I
104TH CONGRESS
1ST SESSION
H. R. 2234
To reduce delinquencies and to improve debt-collection activities Government-
wide, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 4, 1995
Mr. HORN (for himself, Mrs. MALONEY, Mrs. MORELLA, Mr. HUTCHINSON,
Mr. FRANK of Massachusetts, Mr. JACOBS, Mr. FROST, Mr. KASICH, Mr.
KLUG, and Ms. NORTON) introduced the following bill; which was re-
ferred to the Committee on Government Reform and Oversight, and in
addition to the Committees on the Judiciary, Ways and Means, and
House Oversight, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall within
the jurisdiction of the committee concerned
A BILL
To reduce delinquencies and to improve debt-collection
activities Governmentwide, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 101. SHORT TITLE.
This Act may be cited as the ‘‘Debt Collection Im-
provement Act of 1995’’.
SEC. 102. EFFECTIVE DATE.
(a) Except as provided in subsection (b), the provi-
sions of this Act and the amendments made by this Act
shall become effective October 1, 1995.
(b) The amendments made by title III of this Act
shall become effective for levies issued after the date of
enactment of this Act.
SEC. 103. TABLE OF CONTENTS.
TITLE I—GENERAL DEBT COLLECTION INITIATIVES
SUBCHAPTER A—GENERAL OFFSET AUTHORITY
Sec. 201. Enhancement of administrative offset authority.
Sec. 202. House of Representatives as Legislative Agency.
Sec. 203. Exemption from computer matching requirements under the Privacy
Act of 1974.
Sec. 204. Technical and conforming amendments.
SUBCHAPTER B—SALARY OFFSET AUTHORITY
Sec. 301. Enhancement of salary offset authority.
SUBCHAPTER C—TAXPAYER IDENTIFYING NUMBERS
Sec. 401. Access to taxpayer identifying numbers.
Sec. 402. Barring delinquent Federal debtors from obtaining Federal loans or
loan guarantees.
SUBCHAPTER D—EXPANDING COLLECTION AUTHORITIES AND GOVERNMENT-
WIDE CROSS-SERVICING
Sec. 501. Expanding collection authorities under the Debt Collection Act of
1982.
Sec. 502. Governmentwide cross-servicing.
Sec. 503. Compromise of claims.
SUBCHAPTER E—FEDERAL CIVIL MONETARY PENALTIES
Sec. 601. Adjusting Federal civil monetary penalties for inflation.
SUBCHAPTER F—GAIN SHARING
Sec. 701. Debt collection improvement account.
SUBCHAPTER G—TAX REFUND OFFSET AUTHORITY
Sec. 801. Offset of tax refund payment by disbursing officials.
Sec. 802. Expanding tax refund offset authority.
Sec. 803. Expanding authority to collect past-due support.
SUBCHAPTER H—DEFINITIONS, DUE PROCESS RIGHTS, AND SEVERABILITY
Sec. 901. Technical amendments to definitions.
Sec. 902. Severability.
SUBCHAPTER I—REPORTING
Sec. 1001. Monitoring and reporting.
TITLE II—JUSTICE DEBT MANAGEMENT
SUBCHAPTER A—PRIVATE ATTORNEYS
Sec. 1101. Expanded use of private attorneys.
SUBCHAPTER B—NONJUDICIAL FORECLOSURE
Sec. 1201. Nonjudicial foreclosure of mortgages.
TITLE III—IRS LEVY AUTHORITY
Sec. 1301. Provision for continuous levy.
Sec. 1302. Modification of levy exemption.
Sec. 1303. Confidentiality and disclosure of returns and return information.
TITLE I—GENERAL DEBT
COLLECTION INITIATIVES
Subchapter A—General Offset Authority
SEC. 201. 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 off-
set, 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
Justice, the General Accounting Office and/or the
Department of the Treasury without change; or
‘‘(2) prescribe independent regulations on col-
lecting by administrative offset consistent with the
regulations promulgated under paragraph (1).’’;
(2) by amending subsection (c)(2) to read as
follows:
‘‘(2) when a statute explicitly prohibits using
administrative ‘offset’ or ‘setoff’ to collect the claim
or type of claim involved.’’;
(3) by redesignating subsection (c) as sub-
section (d); and
(4) by inserting after subsection (b) the follow-
ing 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 Service, or any disbursing official of the United
States designated by the Secretary of the Treasury, is au-
thorized to offset the amount of a payment which a pay-
ment certifying agency has certified to the disbursing offi-
cial for disbursement by an amount equal to the amount
of a claim which a creditor agency has certified to the Sec-
retary of the Treasury pursuant to this subsection.
