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House of Representatives and Senate Proposed Legislation on Imposing Minimum Lifetime Limits on Health Plans[H.R. 3030 Christopher Reeve Health Insurance Reform Act of 1996; Jeffords Amendment No. 3679; Jeffords Amendment No. 3680; S. 1114 Lifetime Caps Discrimination Prevention Act]INTRODUCTION OF THE CHRISTOPHER REEVE HEALTH INSURANCE REFORM ACT
The SPEAKER pro tempore: Under a previous order of the House, the gentlewoman from California [Ms. Eshoo] is recognized for 5 minutes. Ms. ESHOO: Madam Speaker, today I introduced a bill in the House of Representatives, H.R. 3030, and it is entitled the Christopher Reeve Health Insurance Reform Act. I think that that name, rather than the number 3030, is a name that Americans know and respect. Christopher Reeve is an accomplished actor, someone that has appeared both on stage and screen in our Nation and, I believe, now is playing one of the great roles of his life as he advocates for the reforms that are necessary to our health system. And so I am very pleased that he would lend his name to this piece of legislation that seeks to reform a very, very important part of our health insurance system in our country. What this bill would do would be to lift the lifetime cap limit that exists in health insurance policies today. People that own life insurance policies may not be, and most are not, aware of the fine print that exists within that policy. Back in the 1970's, a $1 million cap was placed on the usage or the ceiling for health insurance policies. One million dollars in 1970 was a lot of money. Today $1 million, when a catastrophic incident happens in an individual's life, as it did and came into Christopher Reeves' life, $1 million will be used up very, very quickly. So I think it is important that that standard lifetime cap on individual health insurance policies be raised. That is what this bill accomplishes. Specifically, the legislation would prohibit insurers from placing limits on health insurance policies of less than $10 million, so those that insure themselves, their policy would have a ceiling of not $1 million, but $10 million. I think this is an important and necessary reform measure that needs to be accomplished. Last year, Madam Speaker, in our great Nation, 1,500 individuals exhausted their lifetime caps under their health insurance plans. Price Waterhouse estimates that between 1995 and the year 2000, an additional 10,000 Americans will reach their lifetime caps because they require continual medical care. This legislation will protect frequent users of health insurance from being stranded, because a $10 million limit better reflects today's medical inflation. The $1 million cap, as I said, was adopted in the early 1970's. That reflected very much the times. But that has never been adjusted with inflationary figures, and we know if there is anything that has inflated, that is the cost of health care. Lifting the lifetime caps. Madam Speaker, would also save the Federal Government money. Price Waterhouse estimates that removing lifetime caps would save the Medicaid Program $7 billion over 5 years. The American Academy of Actuaries estimates that lifting the lifetime caps will cause only a slight increase in premiums, about 1 percent to 2 percent, for employers. I think we can all agree that the $1 million lifetime cap is something that has outlived itself. That is to say that it does not fit with the times. This bill, H.R. 3030, will accomplish that. Let me close, Madam Speaker, by paying tribute to Christopher Reeves. As I said earlier, he is a recognized name by Americans because of how he distinguished himself on stage and screen. He has been a great advocate for the arts and the humanities, and now, today, he is moving into a new role, and that is being an advocate for the necessary, important reforms that we can bring to the health care system. His eloquent voice, I hope, will be matched by the eloquent act of this Congress. That is what I urge my colleagues to support and to cosponsor, so we can correct this in the law, and recognize that Americans will be helped, and that with that, we help move America forward. I salute Christopher Reeves for his courage, and I hope Members of Congress will try to match what he has exhibited by supporting this legislation, and indeed, making it the law.
Mr. MOAKLEY: Mr. Speaker, I yield 1\1/2\ minutes to the gentlewoman from California [Ms. Eshoo]. Ms. ESHOO: Mr. Speaker, I rise in opposition to this rule. I had hoped to have an amendment made in order which would raise the lifetime benefit cap on health insurance from $1 million to $10 million. My amendment would have benefited the 1,500 Americans a year who exceed the current cap, and some 10,000 Americans between now and the year 2000. It would save Medicaid $7 billion over 5 years, and the cost is small. The American Academy of Actuaries estimates a 1-percent to 2-percent increase in premiums. Mr. Speaker, a medical catastrophe could befall any one of us here in this Chamber and in this body, any one of our children, our parents, our loved ones, at any time. Many times I say to myself, "There but for the grace of God go I." Not being able to have sufficient health insurance coverage severely compounds the catastrophe. A point that needs to be made is the plight of the distinguished actor Christopher Reeve, who is well known to all of us. In honor of his courage, I introduced legislation upon which the amendment was based, named the Christopher Reeve Health Insurance Reform Act. Mr. Speaker, every day we see inflation adjustments for other needed services: for consumer products, for education. In some of these cases, the adjustment reflects the reality of current costs. In others, they offer protection to the American people. My amendment would have done both. I am disappointed not for myself, but for the people of this Nation that my amendment was not allowed under this rule.
104th CONGRESS
2d Session
H. R. 3030
To establish a minimum amount that may be applied as an aggregate
lifetime limit with respect to coverage under an employee health
benefits plan or a group health plan.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 6, 1996
Ms. Eshoo introduced the following bill; which was referred to the
Committee on Economic and Educational Opportunities, and in addition to
the Committee on Commerce, 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 establish a minimum amount that may be applied as an aggregate
lifetime limit with respect to coverage under an employee health
benefits plan or a group health plan.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Christopher Reeve Health Insurance
Reform Act of 1996''.
SEC. 2. LIMITATION ON LIFETIME AGGREGATE LIMITS FOR GROUP HEALTH PLANS.
(a) In General.--Except as provided in subsection (b), an employee
health benefit plan or a health plan issuer offering a group health
plan may not impose an aggregate dollar lifetime limit of less than
$10,000,000 with respect to coverage under the plan. The dollar amount
specified in the previous sentence shall be adjusted for inflation in
fiscal years after the fiscal year in which this section becomes
effective.
(b) Small Employer Exception.--Subsection (a) shall not apply to a
group health plan offered to or maintained for employees of a single
employer that employs 20 or fewer employees.
(c) Rule of Construction.--Subsection (a) shall not be construed as
prohibiting the application by an employee health benefit plan or a
health plan issuer offering a group health plan of any limits,
exclusions, or other forms of cost containment mechanisms with respect
to coverage under the plan other than the aggregate limit permitted
under subsection (a).
(d) Disclosure.--Any limits, exclusions, or other cost containment
mechanisms permitted under subsection (c) shall be disclosed under
section 3.
(e) Application of Section.--This section shall not apply to a
health maintenance organization that meets the requirements of title
XIV of the Public Health Service Act.
(f) Effective Date.--This section shall become effective with
respect to health plans on the date that is 2 years after the date of
the enactment of this Act.
SEC. 3. DISCLOSURE OF LIMITS AND EXCLUSIONS.
An employee health benefit plan or a health plan issuer offering a
group health plan shall disclose, as part of its solicitation and sales
materials and in a form and manner that is conspicuous and
understandable to a reasonable individual, any limits, exclusions, or
cost containment mechanisms with respect to coverage provided under the
plan.
SEC. 4. INCORPORATION OF DEFINITIONS AND OTHER TERMS.
For purposes of this Act--
(1) the definitions contained in section 2 of the Health
Insurance Reform Act of 1996 (H.R. 2893) shall apply to this
Act; and
(2) the provisions of title II and sections 303 and 304 of
such Health Insurance Reform Act of 1996 (relating to
enforcement, effective dates, and severability) shall apply to
the provisions of sections 2 and 3 of this Act in the same
manner as if they were parts of sections 103 and 105,
respectively, of such Act.
Thursday, April 18, 1996 (Purpose: To establish a minimum amount that may be applied as an aggregate lifetime limit with respect to coverage under an employee health benefit plan or a group health plan) Mr. JEFFORDS. Mr. President, I have an amendment at the desk.
The PRESIDING OFFICER: The clerk will report. The Senator from Vermont [Mr. Jeffords] proposes an amendment numbered 3679. Mr. JEFFORDS: Mr. President, I ask unanimous consent reading of the amendment be dispensed with. The PRESIDING OFFICER: Without objection, it is so ordered.
JEFFORDS AMENDMENT NO. 3679
Mr. JEFFORDS proposed an amendment to the bill S. 1028, supra; as
follows:
At the end of section 103, add the following new
subsection:
``(g) Limitation on Lifetime Aggregate Limits.--
``(1) In general.--Except as provided in paragraph (2), an
employee health benefit plan or a health plan issuer offering
a group health plan may not impose an aggregate dollar
lifetime limit of less than $10,000,000 (such amount to be
adjusted for inflation in fiscal years subsequent to the
fiscal year in which this subsection becomes effective) with
respect to coverage under the plan.
``(2) Small employers.--Paragraph (1) shall not apply to a
group health plan offered to or maintained for employees of a
single employer that employs 25 or fewer employees.
``(3) Rule of construction.--Paragraph (1) shall not be
construed as prohibiting the application by an employee
health benefit plan or a health plan issuer offering a group
health plan of any limits, exclusions, or other forms of cost
containment mechanisms with respect to coverage under the
plan other than the aggregate limit permitted under paragraph
(1).
``(4) Disclosure.--Any limits, exclusions, or other cost
containment mechanisms permitted under paragraph (3) shall be
disclosed as provided for in section 105(c).
``(5) Application of subsection.--This subsection shall not
apply to health maintenance organization that meets the
requirements of title XIV of the Public Health Service Act.
``(6) Effective date.--This paragraph shall become
effective with respect to health plans on the date that is 2
years after the date of enactment of this Act.''.
At the end of section 105, add the following new
subsection:
``(c) Disclosure of Limits and Exclusions.--An employee
health benefit plan or a health plan issuer offering a group
health plan shall disclose, as part of its solicitation and
sales materials and in a form and manner that is conspicuous
and understandable to a reasonable individual, any limits,
exclusions, or cost containment mechanisms with respect to
coverage provided under the plan.''.
