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‘‘(i) for individuals or classes of individuals for
whom compliance imposes a hardship;
‘‘(ii) for classifications or types of checks; or
‘‘(iii) in other circumstances as may be nec-
essary.
‘‘(B) The Secretary of the Treasury shall make deter-
minations under subparagraph (A) based on standards de-
veloped by the Secretary.
‘‘(g) Each recipient of Federal payments required to
be made by electronic funds transfer shall—
‘‘(1) designate 1 or more financial institutions
or other authorized agents to which such payments
shall be made; and
‘‘(2) provide to the Federal agency that makes
or authorizes the payments information necessary
for the recipient to receive electronic funds transfer
payments through each institution or agent des-
ignated under paragraph (1).’’; and
(2) by adding after subsection (h) (as so redes-
ignated) the following new subsections:
‘‘(i)(1) The Secretary of the Treasury may prescribe
regulations that the Secretary considers necessary to carry
out this section.
‘‘(2) Regulations under this subsection shall ensure
that individuals required under subsection (g) to have an
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account at a financial institution because of the applica-
tion of subsection (f)(1)—
‘‘(A) will have access to such an account at a
reasonable cost; and
‘‘(B) are given the same consumer protections
with respect to the account as other account holders
at the same financial institution.
‘‘(j) For purposes of this section—
‘‘(1) The term ‘electronic funds transfer’ means
any transfer of funds, other than a transaction origi-
nated by cash, check, or similar paper instrument,
that is initiated through an electronic terminal, tele-
phone, computer, or magnetic tape, for the purpose
of ordering, instructing, or authorizing a financial
institution to debit or credit an account. The term
includes Automated Clearing House transfers, Fed
Wire transfers, transfers made at automatic teller
machines, and point-of-sale terminals.
‘‘(2) The term ‘Federal agency’ means—
‘‘(A) an agency (as defined in section 101
of this title); and
‘‘(B) a Government corporation (as defined
in section 103 of title 5).
‘‘(3) The term ‘Federal payments’ includes—
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‘‘(A) Federal wage, salary, and retirement
payments;
‘‘(B) vendor and expense reimbursement
payments; and
‘‘(C) benefit payments.
Such term shall not include any payment under the
Internal Revenue Code of 1986.’’
SEC. 5282. REQUIREMENT TO INCLUDE TAXPAYER IDENTI-
FYING NUMBER WITH PAYMENT VOUCHER.
Section 3325 of title 31, United States Code, is
amended by adding at the end the following new sub-
section:
‘‘(d) The head of an executive agency or an officer
or employee of an executive agency referred to in sub-
section (a)(1)(B), as applicable, shall include with each
certified voucher submitted to a disbursing official pursu-
ant to this section the taxpayer identifying number of each
person to whom payment may be made under the
voucher.’’.
Subpart I—Miscellaneous
SEC. 5291. MISCELLANEOUS AMENDMENTS TO DEFINI-
TIONS.
Section 3701 of title 31, United States Code, is
amended—
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(1) by amending subsection (a)(1) to read as
follows:
‘‘(1) ‘administrative offset’ means withholding
funds payable by the United States (including funds
payable by the United States on behalf of a State
government) to, or held by the United States for, a
person to satisfy a claim.’’;
(2) by amending subsection (b) to read as fol-
lows:
‘‘(b)(1) In subchapter II of this chapter, The term
‘claim’ or ‘debt’ means any amount of funds or property
that has been determined by an appropriate official of the
Federal Government to be owed to the United States by
a person, organization, or entity other than another Fed-
eral agency. A claim includes, without limitation—
‘‘(A) funds owed on account of loans made, in-
sured, or guaranteed by the Government, including
any deficiency or any difference between the price
obtained by the Government in the sale of a prop-
erty and the amount owed to the Government on a
mortgage on the property,
‘‘(B) expenditures of nonappropriated funds,
‘‘(C) over-payments, including payments dis-
allowed by audits performed by the Inspector Gen-
eral of the agency administering the program,
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‘‘(D) any amount the United States is author-
ized by statute to collect for the benefit of any per-
son,
‘‘(E) the unpaid share of any non-Federal part-
ner in a program involving a Federal payment and
a matching, or cost-sharing, payment by the non-
Federal partner,
‘‘(F) any fines or penalties assessed by an agen-
cy; and
‘‘(G) other amounts of money or property owed
to the Government.
