) by redesignating paragraphs (3) and
(4) as paragraphs (4) and (5), respectively;
(C) by inserting after paragraph (2) the fol-
lowing new paragraph:
‘‘(3) The provisions of paragraph (2) shall not
apply to routine intra-agency adjustments of pay that
are attributable to clerical or administrative errors or
delays in processing pay documents that have oc-
curred within the four pay periods preceding the ad-
1420
justment and to any adjustment that amounts to $50
or less, provided that at the time of such adjustment,
or as soon thereafter as practical, the individual is
provided written notice of the nature and the amount
of the adjustment and a point of contact for contest-
ing such adjustment.’’; and
(D) by amending paragraph (5)(B) (as re-
designated) to read as follows:
‘‘(B) For purposes of this section ‘agency’
includes executive departments and agencies, the
United States Postal Service, the Postal Rate
Commission, the United States Senate, the Unit-
ed States House of Representatives, and any
court, court administrative office, or instrumen-
tality in the judicial or legislative branches of
government, and government corporations.’’;
(2) by adding at the end of subsection (b) the fol-
lowing new paragraphs:
‘‘(3) For purposes of this section, the Clerk of the
House of Representatives shall be deemed to be the
head of the agency. Regulations prescribed by the
Clerk of the House of Representatives pursuant to
subsection (b)(1) shall be subject to the approval of the
Committee on Rules of the House of Representatives.
1421
‘‘(4) For purposes of this section, the Secretary
of the Senate shall be deemed to be the head of the
agency. Regulations prescribed by the Secretary of the
Senate pursuant to subsection (b)(1) shall be subject
to the approval of the Committee on Rules and Ad-
ministration of the Senate.’’; and
(3) by adding after subsection (c) the following
new subsection:
‘‘(d) A levy pursuant to the Internal Revenue Code of
1986 shall take precedence over requests for offset received
from other agencies.’’.
Subpart C—Taxpayer Identifying Numbers
SEC. 5231. ACCESS TO TAXPAYER IDENTIFYING NUMBERS;
BARRING 
DELINQUENT 
DEBTORS 
FROM
CREDIT ASSISTANCE.
Section 4 of the Debt Collection Act of 1982 (Public
Law 97–365, 96 Stat. 1749, 26 U.S.C. 6103 note) is amend-
ed—
(1) in subsection (b), by striking ‘‘For purposes
of this section’’ and inserting instead ‘‘For purposes
of subsection (a)’’; and
(2) by adding at the end thereof the following
new subsections:
‘‘(c) FEDERAL AGENCIES.—Each Federal agency shall
require each person doing business with that agency to fur-
1422
nish to that agency such person’s taxpayer identifying
number.
‘‘(1) For purposes of this subsection, a person is
considered to be ‘doing business’ with a Federal agen-
cy if the person is—
‘‘(A) a lender or servicer in a Federal guar-
anteed or insured loan program;
‘‘(B) an applicant for, or recipient of—
‘‘(i) a Federal guaranteed, insured, or
direct loan; or
‘‘(ii) a Federal license, permit, right-
of-way, grant, benefit payment or insur-
ance;
‘‘(C) a contractor of the agency;
‘‘(D) assessed a fine, fee, royalty or penalty
by that agency;
‘‘(E) in a relationship with a Federal agen-
cy that may give rise to a receivable due to that
agency, such as a partner of a borrower in or a
guarantor of a Federal direct or insured loan;
and
‘‘(F) is a joint holder of any account to
which Federal benefit payments are transferred
electronically.
1423
‘‘(2) Each agency shall disclose to the person re-
quired to furnish a taxpayer identifying number
under this subsection its intent to use such number
for purposes of collecting and reporting on any delin-
quent amounts arising out of such persons’s relation-
ship with the government.
‘‘(3) For purposes of this subsection:
‘‘(A) The term ‘taxpayer identifying num-
ber’ has the meaning given such term in section
6109 of title 26, United States Code.
‘‘(B) The term ‘person’ means an individ-
ual, sole proprietorship, partnership, corpora-
tion, nonprofit organization, or any other form
of business association, but with the exception of
debtors owing claims resulting from petroleum
pricing violations does not include debtors under
third party claims of the United States.
‘‘(d) ACCESS TO SOCIAL SECURITY NUMBERS.—Not-
withstanding section 552a of title 5, United States Code,
creditor agencies to which a delinquent claim is owed, and
their agents, may match their debtor records with the Social
Security Administration records to verify name, name con-
trol, Social Security number, address, and date of birth.’’.
1424
SEC. 5232. BARRING DELINQUENT FEDERAL DEBTORS
FROM OBTAINING FEDERAL LOANS OR LOAN
GUARANTEES.
(a) Title 31, United States Code, is amended by add-
ing after section 3720A the following new section:
‘‘§ 3720B. Barring delinquent Federal debtors from ob-
taining Federal loans or loan guarantees
‘‘(a) Unless waived by the head of the agency, no per-
son may obtain any Federal financial assistance in the
form of a loan or a loan guarantee if such person has an
outstanding Federal non-tax debt which is in a delinquent
status, as determined under the standards prescribed by the
Secretary of the Treasury, with a Federal agency. Any such
person may obtain additional Federal financial assistance
only after such delinquency is resolved, pursuant to these
standards. This section shall not apply to loans or loan
guarantees where a statute specifically permits extension of
Federal financial assistance to borrowers in delinquent sta-
tus.
‘‘(b) The head of the agency may delegate the waiver
authority described in subsection (a) to the Chief Financial
Officer of the agency. The waiver authority may be redele-
gated only to the Deputy Chief Financial Officer of the
agency.
‘‘(c) For purposes of this section, ‘person’ means an
individual; or sole proprietorship, partnership, corporation,
1425
non-profit organization, or any other form of business asso-
ciation.’’.
(b) The table of sections for subchapter II of chapter
37 of title 31, United States Code, is amended by inserting
after the item relating to section 3720A the following new
item:
‘‘3720B. Barring delinquent Federal debtors from obtaining Federal loans or loan
guarantees.’’.
Subpart D—Expanding Collection Authorities and
Governmentwide Cross-Servicing
SEC. 5241. EXPANDING COLLECTION AUTHORITIES UNDER
THE DEBT COLLECTION ACT OF 1982.
(a) Subsection 8(e) of the Debt Collection Act of 1982
(Public Law 97–365, 31 U.S.C. 3701(d) and 5 U.S.C. 5514
note) is repealed.
(b) Section 5 of the Social Security Domestic Employ-
ment Reform Act of 1994 (Public Law 103–387) is repealed.
(c) Section 631 of the Tariff Act of 1930 (19 U.S.C.
1631), is repealed.
(d) Title 31, United States Code, is amended—
(1) in section 3701—
(A) by amending subsection (a)(4) to read
as follows:
‘‘(4) ‘executive, judicial or legislative agency’
means a department, military department, agency,
court, court administrative office, or instrumentality
1426
in the executive, judicial or legislative branches of
government, including government corporations.’’;
and
(B) by inserting after subsection (c) the fol-
lowing new subsection:
‘‘(d) Sections 3711(f) and 3716–3719 of this title do
not apply to a claim or debt under, or to an amount pay-
able under, the Internal Revenue Code of 1986.’’;
(2) by amending section 3711(f) to read as fol-
lows:
‘‘(f)(1) When trying to collect a claim of the Govern-
ment, the head of an executive or legislative agency may
disclose to a consumer reporting agency information from
a system of records that an individual is responsible for
a claim if notice required by section 552a(e)(4) of title 5,
United States Code, indicates that information in the sys-
tem may be disclosed to a consumer reporting agency.