Section 3711 of title 31, United States Code, is amended by
adding at the end the following new subsections:
``(g)(1) If a nontax debt or claim owed to the United
States has been delinquent for a period of 180 days--
``(A) the head of the executive, judicial, or legislative
agency that administers the program that gave rise to the
debt or claim shall transfer the debt or claim to the
Secretary of the Treasury; and
``(B) upon such transfer the Secretary of the Treasury
shall take appropriate action to collect or terminate
collection actions on the debt or claim.
``(2) Paragraph (1) shall not apply--
``(A) to any debt or claim that--
``(i) is in litigation or foreclosure;
``(ii) will be disposed of under an asset sales program
within 1 year after the date the debt or claim is first
delinquent, or a greater period of time if a delay would be
in the best interests of the United States, as determined by
the Secretary of the Treasury;
``(iii) has been referred to a private collection
contractor for collection for a period of time determined by
the Secretary of the Treasury;
``(iv) has been referred by, or with the consent of, the
Secretary of the Treasury to a debt collection center for a
period of time determined by the Secretary of the Treasury;
or
``(v) will be collected under internal offset, if such
offset is sufficient to collect the claim within 3 years
after the date the debt or claim is first delinquent; and
``(B) to any other specific class of debt or claim, as
determined by the Secretary of the Treasury at the request of
the head of an executive, judicial, or legislative agency or
otherwise.
``(3) For purposes of this section, the Secretary of the
Treasury may designate, and withdraw such designation of debt
collection centers operated by other Federal agencies. The
Secretary of the Treasury shall designate such centers on the
basis of their performance in collecting delinquent claims
owed to the Government.
``(4) At the discretion of the Secretary of the Treasury,
referral of a nontax claim may be made to--
``(A) any executive department or agency operating a debt
collection center for servicing, collection, compromise, or
suspension or termination of collection action;
``(B) a contractor operating under a contract for servicing
or collection action; or
``(C) the Department of Justice for litigation.
``(5) nontax claims referred or transferred under this
section shall be serviced, collected, or compromised, or
collection action thereon suspended or terminated, in
accordance with otherwise applicable statutory requirements
and authorities. Executive departments and agencies operating
debt collection centers may enter into agreements with the
Secretary of the Treasury to carry out the purposes of this
subsection. The Secretary of the Treasury shall--
``(A) maintain competition in carrying out this subsection;
``(B) maximize collections of delinquent debts by placing
delinquent debts quickly;
``(C) maintain a schedule of contractors and debt
collection centers eligible for referral of claims; and
``(D) refer delinquent debts to the person most appropriate
to collect the type or amount of claim involved.
``(6) Any agency operating a debt collection center to
which nontax claims are referred or transferred under this
subsection may charge a fee sufficient to cover the full cost
of implementing this subsection. The agency transferring or
referring the nontax 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 an activity from another account or from
revenue received from the procedure described under section
3720C of this title. Amounts charged under this subsection
concerning delinquent claims may be considered as costs
pursuant to section 3717(e) of this title.
``(7) 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
account to be determined by the executive department or
agency operating the debt collection center charging the
fee (in this subsection referred to in this section as the
`Account'). Amounts deposited in the Account shall be
available until expended to cover costs associated with the
implementation and operation of Governmentwide debt collection
activities.
Costs properly chargeable to the Account include--
``(A) the costs of computer hardware and software, word
processing and telecommunications equipment, and 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 services and utilities provided by the
Secretary, and administration of the Account.
``(8) Not later than January 1 of each year, there shall be
deposited into the Treasury as miscellaneous receipts an
amount equal to the amount of unobligated balances 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 necessary to cover or defray the costs
under this subsection for the fiscal year in which the
deposit is made.
``(9) To carry out the purposes of this subsection, the
Secretary of the Treasury may prescribe such rules,
regulations, and procedures as the Secretary considers
necessary.
``(h)(1) The head of an executive, judicial, or legislative
agency acting under subsection (a) (1), (2), or (3) of this
section to collect a claim, compromise a claim, or terminate
collection action on a claim may obtain a consumer report (as
that term is defined in section 603 of the Fair Credit
Reporting Act (15 U.S.C. 1681a)) or comparable credit
information on any person who is liable for the claim.
``(2) The obtaining of a consumer report under this
subsection is deemed to be a circumstance or purpose
authorized or listed under section 604 of the Fair Credit
Reporting Act (15 U.S.C. 1681b).''.
Mr. JEFFORDS: Mr. President, I know that we have had a difficult day today. We are having a difficult time trying to face the facts of life that the bill we are amending is a very important one, one which I have been an original cosponsor and one which part of the bill is mine. It is something that I worked very hard on. I believe it is an excellent job. However, I also believe that it has a very serious flaw in it. Thus, at the time the committee was meeting--and I want to point out that we have already made an exception today--the Finance Committee came and said, "Hey, we have a bunch of amendments." Most of them have been accepted. So we have already made several exceptions to the nonamendment rule. I want to remind people of that. Now, I submitted this amendment, which I have before this body, at the committee. I am a member of the committee, ranking Republican on the committee. At that time it was said, "Hey, we want to get out of here a unanimous bill. We may have problems." So I said, "OK, I will wait until the floor." So I come to the floor to offer an amendment, which I think about everybody agrees ought to be on it, and they said, "No. No amendments--except for the Finance Committee amendments." I understand that the ranking Republican and the chairman of the committee are bound by their commitment to no amendments, but nobody else is. Nobody else is in this body. So I hope Members would say he deserves to be heard. He has told me I could raise this amendment on the floor, and here it is. Now we will talk about what the amendment is and why we are here. The bill is one which provides, if a person is working for a business and changing jobs, or whatever else, has a health problem, that they are guaranteed an issuance of a policy or a continuance of a policy, notwithstanding the fact that they are sick. That is very important. This is an important breakthrough. That is why I supported the bill. However, what we were not aware of at the time and I brought to the committee's attention, but perhaps there was too little time to consider it, is the fact that there is no requirement now under the Federal law for any kind of a certain level of cap. Now, what could happen to us is, OK, we require the insurance company to take a sick person, but then the insurance company has the right to change its benefits, or it can say, "OK, we will lower the lifetime cap. So when we take you on, as soon as we pay whatever level of funds we reduce the limit to, you are gone, finished, you have no more coverage." Well, this amendment would rectify that and say we have to put--as a nationwide standard, with the exception, we admit it could cause some problems with small businesses, so we exempt 25 and under. We say you have to have $10 million of coverage. Why the $10 million? The $10 million lifetime cap is because the standard for the industry for many years was a million dollars. But that was 20 years ago. That million dollars is worth about $100,000 now. So we say, let us go back to the standard of 20 years ago and put on that cap. I want to point out that when we do this, we are obviously going to cause some costs. I will explain that later. But let us take a look at who we are talking about when we are talking about those covered under this provision. We are talking about those that are working for businesses, as I say, that get sick. All of a sudden they have some pretty big bills. Remember, some of the lifetime caps out there on these insurance plans are $50,000. That is one day in a hospital sometimes. So you go in there sick, and all of a sudden you have no coverage. We are trying to correct that. Now, let me point out to you, again, what we are talking about from a national policy perspective. What happens now to that sick person? That person is sick. They have been allowed to be covered and then chopped off because they have reached the lifetime limit of, say, $50,000. What happens? Under the law right now, in order for them to qualify for Medicaid, they cannot have resources beyond a certain level. So what we are talking about--and I will give some examples in a minute--is middle income people, or even higher income people, who suddenly are placed in a position where the only way they can get care for their loved one is to get rid of all of their assets and then they will qualify for Medicaid. So the household has to go through that--getting rid of its assets--and then they qualify for Medicaid. Should our policy in this Nation do that? I say no, and I am sure you will, too. This is not good policy. Let me talk a little about some of the people involved. I think all of you have probably heard the ads of Christopher Reeve, or watched them on television, or read the editorials in the newspapers and the stories that have covered this. If you want an example as to whether or not it could happen to you, here is "Superman," who was involved in a very serious accident. He was thrown off his horse and he becomes a C- 2, which is a broken neck. He has lost the functions below the neck level, without some assistance. He has a cap of $1.2 million, and it is costing him $400,000 a year. In 3 years, he will be past that cap. Let us take Jim Brady, who is another one--not an example of the lifetime cap, because he is on worker's compensation, but he had a head injury caused by a bullet when he was with President Reagan. He would be far beyond a million-dollar cap, to say nothing of a $50,000 cap at this time. Let me talk about some of the people that do not have the resources of a Christopher Reeve, or the protection of the law with respect to worker's comp, like Jim Brady. Let me go through some of these so that you understand better what kind of people we are talking about. This story is about Donelle and Kyle Meniketti, from the Washington Post. For 4 years, Donelle Meniketti waged a tremendous fight to save her son Kyle from suffering death or severe brain damage as a result of a rare breathing disorder that struck when he was 18 days old. It says: When he sleeps, said the Livermore, CA, woman, his airway collapses and his brain does not tell him to breathe. He needs a breathing machine at night and an oxygen monitor. When he sleeps, he must have someone there all the time to make sure he is breathing. Home nursing care costs alone can be $10,000 a month, and even though Mrs. Meniketti has spent sleepless nights watching over her son rather than pay for a nurse, his medical care is making constant claims on the health insurance plan of her husband Keith. As these claims mounted, they face the terrible prospect of the child's expenses soon reaching the million-dollar cap. He is 4 years old. So far he has escaped it. But they will be forced into Medicaid if this amendment does not succeed. Then there is Heather Fraser. I wish you would have seen her. She appeared at our press conference the other day. She is 23 years old and suffers from cystic fibrosis. She has suffered already many times. She does not know from one day to the next whether she is going to have one of these respiratory infections. She has had chronic problems of all different kinds and will continue to do so. She graduated from college, is 23, and is looking forward to the future. What is going to happen? The average cost per year to treat a moderate case of cystic fibrosis is $46,000. More severe cases cost roughly $79,000. To date, Heather's medical expenses have exceeded $800,000. Research is going on, but right now she will be beyond the cap and on Medicaid. Another one is Lauren Yandell of Williston, VT. Her policy has a cap of $1 million. Lauren has a son who has suffered