‘‘(2) For purposes of sections 3716 of this title, each
of the terms ‘claim’ and ‘debt’ includes an amount of
funds or property owed by a person to a State (including
any past-due support being enforced by the State), the
District of Columbia, American Samoa, Guam, the United
States Virgin Islands, the Commonwealth of the Northern
Mariana Islands, or the Commonwealth of Puerto Rico.’’;
and
(3) by adding after subsection (f) (as added by
section 5241 of this subtitle) the following new sub-
section:
‘‘(g) In section 3716 of this title—
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‘‘(1) ‘creditor agency’ means any agency owed
a claim that seeks to collect that claim through ad-
ministrative offset; and
‘‘(2) ‘payment certifying agency’ means any
agency that has transmitted a voucher to a disburs-
ing official for disbursement.’’.
SEC. 5292. MONITORING AND REPORTING.
(a) GUIDELINES.—The Secretary of the Treasury, in
consultation with concerned Federal agencies, may estab-
lish guidelines, including information on outstanding debt,
to assist agencies in the performance and monitoring of
debt collection activities.
(b) REPORT.—Not later than 3 years after the date
of enactment of this subtitle, the Secretary of the Treas-
ury shall report to the Congress on collection services pro-
vided by Federal agencies or entities collecting debt on be-
half of other Federal agencies under the authorities con-
tained in section 3711(g) of title 31, United States Code,
as added by section 5243 of this subtitle.
(c) AGENCY REPORTS.—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 Comptrol-
ler General of the United States, the Secretary
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of the Treasury shall prescribe regulations re-
quiring the head of each agency with outstand-
ing nontax claims to prepare and submit to the
Secretary at least once each year a report sum-
marizing the status of loans and accounts re-
ceivable that are 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) CONSOLIDATION OF REPORTS.—Notwithstanding
any other provision of law, the Secretary of the Treasury
may consolidate reports concerning debt collection other-
wise required to be submitted by the Secretary into one
annual report.
SEC. 5293. REVIEW OF STANDARDS AND POLICIES FOR
COMPROMISE OR WRITE-DOWN OF DELIN-
QUENT DEBTS.
The Director of the Office of Management and Budg-
et shall—
(1) review the standards and policies of each
Federal agency for compromising, writing-down, for-
giving, or discharging indebtedness arising from pro-
grams of the agency;
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(2) determine whether those standards and poli-
cies are consistent and protect the interests of the
United States;
(3) in the case of any Federal agency standard
or policy that the Secretary determines is not con-
sistent or does not protect the interests of the Unit-
ed States, direct the head of the agency to make ap-
propriate modifications to the standard or policy;
and
(4) report annually to the Congress on—
(A) deficiencies in the standards and poli-
cies of Federal agencies for compromising, writ-
ing-down, forgiving, or discharging indebted-
ness; and
(B) progress made in improving those
standards and policies.
PART II—JUSTICE DEBT MANAGEMENT
SEC. 5301. EXPANDED USE OF PRIVATE ATTORNEYS.
(a) ELIMINATION OF LIMITATION ON FEES.—Section
3718(b)(1)(A) of title 31, United States Code, is amended
by striking the fourth sentence.
(b) REPEAL.—Sections 3 and 5 of the Act of October
28, 1986 (popularly known as the Federal Debt Recovery
Act; Public Law 99–578, 100 Stat. 3305) are hereby re-
pealed.
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SEC. 5302. NONJUDICIAL FORECLOSURE OF MORTGAGES.
Chapter 176 of title 28, United States Code, is
amended—
(1) in the table of subchapters at the beginning
of the chapter by adding at the end the following
new item:
‘‘E. Nonjudicial foreclosure ...................................................................... 3401’’;
and
(2) by adding at the end of the chapter the fol-
lowing new subchapter:
‘‘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 set forth
in section 101 of title 5, United States Code;
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‘‘(B) an independent establishment, as de-
fined in section 104 of title 5, United States
Code (except that it shall not include the Gen-
eral Accounting Office);
‘‘(C) a military department, as set forth 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 des-
ignation by the head of an agency include the chief
official 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 ad-
verse claim who acquires the seller’s interest free of
any adverse 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 instru-
ment;
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‘‘(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 pursu-
ant to this subchapter;
‘‘(7) ‘mortgage’ means a deed of trust, deed to
secure debt, security agreement, or any other form
of instrument under which any interest in real prop-
erty, including leaseholds, life estates, reversionary
interests, and any other estates under applicable law
is conveyed in trust, mortgaged, encumbered,
pledged, or 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
official recording of deeds, mortgages, and judg-
ments, and that establish the effect of such records
as notice to creditors, purchasers, and other inter-
ested persons;
‘‘(9) ‘owner’ means any person who has an
ownership interest in property and includes heirs,
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devisees, executors, administrators, and other per-
sonal 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 other-
wise; and
‘‘(11) ‘security property’ means real property,
or any interest in real property including leaseholds,
life estates, reversionary interests, and any other es-
tates under applicable State law that secure a mort-
gage.