‘‘(2) The information disclosed to a consumer report-
ing agency shall be limited to—
‘‘(A) information necessary to establish the iden-
tity of the individual, including name, address and
taxpayer identifying number;
‘‘(B) the amount, status, and history of the
claim; and
1427
‘‘(C) the agency or program under which the
claim arose.’’; and
(3) in section 3718—
(A) in subsection (a), by striking the first
sentence and inserting instead the following:
‘‘Under conditions the head of an executive, leg-
islative or judicial agency considers appropriate,
the head of an agency may make a contract with
a person for collection service to recover indebt-
edness owed, or to locate or recover assets of, the
United States Government. No head of an agency
may enter into a contract to locate or recover as-
sets of the United States held by a State govern-
ment or financial institution unless that agency
has established procedures approved by the Sec-
retary of the Treasury to identify and recover
such assets.’’; and
(B) in subsection (d), by inserting ‘‘, or to
locate or recover assets of,’’ after ‘‘owed’’.
SEC. 5242. GOVERNMENTWIDE CROSS-SERVICING.
Section 3711 of title 31, United States Code, is amend-
ed by adding at the end the following new subsection:
‘‘(g)(1) At the discretion of the head of an executive,
judicial or legislative agency, referral of a non-tax claim
may be made to any executive department or agency operat-
1428
ing a debt collection center for servicing and collection in
accordance with an agreement entered into under para-
graph (2). Referral or transfer of a claim may also be made
to the Secretary of the Treasury for servicing, collection,
compromise, and/or suspension or termination of collection
action. Non-tax claims referred or transferred under this
section shall be serviced, collected, compromised, and/or col-
lection action suspended or terminated in accordance with
existing statutory requirements and authorities.
‘‘(2) Executive departments and agencies operating
debt collection centers are authorized to enter into agree-
ments with the heads of executive, judicial, or legislative
agencies to service and/or collect non-tax claims referred or
transferred under this subsection. The heads of other execu-
tive departments and agencies are authorized to enter into
agreements with the Secretary of the Treasury for servicing
or collection of referred or transferred non-tax claims or
other Federal agencies operating debt collection centers to
obtain debt collection services from those agencies.
‘‘(3) Any agency to which non-tax claims are referred
or transferred under this subsection is authorized to charge
a fee sufficient to cover the full cost of implementing this
subsection. The agency transferring or referring the non-
tax claim shall be charged the fee, and the agency charging
the fee shall collect such fee by retaining the amount of the
1429
fee from amounts collected pursuant to this subsection.
Agencies may agree to pay through a different method, or
to fund the activity from another account or from revenue
received from Section 701. Amounts charged under this sub-
section concerning delinquent claims may be considered as
costs pursuant to section 3717(e) of this title.
‘‘(4) Notwithstanding any other law concerning the de-
positing and collection of Federal payments, including sec-
tion 3302(b) of this title, agencies collecting fees may retain
the fees from amounts collected. Any fee charged pursuant
to this subsection shall be deposited into an account to be
determined by the executive department or agency operating
the debt collection center charging the fee (hereafter referred
to in this section as the ‘Account’). Amounts deposited in
the Account shall be available until expended to cover costs
associated with the implementation and operation of gov-
ernment-wide debt collection activities. Costs properly
chargeable to the Account include, but are not limited to—
‘‘(A) the costs of computer hardware and soft-
ware, word processing and telecommunications equip-
ment, other equipment, supplies, and furniture;
‘‘(B) personnel training and travel costs;
‘‘(C) other personnel and administrative costs;
‘‘(D) the costs of any contract for identification,
billing, or collection services; and
1430
‘‘(E) reasonable costs incurred by the Secretary
of the Treasury, including but not limited to, services
and utilities provided by the Secretary, and adminis-
tration of the Account.
‘‘(5) Not later than January 1 of each year, there shall
be deposited into the Treasury as miscellaneous receipts, an
amount equal to the amount of unobligated balances re-
maining in the Account at the close of business on Septem-
ber 30 of the preceding year minus any part of such balance
that the executive department or agency operating the debt
collection center determines is necessary to cover or defray
the costs under this subsection for the fiscal year in which
the deposit is made.
‘‘(6)(A) The head of an executive, legislative, or judi-
cial agency shall transfer to the Secretary of the Treasury
all non-tax claims over 180 days delinquent for additional
collection action and/or closeout. A taxpayer identification
number shall be included with each claim provided if it
is in the agency’s possession.
‘‘(B) Subparagraph (A) shall not apply—
‘‘(i) to claims that—
‘‘(I) are in litigation or foreclosure;
‘‘(II) will be disposed of under the loan
sales program of a Federal department or agen-
cy;
1431
‘‘(III) have been referred to a private collec-
tion contractor for collection;
‘‘(IV) are being collected under internal off-
set procedures;
‘‘(V) have been referred to the Department
of the Treasury, the Department of Defense, the
United States Postal Service, or a disbursing of-
ficial of the United States designated by the Sec-
retary of the Treasury for administrative offset;
‘‘(VI) have been retained by an executive
agency in a debt collection center; or
‘‘(VII) have been referred to another agency
for collection;
‘‘(ii) to claims which may be collected after the
180-day period in accordance with specific statutory
authority or procedural guidelines, provided that the
head of an executive, legislative, or judicial agency
provides notice of such claims to the Secretary of the
Treasury; and
‘‘(iii) to other specific class of claims as deter-
mined by the Secretary of the Treasury at the request
of the head of an agency or otherwise.
‘‘(C) The head of an executive, legislative, or judicial
agency shall transfer to the Secretary of the Treasury all
non-tax claims on which the agency has ceased collection
1432
activity. The Secretary may exempt specific classes of
claims from this requirement, at the request of the head of
an agency, or otherwise. The Secretary shall review trans-
ferred claims to determine if additional collection action is
warranted. The Secretary may, in accordance with section
6050P of title 26, United States Code, report to the Internal
Revenue Service on behalf of the creditor agency any claims
that have been discharged within the meaning of such sec-
tion.
‘‘(7) At the end of each calendar year, the head of an
executive, legislative, or judicial agency which, regarding
a claim owed to the agency, is required to report a discharge
of indebtedness as income under the 6050P of title 26, Unit-
ed States Code, shall either complete the appropriate form
1099 or submit to the Secretary of the Treasury such infor-
mation as is necessary for the Secretary of the Treasury
to complete the appropriate form 1099. The Secretary of
the Treasury shall incorporate this information into the ap-
propriate form and submit the information to the taxpayer
and Internal Revenue Service.
‘‘(8) To carry out the purposes of this subsection, the
Secretary of the Treasury is authorized—
‘‘(A) to prescribe such rules, regulations, and
procedures as the Secretary deems necessary; and
1433
‘‘(B) to designate debt collection centers operated
by other Federal agencies.’’.
SEC. 5243. COMPROMISE OF CLAIMS.
(a) Section 3711(a)(2) of title 31, United States Code,
is amended by striking out ‘‘$20,000 (excluding interest)’’
and inserting in lieu thereof ‘‘$100,000 (excluding interest)
or such higher amount as the Attorney General may from
time to time prescribe.
(b) This section shall be effective as of October 1, 1995.
Subpart E—Federal Civil Monetary Penalties
SEC. 5251. ADJUSTING FEDERAL CIVIL MONETARY PEN-
ALTIES FOR INFLATION.
(a) The Federal Civil Penalties Inflation Adjustment
Act of 1990 (Public Law 101–410, 104 Stat. 890; 28 U.S.C.
2461 note) is amended—
(1) by amending section 4 to read as follows:
‘‘SEC. 4. The head of each agency shall, not later than
180 days after the date of enactment of the Debt Collection
Improvement Act of 1996, and at least once every 4 years
thereafter, by regulation adjust each civil monetary penalty
provided by law within the jurisdiction of the Federal agen-
cy, except for any penalty under title 26, United States
Code, by the inflation adjustment described under section
5 of this Act and publish each such regulation in the Fed-
eral Register.’’;
1434
(2) in section 5(a), by striking ‘‘The adjustment
described under paragraphs (4) and (5)(A) of section
4’’ and inserting ‘‘The inflation adjustment’’; and
(3) by adding at the end the following new sec-
tion:
‘‘SEC. 7. Any increase to a civil monetary penalty re-
sulting from this Act shall apply only to violations which
occur after the date any such increase takes effect.’’.
