PUBLIC LAW
97-365—OCT.
25, 1982 96 STAT. 1749
Public Law 97-365
97th Congress
An Act
To increase the efficiency of Government-wide efforts to collect debts owed the United
States and to provide additional procedures for the collection of debts owed the
United States.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress
assembled.
That this Act may
be cited as the
"Debt
Collection Act of 1982".
AMENDMENTS TO THE PRIVACY ACT
SEC.
2. (a) Section 552a(b) of title 5, United States Code, is
amended—
(1) by striking out "or" at the end of paragraph (10);
(2) by striking out the period at the end of paragraph (11) and
inserting in lieu thereof
";
or"; and
(3) by adding at the end thereof the following new paragraph:
"(12) to a consumer reporting agency in accordance with
section 3(d) of the Federal Claims Collection Act of 1966 (31
U.S.C. 952(d)).".
(b) Section 552a(m) of such title is
amended—
(1) by inserting "(1)" immediately after
"(m)";
and
(2) by adding at the end thereof the following new paragraph:
"(2) A consumer reporting agency to which a record is disclosed
under section 3(d) of the Federal Claims Collection Act of 1966 (31
U.S.C. 952(d)) shall not be considered a contractor for the purposes of
this section.".
Oct. 25, 1982
[H.R. 4613]
Debt Collection
Act of 1982.
5
use
5514 note.
Infra.
AMENDMENT TO THE FEDERAL CLAIMS COLLECTION ACT OF 1966
SEC.
3. Section 3 of the Federal Claims Collection Act of 1966 (31
U.S.C. 952) is amended by adding at the end thereof the following
new subsection:
"(d)(1) Whenever the head of an agency attempts to collect a claim
of the United States under subsection (a) of this section, or under
any other statutory authority except the Internal Revenue Code of
1954,
the head of the agency may disclose to a consumer reporting
agency information from a system of records that an individual is
responsible for a claim
if—
"(A) the notice for the system of records required by section
552a(e)(4) of title 5, United States Code, indicates that informa-
tion in the system may be disclosed to a consumer reporting
agency;
"(B) the head of the agency has reviewed the claim and
determined that such claim is valid and overdue;
"(C) the head of the agency has sent a written notice to the
individual informing such
individual—
"(i) that the payment of the claim is overdue;
"(ii) that the agency intends to disclose to a consumer
reporting agency, within not less than sixty days after
Information
disclosure.
26
use 1
et seq.
96 STAT. 1750
PUBLIC LAW
97-365—OCT.
25, 1982
Review of
individual
obligation.
Definitions.
sending such notice, that the individual is responsible for
such claim;
"(iii)
of the specific information intended to be disclosed
to the consumer reporting agency; and
"(iv)
of the rights of such individual to a full explanation
of the claim, to dispute any information in the records of
the agency concerning the claim, and to administrative
appeal or review with respect to the claim;
"(D) such individual has
not—
"(i)
repaid or agreed to repay such claim under a repay-
ment plan which is agreeable to the head of the agency and
is in a written form signed by such individual; or
"(ii)
filed for review of such claim under paragraph (2) of
this subsection;
"(E) the agency has established procedures (i) for promptly
disclosing, to each consumer reporting agency to which the
original disclosure was made, any substantial change in the
status or amount of the claim, (ii) for promptly verifying or
correcting, as appropriate, information concerning the claim
upon the request of any such consumer reporting agency for
verification of any or all information so disclosed, and (iii) for
obtaining satisfactory assurances from each such consumer re-
porting agency concerning compliance by such consumer report-
ing agency with the Fair Credit Reporting Act (15 U.S.C. 1681 et
seq.) and any other Federal law governing the provision of
consumer credit information; and
"(F) the information disclosed to the consumer reporting
agency is limited to (i) the name, address, taxpayer
identifica-
tion number, and other information necessary to establish the
identity of the individual, (ii) the amount, status, and history of
the claim, and (iii) the agency or program under which the
claim arose.