‘‘§ 3402. Rules of construction
‘‘(a) IN GENERAL.—If an agency head elects to pro-
ceed under this subchapter, this subchapter shall apply
and the provisions of this subchapter shall govern in the
event of 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 335 of the Consolidated Farm and Rural De-
velopment Act, or regulations promulgated there-
under; or
‘‘(2) The Multifamily Mortgage Foreclosure Act
of 1981.
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‘‘(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
provision 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 in-
strument or mortgage for which acceleration or foreclosure
is authorized. An agency head may not institute fore-
closure proceedings on the mortgage under any other pro-
vision of law, or refer such mortgage for litigation, during
the pendency of foreclosure proceedings pursuant to this
subchapter.
‘‘(b) EFFECT OF CANCELLATION OF SALE.—If a
foreclosure sale is canceled pursuant to section 3407, the
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agency head may thereafter foreclose on the security prop-
erty in any manner authorized by law.
‘‘§ 3404. Designation of foreclosure trustee
‘‘(a) IN GENERAL.—An agency head shall designate
a foreclosure trustee who shall supersede any trustee des-
ignated in the mortgage. A foreclosure trustee designated
under this section shall have a nonjudicial power of sale
pursuant to this subchapter.
‘‘(b) DESIGNATION OF FORECLOSURE TRUSTEE.—
‘‘(1) An agency head may designate as fore-
closure trustee—
‘‘(A) an officer or employee of the agency;
‘‘(B) an individual who is a resident of the
State in which the security property is located;
or
‘‘(C) a partnership, association, or corpora-
tion, if such entity is authorized to transact
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 incon-
sistent 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-
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tion. An agency head may designate one or more fore-
closure trustees for the purpose of proceedings with mul-
tiple foreclosures or a class of foreclosures.
‘‘(d) AVAILABILITY OF DESIGNATION.—An agency
head may designate such foreclosure trustees as the agen-
cy head deems necessary to carry out the purposes of this
subchapter.
‘‘(e) MULTIPLE FORECLOSURE TRUSTEES AUTHOR-
IZED.—An agency head may designate multiple fore-
closure trustees for different tracts of a secured property.
‘‘(f) REMOVAL OF FORECLOSURE TRUSTEES; SUC-
CESSOR
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 notwithstanding the removal of the foreclosure
trustee and designation of a successor foreclosure trustee.
Nothing in this section shall be construed to prohibit a
successor foreclosure trustee from postponing the fore-
closure 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
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demand 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 pe-
riods 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 foreclose shall be
deemed to accrue again at the time of each such
payment or acknowledgement.
‘‘(b) NOTICE OF FORECLOSURE SALE.—The notice
of foreclosure sale shall include—
‘‘(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 assign-
ees of the mortgagor of record;
‘‘(3) the street address or location of the secu-
rity property, and a generally accepted designation
used to describe the security property, or so much
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thereof as is to be offered for sale, sufficient to iden-
tify 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.
‘‘§ 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
required by section 3405 shall be filed in the manner au-
thorized for filing a notice of an action concerning real
property according to the law of the State where the secu-
rity property is located or, if none, in the manner author-
ized by section 3201 of this chapter.
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‘‘(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
receipt 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 re-
corded pursuant to subsection (a);
‘‘(B) to all debtors, including the mortga-
gor, assignees of the mortgagor and guarantors
of the debt instrument;
‘‘(C) to all persons having liens, interests
or encumbrances of record upon the security
property, as the record appears on the date that
the notice of foreclosure sale is recorded pursu-
ant to subsection (a); and
‘‘(D) to any occupants of the security
property.
If the names of the occupants of the security prop-
erty are not known to the agency, or the security
property has more than one dwelling unit, the notice
shall be posted at the security property.
‘‘(2) The notice shall be sent to the debtor at
the address, if any, set forth in the debt instrument
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or mortgage as the place to which notice is to be
sent, and if different, to the debtor’s last known ad-
dress as shown in the mortgage record of the agen-
cy. The notice shall be sent to any person other than
the debtor to that person’s address of record or, if
there is no address 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
foreclosure 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 circulation in at least one county in which the
security property is located, copies of the notice of fore-
closure 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—
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‘‘(1) if the debtor or the holder of any subordi-
nate interest in the security property tenders the
performance due under the debt instrument and
mortgage, including any amounts due because of the
exercise of the right to accelerate, and the expenses
of proceeding to foreclosure incurred to the time of
tender; or
‘‘(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 fore-
closure incurred for which payment from the
proceeds of the sale would be allowed; or
‘‘(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 debt-
or has cured a default after being served with a notice
of foreclosure sale pursuant to this subchapter.
