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Bill to Restrict Tax Debtors' Access to Loans, Contracts in House
Government Reform Subcommittee
A House Government Reform subcommittee is set to consider legislation
today that would prohibit tax debtors from receiving federal loans or
contracts until their delinquencies are resolved, according to the CQ
Daily Monitor. The bill (H.R. 4181) would expand the Debt Collection
Improvement Act of 1996, which bars delinquent non-tax debtors from
receiving federal loans or loan guarantees. Delinquent federal tax
debtors, who owe the government an estimated $231 billion, are not under
the law's jurisdiction. The IRS would be required to report the tax
status of all applicants for federal loans, loan guarantees and federal
contracts to the agency granting the loan or issuing the contract.
Administration officials from a variety of government agencies say they
support the effort to reduce debt delinquency, but cited a number of
concerns, most notably the impact on small business. 'Cash flow is an
everyday problem for all businesses and especially small businesses,'
said Deidre A. Lee, acting deputy director for management at the Office
of Management and Budget. 'While large businesses have plentiful lines
of credit, small businesses do not have the same access. Discretion for
the contracting officer might ameliorate this impact.' The
subcommittee's ranking Democrat, Jim Turner (Texas), the bill's sponsor,
said he intends to propose two changes to the legislation that would
restrict the definition of delinquent tax debtors so that if an
individual is in dispute with the IRS, that person would still be able
to apply and receive a loan or contract.
Nursing Home Lobby Applauds Clinton Plan to Restore $21 Billion to
Health Care Providers
Dr. Charles H. Roadman II, president of the American Health Care
Association (AHCA), said that a plan by President Clinton to restore
roughy $21 billion over five years to health care providers 'is a good
start,' and that the proposed restorations show that the Clinton
administration recognizes there is a real problem in the health care
industry, according to Reuters. The Clinton plan would give back some of
the money slashed from provider payments under the Balanced Budget Act
of 1997, a move that many say has resulted in a domino effect of health
care provider bankruptcies and financial difficulties. As a result of
that legislation, Medicare spending for skilled nursing facility
services through 2002 will be $12.2 billion less than originally
projected and $15.8 billion less when extended to 2004. 'I really see it
as a requirement to begin to fund health care for our frail and
elderly...not a giveback to providers,' he explained. 'It clearly
doesn't go far enough to restore what has been taken from the
providers.' AHCA, a Washington-based federation of long-term care
providers, estimates that more than 10 percent of all nursing homes have
filed bankruptcy in the wake of Medicare reductions.
TransCoastal Files for Chapter 7 Liquidation
TransCoastal Marine Services Inc. and a number of its subsidiaries
forming its Pipeline & Marine Group filed a voluntary petition for
chapter 7 in the Southern District of Texas yesterday, according to a
newswire report. Although the company had been attempting to
recapitalize through either divestiture of its ongoing pipeline
operations or raising equity capital, the company said that without an
immediate equity infusion continued operations were not feasible. The
company also announced it has discontinued the operations of its
Pipeline & Marine Group. Among the factors the company said
prevented a timely recapitalization were Chevron Global Technology
Services Co.'s assertion of approximately $28 million in claims against
Dickson GMP International Inc. and delayed recovery in the oilfield
service markets.
DeVlieg-Bullard Seeks Court Approval to Sell Assets
DeVlieg-Bullard Inc. announced yesterday it is seeking court authority
to sell substantially all its assets to KPS Special Situations Fund LP
for $31.6 million or to any other party that submits a more favorable
bid, according to a newswire report. Bankruptcy Judge Marilyn
Shea-Stonum of the U.S. Bankruptcy Court for the Northern District
of Ohio in Akron is scheduled to consider approving the best and highest
purchase offer at a Tuesday hearing. An auction will be held just prior
to the hearing to consider any competing bids submitted by Friday. The
Twinsburg, Ohio-based precision-engineered machine tool manufacturer and
KPS entered into a definitive asset purchase agreement on June 8 under
which KPS would pay about $31.6 million, assume certain liabilities and
be assigned certain contracts and leases. Closing is expected by June
30, at which time DeVlieg-Bullard's debtor-in-possession loan with the
CIT Group/Business Credit Inc., secured by all the company's assets and
expected to be about $16 million, will be satisfied. DeVlieg-Bullard
said the proposed sale is critical to the successful completion of its
chapter 11 case, which it filed on July 15 with assets of $118 million
and liabilities of $107.5 million.
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