"(2) Prior to a disclosure to any consumer reporting agency under
paragraph (1) of this subsection and at such other times as may be
permitted by law, the head of the agency shall, upon request of any
individual alleged by the agency to be responsible for the claim,
provide for the review of the obligation of such individual, including
an opportunity for reconsideration of the initial decision concerning
the claim.
"(3) If an agency does not have a current address for an individual
for the purpose of sending the notice required by paragraph (1)(C),
the agency shall take reasonable action to locate the individual
prior to disclosing any information to a consumer reporting agency
under paragraph (1).
"(4) For purposes of this
subsection—
"(A) the term 'consumer reporting agency'
means—
"(i) a consumer reporting agency within the meaning of
section 603(0 of the Fair Credit Reporting Act (15 U.S.C.
1681a(f)); or
"(ii) any person who, for monetary fees, dues, or on a
cooperative basis, regularly engages in whole or in part in
the practice of (I) obtaining credit or other information on
consumers for the purpose of furnishing such information
to consumer reporting agencies (as defined in clause (i) of
this subparagraph), or (II) serving as a marketing agent
under arrangements enabling third parties to obtain such
information from such reporting agencies;
PUBLIC LAW
97-365—OCT.
25, 1982
96 STAT. 1751
"(B) the term 'system of records' has the meaning given such
term under section 552a(a)(5) of title 5, United States Code; and
"(C) the term 'head of an agency' includes a designee of the
head of an agency.".
REQUIREMENT
THAT APPLICANT FURNISH TAXPAYER IDENTIFYING
NUMBER
SEC.
4. (a) IN
GENERAL.—Each
Federal agency administering an
included Federal loan program shall require any person applying for
a loan under such program to furnish such person's taxpayer identi-
fying number.
(b)
DEFINITIONS.—For
purposes of this
section—
(1) INCLUDED FEDERAL LOAN
PROGRAM.—The
term "included
Federal loan program" has the meaning given to such term by
subparagraph (C) of section
6103(1)(3)
of the Internal Revenue
Code of 1954 (as added by section 7 of this Act).
(2) TAXPAYER IDENTIFYING
NUMBER.—The
term "taxpayer
identifying number" has the meaning given to such term by
section 6109 of such Code.
26
use
6103
note.
26
use
6109.
SALARY
OFFSET
SEC.
5. (a) Subsection (a) of section 5514 of title 5, United States
Code, is amended to read as follows:
"(a)(1) When the head of an agency or his designee determines
that an employee, member of the Armed Forces or Reserve of the
Armed Forces, is indebted to the United States for debts to which
the United States is entitled to be repaid at the time of the determi-
nation by the head of an agency or his designee, or is notified of such
a debt by the head of another agency or his designee the amount of
indebtedness may be collected in monthly installments, or at offi-
cially established pay intervals, by deduction from the current pay
account of the individual. The deductions may be made from basic
pay, special pay, incentive pay, retired pay, retainer pay, or, in the
case of an individual not entitled to basic pay, other authorized pay.
The amount deducted for any period may not exceed 15 percent of
disposable pay, except that a greater percentage may be deducted
upon the written consent of the individual involved. If the individual
retires or resigns, or if his employment or period of active duty
otherwise ends, before collection of the amount of the indebtedness
is completed, deduction shall be made from subsequent payments of
any nature due the individual from the agency concerned.
"(2) Except as provided in paragraph (3) of this subsection, prior to
initiating any proceedings under paragraph (1) of this subsection to
collect any indebtedness of an individual, the head of the agency
holding the debt or his designee, shall provide the individual
with—
"(A) a minimum of thirty days written notice, informing such
individual of the nature and amount of the indebtedness deter-
mined by such agency to be due, the intention of the agency to
initiate proceedings to collect the debt through deductions from
pay, and an explanation of the rights of the individual under
this subsection;
"(B) an opportunity to inspect and copy Government records
relating to the debt;
"(C) an opportunity to enter into a written agreement with
the agency, under terms agreeable to the head of the agency or
Written
notice.
