[House Report 108-46]
[From the U.S. Government Publishing Office]
108th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 108-46
======================================================================
SOCIAL SECURITY PROTECTION ACT OF 2003
_______
March 24, 2003.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Thomas, from the Committee on Ways and Means, submitted the
following
R E P O R T
[To accompany H.R. 743]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 743) to amend the Social Security Act and the
Internal Revenue Code of 1986 to provide additional safeguards
for Social Security and Supplemental Security Income
beneficiaries with representative payees, to enhance program
protections, and for other purposes, having considered the
same, report favorably thereon with an amendment and recommend
that the bill as amended do pass.
CONTENTS
Page
I. Summary and Background...........................................23
A. Purpose and Summary................................... 23
B. Background and Need for Legislation................... 24
C. Legislative History................................... 25
II. Explanation of the Bill..........................................27
Title I. Protection of Beneficiaries.............................27
Subtitle A--Representative Payees........................ 27
A. Authority to reissue benefits misused by
organizational representative payees (sec. 101 of the
bill)................................................ 27
B. Oversight of representative payees (sec. 102 of the
bill)................................................ 28
C. Disqualification from service as representative payee
of persons convicted of offenses resulting in
imprisonment for more than 1 year, or fleeing
prosecution, custody, or confinement (sec. 103 of the
bill)................................................ 29
D. Fee forfeiture in case of benefit misuse by
representative payees (sec. 104 of the bill)......... 30
E. Liability of representative payees for misused
benefits (sec. 105 of the bill)...................... 31
F. Authority to redirect delivery of benefit payments
when a representative payee fails to provide required
accounting (sec. 106 of the bill).................... 31
Subtitle B--Enforcement.................................. 32
G. Civil monetary penalty authority with respect to
wrongful conversions by representative payees (sec.