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‘‘(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, which shall be a location where real estate foreclosure
auctions are customarily held in the county or one of the
counties in which the property to be sold is located or at
a courthouse therein, or upon the property to be sold. Sale
of security 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
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may designate the order in which multiple tracts of secu-
rity 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 agen-
cy 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 employ 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.
‘‘(c) POSTPONEMENT
OF SALE.—The foreclosure
trustee 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 in-
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stead postpone the foreclosure sale for not fewer than 9
nor more than 31 days, by serving notice that the fore-
closure sale has been postponed to a specified date, and
the notice may include any revisions the foreclosure trust-
ee deems appropriate. The notice shall be served by publi-
cation, 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 bid-
der 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 the agency on a subsequent sale of the prop-
erty 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 com-
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mercially reasonable manner. The sale price shall be con-
clusively 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
accordance with the terms of the sale as provided in the
notice of foreclosure sale, the foreclosure trustee shall exe-
cute and deliver to the purchaser a deed conveying the
security property to the purchaser that grants and conveys
title to the security property without warranty or cov-
enants 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 foreclosure trustee’s deed shall be a convey-
ance of the security property and not a quitclaim. No judi-
cial proceeding shall be required ancillary or supple-
mentary to the procedures provided in this subchapter to
establish the validity of the conveyance.
‘‘(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
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the terms of sale. Such delivery to the representative of
the purchaser’s estate shall have the same effect as if ac-
complished 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
pursuant to this subchapter shall be entitled to possession
upon passage of title to the security property, subject to
any interest 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 terminate immediately upon the passage of title to
the security property, and the person shall vacate the secu-
rity property immediately. The purchaser shall be entitled
to take any steps available under Federal law or State law
to obtain possession.
‘‘§ 3411. Record of foreclosure and sale
‘‘(a) RECITAL
REQUIREMENTS.—The foreclosure
trustee shall recite in the deed to the purchaser, or in an
addendum to the foreclosure trustee’s deed, or shall pre-
pare an affidavit stating—
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‘‘(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;
‘‘(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
validity of the sale in favor of bona fide purchasers and
encumbrancers for value without notice.
‘‘(c) DEED TO BE ACCEPTED FOR FILING.—The
register of deeds or other appropriate official of the county
or counties where real estate deeds are regularly filed shall
accept for filing and shall file the foreclosure trustee’s
deed and affidavit, if any, and any other instruments sub-
mitted for filing in relation to the foreclosure of the secu-
rity property under this subchapter.
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‘‘§ 3412. Effect of sale
‘‘A sale conducted under this subchapter to a bona
fide purchaser shall bar all claims upon the security prop-
erty by—
‘‘(1) any person to whom the notice of fore-
closure sale was mailed as provided in this sub-
chapter who claims an interest in the property sub-
ordinate to that of the mortgage, and the heir, devi-
see, executor, administrator, 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,
executor, 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
designated in any of the foregoing subsections of
this section.
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‘‘§ 3413. Disposition of sale proceeds
‘‘(a) DISTRIBUTION OF SALE PROCEEDS.—The fore-
closure trustee shall distribute the proceeds of the fore-
closure sale in the following order:
‘‘(1)(A) First, to pay the commission of the
foreclosure trustee, other than an agency employee,
the greater of—
‘‘(i) the sum of—
‘‘(I) 3 percent of the first $1,000 col-
lected, plus
‘‘(II) 1.5 percent on the excess of any
sum collected over $1,000; or
‘‘(ii) $250.
‘‘(B) The amounts described in subparagraph
(A)(i) shall be computed on the gross proceeds of all
security property sold at a single sale.
‘‘(2) Thereafter, to pay the expense of any auc-
tioneer employed by the foreclosure trustee, if any,
except that the commission payable to the fore-
closure trustee pursuant to paragraph (1) shall be
reduced by the amount paid to an auctioneer, unless
the agency head determines that such reduction
would adversely affect the ability of the agency head
to retain qualified foreclosure trustees or auc-
tioneers.