from a chronic and very rare neurological disease since birth. Because of medications and frequent surgery and personal care, his medical expenses are extremely high--last year alone, over $70,000. He is only 5 years old. At this rate, Lauren believes her son will exhaust the limit within 10 years. Barbara Church, in Shelburne, VT--these are Vermonters, but there are people like this all over the Nation. Barbara has a 12-year-old son who was in a car accident 3 years ago. He has a very similar condition to Christopher Reeve. Since the accident, medical expenses have ranged from $20,000 to $50,000 annually. Her policy through her employer does not have a cap, and she is wary because if she loses her job, as it is under this law now, and she tries to go somewhere, she will not have the cap, or it may be only $50,000. There is no protection for her. These are the kinds of real-life situations. Is it appropriate for us to say that the way these people should get their continuous care is to get rid of all their assets and live in poverty for the rest of their lives, as long as their child survives? No, that is not what the policy of this Nation ought to be. This amendment would make sure that those occurrences do not occur. I hope that people will take into consideration that this is an amendment which will correct the deficiencies in the bill before us by saying that there will be a cap out there, which will be sufficient to take care of the expenses of these people to whom we are saying, "You have a good deal because you can continue your coverage." Right now, the expectations are not there, and they can be changed at any moment. So I want to urge you to consider that this is something that is important to the bill before us. It is an amendment to the bill before us. It is to correct the serious problem in the bill before us. What we are talking about here, as far as the impact, is, obviously, if somebody is paying some money, somebody is going to have to shell out some money somewhere else. If they are being paid to have their health taken care of--first of all, let me review for a moment the kinds of costs involved with these actions. Look at this chart. It will show you about children with hemophilia. There are about 7,000 children with hemophilia, not many in terms of 250 million. The average cost per year per person is $100,000. Life expectancy is 40 years. Lifetime cost per person for hemophilia is $4 million. Do you want to put them all under Medicaid? Cystic fibrosis, the case I talked about earlier; the prevalence is about 4,000 in this country. That is not many relative to the huge population. It is easy to spread around the cost. The average cost per person per year is $18,000, and the average life expectancy is 30 years; $2.5 million. This is the kind of situation which we are talking about. Let us take a look. There are other examples. Spinal injury and head trauma, you can also see where the costs are--around $5 million for a lifetime situation. Now let us review the question of why this is going to be a reasonable cost with respect to the existing situation. Again, insurance--the main purpose of insurance is to spread costs over a larger population so that the cost is small to the employer and to the employee with the insurance policy. But because of the huge number for which we spread it, it makes it reasonable for a family to afford. Let me remind all of my colleagues that we all have no lifetime cap. None of the Federal employees have anything to worry about. We are all covered, whatever the costs are. In addition to that, as this chart shows, we are one of the 20 percent in this country that have no limits whatsoever. There are those that have more than $1 million, about 6 percent. The biggest group is that one that has been carrying the $1 million forward for the last 20 years as long they have been in business. That is 46 percent. So already we are at over 70 percent. Then we go on down. I will be candid with you. The lower, of course, your lifetime caps, especially when you get to the really low levels, you obviously start covering more things than normally, and you end up with more cost. But the thing I am trying to make sure you understand is the cost that is spread around is not that high. Let us take a look at what some of the people say about what those costs would be. First of all, let me run through some of these that have given us some costs. The American Academy of Actuaries, for instance, has given us a cost analysis which demonstrates what we are talking about. Let me go to Price Waterhouse first. Price Waterhouse is a noted accounting firm, which we often look to give us accurate information, estimates that the Jeffords amendment would save $7 billion in Medicaid costs--$7 billion--over 7 years. And more importantly, the cost to businesses would be somewhere in the area of--especially those in the larger areas--would be somewhere around 1 percent of their premiums. Let us go to another one. We have several on this. Also the National Taxpayers Union; let me tell the people on my side of the aisle what the National Taxpayers Union says. They are supporting it. They say it will be scored as a direct spending reduction in the Medicaid Program by approximately $2.8 billion over a 5-year period. In addition, $2.1 billion may be saved through State and local Medicaid Programs. How can you say that this is not something that should be done when we know what it is going to do to help us address the budget problems which we have? Do you know what that amount of money means? That is going to be replaced by the insurance premiums? But it does not even cover the money that is drained out of all those families that went out for expenditures on health care. The Consumers Union, the other side of the aisle usually looks forward to the lifetime cap amendment which would significantly benefit consumers. The Consumers Union agrees that, if health insurance policies have lifetime caps, it would be no lower than $10 million to the people exposed. They say it is important and essential. Then, of course, we have to look to the Congressional Budget Office and we have CBO's estimates. This came to us today. The Congressional Budget Office says the amendment would increase the Federal deficit. They are the only ones who say it is a cost after you balance out the deductions for taxes--$120 million. So by the worst-case scenario we have an offset for this. You could have a tiny, itty-bitty negative impact of $120 million over 5 years. So it is almost a no-brainer. It is hard to find out why anybody is against it. This is the Congressional Budget Office again. The proposal would initially raise private insurance premiums by 0.4 percent. You want to keep in mind that, if you are an employer, you have options. You can increase your premiums, or you can increase your deductibles. So it may not even cost the businessman anything. So again, the Congressional Budget Office says that we have something here which either costs nothing or something which is going to save the Treasury billions of dollars over 7 years. So it is just hard for me to figure out why there can be any opposition to do this. Not only that. But Senator Kennedy, and I think Senator Kassebaum, have suggested that this is a great amendment and that it ought to be on some other bill. What other bill? Why not the one it is most relevant to? Why not on the one with which we are trying to make sure is helping people with their transfer from job to job? I understand the complexity of trying to get a bill through without any amendments on it. But I remind everyone that we have already granted exceptions to the Finance Committee, and I asked the committee that be one of those exemptions because I offered it at the committee level, and they said, "No way. Take it to the floor." I come to the floor. They say, "Sorry. No amendments even though it is relevant to the bill." It will save the middle-income people billions of dollars. It will not cost employers hardly anything, and it will establish for the first time a good policy in this situation so that we do not drive people through poverty to qualify for Medicaid. Mr. President, I yield the floor.
Mr. SIMON addressed the Chair. The PRESIDING OFFICER: The Senator from Illinois. Privilege of the Floor Mr. SIMON: Mr. President, I ask unanimous consent that Jayson Slotnik, a fellow on my staff, be permitted to be on the floor during the action on S. 1028. The PRESIDING OFFICER: Without objection, it is so ordered. Mr. SIMON: Mr. President, I rise in support of Senator Jeffords' amendment. I am blessed to be a cosponsor of that. He mentioned the case of Christopher Reeves. Christopher Reeves and an actor named Robin Williams, when they were students, made a pact that they would support one another if they ever faced this kind of an emergency. Robin Williams, as an actor who makes a great deal of money, is able to help Christopher Reeves. But what about the thousands of Americans who do not have a Robin Williams? It is very interesting. Senator Jeffords talked about the cost. We changed the Federal insurance. In other words, all Federal employees, including everyone here in the Senate right now--all of us--had some changes. We had two major changes. The most costly was adding mental health coverage for all Members--not only Members but all Federal employees. Do you know what that cost? It costs 27 cents each pay period. That is the additional mental health coverage cost. Twice a month we pay 27 cents. I tried to find out what taking the $1 million cap off cost us, and nobody knows what it cost. It is such a small amount. My guess is, if you took that chart that Senator Jeffords has there of companies that have a $1 million limit and the 22 percent that do not have any limit, that you would find really no difference in the rates charged; no pattern of difference. You are talking about something that does not affect very many Americans. So the total cost is very limited. I talked earlier today--four reporters stopped me out here, as they stop all of us. I said to the reporters, when they were asking me about this, "Do you know what kind of limits you have on your insurance?" Well, Adam Clymer of the New York Times knew, but the other three reporters did not know. I think very few Americans have any idea what kind of limit they have. They just know they are covered by insurance or they are not. We should not impoverish people before we protect them. That is what we do with Medicaid. I think the Jeffords amendment makes a great deal of sense, and I am proud to support it and proud to be a cosponsor. Mr. KENNEDY addressed the Chair. The PRESIDING OFFICER: The Senator from Massachusetts. Mr. KENNEDY: Mr. President, it grieves me greatly to rise to indicate my reservation about this amendment on this particular bill. I know how hard the Senator has worked on this project, and in any other forum I would be a strong supporter. I am very familiar with Chris Reeves. He is a resident of my State out in the Berkshires. He was a strong supporter of mine in the last campaign, a personal friend as well. I am very familiar with the real challenges--first of all, the extraordinary courage of this absolutely incredible human being. It is what I think of first when I think of Christopher Reeves. As he has pointed out so well, the human tragedy of others who are facing these kinds of situations is incredible and incredibly difficult, and all of us are familiar with stories of families being bankrupt because of these ceilings which are out there. Most of them were about $1 million just until very recently, some of them as high as $2 million. I agree with the Senator, and it pains me to oppose him on this particular measure. I was mindful of that during his presentation. I ask the Senator what his disposition is, whether he might take a voice vote here. Does he prefer that we make a tabling motion, or is he willing to take---- Mr. JEFFORDS: That, of course, is the Senator's option. I cannot stand here representing 100 groups who support this amendment and taking into consideration the tremendous effort that Christopher Reeves has put into this personally to try and convince this body to do this reasonable thing, and not, unfortunately, from the Senator's perspective, ask for a recorded vote. I do not mean to embarrass the Members on this, but I just remind them that I was told I could come to the floor and offer it, and I am being precluded. But I understand that all got changed as we went along the way, and I do not hold any grudges against anybody. I understand you have to stand by that no amendment outside of the Finance Committee. I just would suggest to my colleagues that they are not bound by any such thing and would urge them to vote in favor of the amendment. Incidentally, I have now heard something which occurs when you get people nervous here, that there has been a rush to find a new cost from CBO, and apparently they are ready to rush over and claim I do not have enough money. Well, I am always ready for those circumstances, and we are rushing over with an amendment which will put a sufficient