‘‘(B) An agency that designates disbursing officials
pursuant to section 3321(c) of this title is not required
to certify claims arising out of its operations to the Sec-
retary of the Treasury before such agency’s disbursing of-
ficials offset 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 satis-
fied; 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 Au-
gust 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 payments 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.
‘‘(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 ex-
emption, the disbursing official shall—
‘‘(i) apply a prorated amount of the exemption
to each periodic benefit payment to be made to debt-
or 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
reduction or deduction required under the laws authoriz-
ing the program under which such payment is authorized
to be made (including any reduction or deduction to re-
cover any overpayment under such program).
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 section.
‘‘(5) The Secretary of the Treasury may disclose to
a creditor agency the current address of any payee and
any data related to certifying and authorizing such pay-
ment 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 pay-
ment. Upon request by the Secretary, the institution re-
ceiving the payment shall report the current address of
the debtor/payee to the Secretary.
‘‘(6) The Secretary of the Treasury is authorized to
prescribe such rules, regulations, and procedures as the
Secretary of the Treasury deems necessary to carry out
the purposes of this subsection. The Secretary shall con-
sult 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 another specific repayment source, in order to
allow sufficient time to either collect the debt through nor-
mal collection processes (including collection by internal
administrative 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 de-
scription of the type and amount of the payment
otherwise payable to the debtor against which the
offset was executed;
‘‘(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 sen-
tence, the failure of the debtor to receive such notice shall
not impair the legality of such offset.
‘‘(9) A levy pursuant to the Internal Revenue Code
of 1986 shall take precedence over requests for offset re-
ceived from other agencies.’’.
(c) Section 3701(a) of title 31, United States Code,
is amended by adding at the end the following new para-
graph:
‘‘(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 In-
ternal Revenue Code of 1986.’’.
SEC. 202. HOUSE OF REPRESENTATIVES AS LEGISLATIVE
AGENCY.
(a) Section 3701(a) of title 31, United States Code,
is amended by adding the following new paragraphs after
paragraph (7):
‘‘(8) 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 legis-
lative 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.
‘‘(9) 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 approved by the Committee on Rules of the
House of Representatives.’’.
SEC. 203. EXEMPTION FROM COMPUTER MATCHING RE-
QUIREMENTS UNDER THE PRIVACY ACT OF
1974.
Section 552a(a) of title 5, United States Code, is
amended—
(1) in paragraph (2), by inserting ‘‘acting in an
individual, not a business capacity’’ after ‘‘resi-
dence’’;
(2) in paragraph (8)(B)—
(A) by striking ‘‘or’’ at the end of clause
(vi);
(B) by inserting ‘‘or’’ at the end of clause
(vii); and
(C) by adding after clause (vii) the follow-
ing 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. 204. 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 exe-
cuted 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
agency’’ 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
Treasury in connection with such reduction’’ adding
after ‘‘6402’’; and
(2) in subparagraph (B), by adding ‘‘and to of-
ficers and employees of the Department of the
Treasury in connection with such reduction’’ after
‘‘agency’’.
Subchapter B—Salary Offset Authority
SEC. 301. ENHANCEMENT OF SALARY OFFSET AUTHORITY.
Section 5514 of title 5, United States Code, is
amended—
(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 repay-
ment, shall participate in a computer match at
least annually of their delinquent debt records
with records of Federal employees to identify
those employees who are delinquent in repay-
ment of those debts. Matched Federal employee
records shall include, but shall not be limited
to, active Civil Service employees government-
wide, military active duty personnel, military re-
servists, United States Postal Service employ-
ees, and records of seasonal and temporary em-
ployees. The Secretary of the Treasury shall es-
tablish and maintain an interagency consortium
to implement centralized salary offset computer
matching, and promulgate regulations for this
program. Agencies that perform centralized sal-
ary offset computer matching services under
this subsection are authorized to charge a fee
sufficient to cover the full cost for such serv-
ices.’’;
(B) by redesignating paragraphs (3) and
(4) as paragraphs (4) and (5), respectively;
(C) by inserting after paragraph (2) the
following 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 er-
rors or delays in processing pay documents that
have occurred within the four pay periods preceding
the adjustment and to any adjustment that amounts
to $50 or less, provided that at the time of such ad-
justment, or as soon thereafter as practical, the indi-
vidual is provided written notice of the nature and
the amount of the adjustment and a point of contact
for contesting 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 United States House of Representatives,
and any court, court administrative office, or
instrumentality in the judicial or legislative
branches of government, and government cor-
porations.’’;
(2) by adding at the end of subsection (b) the
following 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 Rep-
resentatives.