Record
inspection.
Written
agreement.
96 STAT.
1752
PUBLIC LAW
97-365—OCT.
25, 1982
Hearing.
Petition filing.
Definitions.
his designee,
to
establish
a
schedule
for the
repayment
of
the
debt; and
"(D) an opportunity for
a
hearing on the determination of the
agency concerning the existence or the amount of the debt, and
in the case of an individual whose repayment schedule is estab-
lished other than by
a
written agreement pursuant
to
subpara-
graph (C), concerning
the
terms
of the
repayment schedule.
A hearing, described
in
subparagraph (D), shall
be
provided
if
the
individual,
on or
before
the
fifteenth
day
following receipt
of the
notice described
in
subparagraph (A),
and in
accordance with such
procedures
as
the head of the agency may prescribe, files
a
petition
requesting such
a
hearing. The timely filing of a petition for hearing
shall stay
the
commencement
of
collection proceedings.
A
hearing
under subparagraph
(D) may not be
conducted
by an
individual
under
the
supervision
or
control
of
the head
of
the
agency,
except
that nothing
in
this sentence shall
be
construed
to
prohibit
the
appointment
of an
administrative law judge.
The
hearing official
shall issue
a
final decision
at
the earliest practicable date,
but not
later than sixty days after
the
filing
of
the petition requesting
the
hearing.
"(3) The collection
of
any amount under this section shall
be in
accordance with the standards promulgated pursuant to the Federal
Claims Collection Act
of
1966
(31
U.S.C. 951
et
seq.) or in accordance
with any other statutory authority for the collection of claims of the
United States or any agency thereof
"(4) For purposes of this
subsection—
"(A)
'disposable
pay' means that part of pay of any individual
remaining after
the
deduction from those earnings
of any
amounts required by law to be withheld; and
"(B)
'agency' includes
the
United States Postal Service
and
the Postal Rate Commission.".
(b) Section 5514(b)
of
title
5,
United States Code,
is
amended
by
inserting "(1)" immediately after "(b)"
and by
adding
at the end
thereof the following new paragraph:
"(2) For purposes of section 7117(a) of this title, no regulation
prescribed
to
carry out subsection (a)(2)
of
this section shall
be
considered to be
a
Government-wide rule or regulation.".
(c) The section heading
of
section 5514
of
title
5,
United States
Code, is amended to read as follows:
*'§5514.
Installment deduction
for
indebtedness
to the
United
States".
PROTECTION
OF
FEDERAL
DEBT
COLLECTORS
SEC.
6. Section 1114
of
title 18, United States Code,
is
amended—
(1) by striking out "or" before "any attorney"; and
(2)
by
inserting before "shall
be
punished"
a
comma and
the
following:
"or any
officer
or
employee
of
the United States
or
any agency thereof designated
to
collect
or
compromise
a
Fed-
eral claim in accordance with the Federal Claims Collection Act
of 1966 (31 U.S.C. 951
et
seq.)
or
other statutory authority".
SCREENING POTENTIAL DEBTORS
SEC.
7. (a)
DISCLOSURE
TO
FEDERAL
LENDING
AGENCY
THAT
APPU-
CANT
HAS TAX
DEUNQUENT
ACCOUNT.—Paragraph
(3) of
section
PUBLIC LAW
97-365—OCT.
25, 1982 96 STAT. 1753
6103(1) of the Internal Revenue Code of 1954 is amended to read as
26
use
6103.
follows:
"(3) DISCLOSURE THAT APPLICANT FOR FEDERAL LOAN HAS TAX
DELINQUENT
ACCOUNT.—
"(A) IN
GENERAL.—Upon
written request, the Secretary
may disclose to the head of the Federal agency administer-
ing any included Federal loan program whether or not an
applicant for a loan under such program has a tax delin-
quent account,
"(B) RESTRICTION ON
DISCLOSURE.—Any
disclosure under
subparagraph (A) shall be made
only
for the purpose of, and
to the extent necessary in, determining the creditworthi-
ness of the applicant for the loan in question.