111 of the bill)..................................... 32
Title II. Program Protections....................................33
A. Civil monetary penalty authority with respect to
knowing withholding of material facts (sec. 201 of
the bill)............................................ 33
B. Issuance by Commissioner of Social Security of
receipts to acknowledge submission of reports of
changes in work or earnings status of disabled
beneficiaries (sec. 202 of the bill)................. 34
C. Denial of Title II benefits to persons fleeing
prosecution, custody, or confinement, and to persons
violating probation or parole (sec. 203 of the bill). 35
D. Requirements relating to offers to provide for a fee a
product or service available without charge from the
Social Security Administration (sec. 204 of the bill) 36
E. Refusal to recognize certain individuals as claimant
representatives (sec. 205 of the bill)............... 37
F. Penalty for corrupt or forcible interference with
administration of Social Security Act (sec. 206 of
the bill)............................................ 38
G. Use of symbols, emblems, or names in reference to
Social Security or Medicare (sec. 207 of the bill)... 39
H. Disqualification from payment during trial work period
upon conviction of fraudulent concealment of work
activity (sec. 208 of the bill)...................... 40
I. Authority for judicial orders of restitution (sec. 209
of the bill)......................................... 41
Title III. Attorney Fee Payment System Improvements..............42
A. Cap on attorney assessments (sec. 301 of the bill).... 42
B. Extension of attorney fee payment system to Title XVI
claims (sec. 302 of the bill)........................ 42
Title IV. Miscellaneous and Technical Amendments.................43
Subtitle A--Amendments relating to the Ticket to Work and
Work Incentives Improvement Act of 1999.............. 43
A. Application of demonstration authority sunset date to
new projects (sec. 401 of the bill).................. 43
B. Expansion of waiver authority available in connection
with demonstration projects providing for reductions
in disability insurance benefits based on earnings
(sec. 402 of the bill)............................... 44
C. Funding of demonstration projects provided for
reductions in disability insurance benefits based on
earnings (sec. 403 of the bill)...................... 45
D. Availability of Federal and State work incentive
services to additional individuals (sec. 404 of the
bill)................................................ 46
E. Technical amendment clarifying treatment for certain
purposes of individual work plans under the Ticket to
Work and Self-Sufficiency Program (sec. 405 of the
bill)................................................ 47
Subtitle B--Miscellaneous Amendments..................... 49
F. Elimination of transcript requirement in remand cases
fully favorable to the claimant (sec. 411 of the
bill)................................................ 49
G. Nonpayment of benefits upon removal from the United
States (sec. 412 of the bill)........................ 49
H. Reinstatement of certain reporting requirements (sec.
413 of the bill)..................................... 50
I. Clarification of definitions regarding certain
survivor benefits (sec. 414 of the bill)............. 50
J. Clarification respecting the FICA and SECA tax
exemptions for an individual whose earnings are
subject to the laws of a totalization agreement
partner (sec. 415 of the bill)....................... 51
K. Coverage under divided retirement system for public
employees in Kentucky (sec. 416 of the bill)......... 52
L. Compensation for the Social Security Advisory Board
(sec. 417 of the bill)............................... 53
M. 60-month period of employment requirement for
application of government pension offset exemption
(sec. 418 of the bill)............................... 54
Subtitle C--Technical Amendments......................... 55
N. Technical correction relating to responsible agency
head (sec. 421 of the bill).......................... 55
O. Technical correction relating to retirement benefits
of ministers (sec. 422 of the bill).................. 56
P. Technical corrections relating to domestic employment
(sec. 423 of the bill)............................... 56
Q. Technical corrections of outdated references (sec. 424
of the bill)......................................... 57
R. Technical correction respecting self-employment income
in community property States (sec. 425 of the bill).. 57
III.Votes of the Committee...........................................58
IV. Budget Effects of the Bill.......................................60
A. Committee Estimate of Budgetary Effects............... 60
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority........................ 60
C. Cost Estimate Prepared by the Congressional Budget
Office............................................... 60
D. Macroeconomic Impact Analysis......................... 70
V. Other Matters To Be Discussed Under the Rules of the House.......70
A. Committee Oversight Findings and Recommendations...... 70
B. Statement of General Performance Goals and Objectives. 70
C. Constitutional Authority Statement.................... 70
D. Information Relating to Unfunded Mandates............. 71
E. Applicability of House Rule XXI 5(b).................. 71
F. Tax Complexity Analysis............................... 71
VI. Changes in Existing Law Made by the Bill, as Reported............71
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Social Security
Protection Act of 2003''.
(b) Table of Contents.--The table of contents is as follows:
Sec. 1. Short title and table of contents.
TITLE I--PROTECTION OF BENEFICIARIES
Subtitle A--Representative Payees
Sec. 101. Authority to reissue benefits misused by organizational
representative payees.
Sec. 102. Oversight of representative payees.
Sec. 103. Disqualification from service as representative payee of
persons convicted of offenses resulting in imprisonment for more than 1
year or fleeing prosecution, custody, or confinement.
Sec. 104. Fee forfeiture in case of benefit misuse by representative
payees.
Sec. 105. Liability of representative payees for misused benefits.
Sec. 106. Authority to redirect delivery of benefit payments when a
representative payee fails to provide required accounting.
Subtitle B--Enforcement
Sec. 111. Civil monetary penalty authority with respect to wrongful
conversions by representative payees.
TITLE II--PROGRAM PROTECTIONS
Sec. 201. Civil monetary penalty authority with respect to knowing
withholding of material facts.
Sec. 202. Issuance by Commissioner of Social Security of receipts to
acknowledge submission of reports of changes in work or earnings status
of disabled beneficiaries.
Sec. 203. Denial of title II benefits to persons fleeing prosecution,
custody, or confinement, and to persons violating probation or parole.
Sec. 204. Requirements relating to offers to provide for a fee a
product or service available without charge from the Social Security
Administration.
Sec. 205. Refusal to recognize certain individuals as claimant
representatives.
Sec. 206. Penalty for corrupt or forcible interference with
administration of Social Security Act.
Sec. 207. Use of symbols, emblems, or names in reference to social
security or medicare.
Sec. 208. Disqualification from payment during trial work period upon
conviction of fraudulent concealment of work activity.