(b) The initial adjustment of a civil monetary penalty
made pursuant to section 4 of Federal Civil Penalties Infla-
tion Adjustment Act of 1990 (as amended by subsection (a))
may not exceed 10 percent of such penalty.
Subpart F—Gain Sharing
SEC. 5261. DEBT COLLECTION IMPROVEMENT ACCOUNT.
(a) Title 31, United States Code, is amended by insert-
ing after section 3720B the following new section:
‘‘§ 3720C. Debt Collection Improvement Account
‘‘(a)(1) There is hereby established in the Treasury a
special fund to be known as the ‘Debt Collection Improve-
ment Account’ (hereinafter referred to as the ‘Account’).
‘‘(2) The Account shall be maintained and managed
by the Secretary of the Treasury, who shall ensure that pro-
grams are credited with the amounts described in subsection
(b) and with allocations described in subsection (c).
1435
‘‘(b)(1) Not later than 30 days after the end of a fiscal
year, an agency other than the Department of Justice is
authorized to transfer to the Account a dividend not to ex-
ceed five percent of the debt collection improvement amount
as described in paragraph (3).
‘‘(2) Agency transfers to the Account may include col-
lections from—
‘‘(A) salary, administrative and tax referral off-
sets;
‘‘(B) automated levy authority;
‘‘(C) the Department of Justice; and
‘‘(D) private collection agencies.
‘‘(3) For purposes of this section, the term ‘debt collec-
tion improvement amount’ means the amount by which the
collection of delinquent debt with respect to a particular
program during a fiscal year exceeds the delinquent debt
baseline for such program for such fiscal year. The Office
of Management and Budget shall determine the baseline
from which increased collections are measured over the
prior fiscal year, taking into account the recommendations
made by the Secretary of the Treasury in consultation with
creditor agencies.
‘‘(c)(1) The Secretary of the Treasury is authorized to
make payments from the Account solely to reimburse agen-
cies for qualified expenses. For agencies with franchise
1436
funds, payments may be credited to subaccounts designated
for debt collection.
‘‘(2) For purposes of this paragraph, the term ‘quali-
fied expenses’ means expenditures for the improvement of
tax administration and agency debt collection and debt re-
covery activities including, but not limited to, account serv-
icing (including cross-servicing under section 502 of the
Debt Collection Improvement Act of 1996), automatic data
processing equipment acquisitions, delinquent debt collec-
tion, measures to minimize delinquent debt, asset disposi-
tion, and training of personnel involved in credit and debt
management.
‘‘(3) Payments made to agencies pursuant to para-
graph (1) shall be in proportion to their contributions to
the Account.
‘‘(4)(A) Amounts in the Account shall be available to
the Secretary of the Treasury to the extent and in the
amounts provided in advance in appropriation Acts, for
purposes of this section. Such amounts are authorized to
be appropriated without fiscal year limitation.
‘‘(B) As soon as practicable after the end of third fiscal
year after which appropriations are made pursuant to this
section, and every 3 years thereafter, any unappropriated
balance in the account as determined by the Secretary of
the Treasury in consultation with agencies, shall be trans-
1437
ferred to the Treasury general fund as miscellaneous re-
ceipts.
‘‘(d) For direct loan and loan guarantee programs sub-
ject to title V of the Congressional Budget Act of 1974,
amounts credited in accordance with subsection (c) shall be
considered administrative costs and shall not be included
in the estimated payments to the Government for the pur-
pose of calculating the cost of such programs.
‘‘(e) The Secretary of the Treasury shall prescribe such
rules, regulations, and procedures as the Secretary deems
necessary or appropriate to carry out the purposes of this
section.’’.
(b) The table of sections for subchapter II of chapter
37 of title 31, United States Code, is amended by inserting
after the item relating to section 3720B the following new
item:
‘‘3720C. Debt Collection Improvement Account.’’.
Subpart G—Tax Refund Offset Authority
SEC. 5271. OFFSET OF TAX REFUND PAYMENT BY DISBURS-
ING OFFICIALS.
Section 3720A(h) of title 31, United States Code, is
amended to read as follows:
‘‘(h)(1) The term ‘Secretary of the Treasury’ may in-
clude the disbursing official of the Department of the Treas-
ury.
1438
‘‘(2) The disbursing official of the Department of the
Treasury—
‘‘(A) shall notify a taxpayer in writing of—
‘‘(i) the occurrence of an offset to satisfy a
past-due legally enforceable non-tax debt;
‘‘(ii) the identity of the creditor agency re-
questing the offset; and
‘‘(iii) a contact point within the creditor
agency that will handle concerns regarding the
offset;
‘‘(B) shall notify the Internal Revenue Service
on a weekly basis of—
‘‘(i) the occurrence of an offset to satisfy a
past-due legally enforceable non-tax debt;
‘‘(ii) the amount of such offset; and
‘‘(iii) any other information required by
regulations; and
‘‘(C) shall match payment records with requests
for offset by using a name control, taxpayer identify-
ing number (as defined in 26 U.S.C. 6109), and any
other necessary identifiers.’’.
SEC. 5272. EXPANDING TAX REFUND OFFSET AUTHORITY.
(a) Section 3720A of title 31, United States Code, is
amended by adding after subsection (h) the following new
subsection:
1439
‘‘(i) An agency subject to section 9 of the Act of May
18, 1933 (16 U.S.C. 831h) may implement this section at
its discretion.’’.
(b) Section 6402(f) of title 26, United States Code, is
amended to read as follows:
‘‘(f) FEDERAL AGENCY.—For purposes of this section,
the term ‘Federal agency’ means a department, agency, or
instrumentality of the United States, and includes a gov-
ernment corporation (as such term is defined in section 103
of title 5, United States Code).’’.
SEC. 5273. EXPANDING AUTHORITY TO COLLECT PAST-DUE
SUPPORT.
(a) Section 3720A(a) of title 31, United States Code,
is amended to read as follows:
‘‘(a) Any Federal agency that is owed by a named per-
son a past-due, legally enforceable debt (including past-due
support and debt administered by a third party acting as
an agent for the Federal Government) shall, in accordance
with regulations issued pursuant to subsections (b) and (d),
notify the Secretary of the Treasury at least once a year
of the amount of such debt.’’.
(b) Section 464(a) of the Social Security Act (42
U.S.C. 664(a)) is amended—
(1) in paragraph (1), by adding at the end
thereof the following: ‘‘This subsection may be imple-
1441
the United States by a person, organization, or entity other
than another Federal agency. A claim includes, without
limitation, money owed on account of loans insured or
guaranteed by the Government, non-appropriated funds,
over-payments, any amount the United States is authorized
by statute to collect for the benefit of any person, and other
amounts of money or property due the Government.
‘‘(2) For purposes of section 3716 of this title, the term
‘claim’ also includes an amount of money or property owed
by a person to a State, the District of Columbia, American
Samoa, the United States Virgin Islands, the Common-
wealth of the Northern Mariana Islands, or the Common-
wealth of Puerto Rico where there is also a Federal mone-
tary interest or in cases of court ordered child support.’’;
and
(3) by adding after subsection (f) (as added in
section 5202(a)) the following new subsection:
‘‘(g) In section 3716 of this title—
‘‘(1) ‘creditor agency’ means any entity owed a
claim that seeks to collect that claim through admin-
istrative offset; and
‘‘(2) ‘payment certifying agency’ means any
Federal department, agency, or instrumentality and
government corporation, that has transmitted a
voucher to a disbursing official for disbursement.’’.
1442
SEC. 5282. SEVERABILITY.
If any provision of this title, or the amendments made
by this title, or the application of any provision to any
entity, person, or circumstance is for any reason adjudged
by a court of competent jurisdiction to be invalid, the re-
mainder of this title, and the amendments made by this
title, or its application shall not be affected.
Subpart I—Reporting
SEC. 5291. MONITORING AND REPORTING.
(a) The Secretary of the Treasury, in consultation with
concerned Federal agencies, is authorized to establish guide-
lines, including information on outstanding debt, to assist
agencies in the performance and monitoring of debt collec-
tion activities.
