A bill to amend the Equal Access to Justice Act, and for other purposes.

(Reported to Senate from the Committee on the Judiciary with amendment, S. Rept. 98-586)

Amends Federal agency and judicial procedures under the Equal Access to Justice Act relating to reimbursement of litigation expenses incurred by parties prevailing against the United States.

Amends the definition of "a party" which may be so reimbursed to: (1) repeal the exemption from eligibility requirements formerly granted to tax-exempt organizations regardless of their net worth; (2) exclude individuals whose net worth exceeds $2,000,000 (currently $1,000,000); and (3) exclude entities whose net worth exceeds $7,000,000 (currently $5,000,000). Makes municipal corporations and unincorporated towns whose net worth is under $7,000,000 eligible for such reimbursement.

Amends the definition of "adversary adjudication" to include: (1) certain appeals made under the Contract Disputes Act of 1978 before the board of contract appeals; and (2) certain hearings under the Social Security Act.

States that the "position of the agency" includes the underlying action which led to the adversary adjudication. Provides that fees and expenses shall not be awarded against an agency in defending a position after the date such position has become substantially justified.

Entitles the United States to petition to appeal a fee determination. Requires an appellate court to base its determination regarding a fee award upon a de novo review. (Currently, the standard of review is abuse of discretion.)

Requires agencies to pay litigation expenses to prevailing parties from appropriated funds.

Awards interest upon fee determinations which have not been completely paid within 60 days.

Requires a court to grant litigation expenses incurred by a party prevailing against the United States in a proceeding for judicial review of an agency action.

Amends the judicial code to include as a civil action subject to the Equal Access to Justice Act any appeal brought by a party other than the United States from the decision of a contracting officer in a contracts dispute. Applies this provision retroactively to certain actions which were timely filed and dismissed for lack of jurisdiction after October 1, 1981.

Applies such Act to certain Social Security court cases.

Authorizes awards for fees incurred prior to October 1, 1981, for litigation covered by this such Act.

Amends the Internal Revenue Code to require the award of litigation costs to a party prevailing against the United States in a tax case, unless the court finds the position of the United States substantially justified or that special circumstances make an award unjust.

Amends the Judicial Code and the Internal Revenue Code to apply the Equal Access to Justice Act to proceedings brought in the U.S. Claims Court.

Repeals the October 1, 1984, termination date, thus making the provisions of the Equal Access to Justice Act permanent.

Limits the applicability of such Act to proceedings under the Social Security Act to three years after enactment of this Act.