‘‘(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 Administration 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 re-
ceived from other agencies.’’.
Subchapter C—Taxpayer Identifying
Numbers
SEC. 401. 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
amended—
(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 furnish to that agency such person’s taxpayer identify-
ing number.
‘‘(1) For purposes of this subsection, a person
is considered to be ‘doing business’ with a Federal
agency if the person is—
‘‘(A) a lender or servicer in a Federal
guaranteed or insured loan program;
‘‘(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 pen-
alty 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.
‘‘(2) Each agency shall disclose to the person
required to furnish a taxpayer identifying number
under this subsection its intent to use such number
for purposes of collecting and reporting on any de-
linquent amounts arising out of such persons’s rela-
tionship 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 petro-
leum 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 So-
cial Security Administration records to verify name, name
control, Social Security number, address, and date of
birth.’’.
SEC. 402. BARRING DELINQUENT FEDERAL DEBTORS FROM
OBTAINING FEDERAL LOANS OR LOAN GUAR-
ANTEES.
(a) Title 31, United States Code, is amended by add-
ing after section 3720A the following new section:
‘‘§ 3720B. Barring delinquent Federal debtors from
obtaining Federal loans or loan guaran-
tees
‘‘(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 as-
sistance 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 ex-
tension of Federal financial assistance to borrowers in de-
linquent status.
‘‘(b) The head of the agency may delegate the waiver
authority described in subsection (a) to the Chief Finan-
cial Officer of the agency. The waiver authority may be
redelegated only to the Deputy Chief Financial Officer of
the agency.
‘‘(c) For purposes of this section, ‘person’ means an
individual; or sole proprietorship, partnership, corpora-
tion, non-profit organization, or any other form of busi-
ness association.’’.
(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.’’.
Subchapter 
D—Expanding 
Collection 
Au-
thorities 
and 
Governmentwide 
Cross-
Servicing
SEC. 501. 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 Em-
ployment 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
in the executive, judicial or legislative branches of
(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
indebtedness owed, or to locate or recover as-
sets of, the United States Government. No head
of an agency may enter into a contract to locate
or recover assets of the United States held by
a State government or financial institution un-
less that agency has established procedures ap-
proved by the Secretary 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. 502. GOVERNMENTWIDE CROSS-SERVICING.
Section 3711 of title 31, United States Code, is
amended by adding at the end the following new sub-
section:
‘‘(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 oper-
ating 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, collec-
tion, compromise, and/or suspension or termination of col-
lection action. Non-tax claims referred or transferred
under this section shall be serviced, collected, com-
promised, and/or collection action suspended or termi-
nated 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 nontax claims referred
or transferred under this subsection. The heads of other
executive 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 collec-
tion 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 implement-
ing 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 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 subsection concerning delinquent claims may
be considered as costs pursuant to section 3717(e) of this
title.
‘‘(4) Notwithstanding any other law concerning the
depositing and collection of Federal payments, including
section 3302(b) of this title, agencies collecting fees may
retain the fees from amounts collected. Any fee charged
pursuant to this subsection shall be deposited into an ac-
count 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 implementa-
tion and operation of Governmentwide debt collection ac-
tivities. 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
equipment, other equipment, supplies, and furniture;
‘‘(B) personnel training and travel costs;
‘‘(C) other personnel and administrative costs;
‘‘(D) the costs of any contract for identification,
billing, or collection services; and
‘‘(E) reasonable costs incurred by the Secretary
of the Treasury, including but not limited to, serv-
ices and utilities provided by the Secretary, and ad-
ministration of the Account.