amount of money in it so I do not get into a budget problem. If they are not around, if we can just get the yeas and nays without going through the necessity of me amending the amendment, that is fine, too. Mr. SIMON: Will my colleague yield? The PRESIDING OFFICER: The Senator from Massachusetts has the floor. Mr. KENNEDY: I want to be very clear. I had joined with the chairman of the committee in indicating I would oppose amendments on this that virtually were not unanimously accepted. I should like very much to accept it. As I mentioned earlier in the day, there are many different features which I should like to add. I can remember very well I had a son who was in an NIH program, and they terminated the NIH support. It was $3,200 for the treatment they had to give those children every 3 weeks for 3 days for 2 years, and I was able to afford it. Mothers and families were out there saying, well, my child only gets 5 months, 6 months. What chance does that child have to live? I am very mindful of these situations. I feel very strongly about them, and I feel very sympathetic, too. But I am also mindful that we need this legislation, and we have made a commitment at the time which I hope the Senator from Vermont will understand. I joined with the chairman of the committee to that effect. But I will be glad to join with him at another time. But we are going to abide at least by the assurances we gave to the other members of the committee. At the appropriate time I will, or the chairman of the committee can, make a motion to table. Mr. SIMON: Will the Senator from Massachusetts yield? Mr. KENNEDY: I will be glad to yield. Mr. SIMON: I cannot speak for the chief sponsor, but when you ask for a voice vote, the Senator from Massachusetts has a strong voice. If he will be fairly silent in that voice vote, I would be willing to take a voice vote, but I cannot speak for the Senator from Vermont. Mrs. KASSEBAUM: Mr. President, if I may, I, too, am very sympathetic to the issue that Senator Jeffords is addressing. I think we all recognize--I believe the figures are almost 1,500 Americans at least that would benefit from this legislation. It is more than just the enormous financial cost. It is an emotional and difficult issue. However, our agreement was not just with the Finance Committee. Unless there is a consensus of support on both sides of the aisle, then we have to oppose the amendments. I think the Senator from Vermont knows there are many in the business community, particularly the small business community, that have been opposed to this, who worry a great deal about the implications of it and have said they would oppose the whole bill if amendments like this one would be added. We felt that the underlying amendment offered so much that we then had to also oppose those other amendments which I think have much merit, and it is with regret that I would, too, have to oppose it. I certainly am willing to have a rollcall vote. I think it will be up to the sponsor of the legislation to determine that. Mr. KENNEDY: I make a motion to table the Jeffords amendment. Mr. JEFFORDS: I would like to amend my amendment first to have plenty of money in there so nobody can---- Mr. KENNEDY: I am not going to make that argument. That is fine. Mr. JEFFORDS: All right. Mr. KENNEDY: If it is all right with Senator Kassebaum. I have no objection to either doing it -- we are not making a point of order on the money or questioning it at this time. Amendment No. 3680 to Amendment No. 3679 (Purpose: To reduce delinquencies and to improve debt-collection activities government-wide, and for other purposes) Mr. JEFFORDS: I want to preclude that objection from being registered, so, Mr. President, I have an amendment to my amendment. The PRESIDING OFFICER: The Senator has the right to modify his amendment. Is this an amendment to the amendment? Mr. JEFFORDS: Mr. President, it is an amendment to the amendment. I will ask to have it reported. The PRESIDING OFFICER: The clerk will report. The legislative clerk read as follows: The Senator from Vermont [Mr. Jeffords] proposes an amendment numbered 3680 to amendment No. 3679. Mr. JEFFORDS: Mr. President, I ask unanimous consent that reading of the amendment be dispensed with or we will be here the rest of the evening. The PRESIDING OFFICER: Without objection, it is so ordered.
JEFFORDS AMENDMENT NO. 3680
Mr. JEFFORDS proposed an amendment to amendment No. 3679 proposed by
him to the bill S. 1028, supra; as follows:
(Purpose: To reduce delinquencies and to improve debt-collection
activities government-wide, and for other purposes)
Strike pages 4, 5, and 6 of amendment No. 3679, and insert:
SEC. 101. SHORT TITLE.
This Act may be cited as the ``Debt Collection Improvement
Act of 1995''.
SEC. 102. EFFECTIVE DATE.
(a) Except as provided in subsection (b), the provisions 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. Government-wide 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.
Sec. 903. Scope.
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 AUTHORITY.
(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 follows:
``(b) Before collecting a claim by administrative offset,
the head of an executive, legislative, or judicial agency
must either--
``(1) adopt regulations on collecting by administrative
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 collecting 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 subsection (d); and
(4) by inserting after subsection (b) the following new
subsection:
``(c)(1)(A) Except as provided in subparagraphs (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 authorized to offset the
amount of a payment which a payment certifying agency has
certified to the disbursing official for disbursement by an
amount equal to the amount of a claim which a creditor agency
has certified to the Secretary 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 Secretary
of the Treasury before such agency's disbursing officials
offset such claims.
``(C) Payments certified by the Department of Education
under a program administered by the Secretary of Education
under Title IV of the Higher Education Act of 1965, as
amended, shall not be subject to offset under this
subsection.
``(2) Neither the disbursing official nor the
payment certifying agency shall be liable--
(A) for the amount of the offset on the basis that the
underlying obligation, represented by the payment before the
offset was taken, was not satisfied; or
(B) for failure to provide timely notice under paragraph
(8).
``(3)(A) Notwithstanding any other provision of law
(including sections 207 and 1631(d)(1) of the Act of August
14, 1935 (42 U.S.C. 407 and 1383(d)(1)), section 413(b) of
Public Law 91-173 (30 U.S.C. 923(b)) and section 14 of the
Act of August 29, 1935 (45 U.S.C. 231m)), all 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 receive under
Federal benefit programs cited under subparagraph (A) within
a 12-month period shall be exempt from offset under this
subsection. In applying the $10,000 exemption, the disbursing
official shall:
``(i) Apply a prorated amount of the exemption to each
periodic benefit payment to be made to debtor during the
applicable 12-month period; and
``(ii) Consider all benefit payments made during the
applicable 12-month period which are exempt from offset under
this subsection as part of the $10,000 exemption.
``For purposes of the preceding sentence, the amount of a
periodic benefit payment shall be the amount after any
reduction or deduction required under the laws authorizing
the program under which such payment is authorized to be made
(including any reduction or deduction to recover any
overpayment under such program).
``(C) The Secretary of the Treasury shall exempt means-
tested programs when notified by the head of the respective
agency. The Secretary may exempt other payments from offset
under this subsection upon the written request of the head of
a payment certifying agency. A written request for exemption
of other payments must provide justification for the exemption
under the standards prescribed by the Secretary. Such standards
shall give due consideration to whether offset would tend to
interfere substantially with or defeat the purposes of the
payment certifying agency's program.
``(D) The provisions of section 205(b)(1) or 1631(c)(1) of
the Social Security Act shall not apply to any offset
executed pursuant to this section against benefits authorized
by either title II or title XVI of the Social Security Act
respectively.
``(4) The Secretary of the Treasury is authorized to charge
a fee sufficient to cover the full cost of implementing this
subsection. The fee may be collected either by the
retention of a portion of amounts collected pursuant to
this subsection, or by billing the agency referring or
transferring the claim. Fees charged to the agencies shall
be based on actual offsets completed. Fees charged under
this subsection concerning delinquent claims may be
considered as costs pursuant to section 3717(e) of this
title. Fees charged under this subsection shall be
deposited into the `Account' determined by the Secretary
of the Treasury in accordance with section 3711(g) of this
title, and shall be collected and accounted for in
accordance with the provisions of that 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 payment in
accordance with section 552a of title 5, United States Code,
even when the payment has been exempt from offset. Where
payments are made electronically, the Secretary is authorized
to obtain the current address of the debtor/payee from the
institution receiving the payment. Upon request by the
Secretary, the institution receiving the payment shall report
the current address of the debtor/payee to the 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 consult with
the heads of affected agencies in the development of such
rules, regulations and procedures.
``(7) (A) Any Federal agency that is owed, by a named
person a past-due legally enforceable non-tax debt that is
over 180 days delinquent (other than any past-due support),
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 subparagraph
(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 normal 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 description 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 requesting 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
payment, the disbursing official shall take reasonable steps,
as determined by the Secretary of the Treasury, to provide
the notice to the payee not later than the date on which the
payee is otherwise scheduled to receive the payment, or as
soon as practical thereafter, but no later than the date of
the offset. Notwithstanding the preceding sentence, the
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 received from
other agencies.
(c) Section 3701(a) of title 31, U.S.C., is amended by
adding at the end the following new paragraph:
``(8) `non-tax claim' means any claim from any agency of
the Federal Government other than a claim by the Internal
Revenue Service under the Internal Revenue Code of 1986.''.
SEC. 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 the United States Government), the United States
House of Representatives shall be considered to be a
legislative 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 REQUIREMENTS 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 ``residence'';
(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 following new clause:
``(viii) matches for administrative offset or claims
collection pursuant to subsection 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''; and
(2) in section 3325(a)(3), by inserting ``or pursuant to
payment intercepts or offsets pursuant to section 3716 or
3720A, or pursuant to levies executed under 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(1)(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 officers 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 repayment, 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 repayment 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 reservists, United States
Postal Service employees, and records of seasonal and
temporary employees. The Secretary of the Treasury shall
establish and maintain an interagency consortium to implement
centralized salary offset computer matching, and promulgate
regulations for this program. Agencies that perform
centralized salary offset computer matching services under
this subsection are authorized to charge a fee sufficient to
cover the full cost for such services.'';
(B) by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5), respectively;
(C) by inserting after paragraph (2) the 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 errors 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 adjustment,
or as soon thereafter as practical, the individual is
provided written notice of the nature and the amount of the
adjustment and a point of contact for contesting such
adjustment.'';
(D) by amending paragraph (5)(B) (as redesignated) 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 corporations.'';
(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 Representatives.