Sec. 209. Authority for judicial orders of restitution.
TITLE III--ATTORNEY FEE PAYMENT SYSTEM IMPROVEMENTS
Sec. 301. Cap on attorney assessments.
Sec. 302. Extension of attorney fee payment system to title XVI claims.
TITLE IV--MISCELLANEOUS AND TECHNICAL AMENDMENTS
Subtitle A--Amendments Relating to the Ticket to Work and Work
Incentives Improvement Act of 1999
Sec. 401. Application of demonstration authority sunset date to new
projects.
Sec. 402. Expansion of waiver authority available in connection with
demonstration projects providing for reductions in disability insurance
benefits based on earnings.
Sec. 403. Funding of demonstration projects provided for reductions in
disability insurance benefits based on earnings.
Sec. 404. Availability of Federal and State work incentive services to
additional individuals.
Sec. 405. Technical amendment clarifying treatment for certain purposes
of individual work plans under the Ticket to Work and Self-Sufficiency
Program.
Subtitle B--Miscellaneous Amendments
Sec. 411. Elimination of transcript requirement in remand cases fully
favorable to the claimant.
Sec. 412. Nonpayment of benefits upon removal from the United States.
Sec. 413. Reinstatement of certain reporting requirements.
Sec. 414. Clarification of definitions regarding certain survivor
benefits.
Sec. 415. Clarification respecting the FICA and SECA tax exemptions for
an individual whose earnings are subject to the laws of a totalization
agreement partner.
Sec. 416. Coverage under divided retirement system for public employees
in Kentucky.
Sec. 417. Compensation for the Social Security Advisory Board.
Sec. 418. 60-month period of employment requirement for application of
government pension offset exemption.
Subtitle C--Technical Amendments
Sec. 421. Technical correction relating to responsible agency head.
Sec. 422. Technical correction relating to retirement benefits of
ministers.
Sec. 423. Technical corrections relating to domestic employment.
Sec. 424. Technical corrections of outdated references.
Sec. 425. Technical correction respecting self-employment income in
community property States.
TITLE I--PROTECTION OF BENEFICIARIES
Subtitle A--Representative Payees
SEC. 101. AUTHORITY TO REISSUE BENEFITS MISUSED BY ORGANIZATIONAL
REPRESENTATIVE PAYEES.
(a) Title II Amendments.--
(1) Reissuance of benefits.--Section 205(j)(5) of the Social
Security Act (42 U.S.C. 405(j)(5)) is amended by inserting
after the first sentence the following new sentences: ``In any
case in which a representative payee that--
``(A) is not an individual (regardless of whether it is a
`qualified organization' within the meaning of paragraph
(4)(B)); or
``(B) is an individual who, for any month during a period
when misuse occurs, serves 15 or more individuals who are
beneficiaries under this title, title VIII, title XVI, or any
combination of such titles;
misuses all or part of an individual's benefit paid to such
representative payee, the Commissioner of Social Security shall certify
for payment to the beneficiary or the beneficiary's alternative
representative payee an amount equal to the amount of such benefit so
misused. The provisions of this paragraph are subject to the
limitations of paragraph (7)(B).''.
(2) Misuse of benefits defined.--Section 205(j) of such Act
(42 U.S.C. 405(j)) is amended by adding at the end the
following new paragraph:
``(8) For purposes of this subsection, misuse of benefits by a
representative payee occurs in any case in which the representative
payee receives payment under this title for the use and benefit of
another person and converts such payment, or any part thereof, to a use
other than for the use and benefit of such other person. The
Commissioner of Social Security may prescribe by regulation the meaning
of the term `use and benefit' for purposes of this paragraph.''.