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‘‘(3) Thereafter, to pay for the costs of fore-
closure, including—
‘‘(A) reasonable and necessary advertising
costs and postage incurred in giving notice pur-
suant to section 3406;
‘‘(B) mileage for posting notices and for
the foreclosure trustee’s or auctioneer’s attend-
ance at the sale at the rate provided in section
1921 of title 28, United States Code, for mile-
age by the most reasonable road distance;
‘‘(C) reasonable and necessary costs actu-
ally 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) Thereafter, to pay valid real property tax
liens or assessments, if required by the notice of
foreclosure sale.
‘‘(5) Thereafter, to pay any liens senior to the
mortgage, if required by the notice of foreclosure
sale.
‘‘(6) Thereafter, to pay service charges and ad-
vancements for taxes, assessments, and property in-
surance premiums.
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‘‘(7) Thereafter, to pay late charges and other
administrative costs and the principal and interest
balances secured by the mortgage, including expendi-
tures for the necessary protection, preservation, and
repair of the security property as authorized under
the debt instrument or mortgage and interest there-
on if provided for in the debt instrument or mort-
gage, pursuant to the agency’s procedure.
‘‘(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 au-
thorized by applicable law.
‘‘(c) SURPLUS MONIES.—
‘‘(1) After making the payments required by
subsection (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 pay-
ments made pursuant to paragraph (1).
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‘‘(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
disputed funds is not available, and the foreclosure
trustee files a bill of interpleader or is sued as a
stakeholder to determine entitlement to such funds,
the foreclosure trustee’s necessary costs in taking or
defending 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
security property is sold at a foreclosure sale is insufficient
to pay the unpaid balance of the debt secured by the secu-
rity property, counsel for the United States may com-
mence 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.
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‘‘(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
private mortgage guaranty insurer.’’.
TITLE VI—COMMITTEE ON
INTERNATIONAL RELATIONS
Subtitle A—Recovery Of Costs Of
Certain Health Care Services
SEC. 6001. RECOVERY OF COSTS OF HEALTH CARE SERV-
ICES FOR PERSONNEL OF THE FOREIGN
SERVICE 
OF 
THE 
UNITED 
STATES 
AND
OTHER ELIGIBLE INDIVIDUALS.
(a) AUTHORITIES.—Section 904 of the Foreign Serv-
ice Act of 1980 (22 U.S.C. 4084) is amended—
(1) in subsection (a) by—
(A) striking ‘‘and’’ before ‘‘members of the
families of such members and employees’’; and
(B) by inserting immediately before the pe-
riod ‘‘, and for care provided abroad) such
other persons as are designated by the Sec-
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retary of State, except that such persons shall
be considered persons other than covered bene-
ficiaries for purposes of subsections (g) and
(h)’’;
(2) in subsection (d) by inserting ‘‘, subject to
the provisions of subsections (g) and (h)’’ after
‘‘treatment’’; and
(3) by adding the following new subsections:
‘‘(g)(1) In the case of a person who is a covered bene-
ficiary, the Secretary of State is authorized to collect from
a third-party payer the reasonable costs incurred by the
Department of State on behalf of such person for health
care services to the same extent that the covered bene-
ficiary would be eligible to receive reimbursement or in-
demnification from the third-party payer for such costs.
‘‘(2) If the insurance policy, plan, contract, or similar
agreement of that third-party payer includes a require-
ment for a deductible or copayment by the beneficiary of
the plan, then the Secretary of State may collect from the
third-party payer only the reasonable costs of the care pro-
vided less the deductible or copayment amount.
‘‘(3) A covered beneficiary shall not be required to
pay any deductible or copayment for health care services
under this subsection.
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‘‘(4) No provision of any insurance, medical service,
or health plan contract or agreement having the effect of
excluding from coverage or limiting payment of charges
for care in the following circumstances shall operate to
prevent collection by the Secretary of State under para-
graph (1)—
‘‘(A) care provided directly or indirectly by a
governmental entity;
‘‘(B) care provided to an individual who has not
paid a required deductible or copayment; or
‘‘(C) care provided by a provider with which the
third-party payer has no participation agreement.
‘‘(5) No law of any State, or of any political subdivi-
sion of a State, and no provision of any contract or agree-
ment shall operate to prevent or hinder recovery or collec-
tion by the United States under this section.
‘‘(6) As to the authority provided in paragraph (1)
of this subsection—
‘‘(A) the United States shall be subrogated to
any right or claim that the covered beneficiary may
have against a third-party payer;
‘‘(B) the United States may institute and pros-
ecute legal proceedings against a third-party payer
to enforce a right of the United States under this
subsection; and
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‘‘(C) the Secretary may compromise, settle, or
waive a claim of the United States under this sub-
section.