``(4) For purposes of his 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.''.
(3) by adding after subsection (c) the following new
subsection:
``(d) A levy pursuant to the Internal Revenue Code of 1986
shall take precedence over requests for offset received from
other agencies.''.
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 (Pub. L. 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 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 identifying
number.
``(1) For purposes of this subsection, a person is
considered to be `doing business' with a Federal agency if
the person is--
``(A) is 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 insurance;
``(C) a contractor of the agency;
``(D) assessed a fine, fee, royalty or penalty by that
agency;
``(E) in a relationship with a Federal agency 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 of purposes of collecting and
reporting on any delinquent amounts arising out of such
person's relationship with the government.
``(3) For purposes of this subsection--
``(A) The term `taxpayer identifying number' has the
meaning given such term in section 6109 of title 26, United
States Code.
``(B) The term `person' means an individual, sole
proprietorship, partnership, corporation, non-profit
organization, or any other form of business association, but
with the exception of debtors owing claims resulting from
petroleum pricing violations does not include debtors under
third party claims of the United States.
``(d) Access to Social Security Numbers.--Notwithstanding 5
U.S.C. 552a, creditor agencies to which a delinquent claim is
owed, and their agents, may match their debtor records with
the Social Security Administration records to verify name,
name control, Social Security number, address, and date of
birth.''.
SEC. 402. BARRING DELINQUENT FEDERAL DEBTORS FROM OBTAINING
FEDERAL LOANS OR LOAN GUARANTEES.
(a) Title 31, United States Code, is amended by adding
after section 3720A the following new section:
``SEC. 3720B. BARRING DELINQUENT FEDERAL DEBTORS FROM
OBTAINING FEDERAL LOANS OR LOAN GUARANTEES.
``(a) Unless waived by the head of the agency, no person
may obtain any Federal financial assistance in the form of a
loan or a loan guarantee if such person has an outstanding
Federal non-tax debt which is in a delinquent status, as
determined under the standards prescribed by the Secretary
of the Treasury, with a Federal agency. Any such person
may obtain additional Federal financial assistance only
after such delinquency is received, pursuant to these
standards. This section shall not apply to loans or loan
guarantees where a statute specifically permits extension
of Federal financial assistance to borrowers in delinquent
status.
``(b) The head of the agency may delegate the waiver
authority described in (a) to the Chief Financial 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, corporation,
nonprofit organization, or any other form of business
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 Authorities 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 Employment
Reform Act of 1994 (P.L. 103-387) is repealed.
(c) Section 631 of the Tariff Act of 1930, as amended (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 government, including
government corporations.''; and
(B) by adding at the end the following new subsection:
``(d) Sections 3711(f) and 3716-3719 of this title do not
apply to a claim or debt under, or to an amount payable
under, the Internal Revenue Code of 1986;
(2) by amending section 3711(f) to read as follows:
``(f)(1) When trying to collect a claim of the Government,
the head of an executive or legislative agency may disclose
to a consumer reporting agency information from a system of
records that an individual is responsible for a claim if
notice required by section 552a(e)(4) of title 5, United
States Code, indicates that information in the system may
be disclosed to a consumer reporting agency.
``(2) The information disclosed to a consumer reporting
agency shall be limited to--
``(A) information necessary to establish the identity of
the individual, including name, address and taxpayer
identifying number;
``(B) the amount, status, and history of the claim; and
``(C) the agency or program under which the claim arose.'';
and
(3) in section 3718--
(A) in subsection (a), by striking the first sentence and
inserting instead the following: ``Under conditions the head
of an executive, legislative 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 assets 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 unless that agency has
established procedures approved 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 subsection:
``(g)(1) At the discretion of the head of an executive,
judicial or legislative agency, referral of a non-tax claim
may be made to any executive department or agency operating a
debt collection center for servicing and collection in
accordance with an agreement entered into under paragraph
(2). Referral or transfer of a claim may also be made to the
Secretary of the Treasury for servicing, collection,
compromise, and/or suspension or termination of collection
action. Non-tax claims referred or transferred under this
section shall be serviced, collected, compromised, and/or
collection action suspended or terminated in accordance with
existing statutory requirements and authorities.
``(2) Executive departments and agencies operating debt
collection centers are authorized to enter into agreements
with the heads of executive, judicial, or legislative
agencies to service and/or collect non-tax claims referred or
transferred under this subsection. The heads of other
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 collection
centers to obtain debt collection services from those
agencies.
``(3) Any agency to which non-tax claims are referred or
transferred under this subsection is authorized to charge a
fee sufficient to cover the full cost of implementing this
subsection. The agency transferring or referring the non-tax
claim shall be charged the fee, and the agency charging the
fee shall collect such fee by retaining the amount of the fee
from amounts collected pursuant to this subsection. Agencies
may agree to pay through a different method, or to fund the
activity from an account. 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
account to be determined by the executive department or
agency operating the debt collection center charging the fee
(hereafter referred to in this section as the `Account').
Amounts deposited in the Account shall be available until
expended to cover costs associated with the implementation
and operation of government-wide debt collection activities.
Costs properly chargeable to the Account include, but are not
limited to:
``(A) the costs of computer hardware and software, 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, services and
utilities provided by the Secretary, and administration of
the Account.
``(5) Not later than January 1 of each year, there shall be
deposited into the Treasury as miscellaneous receipts, an
amount equal to the amount of unobligated balances 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 necessary to cover or defray the costs
under this subsection for the fiscal year in which the
deposit is made.
``(6)(A) The head of an executive, legislative or judicial
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 collection
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
Secretary of the Treasury for administrative offset;
``(VI) have been retained by an executive agency in a debt
collection center; or
``(VII) have been referred to another agency for
collection;
``(ii) to claims which may be collected after the 180 day
period in accordance with specific statutory authority or
procedural guidelines, provided that the head of an
executive, legislative or judicial agency provides notice of
such claims to the Secretary of the Treasury; and
``(iii) to other specific class of claims as determined by
the Secretary of the Treasury at the request of the head of
an agency or otherwise.
``(C) The head of an executive, legislative or judicial
agency shall transfer to the Secretary of the Treasury all
non-tax claims on which the agency has ceased collection
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
action is warranted. The Secretary may, in accordance with
section 6050P of title 26, United States Code, report to
the Internal Revenue Service on behalf of the creditor
agency any claims that have been discharged within the
meaning of such section.
``(7) At the end of each calendar year, the head of an
executive, legislative or judicial agency which, regarding a
claim owed to the agency, is required to report a discharge
of indebtedness as income under the 6050P of title 26, United
States Code, shall either complete the appropriate form 1099
or submit to the Secretary of the Treasury such information
as is necessary for the Secretary of the Treasury to complete
the appropriate form 1099. The Secretary of the Treasury
shall incorporate this information into the appropriate form
and submit the information to the taxpayer and Internal
Revenue Service.
``(8) To carry out the purposes of this subsection, the
Secretary of the Treasury is authorized
``(A) to prescribe such rules, regulations and procedures
as the Secretary deems necessary; and
``(B) to designate debt collection centers operated 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 following 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 PENALTIES FOR
INFLATION.
(a) The Federal Civil Penalties Inflation Adjustment Act of
1990 (Pub. L. 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 described 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 section 4'' and inserting
``The inflation adjustment''; and
(3) by adding at the end the following new section:
``Sec. 7. Any increase to a civil monetary penalty
resulting 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 Inflation
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 inserting
after section 3720B the following new section:
``Sec. 3720C. Debt Collection Improvement Account
``(a)(1) There is here by established in the Treasury a
special fund to be known as the `Debt Collection Improvement
Account' (hereinafter referred to as the `Account').
``(2) The Account shall be maintained and managed by the
Secretary of the Treasury, who shall ensure that programs are
credited with the amounts described in subsection (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 Justice is
authorized to transfer to the Account a dividend not to
exceed one percent of the debt collection improvement amount
as described in paragraph (3).
(2) Agency transfers to the Account may include collections
from
``(A) salary, administrative and tax referral offsets;
``(B) automated levy authority;
``(C) the Department of Justice; and
``(D) private collection agencies.
``(3) For purposes of this section, the term `debt
collection improvement amount' means the amount by which the
collection of delinquent debt with respect to a particular
program during a fiscal year exceeds the delinquent debt
baseline for such program for such fiscal year. The Office of
Management and Budget shall determine the baseline from which
increased collections are measured over the prior fiscal
year, taking into account the recommendations made by the
Secretary of the Treasury in consultation with creditor
agencies.
``(c)(1) The Secretary of the Treasury is authorized to
make payments from the Account solely to reimburse agencies
for qualified expenses. For agencies with franchise funds,
payments may be credited to subaccounts designated for debt
collection.
``(2) For purposes of this paragraph, the term `qualified
expenses' means expenditures for the improvement of tax
administration and agency debt collection and debt recovery
activities including, but not limited to, account servicing
(including cross-servicing under Section 502 of the Debt
Collection Improvement Act of 1995), 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 paragraph (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 practical after the end of third fiscal
year after which appropriations are made pursuant to this
section, and every 3 years thereafter, any unappropriated
balance in the account as determined by the Secretary of the
Treasury in consultation with agencies, shall be transferred
to the Treasury general fund as miscellaneous 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 section (c) shall be considered
administrative costs and shall not be included in the
estimated payments to the Government for the purpose of
calculating the costs of such programs.
``(e) The Secretary of the Treasury shall prescribe such
rules, regulation, 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 DISBURSING
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 include
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 requesting 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 identifying 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 section, the
term `Federal agency' means a department, agency, or
instrumentality of the United States, and includes a
government corporation (as such term is defined in section
103 of title 5, United States Code).''.