‘‘(5) Not later than January 1 of each year, there
shall be deposited into the Treasury as miscellaneous re-
ceipts, an amount equal to the amount of unobligated bal-
ances remaining in the Account at the close of business
on September 30 of the preceding year minus any part
of such balance that the executive department or agency
operating the debt collection center determines is nec-
essary 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.
‘‘(B) Subparagraph (A) shall not apply—
‘‘(i) to claims that—
‘‘(I) are in litigation or foreclosure;
‘‘(II) are eligible for disposition under the
loan sales programs of a Federal department or
agency;
‘‘(III) have been referred to a private col-
lection contractor for collection;
‘‘(IV) are being collected under internal
offset procedures;
‘‘(V) have been referred to the Department
of the Treasury, the Department of Defense,
the United States Postal Service, or disbursing
official of the United States designated by 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 agen-
cy 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 re-
quest 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
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
transferred claims to determine if additional collection ac-
tion 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 section.
‘‘(7) At the end of each calendar year, the head of
an executive, legislative, or judicial agency which, regard-
ing a claim owed to the agency, is required to report a
discharge of indebtedness as income under the 6050P of
title 26, United States Code, shall either complete the ap-
propriate form 1099 or submit to the Secretary of the
Treasury such information as is necessary for the Sec-
retary of the Treasury to complete the appropriate form
1099. The Secretary of the Treasury shall incorporate this
information into the appropriate form and submit the in-
formation 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
‘‘(B) to designate debt collection centers oper-
ated by other Federal agencies.’’.
SEC. 503. COMPROMISE OF CLAIMS.
Section 11 of the Administrative Dispute Resolution
Act (Public Law 101–552, 104 Stat. 2736, 5 U.S.C. 581
note) is amended by adding at the end thereof the follow-
ing sentence: ‘‘This section shall not apply to section 8(b)
of this Act.’’.
Subchapter E—Federal Civil Monetary
Penalties
SEC. 601. 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 1995, and at least once
every 4 years thereafter, by regulation adjust each civil
monetary penalty provided by law within the jurisdiction
of the Federal agency, except for any penalty under title
26, United States Code, by the inflation adjustment de-
scribed under section 5 of this Act and publish each such
regulation in the Federal Register.’’;
(2) in section 5(a), by striking ‘‘The adjustment
described under paragraphs (4) and (5)(A) of sec-
tion 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 In-
flation Adjustment Act of 1990 (as amended by subsection
(a)) may not exceed 10 percent of such penalty.
Subchapter F—Gain Sharing
SEC. 701. DEBT COLLECTION IMPROVEMENT ACCOUNT.
(a) Title 31, United States Code, is amended by in-
serting 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 Im-
provement Account’ (hereinafter referred to as the ‘Ac-
count’).
‘‘(2) The Account shall be maintained and managed
by the Secretary of the Treasury, who shall ensure that
programs are credited with the amounts described in sub-
section (b) and with allocations described in subsection
(c).
‘‘(b)(1) Not later than 30 days after the end of a
fiscal year, an agency other than the Department of Jus-
tice is authorized to transfer to the Account a dividend
not to exceed one percent of the debt collection improve-
ment amount as described in paragraph (3).
‘‘(2) Agency transfers to the Account may include
collections 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 col-
lection improvement amount’ means the amount by which
the collection of delinquent debt with respect to a particu-
lar 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 rec-
ommendations 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
agencies for qualified expenses. For agencies with fran-
chise funds, payments may be credited to subaccounts des-
ignated 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
servicing (including cross-servicing under section 502 of
the Debt Collection Improvement Act of 1955), automatic
data processing equipment acquisitions, delinquent debt
collection, measures to minimize delinquent debt, asset
disposition, 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 unappro-
priated balance in the account as determined by the Sec-
retary of the Treasury in consultation with agencies, shall
be transferred to the Treasury general fund as miscellane-
ous receipts.
‘‘(d) For direct loan and loan guarantee programs
subject to title V of the Congressional Budget Act of 1974,
amounts credited in accordance with subsection (c) shall
be considered administrative costs and shall not be in-
cluded in the estimated payments to the Government for
the purpose 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.’’.
Subchapter G—Tax Refund Offset Authority
SEC. 801. 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
Treasury.
