Student Aid Simplification Act

I 116TH CONGRESS 1ST SESSION H. R. 640 To amend the Internal Revenue Code of 1986 and the Higher Education Act of 1965 to facilitate the disclosure of tax return information to carry out the Higher Education Act of 1965, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JANUARY 17, 2019 Mr. DOGGETT (for himself and Mr. BUCHANAN) introduced the following bill; which was referred to the Committee on Ways and Means, and in addi- tion to the Committee on Education and Labor, for a period to be subse- quently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Internal Revenue Code of 1986 and the High- er Education Act of 1965 to facilitate the disclosure of tax return information to carry out the Higher Edu- cation Act of 1965, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Student Aid Sim- 4 plification Act’’. 5 VerDate Sep 11 2014 02:08 Jan 30, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H640.IH H640 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 640 IH SEC. 2. DISCLOSURE OF CERTAIN TAX RETURN INFORMA- 1 TION TO THE SECRETARY OF EDUCATION. 2 (a) IN GENERAL.—Paragraph (13) of section 6103(l) 3 of the Internal Revenue Code of 1986 is amended to read 4 as follows: 5 ‘‘(13) DISCLOSURE OF RETURN INFORMATION 6 TO THE SECRETARY OF EDUCATION.— 7 ‘‘(A) INCOME-CONTINGENT OR INCOME- 8 BASED REPAYMENT AND TOTAL AND PERMA- 9 NENT DISABILITY DISCHARGE.—The Secretary 10 shall, upon written request from the Secretary 11 of Education, disclose to officers, employees, 12 and contractors of the Department of Edu- 13 cation, as specifically authorized and designated 14 by the Secretary of Education, only for the pur- 15 pose of (and to the extent necessary in) estab- 16 lishing, renewing, administering, and con- 17 ducting analyses and forecasts for estimating 18 costs related to income-contingent or income- 19 based repayment programs, and the discharge 20 of loans based on a total and permanent dis- 21 ability (within the meaning of section 437(a) of 22 the Higher Education Act of 1965), under title 23 IV of the Higher Education Act of 1965 (as in 24 effect on the date of enactment of this para- 25 graph), the following return information (as de- 26 VerDate Sep 11 2014 02:08 Jan 30, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H640.IH H640 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 640 IH fined in subsection (b)(2)) with respect to tax- 1 payers identified by the Secretary of Education 2 as participating in the loan programs under 3 title IV of such Act, for taxable years specified 4 by such Secretary: 5 ‘‘(i) Taxpayer identity information 6 with respect to such taxpayer. 7 ‘‘(ii) The filing status of such tax- 8 payer. 9 ‘‘(iii) Type of tax return from which 10 the return information is provided. 11 ‘‘(iv) The adjusted gross income of 12 such taxpayer. 13 ‘‘(v) Total number of exemptions 14 claimed, or total number of individuals and 15 dependents claimed, as applicable, on the 16 return. 17 ‘‘(vi) Number of children with respect 18 to which tax credits under section 24 are 19 claimed on the return. 20 ‘‘(B) FEDERAL STUDENT FINANCIAL 21 AID.—The Secretary shall, upon written request 22 from the Secretary of Education, disclose to of- 23 ficers, employees, and contractors of the De- 24 partment of Education, as specifically author- 25 VerDate Sep 11 2014 02:08 Jan 30, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H640.IH H640 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 640 IH ized and designated by the Secretary of Edu- 1 cation, only for the purpose of (and to the ex- 2 tent necessary in) determining eligibility for, 3 and amount of, Federal student financial aid 4 under programs authorized by title IV of the 5 Higher Education Act of 1965 (as in effect on 6 the date of enactment of this paragraph) and 7 conducting analyses and forecasts for esti- 8 mating costs related to such programs, the fol- 9 lowing return information (as defined in sub- 10 section (b)(2)) with respect to taxpayers identi- 11 fied by the Secretary of Education as applicants 12 for Federal student financial aid under title IV 13 of such Act, for taxable years specified by such 14 Secretary: 15 ‘‘(i) Taxpayer identity information 16 with respect to such taxpayer. 17 ‘‘(ii) The filing status of such tax- 18 payer. 19 ‘‘(iii) Type of tax return from which 20 the return information is provided. 21 ‘‘(iv) The adjusted gross income of 22 such taxpayer. 