‘‘(7) The Secretary shall prescribe regulations for the
administration of this subsection and subsection (h). Such
regulations shall provide for computation of the reasonable
cost of health care services.
‘‘(8) Regulations prescribed under this subsection
shall provide that medical records of a covered beneficiary
receiving health care under this subsection shall be made
available for inspection and review by representatives of
the payer from which collection by the United States is
sought for the sole purpose of permitting the third party
to verify—
‘‘(A) that the care or services for which recov-
ery or collection is sought were furnished to the cov-
ered beneficiary; and
‘‘(B) that the provisions of such care or services
to the covered beneficiary meets criteria generally
applicable under the health plan contract involved,
except that this paragraph shall be subject to the
provisions of paragraphs (2) and (4).
‘‘(9) Amounts collected under this subsection or
under subsection (h) from a third party payer or from any
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other payer shall be deposited in the Treasury as a mis-
cellaneous offsetting receipt.
‘‘(10) For purposes of this section—
‘‘(A) the term ‘covered beneficiary’ means an
individual eligible to receive health care under this
section whose health care costs are to be paid by a
third-party payer under a contractual agreement
with such payer;
‘‘(B) the term ‘services’, as used in ‘health care
services’ includes products; and
‘‘(C) the term ‘third-party payer’ means an en-
tity that provides a fee-for-service insurance policy,
contract, or similar agreement through the Federal
Employees Health Benefit program, under which the
expenses of health care services for individuals are
paid.
‘‘(h) In the case of a person, other than a covered
beneficiary, who receives health care services pursuant to
this section, the Secretary of State is authorized to collect
from such person the reasonable costs of health care serv-
ices incurred by the Department of State on behalf of such
person. The United States shall have the same rights
against persons subject to the provisions of this subsection
as against third-party payers covered by subsection (g).’’.
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(b) EFFECTIVE DATE.—The authorities of this sec-
tion shall be effective beginning on the date of the enact-
ment of this Act.
Subtitle B—Enactment Into Law of
Division A of H.R. 1561
SEC. 6101. ENACTMENT INTO LAW OF DIVISION A OF H.R.
1561.
Division A of H.R. 1561, as passed the House of
Representatives on June 8, 1995 (relating to consolidation
of foreign affairs agencies), is hereby enacted into law.
Subtitle 
C—Cuban 
Liberty 
and
Democratic Solidarity (LIBER-
TAD) Act of 1995
SEC. 6201. SHORT TITLE.
This subtitle may be cited as the ‘‘Cuban Liberty and
Democratic Solidarity (LIBERTAD) Act of 1995’’.
SEC. 6202. FINDINGS.
The Congress makes the following findings:
(1) The economy of Cuba has experienced a de-
cline of at least 60 percent in the last 5 years as a
result of—
(A) the end of its subsidization by the
former Soviet Union of between 5 billion and 6
billion dollars annually;
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(B) 36 years of Communist tyranny and
economic mismanagement by the Castro govern-
ment;
(C) the extreme decline in trade between
Cuba and the countries of the former Soviet
bloc; and
(D) the stated policy of the Russian Gov-
ernment and the countries of the former Soviet
bloc to conduct economic relations with Cuba
on strictly commercial terms.
(2) At the same time, the welfare and health of
the Cuban people have substantially deteriorated as
a result of this economic decline and the refusal of
the Castro regime to permit free and fair democratic
elections in Cuba.
(3) The Castro regime has made it abundantly
clear that it will not engage in any substantive polit-
ical reforms that would lead to democracy, a market
economy, or an economic recovery.
(4) The repression of the Cuban people, includ-
ing a ban on free and fair democratic elections, and
continuing violations of fundamental human rights
have isolated the Cuban regime as the only com-
pletely nondemocratic government in the Western
Hemisphere.
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(5) As long as free elections are not held in
Cuba, the economic condition of the country and the
welfare of the Cuban people will not improve in any
significant way.
(6) The totalitarian nature of the Castro regime
has deprived the Cuban people of any peaceful
means to improve their condition and has led thou-
sands of Cuban citizens to risk or lose their lives in
dangerous attempts to escape from Cuba to freedom.
(7) Radio Marti and Television Marti have both
been effective vehicles for providing the people of
Cuba with news and information and have helped to
bolster the morale of the people of Cuba living under
tyranny.
(8) The consistent policy of the United States
towards Cuba since the beginning of the Castro re-
gime, carried out by both Democratic and Repub-
lican administrations, has sought to keep faith with
the people of Cuba, and has been effective in sanc-
tioning the totalitarian Castro regime.