‘‘(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. 802. 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:
‘‘(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 sec-
tion, the term ‘Federal agency’ means a department, agen-
cy, or instrumentality of the United States, and includes
a government corporation (as such term is defined in sec-
tion 103 of title 5, United States Code).’’.
SEC. 803. 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
person 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 accord-
ance 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 664(a) of the Act of August 13, 1935,
as amended (42 U.S.C. 664(a)) is amended—
(1) in paragraph (1), by adding at the end
thereof the following: ‘‘This subsection may be im-
plemented by the Secretary of the Treasury in ac-
cordance with section 3720A of title 31, United
States Code.’’; and
(2) in paragraph (2)(A), by adding at the end
thereof the following: ‘‘This subsection may be im-
plemented by the Secretary of the Treasury in ac-
cordance with section 3720A of title 31, United
States Code.’’.
Subchapter H—Definitions, Due Process
Rights, and Severability
SEC. 901. TECHNICAL AMENDMENTS TO DEFINITIONS.
Section 3701 of title 31, United States Code, is
amended—
(1) by amending subsection (a)(1) to read as
follows:
‘‘(1) ‘administrative offset’ means withholding
money payable by the United States (including
money 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 (a)(4) to read as
follows:
‘‘(4) ‘executive, judicial, or legislative agency’
means a department, agency, court, court adminis-
trative office, or instrumentality in the executive, ju-
dicial, or legislative branches of government, includ-
ing government corporations.’’;
(3) by amending subsection (b) to read as fol-
lows:
‘‘(b)(1) The term ‘claim’ or ‘debt’ means any amount
of money or property that has been determined by an ap-
propriate official of the Federal Government to be owed
to the United States by a person, organization, or entity
other than another Federal agency. A claim includes, with-
out 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 per-
son, and other amounts of money or property due the Gov-
ernment.
‘‘(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
Commonwealth of the Northern Mariana Islands, or the
Commonwealth of Puerto Rico.’’;
(4) by adding after subsection (d) the following
new subsection:
‘‘(e) 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.’’.
SEC. 902. 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.
Subchapter I—Reporting
SEC. 1001. MONITORING AND REPORTING.
(a) The Secretary of the Treasury, in consultation
with concerned Federal agencies, is authorized to establish
guidelines, including information on outstanding debt, to
assist agencies in the performance and monitoring of debt
collection activities.
(b) Not later than three years after the date of enact-
ment of this Act, the Secretary of the Treasury shall re-
port 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, as added
by section 502 of this Act.
(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 Comptrol-
ler General, the Secretary of the Treasury shall
prescribe 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.
TITLE II—JUSTICE DEBT
MANAGEMENT
Subchapter A—Private Attorneys
SEC. 1101. 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 re-
pealed.
Subchapter B—Nonjudicial Foreclosure
SEC. 1201. NONJUDICIAL FORECLOSURE OF MORTGAGES.
Chapter 176 of title 28 of the United States Code
is amended by adding at the end thereof the following:
‘‘Subchapter E—Nonjudicial Foreclosure
‘‘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 Gen-
eral 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 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.
‘‘(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,
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.
‘‘(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 1985 of title 7, United States Code, or regu-
lations 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
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
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, provided 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-
tion. An agency head may designate one or more fore-
closure trustees for the purpose of proceeding 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
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 forecloseure 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 the following:
‘‘(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
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.
‘‘(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 property 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
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—
‘‘(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.
‘‘(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
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-
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-
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
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.
‘‘(e) RIGHT OF REDEMPTION; RIGHT OF POSSES-
SION.—This subchapter shall preempt all Federal and
State rights of redemption, statutory, or common law.
Upon conclusion of the public auction of the security prop-
erty, no person shall have a right of redemption.
‘‘(f) PROHIBITION OF IMPOSITION OF TAX ON CON-
VEYANCE BY THE UNITED STATES OR AGENCY THERE-
OF.—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 fore-
closure trustee or the purchaser by any State or political
subdivision thereof.
‘‘§ 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—
‘‘(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.
‘‘§ 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.
‘‘§ 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) to pay the commission of the fore-
closure 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; and
‘‘(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) to pay the expense of any auctioneer em-
ployed by the foreclosure trustee, if any, except that
the commission payable to the foreclosure 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 quali-
fied foreclosure trustees or auctioneers;
‘‘(3) to pay for the costs of foreclosure, includ-
ing—
‘‘(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) 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 pre-
miums; 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
instrument or mortgage and interest thereon if pro-
vided for in the debt instrument or mortgage, pursu-
ant 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).