23 ‘‘(v) The amount of any net earnings 24 from self-employment (as defined in sec- 25 VerDate Sep 11 2014 02:08 Jan 30, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H640.IH H640 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 640 IH tion 1402), wages (as defined in section 1 3121(a) or 3401(a)), and taxable income 2 from a farming business (as defined in sec- 3 tion 236A(e)(4)) for the period reported on 4 the return. 5 ‘‘(vi) The total income tax of such 6 taxpayer. 7 ‘‘(vii) Total number of exemptions 8 claimed, or total number of individuals and 9 dependents claimed, as applicable, on the 10 return. 11 ‘‘(viii) Number of children with re- 12 spect to which tax credits under section 24 13 are claimed on the return. 14 ‘‘(ix) Amount of any credit claimed 15 under section 25A for the taxable year. 16 ‘‘(x) Amount of individual retirement 17 account distributions not included in ad- 18 justed gross income for the taxable year. 19 ‘‘(xi) Amount of individual retirement 20 account contributions and payments to 21 self-employed SEP, Keogh, and other 22 qualified plans which were deducted from 23 income for the taxable year. 24 VerDate Sep 11 2014 02:08 Jan 30, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H640.IH H640 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 640 IH ‘‘(xii) The amount of tax-exempt in- 1 terest. 2 ‘‘(xiii) Amounts from retirement pen- 3 sions and annuities not included in ad- 4 justed gross income for the taxable year. 5 ‘‘(xiv) If applicable, the fact that 6 there is no return filed for such taxpayer 7 for the applicable year. 8 ‘‘(C) RESTRICTION ON USE OF DISCLOSED 9 INFORMATION.— 10 ‘‘(i) IN GENERAL.—Return informa- 11 tion disclosed under subparagraphs (A) 12 and (B) may be used by officers, employ- 13 ees, and contractors of the Department of 14 Education, as specifically authorized and 15 designated by the Secretary of Education, 16 only for the purposes and to the extent 17 necessary described in such subparagraphs 18 and for mitigating risks (as defined in 19 clause (ii)) relating to the programs de- 20 scribed in such subparagraphs. 21 ‘‘(ii) MITIGATING RISKS.—For pur- 22 poses of this subparagraph, the term ‘miti- 23 gating risks’ means, with respect to the 24 VerDate Sep 11 2014 02:08 Jan 30, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H640.IH H640 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 640 IH programs described in subparagraphs (A) 1 and (B)— 2 ‘‘(I) analyzing or estimating costs 3 associated with potential changes to 4 the need-analysis formula, 5 ‘‘(II) oversight activities by the 6 Office of Inspector General of the De- 7 partment of Education as authorized 8 by the Inspector General Act of 1978, 9 as amended, 10 ‘‘(III) developing or admin- 11 istering statistical models that inform 12 support to populations of Federal stu- 13 dent loan borrowers who are at risk of 14 default or delinquency, 15 ‘‘(IV) reducing the net cost of 16 improper payments to Federal finan- 17 cial aid recipients, and 18 ‘‘(V) producing aggregate statis- 19 tics for reporting, research, or con- 20 sumer information on the performance 21 of programs or institutions of higher 22 education participating in the pro- 23 grams under title IV of the Higher 24 Education Act of 1965. 25 VerDate Sep 11 2014 02:08 Jan 30, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H640.IH H640 pamtmann on DSKBFK8HB2PROD with BILLS 8 •HR 640 IH Such term does not include the conduct of 1 criminal investigations or prosecutions. 2 ‘‘(iii) REDISCLOSURE TO INSTITU- 3 TIONS OF HIGHER EDUCATION, STATE 4 HIGHER EDUCATION AGENCIES, AND DES- 5 IGNATED SCHOLARSHIP ORGANIZATIONS.— 6 The Secretary of Education, and officers, 7 employees, and contractors of the Depart- 8 ment of Education, may disclose return in- 9 formation received under subparagraph 10 (B), solely for the use in the application, 11 award, and administration of Federal stu- 12 dent financial aid, State aid, or aid award- 13 ed by eligible institutions or such entities 14 as the Secretary of Education may des- 15 ignate, to the following persons: 16 ‘‘(I) An institution of higher edu- 17 cation with which the Secretary of 18 Education has an agreement under 19 subpart 1 of part A, or part D or E, 20 of title IV of the Higher Education 21 Act of 1965. 22 ‘‘(II) A State higher education 23 agency. 24 VerDate Sep 11 2014 02:08 Jan 30, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H640.IH H640 pamtmann on DSKBFK8HB2PROD with BILLS 9 •HR 640 IH ‘‘(III) A scholarship organization 1 which is designated by the Secretary 2 of Education as of the date of the en- 3 actment of the Student Aid Sim- 4 plification Act as an organization eli- 5 gible to receive the information pro- 6 vided under this clause. 