(b) Not later than three years after the date of enact-
ment of this Act, the Secretary of the Treasury shall report
to the Congress on collection services provided by Federal
agencies or entities collecting debt on behalf of other Federal
agencies under the authorities contained in section 3711(g)
of title 31, United States Code.
(c) Section 3719 of title 31, United States Code, is
amended—
(1) in subsection (a)—
(A) by amending the first sentence to read
as follows: ‘‘In consultation with the Comptroller
General, the Secretary of the Treasury shall pre-
1443
scribe regulations requiring the head of each
agency with outstanding non-tax claims to pre-
pare and submit to the Secretary at least once
a year a report summarizing the status of loans
and accounts receivable managed by the head of
the agency.’’; and
(B) in paragraph (3), by striking ‘‘Direc-
tor’’ and inserting ‘‘Secretary’’; and
(2) in subsection (b), by striking ‘‘Director’’ and
inserting ‘‘Secretary’’.
(d) Notwithstanding any other provision of law, the
Secretary of the Treasury is authorized to consolidate all
reports concerning debt collection into one annual report.
PART II—JUSTICE DEBT MANAGEMENT
Subpart A—Private Attorneys
SEC. 5301. EXPANDED USE OF PRIVATE ATTORNEYS.
(a) Section 3718(b)(1)(A) of title 31, United States
Code, is amended by striking the fourth sentence.
(b) Sections 3 and 5 of the Federal Debt Recovery Act
(Public Law 99–578, 100 Stat. 3305) are hereby repealed.
Subpart B—Nonjudicial Foreclosure
SEC. 5311. NONJUDICIAL FORECLOSURE OF MORTGAGES.
Chapter 176 of title 28 of the United States Code is
amended by adding at the end thereof the following:
1444
‘‘SUBCHAPTER E—NONJUDICIAL FORECLOSURE
‘‘Sec.
‘‘3401. Definitions.
‘‘3402. Rules of construction.
‘‘3403. Election of procedure.
‘‘3404. Designation of foreclosure trustee.
‘‘3405. Notice of foreclosure sale; statute of limitations.
‘‘3406. Service of notice of foreclosure sale.
‘‘3407. Cancellation of foreclosure sale.
‘‘3408. Stay.
‘‘3409. Conduct of sale; postponement.
‘‘3410. Transfer of title and possession.
‘‘3411. Record of foreclosure and sale.
‘‘3412. Effect of sale.
‘‘3413. Disposition of sale proceeds.
‘‘3414. Deficiency judgment.
‘‘§ 3401. Definitions
‘‘As used in this subchapter—
‘‘(1) ‘agency’ means—
‘‘(A) an executive department as defined in
section 101 of title 5, United States Code;
‘‘(B) an independent establishment as de-
fined in section 104 of title 5, United States
Code (except that it shall not include the General
Accounting Office);
‘‘(C) a military department as defined in
section 102 of title 5, United States Code; and
‘‘(D) a wholly owned government corpora-
tion as defined in section 9101(3) of title 31,
United States Code;
‘‘(2) ‘agency head’ means the head and any as-
sistant head of an agency, and may upon the designa-
tion by the head of an agency include the chief official
1445
of any principal division of an agency or any other
employee of an agency;
‘‘(3) ‘bona fide purchaser’ means a purchaser for
value in good faith and without notice of any adverse
claim who acquires the seller’s interest free of any ad-
verse claim;
‘‘(4) ‘debt instrument’ means a note, mortgage
bond, guaranty or other instrument creating a debt or
other obligation, including any instrument incor-
porated by reference therein and any instrument or
agreement amending or modifying a debt instrument;
‘‘(5) ‘file’ or ‘filing’ means docketing, indexing,
recording, or registering, or any other requirement for
perfecting a mortgage or a judgment;
‘‘(6) ‘foreclosure trustee’ means an individual,
partnership, association, or corporation, or any em-
ployee thereof, including a successor, appointed by the
agency head to conduct a foreclosure sale pursuant to
this subchapter;
‘‘(7) ‘mortgage’ means a deed of trust, deed to se-
cure debt, security agreement, or any other form of
instrument under which any interest in real prop-
erty, including leaseholds, life estates, reversionary in-
terests, and any other estates under applicable law is
conveyed in trust, mortgaged, encumbered, pledged or
1446
otherwise rendered subject to a lien, for the purpose
of securing the payment of money or the performance
of any other obligation;
‘‘(8) ‘of record’ means an interest recorded pur-
suant to Federal or State statutes that provide for of-
ficial recording of deeds, mortgages and judgments,
and that establish the effect of such records as notice
to creditors, purchasers, and other interested persons;
‘‘(9) ‘owner’ means any person who has an own-
ership interest in property and includes heirs, devi-
sees, executors, administrators, and other personal
representatives, and trustees of testamentary trusts if
the owner of record is deceased;
‘‘(10) ‘sale’ means a sale conducted pursuant to
this subchapter, unless the context requires otherwise;
and
‘‘(11) ‘security property’ means real property, or
any interest in real property including leaseholds, life
estates, reversionary interests, and any other estates
under applicable State law that secure a mortgage.
‘‘§ 3402. Rules of construction
‘‘(a) IN GENERAL.—If an agency head elects to proceed
under this subchapter, this subchapter shall apply and the
provisions of this subchapter shall govern in the event of
1447
a conflict with any other provision of Federal law or State
law.
‘‘(b) LIMITATION.—This subchapter shall not be con-
strued to supersede or modify the operation of—
‘‘(1) the lease-back/buy-back provisions under
section 1985 of title 7, United States Code, or regula-
tions promulgated thereunder; or
‘‘(2) The Multifamily Mortgage Foreclosure Act
of 1981 (chapter 38 of title 12, United States Code).
‘‘(c) EFFECT ON OTHER LAWS.—This subchapter shall
not be construed to curtail or limit the rights of the United
States or any of its agencies—
‘‘(1) to foreclose a mortgage under any other pro-
vision of Federal law or State law; or
‘‘(2) to enforce any right under Federal law or
State law in lieu of or in addition to foreclosure, in-
cluding any right to obtain a monetary judgment.
‘‘(d) APPLICATION TO MORTGAGES.—The provisions of
this subchapter may be used to foreclose any mortgage,
whether executed prior or subsequent to the effective date
of this subchapter.
‘‘§ 3403. Election of procedure
‘‘(a) SECURITY
PROPERTY
SUBJECT
TO
FORE-
CLOSURE.—An agency head may foreclose a mortgage upon
the breach of a covenant or condition in a debt instrument
1449
act business under the laws of the State in which
the security property is located.
‘‘(2) The agency head is authorized to enter into
personal services and other contracts not inconsistent
with this subchapter.
‘‘(c) METHOD
OF DESIGNATION.—An agency head
shall designate the foreclosure trustee in writing. The fore-
closure trustee may be designated by name, title, or posi-
tion. An agency head may designate one or more foreclosure
trustees for the purpose of proceeding with multiple fore-
closures or a class of foreclosures.
‘‘(d) AVAILABILITY
OF DESIGNATION.—An agency
head may designate such foreclosure trustees as the agency
head deems necessary to carry out the purposes of this sub-
chapter.
‘‘(e) MULTIPLE FORECLOSURE TRUSTEES AUTHOR-
IZED.—An agency head may designate multiple foreclosure
trustees for different tracts of a secured property.
‘‘(f) REMOVAL OF FORECLOSURE TRUSTEES; SUCCES-
SOR FORECLOSURE TRUSTEES.—An agency head may,
with or without cause or notice, remove a foreclosure trustee
and designate a successor trustee as provided in this section.
The foreclosure sale shall continue without prejudice not-
withstanding the removal of the foreclosure trustee and des-
ignation of a successor foreclosure trustee. Nothing in this
1450
section shall be construed to prohibit a successor foreclosure
trustee from postponing the foreclosure sale in accordance
with this subchapter.