"(C) INCLUDED FEDERAL LOAN PROGRAM
DEFINED.—For
purposes of this paragraph, the term 'included Federal loan
program' means any
program—
"(i)
under which the United States or a Federal
agency makes, guarantees, or insures loans, and
"(ii)
with respect to which there is in effect a determi-
nation by the Director of the Office of Management and
Budget (which has been published in the Federal Regis-
ter) that the application of this paragraph to such
program will substantially prevent or reduce future
delinquencies under such program."
(b) TECHNICAL AMENDMENTS.—
(1) Clause (i) of section 6103(p)(3)(C) of such Code is amended
by striking out "(1) (3) or (6)" and inserting in lieu thereof
"(1)(6)".
(2)
Paragraph
(4) of section 6103(p) of such Code is
amended—
(A) by striking out "(1) (1), (2)," in the matter preceding
subparagraph (A) and inserting in lieu thereof "(1) (1), (2),
(3),'\
(B) by striking out "(1) (3), (6)," and inserting in lieu
thereof
"(1)(6),",
and
(C) by striking out "(1) (1), (2), or (5), or (o)(l), the commis-
sion described in subsection (1X3)" in subparagraph (F)(ii)
and inserting in lieu thereof "(1) (1), (2), (3), or (5), or (o)(l),".
(c) EFFECTIVE
DATE,—The
amendments made by this section shall
26
use
6103
apply in the case of loan applications made after September 30,
^°^^-
1982.
DISCLOSURE
OF
MAIUNG
ADDRESS
TO THIRD PARTIES FOR PURPOSES OF
COLLECTING
FEDERAL CLAIMS
SEC.
8. (a) Paragraph (2) of section 6103(m) of the Internal Revenue
Code of 1954 (relating to disclosure of taxpayer identity information)
26
use
6103.
is amended to read as follows:
"(2) FEDERAL CLAIMS.—
"(A) IN
GENERAL.—Except
as provided in subparagraph
(B),
the Secretary may, upon written request, disclose the
mailing address of a taxpayer for use by officers, employees,
or agents of a Federal agency for purposes of locating such
taxpayer to collect or compromise a Federal claim against
the taxpayer in accordance with section 3 of the Federal
Claims Collection Act of 1966
(31
U.S.C. 952).
"(B) SPECIAL RULE FOR CONSUMER REPORTING
AGENCY.—In
the case of an agent of a Federal agency which is a consum-
96 STAT. 1754 PUBLIC LAW
97-365—OCT.
25, 1982
er reporting agency (within the meaning of section 603(f) of
the Fair Credit Reporting Act (15 U.S.C. 1681a(f))), the
mailing address of a taxpayer may be disclosed to such
agent under subparagraph (A) only for the purpose of allow-
ing such agent to prepare a commercial credit report on the
taxpayer for use by such Federal agency in accordance with
section 3 of the Federal Claims Collection Act of 1966 (31
U.S.C. 952)."
26
use
6103.
(b)
SAFEGUARDS.—Paragraph
(4) of section 6103(p) of such Code
(relating to safeguards) is amended by adding at the end thereof the
following new sentence: "In the case of any agency which receives
any mailing address under subsection (m) (2) or (4) and which
discloses any such mailing address to any agent, this paragraph
shall apply to such agency and each such agent (except that, in the
case of an agent, any report to the Secretary or other action with
respect to the Secretary shall be made or taken through such
agency)."
(c) TECHNICAL AMENDMENTS.—
(1) Paragraph (3) of section 6103(a) of such Code is amended by
striking out "subsection (m)(4)(B)" and inserting in lieu thereof
"paragraph (2) or (4XB) of subsection (m)".
26
use
7213.
(2) Paragraph (2) of section 7213(a) of such Code
(relating
to
unauthorized disclosure of information) is amended by striking
out "(m)(4)" and inserting in lieu thereof "(m) (2) or (4)".