SEC. 803. EXPANDING AUTHORITY TO COLLECT PAST-DUE SUPPORT.
(a) Subsection 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 accordance with
regulations issued pursuant to subsections (b) and (d),
notify the Secretary of the Treasury at least once a year of
the amount of such debt.''.
(b) Section 664(a) of the Act of August 13, 1935, as
amended (42 U.S.C. section 664(a)) is amended--
(1) in paragraph (1), by adding at the end thereof the
following: ``This subsection may be implemented by the
Secretary of the Treasury in accordance 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 implemented by the
Secretary of the Treasury in accordance 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 administrative office, or
instrumentality in the executive, judicial or legislative
branches of government, including government corporations.'';
(3) by amending subsection (b) to read as follows:
``(b)(1) The term `claim' or `debt' means any amount of
money 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 Federal agency. A claim includes,
without limitation, money owed on account of loans insured
or guaranteed by the Government, non-appropriated funds,
over-payments, any amount the United States is authorized
by statute to collect for the benefit of any person, and
other amounts of money or property due the Government.
``(2) For purposes of section 3716 of this title, the term
`claim' also includes an amount of money or property owed by
a person to a State, the District of Columbia, American
Samoa, the United States Virgin Islands, the Commonwealth of
the Northern Mariana Islands, or the Commonwealth of Puerto
Rico.'';
(3) 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 administrative offset.
``(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
remainder of this title, and the amendments made by this
title, or its application shall not be affected.
SEC. 903. SCOPE.
This Act, the Federal Claims Collection Act of 1966, as
amended, the Debt Collection Act of 1982, as amended, and the
remaining provisions of chapter 37 of title 31, United States
Code shall not be deemed to apply to claims or debts
involving foreign persons. For purposes of this section,
`foreign person' means any person, sole proprietorship,
partnership, corporation, organization or other entity that
is an agency, department or instrumentality of a government
of a foreign country, is owned, controlled, operated or
managed by a government of a foreign country or any agency,
department or instrumentality thereof, is a citizen of a
foreign country, is organized under the laws of a foreign
country, or has its principal place of business outside the
United States, and `foreign country' means a country other
than the United States.
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 three years after the date of enactment of
this Act, the Secretary of the Treasury shall report to the
Congress on collection services provided by Federal agencies
or entities collecting debt on behalf of other Federal
agencies under the authorities contained in section 3711(g)
of title 31, United States Code, 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 Comptroller General, the Secretary of
the Treasury shall prescribe regulations requiring the head
of each agency with outstanding non-tax claims to prepare 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 ``Director'' and
inserting instead ``Secretary''; and
(2) in subsection (b), by striking ``Director'' and
inserting instead ``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 (Pub.
L. 99-578, 100 Stat. 3305) are hereby repealed.
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.
``SEC. 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 defined in section
104 of title 5, United States Code (except that it shall not
include the General Accounting Office);
``(C) a military department as defined in section 102 of
title 5, United States Code; and
``(D) a wholly owned government corporation as defined in
section 9101(3) of title 31, United States Code.
``(2) `agency head' means the head and any assistant head
of an agency, and may upon the designation 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 adverse 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 incorporated by
reference therein and any instrument or agreement amending or
modifying a debt instrument.
``(5) `file' or `filing' means docketing, indexing,
recording, or registering, or any other requirement for
perfecting a mortgage or a judgment.
``(6) `foreclosure trustee' means an individual,
partnership, association, or corporation, or any employee
thereof, including a successor, appointed by the agency head
to conduct a foreclosure sale pursuant to this subchapter.
``(7) `mortgage' means a deed of trust, deed to secure
debt, security agreement, or any other form of instrument
under which any interest in real property, 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 pursuant to
Federal or State statutes that provide for official recording
of deeds, mortgages and judgments, and that establish the
effect of such records as notice to creditors, purchasers,
and other interested persons.
``(9) `owner' means nay person who has an ownership
interest in property and includes heirs, devisees, executors,
administrators, and other personal representatives, and
trustees of testamentary trusts if the owner of record is
deceased.
``(10) `sale' means a sale conducted pursuant to this
subchapter, unless the context requires otherwise.
``(11) `security property' means real property, or any
interest in real property including leaseholds life estates,
reversionary interests, and any other estates under
applicable State law that secure a mortgage.
``SEC. 3402. RULES OF CONSTRUCTION.
``(a) In General.--If an agency head elects to proceed
under this subchapter, this subchapter shall apply and the
provisions of this subchapter shall govern in the event of a
conflict with any other provision of Federal law or State
law.
``(b) Limitation.--This subchapter shall not be construed
to supersede or modify the operation of--
``(1) the lease-back/buy-back provisions under section 1985
of title 7, United States Code, or regulations 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, including 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.
``SEC. 3403. ELECTION OF PROCEDURE.
``(a) Security Property Subject to Foreclosure.--An agency
head may foreclose a mortgage upon the breach of a covenant
or condition in a debt instrument or mortgage for which
acceleration or foreclosure is authorized. An agency head may
not institute foreclosure proceedings on the mortgage under
any other provision 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 property in any
manner authorized by law.
``SEC. 3404. DESIGNATION OF FORECLOSURE TRUSTEE.
``(a) In General.--An agency head shall designate a
foreclosure trustee who shall supersede any trustee
designated 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 foreclosure trustee--
``(A) an officer or employee of the agency; or
``(B) an individual who is a resident of the State in which
the security property is located or
``(C) a partnership, association, or corporation, 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 inconsistent with this
subchapter.
``(c) Method of Designation.--An agency head shall
designate the foreclosure trustee in writing. The foreclosure
trustee may be designated by name, title or position. An
agency head may designate one or more foreclosure trustees
for the purpose of proceeding with multiple foreclosures or a
class of foreclosures.
``(d) Availability of Designation.--An agency head may
designate such foreclosure trustees as the agency head deems
necessary to carry out the purposes of this subchapter.
``(3) Multiple Foreclosure Trustees Authorized.--An agency
head may designate multiple foreclosure trustees for
different tracts of a secured property.
``(f) Removal of Foreclosure Trustees; Successor
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 foreclosure sale in
accordance with this subchapter.
``SEC. 3405. NOTICE OF FORECLOSURE SALE; STATUTE OF
LIMITATIONS.
``(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 periods during
which there is in effect--
``(A) a judicially imposed stay of foreclosure; 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 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 assignees of the
mortgagor of record;
``(3) the street address or location of the security
property, and a generally accepted designation used to
describe the security property, or so much thereof as is to
be offered for sale, sufficient to identify the property to
be sold;
``(4) the date of the mortgage, the office in which the
mortgage is filed, and the location of the filing of the
mortgage;
``(5) the default or defaults upon which foreclosure
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.
``SEC. 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 authorized for
filing a notice of an action concerning real property
according to the law of the State where the security property
is located or, if none, in the manner authorized by section
3201 of this chapter.
``(b) Notice by Mail.--
``(1) At least 21 days prior to the date of the foreclosure
sale, the notice set forth in section 3405 shall be sent by
registered or certified mail, return 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 recorded pursuant to subsection (a);
``(B) to all debtors, including the mortgagor, assignees of
the mortgagor and guarantors of the debt instrument;
``(C) to all persons having liens, interests or
encumbrances of record upon the security property, as the
record appears on the date that the notice of foreclosure
sale is recorded pursuant 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 address as shown in the mortgage
record of the agency. 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.--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 foreclosure
sale shall instead be posted at least 21 days prior to the
sale at the courthouse of any county or counties in which
the property is located and at the place where the sale is
to be held.
``SEC. 3407. CANCELLATION OF FORECLOSURE SALE.
``(a) In General.--At any time prior to the foreclosure
sale, the foreclosure trustee shall cancel the sale--
``(1) if the debtor or the holder of any subordinate
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 absence of any acceleration;
``(B) performs any other obligation which would have been
required in the absence of any acceleration; and
``(C) pays or tenders all costs of foreclosure incurred for
which payment from the proceeds of the sale would be allowed;
or
``(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 subsection (a)(2)
if, within the preceding 12 months, the debtor 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).
``SEC. 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.
``SEC. 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 security
property are sold.
``(b) Bidding Requirements.--Written one-price sealed bids
shall be accepted by the foreclosure trustee, if submitted by
the agency head or other persons for entry by announcement by
the foreclosure trustee at the sale. The sealed bids shall be
submitted in accordance with the terms set forth in the
notice of foreclosure sale. The agency head or any other
person may bid at the foreclosure sale, even if the agency
head or other person previously submitted a written one-price
bid. The agency head may bid a credit against the debt due
without the tender or payment of cash. The foreclosure
trustee may serve as auctioneer, or may 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 instead postpone the foreclosure sale
for not fewer than 9 nor more than 31 days, by serving notice
that the foreclosure sale has been postponed to a specified
date, and the notice may include any revisions the
foreclosure trustee deems appropriate. The notice shall be
served by publication, mailing, and posting in accordance
with subsections 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 data of the foreclosure
sale.
``(d) Liability of Successful Bidder Who Fails To Comply.--
The foreclosure trustee may require a bidder to make a cash
deposit before the bid is accepted. The amount or percentage
of the cash deposit shall be stated by the foreclosure
trustee in the notice of foreclosure sale. A successful
bidder at the foreclosure sale who fails to comply with the
terms of the sale shall forfeit the cash deposit or, at the
election of the foreclosure trustee, shall be liable to the
agency on a subsequent sale of the property for all net
losses incurred by the agency as a result of such failure.
``(e) Effect of Sale.--Any foreclosure sale held in
accordance with this subchapter shall be conclusively
presumed to have been conducted in a legal, fair and
commercially reasonable manner. The sale price shall be
conclusively presumed to constitute the reasonably equivalent
value of the security property.