(9) The United States has shown a deep com-
mitment, and considers it a moral obligation, to pro-
mote and protect human rights and fundamental
freedoms as expressed in the Charter of the United
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Nations and in the Universal Declaration of Human
Rights.
(10) The Congress has historically and consist-
ently manifested its solidarity and the solidarity of
the American people with the democratic aspirations
of the Cuban people.
(11) The Cuban Democracy Act of 1992 calls
upon the President to encourage the governments of
countries that conduct trade with Cuba to restrict
their trade and credit relations with Cuba in a man-
ner consistent with the purposes of that Act.
(12) The 1992 FREEDOM Support Act re-
quires that the President, in providing economic as-
sistance to Russia and the emerging Eurasian de-
mocracies, take into account the extent to which
they are acting to ‘‘terminate support for the com-
munist regime in Cuba, including removal of troops,
closing military facilities, and ceasing trade subsidies
and economic, nuclear, and other assistance’’.
(13) The Cuban Government engages in the il-
legal international narcotics trade and harbors fugi-
tives from justice in the United States.
(14) The Castro government threatens inter-
national peace and security by engaging in acts of
armed subversion and terrorism such as the training
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and supplying of groups dedicated to international
violence.
(15) The Castro government has utilized from
its inception and continues to utilize torture in var-
ious forms (including by psychiatry), as well as exe-
cution, exile, confiscation, political imprisonment,
and other forms of terror and repression, as means
of retaining power.
(16) Fidel Castro has defined democratic plu-
ralism as ‘‘pluralistic garbage’’ and continues to
make clear that he has no intention of tolerating the
democratization of Cuban society.
(17) The Castro government holds innocent Cu-
bans hostage in Cuba by no fault of the hostages
themselves solely because relatives have escaped the
country.
(18) Although a signatory state to the 1928
Inter-American Convention on Asylum and the
International Covenant on Civil and Political Rights
(which protects the right to leave one’s own coun-
try), Cuba nevertheless surrounds embassies in its
capital by armed forces to thwart the right of its
citizens to seek asylum and systematically denies
that right to the Cuban people, punishing them by
imprisonment for seeking to leave the country and
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killing them for attempting to do so (as dem-
onstrated in the case of the confirmed murder of
over 40 men, women, and children who were seeking
to leave Cuba on July 13, 1994).
(19) The Castro government continues to utilize
blackmail, such as the immigration crisis with which
it threatened the United States in the summer of
1994, and other unacceptable and illegal forms of
conduct to influence the actions of sovereign states
in the Western Hemisphere in violation of the Char-
ter of the Organization of American States and
other international agreements and international
law.
(20) The United Nations Commission on
Human Rights has repeatedly reported on the unac-
ceptable human rights situation in Cuba and has
taken the extraordinary step of appointing a Special
Rapporteur.
(21) The Cuban Government has consistently
refused access to the Special Rapporteur and for-
mally expressed its decision not to ‘‘implement so
much as one comma’’ of the United Nations Resolu-
tions appointing the Rapporteur.
(22) The United Nations General Assembly
passed Resolution 1992/70 on December 4, 1992,
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Resolution 1993/48/142 on December 20, 1993, and
Resolution 1994/49/544 on October 19, 1994, ref-
erencing the Special Rapporteur’s reports to the
United Nations and condemning ‘‘violations of
human rights and fundamental freedoms’’ in Cuba.
(23) Article 39 of Chapter VII of the United
Nations Charter provides that the United Nations
Security Council ‘‘shall determine the existence of
any threat to the peace, breach of the peace, or act
of aggression and shall make recommendations, or
decide what measures shall be taken . . ., to main-
tain or restore international peace and security.’’.
(24) The United Nations has determined that
massive and systematic violations of human rights
may constitute a ‘‘threat to peace’’ under Article 39
and has imposed sanctions due to such violations of
human rights in the cases of Rhodesia, South Africa,
Iraq, and the former Yugoslavia.
(25) In the case of Haiti, a neighbor of Cuba
not as close to the United States as Cuba, the
United States led an effort to obtain and did obtain
a United Nations Security Council embargo and
blockade against that country due to the existence of
a military dictatorship in power less than 3 years.
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(26) United Nations Security Council Resolu-
tion 940 of July 31, 1994, subsequently authorized
the use of ‘‘all necessary means’’ to restore the
‘‘democratically elected government of Haiti’’, and
the democratically elected government of Haiti was
restored to power on October 15, 1994.
(27) The Cuban people deserve to be assisted in
a decisive manner to end the tyranny that has op-
pressed them for 36 years and the continued failure
to do so constitutes ethically improper conduct by
the international community.