‘‘§ 3405. Notice of foreclosure sale; statute of limita-
tions
‘‘(a) IN GENERAL.—
‘‘(1) Not earlier than 21 days nor later than ten
years after acceleration of a debt instrument or de-
mand on a guaranty, the foreclosure trustee shall
serve a notice of foreclosure sale in accordance with
this subchapter.
‘‘(2) For purposes of computing the time period
under paragraph (1), there shall be excluded all peri-
ods during which there is in effect—
‘‘(A) a judicially imposed stay of fore-
closure; or
‘‘(B) a stay imposed by section 362 of title
11, United States Code.
‘‘(3) In the event of partial payment or written
acknowledgement of the debt after acceleration of the
debt instrument, the right to foreclosure shall be
deemed to accrue again at the time of each such pay-
ment or acknowledgement.
‘‘(b) NOTICE OF FORECLOSURE SALE.—The notice of
foreclosure sale shall include—
1451
‘‘(1) the name, title, and business address of the
foreclosure trustee as of the date of the notice;
‘‘(2) the names of the original parties to the debt
instrument and the mortgage, and any assignees of
the mortgagor of record;
‘‘(3) the street address or location of the security
property, and a generally accepted designation used
to describe the security property, or so much thereof
as is to be offered for sale, sufficient to identify the
property to be sold;
‘‘(4) the date of the mortgage, the office in which
the mortgage is filed, and the location of the filing of
the mortgage;
‘‘(5) the default or defaults upon which fore-
closure is based, and the date of the acceleration of the
debt instrument;
‘‘(6) the date, time, and place of the foreclosure
sale;
‘‘(7) a statement that the foreclosure is being
conducted in accordance with this subchapter;
‘‘(8) the types of costs, if any, to be paid by the
purchaser upon transfer of title; and
‘‘(9) the terms and conditions of sale, including
the method and time of payment of the foreclosure
purchase price.
1452
‘‘§ 3406. Service of notice of foreclosure sale
‘‘(a) RECORD NOTICE.—At least 21 days prior to the
date of the foreclosure sale, the notice of foreclosure sale re-
quired by section 3405 shall be filed in the manner author-
ized for filing a notice of an action concerning real property
according to the law of the State where the security property
is located or, if none, in the manner authorized by section
3201 of this chapter.
‘‘(b) NOTICE BY MAIL.—
‘‘(1) At least 21 days prior to the date of the
foreclosure sale, the notice set forth in section 3405
shall be sent by registered or certified mail, return re-
ceipt requested—
‘‘(A) to the current owner of record of the
security property as the record appears on the
date that the notice of foreclosure sale is recorded
pursuant to subsection (a);
‘‘(B) to all debtors, including the mortgagor,
assignees of the mortgagor and guarantors of the
debt instrument;
‘‘(C) to all persons having liens, interests or
encumbrances of record upon the security prop-
erty, as the record appears on the date that the
notice of foreclosure sale is recorded pursuant to
subsection (a); and
1453
‘‘(D) to any occupants of the security prop-
erty. If the names of the occupants of the security
property are not known to the agency, or the se-
curity property has more than one dwelling unit,
the notice shall be posted at the security prop-
erty.
‘‘(2) The notice shall be sent to the debtor at the
address, if any, set forth in the debt instrument or
mortgage as the place to which notice is to be sent,
and if different, to the debtor’s last known address as
shown in the mortgage record of the agency. The no-
tice shall be sent to any person other than the debtor
to that person’s address of record or, if there is no ad-
dress of record, to any address at which the agency
in good faith believes the notice is likely to come to
that person’s attention.
‘‘(3) Notice by mail pursuant to this subsection
shall be effective upon mailing.
‘‘(c) NOTICE BY PUBLICATION.—The notice of the fore-
closure sale shall be published at least once a week for each
of three successive weeks prior to the sale in at least one
newspaper of general circulation in any county or counties
in which the security property is located. If there is no
newspaper published at least weekly that has a general cir-
culation in at least one county in which the security prop-
1454
erty is located, copies of the notice of foreclosure sale shall
instead be posted at least 21 days prior to the sale at the
courthouse of any county or counties in which the property
is located and the place where the sale is to be held.
‘‘§ 3407. Cancellation of foreclosure sale
‘‘(a) IN GENERAL.—At any time prior to the fore-
closure sale, the foreclosure trustee shall cancel the sale—
‘‘(1) if the debtor or the holder of any subordi-
nate interest in the security property tenders the per-
formance due under the debt instrument and mort-
gage, including any amounts due because of the exer-
cise of the right to accelerate, and the expenses of pro-
ceeding to foreclosure incurred to the time of tender;
‘‘(2) if the security property is a dwelling of four
units or fewer, and the debtor—
‘‘(A) pays or tenders all sums which would
have been due at the time of tender in the ab-
sence of any acceleration;
‘‘(B) performs any other obligation which
would have been required in the absence of any
acceleration; and
‘‘(C) pays or tenders all costs of foreclosure
incurred for which payment from the proceeds of
the sale would be allowed; or
1455
‘‘(3) for any reason approved by the agency
head.
‘‘(b) LIMITATION.—The debtor may not, without the
approval of the agency head, cure the default under sub-
section (a)(2) if, within the preceding 12 months, the debtor
has cured a default after being served with a notice of fore-
closure sale pursuant to this subchapter.
‘‘(c) NOTICE
OF
CANCELLATION.—The foreclosure
trustee shall file a notice of the cancellation in the same
place and manner provided for the filing of the notice of
foreclosure sale under section 3406(a).
‘‘§ 3408. Stay
‘‘If, prior to the time of sale, foreclosure proceedings
under this subchapter are stayed in any manner, including
the filing of bankruptcy, no person may thereafter cure the
default under the provisions of section 3407(a)(2). If the
default is not cured at the time a stay is terminated, the
foreclosure trustee shall proceed to sell the security property
as provided in this subchapter.
‘‘§ 3409. Conduct of sale; postponement
‘‘(a) SALE PROCEDURES.—Foreclosure sale pursuant
to this subchapter shall be at public auction and shall be
scheduled to begin at a time between the hours of 9:00 a.m.
and 4:00 p.m. local time. The foreclosure sale shall be held
at the location specified in the notice of foreclosure sale,
1456
which shall be a location where real estate foreclosure auc-
tions are customarily held in the county or one of the coun-
ties in which the property to be sold is located or at a court-
house therein, or upon the property to be sold. Sale of secu-
rity property situated in two or more counties may be held
in any one of the counties in which any part of the security
property is situated. The foreclosure trustee may designate
the order in which multiple tracts of security property are
sold.
‘‘(b) BIDDING
REQUIREMENTS.—Written one-price
sealed bids shall be accepted by the foreclosure trustee, if
submitted by the agency head or other persons for entry by
announcement by the foreclosure trustee at the sale. The
sealed bids shall be submitted in accordance with the terms
set forth in the notice of foreclosure sale. The agency head
or any other person may bid at the foreclosure sale, even
if the agency head or other person previously submitted a
written one-price bid. The agency head may bid a credit
against the debt due without the tender or payment of cash.
The foreclosure trustee may serve as auctioneer, or may em-
ploy an auctioneer who may be paid from the sale proceeds.
If an auctioneer is employed, the foreclosure trustee is not
required to attend the sale. The foreclosure trustee or an
auctioneer may bid as directed by the agency head.
1457
‘‘(c) POSTPONEMENT OF SALE.—The foreclosure trust-
ee shall have discretion, prior to or at the time of sale, to
postpone the foreclosure sale. The foreclosure trustee may
postpone a sale to a later hour the same day by announcing
or posting the new time and place of the foreclosure sale
at the time and place originally scheduled for the foreclosure
sale. The foreclosure trustee may instead postpone the fore-
closure sale for not fewer than 9 nor more than 31 days,
by serving notice that the foreclosure sale has been post-
poned to a specified date, and the notice may include any
revisions the foreclosure trustee deems appropriate. The no-
tice shall be served by publication, mailing, and posting
in accordance with section 3406 (b) and (c), except that
publication may be made on any of three separate days
prior to the new date of the foreclosure sale, and mailing
may be made at any time at least 7 days prior to the new
date of the foreclosure sale.