``SEC. 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
execute 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
covenants to the purchaser. The execution of the
foreclosure trustee's deed shall have the effect of
conveying all of the right, title, and interest in the
security property covered by the mortgage. Notwithstanding
any other law to the contrary, the foreclosure trustee's
deed shall be a conveyance of the security property and
not a quitclaim. No judicial proceeding shall be required
ancillary or supplementary to the procedures provided in
this chapter to establish the validity of the conveyance.
``(b) Death of Purchaser Prior to Consummation of Sale.--If
a purchaser dies before execution and delivery of the deed
conveying the security property to the purchaser, the
foreclosure trustee shall execute and deliver the deed to the
representative of the purchaser's estate upon payment of the
purchase price in accordance with the terms of sale. Such
delivery to the representative of the purchaser's estate
shall have the same effect as if accomplished during the
lifetime of the purchaser.
``(c) Purchaser Considered Bona Fide Purchaser 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 conveyed to the purchaser.
``(d) Possession by Purchaser; Continuing Interests.--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 security 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 Possession.--This
subchapter shall preempt all Federal and State rights of
redemption, statutory of common law. Upon conclusion of the
public auction of the security property, no person shall have
a right of redemption.
``(f) Prohibition of Imposition of Tax on Conveyance by the
United States or Agency Thereof.--No tax, or fee in the
nature of a tax, for the transfer of title to the security
property by the foreclosure trustee's deed shall be imposed
upon or collected from the foreclosure trustee or the
purchaser by any State or political subdivision thereof.
``SEC. 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 prepare an affidavit
stating--
``(1) the date, time, and place of sale;
``(2) the date of the mortgage, the office in which the
mortgage is filed, and the location of the filing of the
mortgage;
``(3) the persons served with the notice of foreclosure
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 accordance 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 subsection
(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 submitted for
filing in relation to the foreclosure of the security
property under this subchapter.
``SEC. 3412. EFFECT OF SALE.
``A sale conducted under this subchapter to a bona fide
purchaser shall bar all claims upon the security property
by--
``(1) any person to whom the notice of foreclosure sale was
mailed as provided in this subchapter who claims an interest
in the property subordinate to that of the mortgage, and the
heir, devisee, 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 statutory 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.
``SEC. 3413. DISPOSITION OF SALE PROCEEDS.
``(a) Distribution of Sale Proceeds.--The foreclosure
trustee shall distribute the proceeds of the foreclosure sale
in the following order--
``(1)(A) 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 collected, 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 employed 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
qualified foreclosure trustees or auctioneers;
``(3) to pay for the costs of foreclosure, including--
``(A) reasonable and necessary advertising costs and
postage incurred in giving notice pursuant to section 3406;
``(B) mileage for posting notices and for the foreclosure
trustee's or auctioneer's attendance at the sale at the rate
provided in section 1921 of title 28, United States Code,
for mileage by the most reasonable road distance;
``(C) reasonable and necessary costs actually incurred in
connection with any search of title and lien records; and
``(D) necessary costs incurred by the foreclosure trustee
to file documents;
``(4) to pay valid real property tax liens or assessments,
if required by the notice of foreclosure sale;
``(5) to pay any liens senior to the mortgage, if required
by the notice of foreclosure sale;
``(6) to pay service charges and advancements for taxes,
assessments, and property insurance premiums;
``(7) to pay late charges and other administrative costs
and the principal and interest balances secured 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 provided for in the debt instrument or
mortgage, 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 authorized 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 payments made pursuant to paragraph (1).
``(2) If the person to whom such surplus is to be
paid cannot be located, or if the surplus available is
insufficient to pay all claimants and the claimants cannot
agree on the distribution of the surplus, that portion of
the sale proceeds may be deposited by the foreclosure
trustee with an appropriate official authorized under law
to receive funds under such circumstances. 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.
``SEC. 3414. DEFICIENCY JUDGMENT.
``(a) In General.--If after deducting the disbursements
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 security
property, counsel for the United States may commence an
action or actions against any or all debtors to recover the
deficiency, unless specifically prohibited by the mortgage.
The United States is also entitled to recover any amount
authorized by section 3011 and costs of the action.
``(b) Limitation.--Any action commenced to recover the
deficiency shall be brought within 6 years of the last sale
of security property.
``(c) Credits.--The amount payable by a private mortgage
guaranty insurer shall be credited to the account of the
debtor prior to the commencement of an action for any
deficiency owed by the debtor. Nothing in this subsection
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 subsection (i); and
(2) by inserting after subsection (g) the following 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 to 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, or that is not a loan.''.
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 RETURNS 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 Payments.--
``(A) Disclosure of return information in levies on
Financial Management Service.--The Secretary may disclose to
officers and employees of the Financial Management Service
return information, including taxpayer identity information,
the amount of any unpaid liability under this title
(including penalties 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 payment.
``(B) Restriction on use of disclosed information.--Return
information disclosed under subparagraph (A) may be used by
officers and employees of the Financial Management 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 release thereof, notifying the taxpayer and the agency
certifying such payment that the levy has been honored, or in
the defense of any litigation ensuing from the honor of such
levy.
``(C) Applicable Government Payment.--For purposes of this
paragraph, the term `applicable government payment' means any
non-means tested Federal payment, as defined in section
6331(h) certified to the Financial Management Service for
disbursement and any other payment certified to the Financial
Management Service for disbursement and which the
Commissioner designates by published 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.''.Mr. JEFFORDS: What this does, Mr. President, is take an amount of money which has been verified by CBO, which has yet to be utilized and also verified by OMB, that will cover any conceivable cost of this bill, to make sure someone does not come back and say I failed to cover any cost of that. I understand there will be maybe a motion to table. Let me just urge my colleagues to please remember what we are trying to do here. You have 100 disability groups of people who are in favor of this amendment. You have estimates which indicate that we have eliminated all the small businesses 25 or under. We have not pulled lifetime caps. We have gone to $10 million, which is exactly the value of what they were many years ago when the million dollar cap was in fashion. What we are trying to do is prevent people going into bankruptcy in order to qualify for Medicaid in order to take care of their sick ones. It also improves this bill because this bill would allow an insurance company--although they are forced to take somebody on the policy, they can lower the lifetime caps and chop them off after a year again, and then they are back out on the street looking for care and back onto Medicaid. With that, I would suffer the indulgence of a tabling motion at this time. The PRESIDING OFFICER: If there be no further debate, the question is on agreeing to the amendment. The amendment (No. 3680) was agreed to. Mrs. KASSEBAUM: Does any Senator wish further debate on the amendment, as amended? If not, I move to table the amendment of the Senator from Vermont. The PRESIDING OFFICER: The Senator from Kansas has moved to table the amendment of the Senator from Vermont, as amended. Mr. JEFFORDS: Mr. President, I ask for the yeas and nays. The PRESIDING OFFICER: Is there a sufficient second? There is a sufficient second. The yeas and nays were ordered. Mrs. KASSEBAUM: Mr. President, I ask if there could be about a 5-minute delay to notify everybody to come. Mr. JEFFORDS: Mr. President, I suggest the absence of a quorum. The PRESIDING OFFICER: The clerk will call the roll. The bill clerk proceeded to call the roll. Mrs. KASSEBAUM: Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER (Mr. Bennett): Without objection, it is so ordered. Mrs. KASSEBAUM: Mr. President, I ask that we now proceed to vote on the motion to table the amendment of the Senator from Vermont. The yeas and nays have been ordered. The PRESIDING OFFICER: The question is on agreeing to the motion to lay on the table the amendment of the Senator from Vermont, No. 3679. The yeas and nays have been ordered. The clerk will call the roll. The bill clerk called the roll. Mr. LOTT: I announce that the Senator from Colorado [Mr. Campbell] and the Senator from Florida [Mr. Mack] are necessarily absent. The PRESIDING OFFICER: Are there any other Senators in the Chamber desiring to vote? The result was announced--yeas 56, nays 42, as follows:
YEAS--56
Abraham
Baucus
Campbell So the motion to lay on the table the amendment (No. 3679) was agreed to.
