text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Student Aid Streamlined Disclosure 
  Act of 2003''.
  
  SEC. 2. DISCLOSURE OF TAX RETURN INFORMATION FOR STUDENT AID PURPOSES.
  
      (a) In General.--Subsection (l) of section 6103 of the Internal 
  Revenue Code of 1986 (relating to disclosure of returns and return 
  information for purposes other than tax administration) is amended to 
  read as follows:
              ``(13) Disclosure of return information for student 
          financial assistance purposes.--
                      ``(A) Full disclosure to department of education.--
                  The Secretary may, with respect to a person described 
                  in subparagraph (F)(i) and upon written request from 
                  the Secretary of Education, disclose to the officers 
                  and employees of the Department of Education for the 
                  purposes described in subparagraph (E)--
                              ``(i) taxpayer identity information, and
                              ``(ii) the following items in the case of a 
                          material discrepancy between the information 
                          reported, directly or indirectly, to officers, 
                          employees, and contractors of the Department of 
                          Education and the following items:
                                      ``(I) The filing status of that 
                                  taxpayer.
                                      ``(II) The adjusted gross income of 
                                  that taxpayer.
                                      ``(III) The total earnings from 
                                  employment (including net earnings from 
                                  self-employment) of that taxpayer.
                                      ``(IV) The Federal income tax 
                                  liability of that taxpayer.
                                      ``(V) The type of tax return filed 
                                  by that taxpayer.
                      ``(B) Redisclosure to contractors.--Officers and 
                  employees of the Department of Education may disclose 
                  to contractors whether a material discrepancy between 
                  items reported, directly or indirectly, to an officer, 
                  employee, or contractor of the Department of Education 
                  and any of the items described in subparagraph (A)(ii) 
                  would result in an over or under award of grants or 
                  loans under title IV of the Higher Education Act of 
                  1965.
                      ``(C) Fact of discrepancy redisclosure of 
                  information.--
                              ``(i) In general.--Subject to subparagraphs 
                          (D) and (E), officers, employees, and 
                          contractors of the Department of Education may, 
                          with respect to an application for assistance 
                          under title IV of the Higher Education Act of 
                          1965, disclose to persons described in clauses 
                          (ii) and (iii)--
                                      ``(I) the fact of a material 
                                  discrepancy between items reported, 
                                  directly or indirectly, to such 
                                  officers, employees, or contractors and 
                                  any of the items described in 
                                  subparagraph (A)(ii), and
                                      ``(II) whether such items as shown 
                                  on the return are greater than or less 
                                  than such items as reported to the 
                                  Department of Education.
                              ``(ii) Applicant.--The person described in 
                          this clause is the applicant described in 
                          subclause (I) or (II) of subparagraph (F)(i).
                              ``(iii) Other persons.--The persons 
                          described in this clause are--
                                      ``(I) individuals whose information 
                                  is discrepant,
                                      ``(II) officers and employees of 
                                  institutions of higher education (as 
                                  defined in section 102 of the Higher 
                                  Education Act of 1965) that administer, 
                                  or assist the Secretary of Education in 
                                  administering, a grant, loan, benefit, 
                                  or work assistance program under title 
                                  IV of such Act,
                                      ``(III) officers and employees of 
                                  State agencies that administer a grant 
                                  or work assistance program under 
                                  subpart 4 of part A of title IV of such 
                                  Act, and
                                      ``(IV) auditors engaged to perform 
                                  audits or reviews required under 
                                  section 487(c) of such Act,
                      ``(D) Limitation on full redisclosures relating to 
                  material discrepancies.--Information specific to an 
                  individual which is disclosed by the Secretary under 
                  subparagraph (A) may only be redisclosed to the 
                  individual whose information is discrepant and to the 
                  Department of Justice for purposes relating to the 
                  collection of overpayments of grants or loans provided 
                  under title IV of the Higher Education Act of 1965, 
                  including by means of litigation.
                      ``(E) Restriction on use of disclosed 
                  information.--
                              ``(i) In general.--Information may be 
                          disclosed under subparagraphs (A) through (C) 
                          only for the purpose of, and to the extent 
                          necessary to--
                                      ``(I) verify the information 
                                  reported by a person described in 
                                  subparagraph (F)(i) in connection with 
                                  any application for grant, loan, 
                                  benefit or work assistance under title 
                                  IV of the Higher Education Act of 1965,
                                      ``(II) determine income contingent 
                                  repayment amounts and schedules on an 
                                  applicable student loan,
                                      ``(III) collect overpayments of 
                                  grants or loans provided under title IV 
                                  of such Act, including by means of 
                                  litigation in the case of the 
                                  Department of Justice, or
                                      ``(IV) audit title IV student 
                                  assistance programs, as required under 
                                  section 487(c) of such Act.