26
use
6103
((J)
EFFECTIVE
DATE.—The
amendments made by this section shall
"° ®
take effect on the date of the enactment of this Act.
5
use
5514 (e) Except as otherwise provided in section 4 or 7 or the foregoing
note.
provisions of this section, nothing in this Act (or in the amendments
made by this Act) shall apply to claims or indebtedness arising
under, or amounts payable under, the Internal Revenue Code of
26
use
1
et
seq.
1954,
the Social Security Act, or the tariff laws of the United States.
42
use
1305.
STATUTE OF LIMITATIONS WITH RESPECT TO ADMINISTRATIVE OFFSETS
SEC.
9. Section 2415 of title 28, United States Code, is amended by
adding at the end thereof the following new subsection:
"(i) The provisions of this section shall not prevent the United
States or an officer or agency thereof from collecting any claim of
the United States by means of administrative offset, in accordance
Infra.
with section 5 of the Federal Claims Collection Act of 1966.".
ADMINISTRATIVE OFFSETS
SEC.
10. The Federal Claims Collection Act of 1966 (31 U.S.C. 951
et seq.) is
amended—
31
use
951
note. (1) by redesignating section 5 as section 6; and
(2) by adding the following new section 5:
31
use
954. "SEC.
5. (a) The head of an agency or his designee may, after
attempting to collect a claim from a person under section 3(a) of this
Act, collect the claim by means of administrative offset, except that
no claim under this Act that has been outstanding for more than ten
years may be collected by means of administrative offset.
"(b) The head of an agency or his designee may not collect any
claim by administrative offset authorized by subsection (a) unless
the agency head has prescribed regulations for the exercise of such
administrative offset, based on the best interests of the United
States, the likelihood of collecting a claim by administrative
offset.
PUBLIC LAW
97-365—OCT.
25, 1982
96 STAT. 1755
and, with respect to the collection of claims by means of administra-
tive offset after the six-year period provided in section 2415 of title
28,
United States Code, has expired for bringing an action on such a
claim, the cost effectiveness of leaving such claim unresolved for
more than six years.
"(c) Prior to collecting any claim through administrative offset,
the head of the agency or his designee shall provide the debtor
with—
"(1) written notification of the nature and amount of the
claim, the intention of the agency to collect the claim through
administrative offset, and an explanation of the rights of the
debtor under this section;
"(2) an opportunity to inspect and copy the records of the
agency with respect to the claim;
"(3) an opportunity for the review, within the agency, of the
determination of the agency with respect to the claim; and
"(4) an opportunity to enter into a written agreement with
the head of the agency or his designee, for the repayment of the
amount of the claim.
"(d) The provisions of this section shall not apply in any case in
which a statute either explicitly provides for or prohibits the collec-
tion through administrative offset of the claim or type of claim
involved.
"(e) For purposes of this
section—
"(1) the term 'administrative offset' means the withholding of
money payable by the United States to or held by the United
States on behalf of a person to satisfy a debt owed the United
States by that person; and
"(2) the term 'person' does not include any agency of the
United States, or of any State or local government.".
Provisions
affecting
debtor.
"Administrative
offset."
"Person.
INTEREST AND PENALTY ON INDEBTEDNESS TO THE UNITED STATES
SEC.
11. Section 3 of the Federal Claims Collection Act of 1966 (31
U.S.C. 952) (as amended by section 3 of this Act) is further amended
by adding at the end thereof the following new subsection:
"(e)(1) Except as provided in paragraph (3), the head of an agency
or his designee shall charge a minimum annual rate of interest on
outstanding debts on claims owed by persons that is equal to the
average investment rate for the Treasury tax and loan accounts for
the twelve-month period ending on September 30 of each year,
rounded to the nearest whole per centum. The Secretary of the
Treasury or his designee shall publish such rate each year not later
than October 31 and such rate shall become effective on the first day
of the next calendar quarter. The Secretary of the Treasury may
revise such rate quarterly if the average investment rate for the
twelve-month period ending at the close of that calendar quarter,
rounded to the nearest whole per centum, is greater or less than the
existing published rate by 2 per centum. For purposes of this
paragraph, 'calendar quarter' means any three-month period begin-
ning on January 1, April 1, July 1, or October 1.