Thursday, July 31, 1997 By Mr. JEFFORDS (for himself, Mr. Rockefeller, Ms. Mikulski, Mr. Inouye, Mr. Daschle, Mr. Kerry, Mrs. Boxer, Mrs. Feinstein, Mr. Dodd, Mr. Wellstone, Mr. Harkin, and Mr. Hollings): S. 1114. A bill to impose a limitation on lifetime aggregate limits imposed by health plans; to the Committee on Labor and Human Resources. THE LIFETIME CAPS DISCRIMINATION PREVENTION ACT Mr. JEFFORDS: Mr. President, I am pleased to introduce legislation with Senator Rockefeller that will ensure that health insurance policies cover at least $10 million in lifetime benefits. This bill, the Lifetime Caps Discrimination Prevention Act, will help fulfill the promise of real health security and is an appropriate sequel to last year's Kassebaum-Kennedy health insurance reform legislation. Through our reform legislation, families can be spared the loss of their health insurance when they need it the most. All of us are at risk of incurring high-cost injuries or illnesses-- the very kind of situations that most people want covered by their health insurance polices. A $1 million cap was adequate when it was established by the insurance industry in the early 1970's. Since then, however, inflation has sent medical costs skyrocketing, and today, thousands of Americans have hit their payment ceiling. A majority of those who exceed their lifetime limits must turn to public assistance. While waiting for a determination of eligibility, many individuals are forced to go without medical treatment. This legislation would keep within the private sector those who most need health coverage and would keep them off Medicaid. Most of us assume that our health insurance will be there when we need it most--when we are very sick. Unfortunately, many people do not read the fine print in their insurance policies. The average lifetime cost of care for a person who has a spinal cord injury and is ventilator dependent--just like Christopher Reeve--is over $5 million. For someone like Jim Brady, who had a severe head trauma injury, the average cost is about $4 million, and that is in 1990 dollars. As Christopher Reeve said, "I didn't think it could happen to Superman." The Lifetime Caps Discrimination Prevention Act fulfills a promise of real health security by raising the lifetime cap from the typical limit of $1 million--a dollar figure selected in the 1970's--to $5 million in 1998, and then in 2002 to $10 million, which is the real dollar equivalent today. Currently, the vast majority of health maintenance organizations and approximately one-quarter of employer-sponsored health plans have no aggregate lifetime limit. The Federal Employee Health Benefit plans removed lifetime maximums in 1995. According to a Price Waterhouse study, employers with a workforce of 250 employees would experience a mere 1 percent increase in premiums. This is a small price to pay for real health insurance security for people covered in the group market. Our legislation excludes employers with fewer than 20 employees. The Lifetime Caps Discrimination Prevention Act was originally introduced as an amendment to the Kassebaum-Kennedy health insurance legislation passed during the 104th Congress. The amendment enjoyed strong bipartisan support, but it was defeated due to the strategy of opposing amendments to that bill. We believe that this legislation is worthy of reintroduction in the 105th Congress, and we are hopeful that it will attract even broader support as another step that can be taken in strengthening Americans' health security. Over 150 national health-related groups, including the American Medical Association, the American Cancer Society, the United Cerebral Palsy Association, and the National Association of Professional Insurance Agents, have expressed their support for our efforts to increase lifetime limits on health insurance benefits. The insurance industry standard of $1 million, adopted in 1970, was right for those times but today is financially unrealistic. Today, the time has come to protect thousands of individuals from suffering the emotional, medical, and financial consequences of exceeding their caps by adopting a new lifetime limit for health insurance coverage. Mr. ROCKEFELLER: Mr. President, I rise today with my friend, Senator Jim Jeffords, of Vermont to introduce a bill that will help families avoid an additional tragedy in their already traumatized lives. We are introducing a bill to raise lifetime limits on insurance policies to $10 million. But, first, I want to recognize and applaud Chairman Jeffords' extraordinary leadership on this issue--last Congress and this year. With his leadership, we will succeed in raising the lifetime cap on health benefits to $10 million. People buy health insurance to protect themselves and their families when they get sick. They spend their lives paying for it. They count on it. But each year, 1,500 people have their insurance taken away, just when they need it most and for the very reason why they bought the insurance in the first place, because they are gravely ill or in need to extensive medical care or some other extraordinary reason. These 1,500 people run into the lifetime limit on their health insurance policy. When that happens, the insurance company won't spend a single cent to help that person cope with his or her health care costs. But the need for medical care continues. And the bills keep coming. The $1 million limit, first used by insurance companies to give their customers peace of mind and security in the 1970's, is widely out-of-date and hugely insufficient. According to Price Waterhouse, had the limit kept pace with medical inflation, it would be more than $10 million today. In fact, a $1 million health insurance policy in 1970 would buy you about $100,000 in health benefits in 1997. When a family runs into the lifetime limit, they have no choice but to spend themselves into poverty in order to qualify for Medicaid. This drains families of their assets, their self-esteem and costs Medicaid several billion dollars in additional health care costs. Many people have to give up everything--their house, their savings, and their kids' education in order to get the medical care they need through Medicaid. In my home State of West Virginia, Mike Davis hit his $1 million lifetime cap in 1994. That was 14 years after his son Todd was hit by a drunk driver, causing severe brain injury. Before Todd qualified for Medicaid, his father received a $90,000 bill for his son's care--a bill he's still struggling to pay. This can happen to anyone. Catastrophic injury, chronic illness or significant disability are arbitrary. They hit young and old, rich and poor. You plan for routine illness, but no one plans for this kind of illness or injury. At least if you have a health insurance policy without a $1 million cap, you can get the medical treatment you need. Most people don't even know if their insurance policy has a lifetime cap. The insurance companies don't talk about them. The caps are stuck in the fine print. People assume that if you buy insurance, you're covered. Unfortunately, that's not the case. About 60 percent of employer-sponsored health plans have lifetime caps. Several modifications were made to this year's bill. We include an exemption for small businesses. We give all businesses 2 years to comply. We phase the cap in--first raising it to $5 million and then lifting it to $10 million by the year 2002. We're talking about a roughly 1 percent increase in premiums, according to Price-Waterhouse. That's it. The Federal Employees Health Benefits Program doesn't allow participating insurers to set lifetime limits on their basic health insurance polices for Federal employees. Members of Congress don't have lifetime caps. We know our health insurance will be there when we need it. All Americans should have that same security. Raising the cap is something we can and should do. It's the right thing to do. It's good policy and it can save Medicaid up to $7 billion over the next 7 years. Mr. President, the idea behind insurance is simple: no matter how sick you are, you're covered. It's about basic decency and fairness.
105th CONGRESS
1st Session
S. 1114
To impose a limitation on lifetime aggregate limits imposed by health
plans.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 31, 1997
Mr. Jeffords (for himself, Mr. Rockefeller, Ms. Mikulski, Mr. Inouye,
Mr. Daschle, Mr. Kerry, Mrs. Boxer, Mrs. Feinstein, Mr. Dodd, Mr.
Wellstone, Mr. Harkin, and Mr. Hollings) introduced the following bill;
which was read twice and referred to the Committee on Labor and Human
Resources
_______________________________________________________________________
A BILL
To impose a limitation on lifetime aggregate limits imposed by health
plans.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Lifetime Caps Discrimination
Prevention Act''.
SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974.
(a) In General.--Subpart B of part 7 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974 (as added by
section 603(a) of the Newborns' and Mothers' Health Protection Act of
1996 and amended by section 702(a) of the Mental Health Parity Act of
1996) is amended by adding at the end the following new section:
``SEC. 713. LIMITATION ON LIFETIME AGGREGATE LIMITS.
``(a) In General.--A group health plan and a health insurance
issuer providing health insurance coverage in connection with a group
health plan, may not impose an aggregate dollar lifetime limit of less
than--
``(1) with respect to the first 3 plan years after the
effective date of this section, $5,000,000; and
``(2) with respect to subsequent plan years, $10,000,000;
with respect to benefits payable under the plan or coverage.
``(b) Small Employers.--
``(1) In general.--Subsection (a) shall not apply to any
group health plan (and group health insurance coverage offered
in connection with a group health plan) offered to or
maintained for employees of a small employer.
``(2) Small employer.--For purposes of paragraph (1), the
term `small employer' means an employer who normally employed
fewer than 20 employees on a typical business day during the
preceding calendar year and who employs fewer than 20 employees
on the first day of the plan year.
``(3) Application of certain rules in determination of
employer size.--For purposes of this subsection--
``(A) Application of aggregation rule for
employers.--Rules similar to the rules under
subsections (b), (c), (m), and (o) of section 414 of
the Internal Revenue Code of 1986 shall apply for
purposes of treating persons as a single employer.
``(B) Employers not in existence in preceding
year.--In the case of an employer which was not in
existence throughout the preceding calendar year, the
determination of whether such employer is a small
employer shall be based on the number of employees that
it is reasonably expected such employer will normally
employ on a typical business day in the current
calendar year.
``(C) Predecessors.--Any reference in this
subsection to an employer shall include a reference to
any predecessor of such employer.
``(c) Definition.--In this section, the term `aggregate dollar
lifetime limit' means, with respect to benefits under a group health
plan or health insurance coverage, a dollar limitation on the total
amount that may be paid with respect to such benefits under the plan or
health insurance coverage with respect to an individual or other
coverage unit.''.
(b) Clerical Amendment.--The table of contents in section 1 of such
Act, as amended by section 603 of the Newborns' and Mothers' Health
Protection Act of 1996 and section 702 of the Mental Health Parity Act
of 1996, is amended by inserting after the item relating to section 712
the following new item:
``Sec. 713. Limitation on lifetime aggregate limits.''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to plan years beginning on or after the date that is
2 years after the date of enactment of this Act.
SEC. 3. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT RELATING TO THE
GROUP MARKET.
(a) In General.--Subpart 2 of part A of title XXVII of the Public
Health Service Act (as added by section 604(a) of the Newborns' and
Mothers' Health Protection Act of 1996 and amended by section 703(a) of
the Mental Health Parity Act of 1996) is amended by adding at the end
the following new section:
``SEC. 2706. LIMITATION ON LIFETIME AGGREGATE LIMITS.
``(a) In General.--A group health plan and a health insurance
issuer providing health insurance coverage in connection with a group
health plan, may not impose an aggregate dollar lifetime limit of less
than--
``(1) with respect to the first 3 plan years after the
effective date of this section, $5,000,000; and
``(2) with respect to subsequent plan years, $10,000,000;
with respect to benefits payable under the plan or coverage.
``(b) Small Employers.--
``(1) In general.--Subsection (a) shall not apply to any
group health plan (and group health insurance coverage offered
in connection with a group health plan) offered to or
maintained for employees of a small employer.
``(2) Small employer.--For purposes of paragraph (1), the
term `small employer' means an employer who normally employed
fewer than 20 employees on a typical business day during the
preceding calendar year and who employs fewer than 20 employees
on the first day of the plan year.
``(3) Application of certain rules in determination of
employer size.--For purposes of this subsection--
``(A) Application of aggregation rule for
employers.--Rules similar to the rules under
subsections (b), (c), (m), and (o) of section 414 of
the Internal Revenue Code of 1986 shall apply for
purposes of treating persons as a single employer.
``(B) Employers not in existence in preceding
year.--In the case of an employer which was not in
existence throughout the preceding calendar year, the
determination of whether such employer is a small
employer shall be based on the number of employees that
it is reasonably expected such employer will normally
employ on a typical business day in the current
calendar year.
``(C) Predecessors.--Any reference in this
subsection to an employer shall include a reference to
any predecessor of such employer.
``(c) Definition.--In this section, the term `aggregate dollar
lifetime limit' means, with respect to benefits under a group health
plan or health insurance coverage, a dollar limitation on the total
amount that may be paid with respect to such benefits under the plan or
health insurance coverage with respect to an individual or other
coverage unit.''.
(b) Effective Date.--The amendment made by this section shall apply
with respect to plan years beginning on or after the date that is 2
years after the date of enactment of this Act.
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