‘‘(d) LIABILITY OF SUCCESSFUL BIDDER WHO FAILS
TO COMPLY.—The foreclosure trustee may require a bidder
to make a cash deposit before the bid is accepted. The
amount or percentage of the cash deposit shall be stated by
the foreclosure trustee in the notice of foreclosure sale. A
successful bidder at the foreclosure sale who fails to comply
with the terms of the sale shall forfeit the cash deposit or,
at the election of the foreclosure trustee, shall be liable to
1458
the agency on a subsequent sale of the property for all net
losses incurred by the agency as a result of such failure.
‘‘(e) EFFECT OF SALE.—Any foreclosure sale held in
accordance with this subchapter shall be conclusively pre-
sumed to have been conducted in a legal, fair, and commer-
cially reasonable manner. The sale price shall be conclu-
sively presumed to constitute the reasonably equivalent
value of the security property.
‘‘§ 3410. Transfer of title and possession
‘‘(a) DEED.—After receipt of the purchase price in ac-
cordance with the terms of the sale as provided in the notice
of foreclosure sale, the foreclosure trustee shall execute and
deliver to the purchaser a deed conveying the security prop-
erty to the purchaser that grants and conveys title to the
security property without warranty or covenants to the
purchaser. The execution of the foreclosure trustee’s deed
shall have the effect of conveying all of the right, title, and
interest in the security property covered by the mortgage.
Notwithstanding any other law to the contrary, the fore-
closure trustee’s deed shall be a conveyance of the security
property and not a quitclaim. No judicial proceeding shall
be required ancillary or supplementary to the procedures
provided in this subchapter to establish the validity of the
conveyance.
1459
‘‘(b) DEATH OF PURCHASER PRIOR TO CONSUMMA-
TION OF SALE.—If a purchaser dies before execution and
delivery of the deed conveying the security property to the
purchaser, the foreclosure trustee shall execute and deliver
the deed to the representative of the purchaser’s estate upon
payment of the purchase price in accordance with the terms
of sale. Such delivery to the representative of the purchaser’s
estate shall have the same effect as if accomplished during
the lifetime of the purchaser.
‘‘(c) PURCHASER CONSIDERED BONA FIDE PUR-
CHASER WITHOUT NOTICE.—The purchaser of property
under this subchapter shall be presumed to be a bona fide
purchaser without notice of defects, if any, in the title con-
veyed to the purchaser.
‘‘(d) POSSESSION BY PURCHASER; CONTINUING IN-
TERESTS.—A purchaser at a foreclosure sale conducted pur-
suant to this subchapter shall be entitled to possession upon
passage of title to the security property, subject to any in-
terest or interests senior to that of the mortgage. The right
to possession of any person without an interest senior to
the mortgage who is in possession of the property shall ter-
minate immediately upon the passage of title to the security
property, and the person shall vacate the security property
immediately. The purchaser shall be entitled to take any
1460
steps available under Federal law or State law to obtain
possession.
‘‘(e) RIGHT
OF REDEMPTION; RIGHT
OF POSSES-
SION.—This subchapter shall preempt all Federal and State
rights of redemption, statutory, or common law. Upon con-
clusion of the public auction of the security property, no
person shall have a right of redemption.
‘‘(f) PROHIBITION OF IMPOSITION OF TAX ON CONVEY-
ANCE BY THE UNITED STATES OR AGENCY THEREOF.—No
tax, or fee in the nature of a tax, for the transfer of title
to the security property by the foreclosure trustee’s deed
shall be imposed upon or collected from the foreclosure trust-
ee or the purchaser by any State or political subdivision
thereof.
‘‘§ 3411. Record of foreclosure and sale
‘‘(a) RECITAL REQUIREMENTS.—The foreclosure trust-
ee shall recite in the deed to the purchaser, or in an adden-
dum to the foreclosure trustee’s deed, or shall prepare an
affidavit stating—
‘‘(1) the date, time, and place of sale;
‘‘(2) the date of the mortgage, the office in which
the mortgage is filed, and the location of the filing of
the mortgage;
‘‘(3) the persons served with the notice of fore-
closure sale;
1461
‘‘(4) the date and place of filing of the notice of
foreclosure sale under section 3406(a);
‘‘(5) that the foreclosure was conducted in ac-
cordance with the provisions of this subchapter; and
‘‘(6) the sale amount.
‘‘(b) EFFECT OF RECITALS.—The recitals set forth in
subsection (a) shall be prima facie evidence of the truth of
such recitals. Compliance with the requirements of sub-
section (a) shall create a conclusive presumption of the va-
lidity of the sale in favor of bona fide purchasers and en-
cumbrancers for value without notice.
‘‘(c) DEED TO BE ACCEPTED FOR FILING.—The reg-
ister of deeds or other appropriate official of the county or
counties where real estate deeds are regularly filed shall ac-
cept for filing and shall file the foreclosure trustee’s deed
and affidavit, if any, and any other instruments submitted
for filing in relation to the foreclosure of the security prop-
erty under this subchapter.
‘‘§ 3412. Effect of sale
‘‘A sale conducted under this subchapter to a bona fide
purchaser shall bar all claims upon the security property
by—
‘‘(1) any person to whom the notice of foreclosure
sale was mailed as provided in this subchapter who
claims an interest in the property subordinate to that
1462
of the mortgage, and the heir, devisee, executor, ad-
ministrator, successor, or assignee claiming under
any such person;
‘‘(2) any person claiming any interest in the
property subordinate to that of the mortgage, if such
person had actual knowledge of the sale;
‘‘(3) any person so claiming, whose assignment,
mortgage, or other conveyance was not filed in the
proper place for filing, or whose judgment or decree
was not filed in the proper place for filing, prior to
the date of filing of the notice of foreclosure sale as
required by section 3406(a), and the heir, devisee, ex-
ecutor, administrator, successor, or assignee of such a
person; or
‘‘(4) any other person claiming under a statu-
tory lien or encumbrance not required to be filed and
attaching to the title or interest of any person des-
ignated in any of the foregoing subsections of this sec-
tion.
‘‘§ 3413. Disposition of sale proceeds
‘‘(a) DISTRIBUTION OF SALE PROCEEDS.—The fore-
closure trustee shall distribute the proceeds of the foreclosure
sale in the following order—
1464
‘‘(B) mileage for posting notices and for the
foreclosure trustee’s or auctioneer’s attendance at
the sale at the rate provided in section 1921 of
title 28, United States Code, for mileage by the
most reasonable road distance;
‘‘(C) reasonable and necessary costs actually
incurred in connection with any search of title
and lien records; and
‘‘(D) necessary costs incurred by the fore-
closure trustee to file documents;
‘‘(4) to pay valid real property tax liens or as-
sessments, if required by the notice of foreclosure sale;
‘‘(5) to pay any liens senior to the mortgage, if
required by the notice of foreclosure sale;
‘‘(6) to pay service charges and advancements for
taxes, assessments, and property insurance premiums;
and
‘‘(7) to pay late charges and other administra-
tive costs and the principal and interest balances se-
cured by the mortgage, including expenditures for the
necessary protection, preservation, and repair of the
security property as authorized under the debt instru-
ment or mortgage and interest thereon if provided for
in the debt instrument or mortgage, pursuant to the
agency’s procedure.
1465
‘‘(b) INSUFFICIENT PROCEEDS.—In the event there are
no proceeds of sale or the proceeds are insufficient to pay
the costs and expenses set forth in subsection (a), the agency
head shall pay such costs and expenses as authorized by
applicable law.
‘‘(c) SURPLUS MONIES.—
‘‘(1) After making the payments required by sub-
section (a), the foreclosure trustee shall—
‘‘(A) distribute any surplus to pay liens in
the order of priority under Federal law or the
law of the State where the security property is
located; and
‘‘(B) pay to the person who was the owner
of record on the date the notice of foreclosure sale
was filed the balance, if any, after any payments
made pursuant to paragraph (1).