(b) Title VIII Amendments.--
(1) Reissuance of benefits.--Section 807(i) of the Social
Security Act (42 U.S.C. 1007(i)) (as amended by section
209(b)(1) of this Act) is amended further by inserting after
the first sentence the following new sentences: ``In any case
in which a representative payee that--
``(A) is not an individual; or
``(B) is an individual who, for any month during a
period when misuse occurs, serves 15 or more
individuals who are beneficiaries under this title,
title II, title XVI, or any combination of such titles;
misuses all or part of an individual's benefit paid to such
representative payee, the Commissioner of Social Security shall
pay to the beneficiary or the beneficiary's alternative
representative payee an amount equal to the amount of such
benefit so misused. The provisions of this paragraph are
subject to the limitations of subsection (l)(2).''.
(2) Misuse of benefits defined.--Section 807 of such Act (42
U.S.C. 1007) is amended by adding at the end the following new
subsection:
``(j) Misuse of Benefits.--For purposes of this title, misuse of
benefits by a representative payee occurs in any case in which the
representative payee receives payment under this title for the use and
benefit of another person under this title and converts such payment,
or any part thereof, to a use other than for the use and benefit of
such person. The Commissioner of Social Security may prescribe by
regulation the meaning of the term `use and benefit' for purposes of
this subsection.''.
(3) Technical amendment.--Section 807(a) of such Act (42
U.S.C. 1007(a)) is amended, in the first sentence, by striking
``for his or her benefit'' and inserting ``for his or her use
and benefit''.
(c) Title XVI Amendments.--
(1) Reissuance of benefits.--Section 1631(a)(2)(E) of such
Act (42 U.S.C. 1383(a)(2)(E)) is amended by inserting after the
first sentence the following new sentences: ``In any case in
which a representative payee that--
``(i) is not an individual (regardless of whether it is a
`qualified organization' within the meaning of subparagraph
(D)(ii)); or
``(ii) is an individual who, for any month during a period
when misuse occurs, serves 15 or more individuals who are
beneficiaries under this title, title II, title VIII, or any
combination of such titles;
misuses all or part of an individual's benefit paid to the
representative payee, the Commissioner of Social Security shall pay to
the beneficiary or the beneficiary's alternative representative payee
an amount equal to the amount of the benefit so misused. The provisions
of this subparagraph are subject to the limitations of subparagraph
(H)(ii).''.
(2) Exclusion of reissued benefits from resources.--Section
1613(a) of such Act (42 U.S.C. 1382b(a)) is amended--
(A) in paragraph (12), by striking ``and'' at the
end;
(B) in paragraph (13), by striking the period and
inserting ``; and''; and
(C) by inserting after paragraph (13) the following
new paragraph:
``(14) for the 9-month period beginning after the month in
which received, any amount received by such individual (or
spouse) or any other person whose income is deemed to be
included in such individual's (or spouse's) income for purposes
of this title as restitution for benefits under this title,
title II, or title VIII that a representative payee of such
individual (or spouse) or such other person under section
205(j), 807, or 1631(a)(2) has misused.''.
(3) Misuse of benefits defined.--Section 1631(a)(2)(A) of
such Act (42 U.S.C. 1383(a)(2)(A)) is amended by adding at the
end the following new clause:
``(iv) For purposes of this paragraph, misuse of benefits by a
representative payee occurs in any case in which the representative
payee receives payment under this title for the use and benefit of
another person and converts such payment, or any part thereof, to a use
other than for the use and benefit of such other person. The
Commissioner of Social Security may prescribe by regulation the meaning
of the term `use and benefit' for purposes of this clause.''.
(d) Effective Date.--The amendments made by this section shall apply
to any case of benefit misuse by a representative payee with respect to
which the Commissioner makes the determination of misuse on or after
January 1, 1995.
SEC. 102. OVERSIGHT OF REPRESENTATIVE PAYEES.