‘‘(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.
‘‘(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 III—IRS LEVY AUTHORITY
Subchapter A—Amendments To The Internal
Revenue Code of 1986
SEC. 1301. PROVISION FOR CONTINUOUS LEVY.
Section 6331 of the Internal Revenue Code of 1986
(26 U.S.C. 6331) is amended—
(1) by redesignating subsection (h) as sub-
section (i); and
(2) by inserting after subsection (g) the follow-
ing new subsection:
‘‘(h) CONTINUING LEVY ON NON-MEANS TESTED
FEDERAL PAYMENTS.—The effect of a levy on non-means
tested Federal payments to or received by a taxpayer shall
be continuous from the date such levy is first made until
such levy is released. Notwithstanding section 6334, such
levy shall attach up to 15 percent of any salary or pension
payment due to the taxpayer. For the purposes of this
subsection, the term ‘non-means tested Federal payment’
refers to a Federal payment for which eligibility is not
based on the income and/or assets of a payee.’’.
SEC. 1302. MODIFICATION OF LEVY EXEMPTION.
Section 6334 of the Internal Revenue Code of 1986
(26 U.S.C. 6334) is amended by adding at the end the
following new subsection:
‘‘(f) LEVY
ALLOWED
ON
CERTAIN
NON-MEANS
TESTED
FEDERAL
PAYMENTS.—Non-means 
tested
amounts—
‘‘(1) described in subsections (a)(7) and (a)(9)
of this section; and
‘‘(2) annuity or pension payments under the
Railroad Retirement Act and benefits under the
Railroad Unemployment Insurance Act described in
subsection (a)(6) of this section,
shall not be exempt from levy if the Secretary approves
the levy of such property.’’.
SEC. 1303. CONFIDENTIALITY AND DISCLOSURE OF RE-
TURNS AND RETURN INFORMATION.
(a) Section 6103 of the Internal Revenue Code of
1986 (26 U.S.C. 6103) is amended by adding at the end
of subsection (k) the following new paragraph:
‘‘(8) LEVIES ON CERTAIN GOVERNMENT PAY-
MENTS.—
‘‘(A) DISCLOSURE OF RETURN INFORMA-
TION IN LEVIES ON FINANCIAL MANAGEMENT
SERVICE.—The Secretary may disclose to offi-
cers and employees of the Financial Manage-
ment Service return information, including tax-
payer identity information, the amount of any
unpaid liability under this title (including pen-
alties and interest), and the type of tax and tax
period to which such unpaid liability relates, in
serving a notice of levy, or release of such levy,
with respect to any applicable government pay-
ment.
‘‘(B) RESTRICTION ON USE OF DISCLOSED
INFORMATION.—Return information disclosed
under subparagraph (A) may be used by offi-
cers and employees of the Financial Manage-
ment Service only for the purpose of, and to the
extent necessary in, transferring levied funds in
satisfaction of the levy, maintaining appropriate
agency records in regard to such levy or the re-
lease thereof, notifying the taxpayer and the
agency certifying such payment that the levy
has been honored, or in the defense of any liti-
gation ensuing from the honor of such levy.
‘‘(C) 
APPLICABLE
GOVERNMENT
PAY-
MENT.—For purposes of this paragraph, the
term ‘applicable government payment’ means
any non-means tested Federal payment, as de-
fined in section 6331(h) certified to the Finan-
cial Management Service for disbursement and
any other payment certified to the Financial
Management Service for disbursement and
which the Commissioner designates by pub-
lished notice.’’.
(b) Section 6301(p) of the Internal Revenue Code of
1986 (26 U.S.C. 6301(p)), is amended—
(1) in paragraph (3)(A), by inserting ‘‘(8)’’
after ‘‘(6),’’; and
(2) in paragraph (4), by inserting ‘‘(k)(8),’’
after ‘‘(j) (1) or (2),’’.
(c) Section 552a(a)(8)(B) of title 5, United States
Code, is amended by adding at the end the following new
clause:
‘‘(ix) matches performed incident to a
levy described in section 6103(k)(8) of the
Internal Revenue Code of 1986.’’.
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