"(2) Except as provided in paragraph (3), the head of an agency or
his designee shall, with respect to claims owed by
persons—
"(A) assess charges to cover the costs of processing and han-
dling delinquent claims, and
Publication
of rate.
"Calendar
quarter."
PUBLIC LAW
97-365—OCT.
25, 1982
96 STAT. 1757
(3) the total amount written off as uncollectable, actual, and
allowed for;
(4) the rate of interest charged for overdue debts and the
amount of interest charged and collected on debts;
(5) the total number of claims and total amount collected;
(6) the number of claims and the total amount of claims
referred to the Department of Justice for settlement and the
number of claims and the total amount of claims settled by such
Department;
(7) for each program or activity administered by the agency,
the information described in clauses (1) through (6) of this
. subsection; and
(8) such other information as the Director finds necessary in
order to determine whether the agency is engaging in aggres-
sive action to collect the claims of the agency.
(b) The Director shall analyze the reports received by each agency
under subsection (a) and shall report annually to the Congress on
the management of agency debt collection activities, including the
information provided to the Director under subsection (a) above.
Report to
Congress.
CONTRACTS FOR COLLECTION SERVICES
SEC.
13. (a) Section 3617 of the Revised Statutes (31 U.S.C. 484) is
amended by striking out "section 487" and inserting in lieu thereof
"sections 487 and 952(g)(2)".
(b) Section 3 of the Federal Claims Collection Act of 1966 (31
U.S.C. 952) (as amended by sections 3 and 11 of this Act) is further
amended by adding at the end thereof the following new subsec-
tions:
"(f)(1) Notwithstanding the provisions of any other law governing
the collection of claims owed the United States, except for collec-
tions of unpaid or underpaid debts under the Internal Revenue Code
of 1954, the head of an agency or his designee may enter into a
contract with any person or organization, under such terms and
conditions as the head of the agency or his designee considers
appropriate, for collection services to recover indebtedness owed to
the United States. Any such contract shall include provisions speci-
fying that the head of the agency or his designee retains the
authority to resolve disputes, compromise claims, terminate collec-
tion action, and refer the matter to the Attorney General to initiate
legal action, and that the contractor shall be subject to section 552a
of title 5, United States Code, to the extent provided in subsection
(m) of that section, and shall be subject to Federal and State laws
and regulations pertaining to debt collection practices, including the
Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.).
"(2) Notwithstanding section 3617 of the Revised Statutes (31
U.S.C. 484), the head of an agency or his designee may provide, as
part of a contract described in paragraph (1), that appropriate fees
charged by a contractor to recover indebtedness owed to the United
States may be payable from the amount collected by such contrac-
tor.
"(3) Any such contract shall be effective only to such extent and in
such amounts as are provided in advance appropriation Acts.
Contractor
fees.
96 STAT. 1758 PUBLIC LAW
97-365—OCT.
25, 1982
"Claim." "(g)
For
purposes of this Act, the term
'claim'
includes amounts
owing on account of loans insured or guaranteed by the United
States and all other amounts due the United States from fees,
duties, leases, rents, royalties, services, sales of real or personal
property, overpayments, fines, penalties, damages, interest, taxes,
forfeitures, and other sources.".
Approved October 25, 1982.
LEGISLATIVE
HISTORY—H.R.
4613 (S. 1249):
HOUSE REPORT No. 97-496 (Comm. on Ways and Means).
SENATE REPORTS: No. 97-378 (Comm. on Governmental Affairs) and No. 97-287
(Comm. on Finance) both accompanying S. 1249.
CONGRESSIONAL RECORD, Vol. 128 (1982):
May 4, 5, considered and passed House.
Sept. 27, 28, considered and passed Senate, amended.
Sept. 30, House concurred in Senate amendment with amendments.
Oct. 1, Senate concurred in House amendments.