(a) Certification of Bonding and Licensing Requirements for
Nongovernmental Organizational Representative Payees.--
(1) Title ii amendments.--Section 205(j) of the Social
Security Act (42 U.S.C. 405(j)) is amended--
(A) in paragraph (2)(C)(v), by striking ``a
community-based nonprofit social service agency
licensed or bonded by the State'' in subclause (I) and
inserting ``a certified community-based nonprofit
social service agency (as defined in paragraph (9))'';
(B) in paragraph (3)(F), by striking ``community-
based nonprofit social service agencies'' and inserting
``certified community-based nonprofit social service
agencies (as defined in paragraph (9))'';
(C) in paragraph (4)(B), by striking ``any community-
based nonprofit social service agency which is bonded
or licensed in each State in which it serves as a
representative payee'' and inserting ``any certified
community-based nonprofit social service agency (as
defined in paragraph (9))''; and
(D) by adding after paragraph (8) (as added by
section 101(a)(2) of this Act) the following new
paragraph:
``(9) For purposes of this subsection, the term `certified community-
based nonprofit social service agency' means a community-based
nonprofit social service agency which is in compliance with
requirements, under regulations which shall be prescribed by the
Commissioner, for annual certification to the Commissioner that it is
bonded in accordance with requirements specified by the Commissioner
and that it is licensed in each State in which it serves as a
representative payee (if licensing is available in such State) in
accordance with requirements specified by the Commissioner. Any such
annual certification shall include a copy of any independent audit on
such agency which may have been performed since the previous
certification.''.
(2) Title xvi amendments.--Section 1631(a)(2) of such Act (42
U.S.C. 1383(a)(2)) is amended--
(A) in subparagraph (B)(vii), by striking ``a
community-based nonprofit social service agency
licensed or bonded by the State'' in subclause (I) and
inserting ``a certified community-based nonprofit
social service agency (as defined in subparagraph
(I))'';
(B) in subparagraph (D)(ii)--
(i) by striking ``or any community-based''
and all that follows through ``in accordance''
in subclause (II) and inserting ``or any
certified community-based nonprofit social
service agency (as defined in subparagraph
(I)), if the agency, in accordance'';
(ii) by redesignating items (aa) and (bb) as
subclauses (I) and (II), respectively (and
adjusting the margination accordingly); and
(iii) by striking ``subclause (II)(bb)'' and
inserting ``subclause (II)''; and
(C) by adding at the end the following new
subparagraph:
``(I) For purposes of this paragraph, the term `certified community-
based nonprofit social service agency' means a community-based
nonprofit social service agency which is in compliance with
requirements, under regulations which shall be prescribed by the
Commissioner, for annual certification to the Commissioner that it is
bonded in accordance with requirements specified by the Commissioner
and that it is licensed in each State in which it serves as a
representative payee (if licensing is available in the State) in
accordance with requirements specified by the Commissioner. Any such
annual certification shall include a copy of any independent audit on
the agency which may have been performed since the previous
certification.''.
(3) Effective date.--The amendments made by this subsection
shall take effect on the first day of the thirteenth month
beginning after the date of the enactment of this Act.
(b) Periodic Onsite Review.--
(1) Title ii amendment.--Section 205(j)(6) of such Act (42
U.S.C. 405(j)(6)) is amended to read as follows:
``(6)(A) In addition to such other reviews of representative payees
as the Commissioner of Social Security may otherwise conduct, the
Commissioner shall provide for the periodic onsite review of any person
or agency located in the United States that receives the benefits
payable under this title (alone or in combination with benefits payable
under title VIII or title XVI) to another individual pursuant to the
appointment of such person or agency as a representative payee under
this subsection, section 807, or section 1631(a)(2) in any case in
which--
``(i) the representative payee is a person who serves in that
capacity with respect to 15 or more such individuals;
``(ii) the representative payee is a certified community-
based nonprofit social service agency (as defined in paragraph
(9) of this subsection or section 1631(a)(2)(I)); or
``(iii) the representative payee is an agency (other than an
agency described in clause (ii)) that serves in that capacity
with respect to 50 or more such individuals.