                              ``(ii) Information limited to tax years 
                          required.--Information disclosed under this 
                          paragraph shall be limited to the tax years 
                          required, in accordance with such Act and 
                          implementing regulations, to carry out the 
                          purposes described in this paragraph.
                      ``(F) Definitions and special rules.--For purposes 
                  of this paragraph--
                              ``(i) Person described.--A person is 
                          described in this clause if the person--
                                      ``(I) has applied for grant, loan, 
                                  benefit, or work assistance under title 
                                  IV of the Higher Education Act of 1965,
                                      ``(II) is seeking income contingent 
                                  repayment on an applicable student 
                                  loan,
                                      ``(III) in the case of an 
                                  individual who is a dependent student 
                                  and who has applied for the assistance 
                                  described in subclauses (I) and (II), 
                                  is the parent (as defined for purposes 
                                  of title IV of such Act) of such 
                                  individual, or
                                      ``(IV) in the case of an individual 
                                  who is an independent student and who 
                                  has applied for the assistance 
                                  described in subclauses (I) and (II), 
                                  is the spouse of such individual.
                              ``(ii) Material discrepancy.--The term 
                          `material discrepancy' means, with respect to 
                          similar items in 2 sets of information--
                                      ``(I) a difference between such 
                                  sets of not less than the greater of 
                                  $100 or one percent of the item shown 
                                  on the return in the case of items 
                                  described in subclause (II), (III), or 
                                  (IV) of subparagraph (A)(ii), and
                                      ``(II) any difference between such 
                                  sets of information in the case of 
                                  items described in subclause (I) or (V) 
                                  of subparagraph (A)(ii).
                              ``(iii) Applicable student loan.--The term 
                          `applicable student loan' means--
                                      ``(I) any loan made under the 
                                  program authorized under part D of 
                                  title IV of such Act, and
                                      ``(II) any loan made under part B 
                                  or E of title IV of such Act that is in 
                                  default and has been assigned to the 
                                  Department of Education.
                              ``(iv) Exclusive authority.--For purposes 
                          of subsection (a), subsection (c) shall not be 
                          construed to be an authorization for any 
                          disclosure covered by this paragraph.
                              ``(v) Funding.--Information may be 
                          disclosed under this paragraph only if there is 
                          in effect an agreement between the Secretary 
                          and the Secretary of Education under which the 
                          Secretary of Education makes periodic payments 
                          to the Secretary--
                                      ``(I) to reimburse the Secretary 
                                  for costs incurred in carrying out this 
                                  paragraph, and
                                      ``(II) to cover the cost to the 
                                  Secretary of monitoring compliance with 
                                  this section by the Secretary of 
                                  Education in carrying out this 
                                  paragraph.
                              ``(vi) References to higher education act 
                          of 1965.--For purposes of this paragraph, 
                          references to the Higher Education Act of 1965 
                          shall be treated as references to the Higher 
                          Education Act of 1965 as in effect on the date 
                          of the enactment of this paragraph.
                      ``(G) Termination.--This paragraph shall not apply 
                  to requests for disclosures made after September 30, 
                  2008.''.
      (b) Conforming and Other Amendments.--
              (1) Section 6103(a)(3) of such Code is amended by striking 
          ``paragraph (6), (12), or (16) of subsection (l),'' and 
          inserting ``paragraph (6), (12), (13), or (16) of subsection 
          (l),''.
              (2) Section 6103(p) of such Code is amended--
                      (A) in paragraph (3)(A) by striking ``(13)''; and
                      (B) in paragraph (4) by striking ``paragraph 
                  (6)(A), (12)(B), or (16) of subsection (l)'' in the 
                  flush language at the end and inserting ``paragraph 
                  (6)(A), (12)(B), (13), or (16) of subsection (l)''.
              (3) Section 7213(a)(2) of such Code is amended by inserting 
          ``(13),'' after ``(12),''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to requests for disclosures made after the date of the enactment 
  of this Act.
target: Student Aid Streamlined Disclosure Act of 2003 - Amends the Internal Revenue Code to authorize, through September 30, 2008, the disclosure of certain tax return information to the Department of Education with respect to students seeking federal student aid.
feat_title: To amend the Internal Revenue Code of 1986 to provide for the disclosure of return information for student financial assistance purposes.