‘‘(2) If the person to whom such surplus is to be
paid cannot be located, or if the surplus available is
insufficient to pay all claimants and the claimants
cannot agree on the distribution of the surplus, that
portion of the sale proceeds may be deposited by the
foreclosure trustee with an appropriate official au-
thorized under law to receive funds under such cir-
cumstances. If such a procedure for the deposit of dis-
puted funds is not available, and the foreclosure trust-
1466
ee files a bill of interpleader or is sued as a stake-
holder to determine entitlement to such funds, the
foreclosure trustee’s necessary costs in taking or de-
fending such action shall be deducted first from the
disputed funds.
‘‘§ 3414. Deficiency judgment
‘‘(a) IN GENERAL.—If after deducting the disburse-
ments described in section 3413, the price at which the secu-
rity property is sold at a foreclosure sale is insufficient to
pay the unpaid balance of the debt secured by the security
property, counsel for the United States may commence an
action or actions against any or all debtors to recover the
deficiency, unless specifically prohibited by the mortgage.
The United States is also entitled to recover any amount
authorized by section 3011 and costs of the action.
‘‘(b) LIMITATION.—Any action commenced to recover
the deficiency shall be brought within 6 years of the last
sale of security property.
‘‘(c) CREDITS.—The amount payable by a private
mortgage guaranty insurer shall be credited to the account
of the debtor prior to the commencement of an action for
any deficiency owed by the debtor. Nothing in this sub-
section shall curtail or limit the subrogation rights of a pri-
vate mortgage guaranty insurer.’’.
1467
SUBCHAPTER B—FAA GRANTS-IN-AID FOR AIRPORTS
FEDERAL AVIATION ADMINISTRATION GRANTS-IN-AID FOR
AIRPORTS
(AIRPORT AND AIRWAY TRUST FUND)
(RESCISSION OF CONTRACT AUTHORITY)
Of the available contract authority balances under this
account, $48,000,000 are hereby rescinded, in addition to
any such sums otherwise rescinded by this Act.
TITLE VI—FOOD AND DRUG EXPORT
REFORM
SEC. 6001. SHORT TITLE, REFERENCE.
(a) SHORT TITLE.—This title may be cited as the
‘‘FDA Export Reform and Enhancement Act of 1996’’.
(b) REFERENCE.—Wherever in this title (other than
in section 6004) an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other
provision, the reference shall be considered to be made to
a section or other provision of the Federal Food, Drug, and
Cosmetic Act. (21 U.S.C. 321 et seq.)
SEC. 6002. EXPORT OF DRUGS AND DEVICES.
(a) EXPORT AND IMPORTS.—Section 801 (21 U.S.C.
381) is amended—
(1) in subsection (d), by adding at the end there-
of the following new paragraphs:
‘‘(3) No component, part, or accessory of a drug, bio-
logical product, or device, including a drug in bulk inform,
1468
shall be excluded from importation into the United States
under subsection (a) if—
‘‘(A) the importer affirms at the time of initial
importation that such component, part, or accessory
is intended to be incorporated by the initial owner or
consignee into a drug, biological product, or device
that will be exported by such owner or consignee from
the United States in accordance with subsection
801(e) or section 802 of this Act or section 351(h) of
the Public Health Service Act;
‘‘(B) the initial owner or consignee responsible
for such imported articles maintains records that
identify the use of such imported articles and upon
request of the Secretary submits a report that pro-
vides an accounting of the exportation or the disposi-
tion of the imported articles, including portions that
have been destroyed, and the manner in which such
person complied with the requirements of this para-
graph; and
‘‘(C) any imported component, part or ac-
cessory not so incorporated is destroyed or ex-
ported by the owner or consignee.’’
‘‘(4) The importation into the United States of blood,
blood components, source plasma, and source leukocytes, is
not permitted pursuant to paragraph (3) unless the impor-
1469
tation complies with section 351(a) of the Public Health
Service Act. The importation of tissue is not permitted pur-
suant to paragraph (3) unless the importation complies
with section 361 of the Public Health Service Act.’’;
(2) in subsection (e)(1), by striking the second
sentence;
(3) in subsection (e)(2)—
(A) by striking ‘‘the Secretary’’ and insert-
ing ‘‘either (i) the Secretary’’; and
(B) by inserting before the period at the end
thereof the following: ‘‘or (ii) the device is eligible
for export under section 802’’; and
(4) in subsection (e), by adding at the end thereof the
following new paragraph:;
‘‘(3) A new animal drug that requires approval under
section 512 shall not be exported pursuant to paragraph
(1) if such drug has been banned in the United States.’’.
(b) EXPORT OF CERTAIN UNAPPROVED DRUGS AND
DEVICES.—Section 802 (21 U.S.C. 382) is amended to read
as follows:
‘‘EXPORTS OF CERTAIN UNAPPROVED PRODUCTS
‘‘SEC. 802. (a) A drug (including a biological product)
intended for human use or a device for human use—
‘‘(1) which, in the case of a drug—
‘‘(A)(i) requires approval by the Secretary
under section 505 before such drug may be intro-
1470
duced or delivered for introduction into inter-
state commerce; or
‘‘(ii) requires licensing by the Secretary
under section 351 of the Public Health Service
Act or by the Secretary of Agriculture under the
Act of March 4, 1913 (known as the Virus-Serum
Toxin Act) before it may be introduced or deliv-
ered for introduction into interstate commerce;
and
‘‘(B) does not have such approval or license,
is not exempt from such sections or Act, and is
introduced or delivered for introduction into
interstate commerce; or
‘‘(2) which, in the case of a device—
‘‘(A) does not comply with an applicable re-
quirement under section 514 or 515;
‘‘(B) under section 520(g) is exempt from
either such section; or
‘‘(C) is a banned device under section 516,
is adulterated, misbranded, and in violation of such sections
or Act unless the export of the drug or device is authorized
under subsection (b), (c), (d), or (e), or under section
801(e)(2). If a drug (including a biological product) or de-
vice described in paragraphs (1) and (2) may be exported
under subsection (b) and if an application for such drug
1471
or device under section 505 or 514 or section 351 of the
Public Health Service Act was disapproved, the Secretary
shall notify the appropriate public health official of the
country to which such drug will be exported of such dis-
approval.
‘‘(b)(1) Except as otherwise provided in this section,
a drug (including a biological product) or device may be
exported to any country, if the drug or device complies with
the laws of that country and has valid marketing authoriza-
tion by the appropriate approval authority—
‘‘(A) in Australia, Canada, Israel, Japan, New
Zealand, Switzerland, or South Africa; or
‘‘(B) in the European Union or a country in the
European Economic Area (the countries in the Euro-
pean Union and the European Free Trade Associa-
tion) if the drug or device is marketed in that country
or the drug or device is authorized for general market-
ing in the European Economic Area.
‘‘(2) The Secretary may designate an additional coun-
try or countries to be included in the list of countries de-
scribed in subparagraphs (A) and (B) of paragraph (1).
The Secretary shall not delegate the authority granted
under this paragraph.
‘‘(3) An appropriate country official, manufacturer, or
exporter may request the Secretary to designate an addi-
1472
tional country or countries to be included in the list of
countries described in subparagraphs (A) and (B) of para-
graph (1) by submitting documentation to the Secretary in
support of such designation. Any person other than a coun-
try requesting such designation shall include along with the
request a letter from the country indicating the desire of
such country to be designated.
‘‘(4) The Secretary shall designate a country or coun-
tries to be included in the list of countries described in sub-
paragraphs (A) and (B) of paragraph (1) if the Secretary
finds that the valid marketing authorization system in such
country or countries is equivalent to the systems in the
countries described in subparagraphs (A) and (B) of para-
graph (1).
‘‘(c) A drug or device intended for investigational use
in any country described in subsection (b) may be exported
in accordance with the laws of that country and shall be
exempt from regulation under section 505(i) or 520(g).