7 The preceding sentence shall only apply to 8 the extent that the taxpayer with respect 9 to whom the return information relates 10 provides consent for such disclosure to the 11 Secretary of Education as part of the ap- 12 plication for Federal student financial aid 13 under title IV of the Higher Education Act 14 of 1965. 15 ‘‘(D) REQUIRED NOTIFICATION PERI- 16 ODS.— 17 ‘‘(i) NOTIFICATION TO CONGRESS.— 18 The Secretary and the Secretary of Edu- 19 cation shall issue joint notifications to the 20 Committees on Finance and Health, Edu- 21 cation, Labor, and Pensions of the Senate 22 and the Committees on Ways and Means 23 and Education and Labor of the House of 24 Representatives not less than 120 days 25 VerDate Sep 11 2014 02:08 Jan 30, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H640.IH H640 pamtmann on DSKBFK8HB2PROD with BILLS 10 •HR 640 IH prior to the first disclosure of any type of 1 return information under subparagraph 2 (A)(vii) or (B)(xv) with respect to which 3 such a notification has not been previously 4 made. 5 ‘‘(ii) PUBLIC NOTICE AND COM- 6 MENT.—There shall be a public notice and 7 comment period beginning not less than 60 8 days prior to the first disclosure of any 9 type of return information under subpara- 10 graph (A)(vii) or (B)(xv) with respect to 11 which such a notification has not been pre- 12 viously made, subsequent to the period al- 13 lotted for Congressional comment under 14 clause (i). 15 ‘‘(E) NOTIFICATION OF TAXPAYERS.—The 16 Secretary of Education may not submit a writ- 17 ten request under this paragraph with respect 18 to any taxpayer unless such Secretary has ad- 19 vised such taxpayer that such Secretary has the 20 authority to request that the Internal Revenue 21 Service disclose under this section the tax re- 22 turn information of such taxpayer, and of par- 23 ents and spouses who sign an application or re- 24 VerDate Sep 11 2014 02:08 Jan 30, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H640.IH H640 pamtmann on DSKBFK8HB2PROD with BILLS 11 •HR 640 IH quest or a Master Promissory Note on behalf of 1 such taxpayer. 2 ‘‘(F) ADDITIONAL RESTRICTION ON DIS- 3 CLOSURE TO CONTRACTORS.—For purposes of 4 this paragraph, the Secretary shall not consider 5 any contractors to be specifically authorized 6 and designated by the Secretary of Education 7 with respect to a disclosure unless the Secretary 8 of Education finds that no officer or employee 9 can carry out the purpose for which such disclo- 10 sure is requested.’’. 11 (b) CONFIDENTIALITY OF RETURN INFORMATION.— 12 Section 6103(a)(3) of such Code is amended by inserting 13 ‘‘, (13)(A), (13)(B)’’ after ‘‘(12)’’. 14 (c) CONFORMING AMENDMENTS.—Section 15 6103(p)(4) of such Code is amended— 16 (1) by inserting ‘‘(A), (13)(B)’’ after ‘‘(13)’’ 17 each place it occurs, and 18 (2) by inserting ‘‘, (13)(A), (13)(B)’’ after 19 ‘‘(l)(10)’’ each place it occurs. 20 (d) EFFECTIVE DATE.—The amendments made by 21 this section shall apply to disclosures made under section 22 6103(l)(13) of the Internal Revenue Code of 1986 (as 23 amended by this section) after the date of the enactment 24 of this Act. 25 VerDate Sep 11 2014 02:08 Jan 30, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H640.IH H640 pamtmann on DSKBFK8HB2PROD with BILLS 12 •HR 640 IH SEC. 3. REPORTS ON IMPLEMENTATION. 1 (a) IN GENERAL.—Not later than each specified 2 date, the Secretary of Education and the Secretary of the 3 Treasury shall issue joint reports to the Committees on 4 Health, Education, Labor, and Pensions and Finance of 5 the Senate and the Committees on Education and Labor 6 and Ways and Means of the House of Representatives re- 7 garding the amendments made by section 2. 8 (b) SPECIFIED DATE DEFINED.—For purposes of 9 subsection (a), the term ‘‘specified date’’ means— 10 (1) the date that is 90 days after the date of 11 the enactment of this Act, 12 (2) the date that is 120 days after the first day 13 that the disclosure process established under section 14 6103(l)(13) of the Internal Revenue Code of 1986, 15 as amended by section 2, is operational, and 16 (3) the date that is 1 year after the report date 17 described in paragraph (2). 18 Æ VerDate Sep 11 2014 02:08 Jan 30, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6301 E:\BILLS\H640.IH H640 pamtmann on DSKBFK8HB2PROD with BILLS