(28) For the past 36 years, the Cuban Govern-
ment has posed and continues to pose a national se-
curity threat to the United States.
SEC. 6203. PURPOSES.
The purposes of this subtitle are as follows:
(1) To assist the Cuban people in regaining
their freedom and prosperity, as well as in joining
the community of democracies that are flourishing in
the Western Hemisphere.
(2) To seek international sanctions against the
Castro government in Cuba.
(3) To encourage the holding of free and fair
democratic elections in Cuba, conducted under the
supervision of internationally recognized observers.
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(4) To develop a plan for furnishing assistance
to a transition government and, subsequently, to a
democratically elected government when such gov-
ernments meet the eligibility requirements of this
subtitle.
(5) To protect property rights abroad of United
States nationals.
(6) To provide for the continued national secu-
rity of the United States in the face of continuing
threats from the Castro government of terrorism,
theft of property from United States nationals, and
domestic repression from which refugees flee to
United States shores.
SEC. 6204. DEFINITIONS.
As used in this subtitle, the following terms have the
following meanings:
(1) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional com-
mittees’’ means the Committee on International Re-
lations, the Committee on Ways and Means, and the
Committee on Appropriations of the House of Rep-
resentatives and the Committee on Foreign Rela-
tions, the Committee on Finance, and the Commit-
tee on Appropriations of the Senate.
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(2) COMMERCIAL ACTIVITY.—The term ‘‘com-
mercial activity’’ has the meaning given that term in
section 1603(d) of title 28, United States Code.
(3) CONFISCATED.—As used in parts 1 and 3,
the term ‘‘confiscated’’ refers to—
(A) the nationalization, expropriation, or
other seizure by the Cuban Government of own-
ership or control of property, on or after Janu-
ary 1, 1959—
(i) without the property having been
returned or adequate and effective com-
pensation provided; or
(ii) without the claim to the property
having been settled pursuant to an inter-
national claims settlement agreement or
other mutually accepted settlement proce-
dure; and
(B) the repudiation by the Cuban Govern-
ment of, the default by the Cuban Government
on, or the failure by the Cuban Government to
pay, on or after January 1, 1959—
(i) a debt of any enterprise which has
been nationalized, expropriated, or other-
wise taken by the Cuban Government;
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(ii) a debt which is a charge on prop-
erty nationalized, expropriated, or other-
wise taken by the Cuban Government; or
(iii) a debt which was incurred by the
Cuban Government in satisfaction or set-
tlement of a confiscated property claim.
(4) CUBAN
GOVERNMENT.—(A) The term
‘‘Cuban Government’’ includes the government of
any political subdivision of Cuba, and any agency or
instrumentality of the Government of Cuba.
(B) For purposes of subparagraph (A), the
term ‘‘agency or instrumentality of the Government
of Cuba’’ means an agency or instrumentality of a
foreign state as defined in section 1603(b) of title
28, United States Code, with ‘‘Cuba’’ substituted for
‘‘a foreign state’’ each place it appears in such sec-
tion.
(5) DEMOCRATICALLY ELECTED GOVERNMENT
IN CUBA.—The term ‘‘democratically elected govern-
ment in Cuba’’ means a government determined by
the President to have met the requirements of sec-
tion 206.
(6) ECONOMIC EMBARGO OF CUBA.—The term
‘‘economic embargo of Cuba’’ refers to the economic
embargo imposed against Cuba pursuant to section
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620(a) of the Foreign Assistance Act of 1961 (22
U.S.C. 2370(a)), section 5(b) of the Trading With
the Enemy Act (50 U.S.C. App. 5(b)), the Inter-
national Emergency Economic Powers Act (50
U.S.C. 1701 and following), and the Export Admin-
istration Act of 1979 (50 U.S.C. App. 2401 and fol-
lowing), as modified by the Cuban Democracy Act of
1992 (22 U.S.C. 6001 and following).
(7) FOREIGN
NATIONAL.—The term ‘‘foreign
national’’ means—
(A) an alien; or
(B) any corporation, trust, partnership, or
other juridical entity not organized under the
laws of the United States, or of any State, the
District of Columbia, the Commonwealth of
Puerto Rico, or any other territory or posses-
sion of the United States.
(8) 
KNOWINGLY.—The 
term 
‘‘knowingly’’
means with knowledge or having reason to know.
(9) PROPERTY.—(A) The term ‘‘property’’
means any property (including patents, copyrights,
trademarks, and any other form of intellectual prop-
erty), whether real, personal, or mixed, and any
present, future, or contingent right, security, or