‘‘(d) A drug or device intended for formulation, filling,
packaging, labeling, or further processing in anticipation
of market authorization in any country described in para-
graph (1)(A) or (B) of subsection (b) may be exported to
those countries for use in accordance with the laws of that
country.
1473
‘‘(e)(1) A drug (including a biological product) or de-
vice which is to be used in the prevention or treatment of
a tropical disease or other disease not prevalent in the Unit-
ed States and which does not otherwise qualify for export
under this section may, upon approval of an application
submitted under paragraph (2), be exported if—
‘‘(A) the Secretary finds, based on credible sci-
entific evidence, including clinical investigations, that
the drug or device is safe and effective in the country
to which the drug or device is to be exported in the
prevention or treatment of a tropical disease or other
disease not prevalent in the United States in such
country;
‘‘(B) the drug or device is manufactured, proc-
essed, packaged, and held in conformity with current
good manufacturing practice and is not adulterated
under subsection (a)(1), (a)(2)(A), (a)(3), (c), or (d)
of section 501;
‘‘(C) the outside of the shipping package is la-
beled with the following statement: ‘This drug or de-
vice may be sold or offered for sale only in the follow-
ing countries: 
’, the blank space being
filled with a list of the countries to which export of
the drug or device is authorized under this subsection;
1474
‘‘(D) the drug or device is not the subject of a
notice by the Secretary or the Secretary of Agriculture
of a determination that the manufacture of the drug
or device in the United States for export to a country
is contrary to the public health and safety of the
United States; and
‘‘(E) the requirements of subparagraphs (A)
through (D) of section 801(e)(1) have been met.
‘‘(2) Any person may apply to have a drug or device
exported under paragraph (1). The application shall—
‘‘(A) describe the drug or device to be exported;
‘‘(B) list each country to which the drug or de-
vice is to be exported;
‘‘(C) contain a certification by the applicant
that the drug or device will not be exported to a coun-
try for which the Secretary cannot make a finding de-
scribed in paragraph (1)(A);
‘‘(D) identify the establishments in which the
drug or device is manufactured; and
‘‘(E) demonstrate to the Secretary that the drug
or device meets the requirements of paragraph (1).
‘‘(3) The holder of an approved application for the ex-
port of a drug or device under this subsection shall report
to the Secretary—
1475
‘‘(A) the receipt of any information indicating
that the drug or device is being or may have been ex-
ported from a country for which the Secretary made
a finding under paragraph (1)(A) to a country for
which the Secretary cannot make such a finding; and
‘‘(B) the receipt of any information indicating
any adverse reactions to such drug.
‘‘(4)(A) If the Secretary determines that—
‘‘(i) a drug or device for which an application
is approved under paragraph (2) does not continue to
meet the requirements of paragraph (1);
‘‘(ii) the holder of such application has not made
the report required by paragraph (3); or
‘‘(iii) the manufacture of such drug or device in
the United States for export is contrary to the public
health and safety of the United States and an appli-
cation for the export of such drug or device has been
approved under paragraph (2),
then before taking action against the holder of an applica-
tion for which a determination was made under clause (i),
(ii), or (iii), the Secretary shall notify the holder in writing
of the determination and provide the holder 30 days to take
such action as may be required to prevent the Secretary
from taking action against the holder under this subpara-
graph. If the Secretary takes action against such holder be-
1476
cause of such a determination, the Secretary shall provide
the holder a written statement specifying the reasons for
such determination and provide the holder, on request, an
opportunity for an informal hearing with respect to such
determination.
‘‘(B) If at any time the Secretary, or in the absence
of the Secretary, the official designated to act on behalf of
the Secretary, determines that—
‘‘(i) the holder of an approved application under
paragraph (2) is exporting a drug or device from the
United States to an importer;
‘‘(ii) such importer is exporting the drug or de-
vice to a country for which the Secretary cannot make
a finding under paragraph (1)(A); and
‘‘(iii) such export presents an imminent hazard
to the public health in such country,
the Secretary shall immediately prohibit the export of the
drug or device to such importer, provide the person export-
ing the drug or device from the United States prompt notice
of the determination, and afford such person an oppor-
tunity for an expedited hearing. A determination by the
Secretary under this subparagraph may not be stayed pend-
ing final action by a reviewing court. The authority con-
ferred by this subparagraph shall not be delegated by the
Secretary.
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‘‘(3)(A) the drug or device is the subject of a no-
tice by the Secretary or the Secretary of Agriculture
of 
a 
determination 
that 
the 
possibility 
of
reimportation of the exported drug or device would
present an imminent hazard to the public health and
safety of the United States and the only means of lim-
iting the hazard is to prohibit the export of the drug
or device;
‘‘(B) the drug or device presents an imminent
hazard to the public health of the country to which
the drug or device would be exported; or
‘‘(4) the drug or device is not labeled or pro-
moted—
‘‘(A) in accordance with the requirements
and conditions for use in—
‘‘(i) the country in which the drug or
device received a valid marketing authoriza-
tion under subsection (b)(2); and
‘‘(ii) the country to which the drug or
device would be exported; and
‘‘(B) in the language of the country or des-
ignated by the country to which the drug or de-
vice would be exported.
‘‘In making a finding under paragraph (3)(B), the Sec-
retary shall, to the maximum extent possible, consult with
1480
the appropriate public health official in the affected coun-
try.
‘‘(g) The exporter of a drug or device exported under
this section shall provide a simple notification to the Sec-
retary when the exporter first begins to export such drug
or device to a country and shall maintain records of all
products exported pursuant to this section.
‘‘(h) For purposes of this section—
(1) a reference to the Secretary shall in the case
of a biological product which is required to be licensed
under the Act of March 4, 1913 (37 Stat. 832-833)
(commonly known as the Virus-Serum Toxin Act) be
considered to be a reference to the Secretary of Agri-
culture, and
(2) the term ‘‘drug’’ includes drugs for human
use as well as biologicals under section 351 of the
Public Health Service Act or the Act of March 4, 1913
(37 Stat. 832-833) (commonly known as the Virus-
Serum Toxin Act).’’
SEC. 6003. PROHIBITED ACT.
Section 301 (21 U.S.C. 331) is amended—
(1) by redesignating the second subsection (u) as
subsection (v); and
(2) by adding at the end thereof the following
new subsection:
1481
‘‘(w)(1) The failure to maintain records as required
by section 801(d)(3), the making of a knowing false state-
ment in any record or report required or requested under
section 801(d)(3), the release into interstate commerce of
any article imported into the United States under section
801(d)(3) or any finished product made from such article
(except for export in accordance with subsection 801(e) or
section 802 of the Act or section 351(h) of the Public Health
Service Act), or the failure to export or destroy any compo-
nent, part or accessory not incorporated into a drug, bio-
logical product or device that will be exported in accordance
with subsection 801(e) or section 802 of this Act or section
351(h) of the Public Health Service Act.’’
SEC. 6004. PARTIALLY PROCESSED BIOLOGICAL PRODUCTS.
Subsection (h) of section 351 of the Public Health
Service Act (42 U.S.C. 262) is amended to read as follows:
‘‘(h) A partially processed biological product which—
‘‘(1) is not in a form applicable to the preven-
tion, treatment, or cure of diseases or injuries of man;
‘‘(2) is not intended for sale in the United
States; and
‘‘(3) is intended for further manufacture into
final dosage form outside the United States,
shall be subject to no restriction on the export of the product
under this Act or the Federal Food, Drug, and Cosmetic
1482
Act (21 U.S.C. 321 et seq.) if the product is manufactured,
processed, packaged, and held in conformity with current
good manufacturing practice and meets the requirements in
section 801(e)(1) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 381(e)).’’.
This Act may be cited as the ‘‘Omnibus Consolidated
Rescissions and Appropriations Act of 1996’’.
Passed the House of Representatives March 7,
1996.
Attest:
ROBIN H. CARLE,
Clerk.
Passed the Senate March 19, 1996.
Attest:
KELLY D. JOHNSTON,
Secretary.