``(B) Within 120 days after the end of each fiscal year, the
Commissioner shall submit to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the Senate a
report on the results of periodic onsite reviews conducted during the
fiscal year pursuant to subparagraph (A) and of any other reviews of
representative payees conducted during such fiscal year in connection
with benefits under this title. Each such report shall describe in
detail all problems identified in such reviews and any corrective
action taken or planned to be taken to correct such problems, and shall
include--
``(i) the number of such reviews;
``(ii) the results of such reviews;
``(iii) the number of cases in which the representative payee
was changed and why;
``(iv) the number of cases involving the exercise of
expedited, targeted oversight of the representative payee by
the Commissioner conducted upon receipt of an allegation of
misuse of funds, failure to pay a vendor, or a similar
irregularity;
``(v) the number of cases discovered in which there was a
misuse of funds;
``(vi) how any such cases of misuse of funds were dealt with
by the Commissioner;
``(vii) the final disposition of such cases of misuse of
funds, including any criminal penalties imposed; and
``(viii) such other information as the Commissioner deems
appropriate.''.
(2) Title viii amendment.--Section 807 of such Act (as
amended by section 101(b)(2) of this Act) is amended further by
adding at the end the following new subsection:
``(k) Periodic Onsite Review.--(1) In addition to such other reviews
of representative payees as the Commissioner of Social Security may
otherwise conduct, the Commissioner may provide for the periodic onsite
review of any person or agency that receives the benefits payable under
this title (alone or in combination with benefits payable under title
II or title XVI) to another individual pursuant to the appointment of
such person or agency as a representative payee under this section,
section 205(j), or section 1631(a)(2) in any case in which--
``(A) the representative payee is a person who serves in that
capacity with respect to 15 or more such individuals; or
``(B) the representative payee is an agency that serves in
that capacity with respect to 50 or more such individuals.
``(2) Within 120 days after the end of each fiscal year, the
Commissioner shall submit to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the Senate a
report on the results of periodic onsite reviews conducted during the
fiscal year pursuant to paragraph (1) and of any other reviews of
representative payees conducted during such fiscal year in connection
with benefits under this title. Each such report shall describe in
detail all problems identified in such reviews and any corrective
action taken or planned to be taken to correct such problems, and shall
include--
``(A) the number of such reviews;
``(B) the results of such reviews;
``(C) the number of cases in which the representative payee
was changed and why;
``(D) the number of cases involving the exercise of
expedited, targeted oversight of the representative payee by
the Commissioner conducted upon receipt of an allegation of
misuse of funds, failure to pay a vendor, or a similar
irregularity;
``(E) the number of cases discovered in which there was a
misuse of funds;
``(F) how any such cases of misuse of funds were dealt with
by the Commissioner;
``(G) the final disposition of such cases of misuse of funds,
including any criminal penalties imposed; and
``(H) such other information as the Commissioner deems
appropriate.''.
(3) Title xvi amendment.--Section 1631(a)(2)(G) of such Act
(42 U.S.C. 1383(a)(2)(G)) is amended to read as follows:
``(G)(i) In addition to such other reviews of representative payees
as the Commissioner of Social Security may otherwise conduct, the
Commissioner shall provide for the periodic onsite review of any person
or agency that receives the benefits payable under this title (alone or
in combination with benefits payable under title II or title VIII) to
another individual pursuant to the appointment of the person or agency
as a representative payee under this paragraph, section 205(j), or
section 807 in any case in which--
``(I) the representative payee is a person who serves in that
capacity with respect to 15 or more such individuals;
``(II) the representative payee is a certified community-
based nonprofit social service agency (as defined in
subparagraph (I) of this paragraph or section 205(j)(9)); or
``(III) the representative payee is an agency (other than an
agency described in subclause (II)) that serves in that
capacity with respect to 50 or more such individuals.
``(ii) Within 120 days after the end of each fiscal year, the
Commissioner shall submit to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the Senate a
report on the results of periodic onsite reviews conducted during the
fiscal year pursuant to clause (i) and of any other reviews of
representative payees conducted during such fiscal year in connection
with benefits under this title. Each such report shall describe in
detail all problems identified in the reviews and any corrective action
taken or planned to be taken to correct the problems, and shall
include--
``(I) the number of the reviews;
``(II) the results of such reviews;
``(III) the number of cases in which the representative payee
was changed and why;
``(IV) the number of cases involving the exercise of
expedited, targeted oversight of the representative payee by
the Commissioner conducted upon receipt of an allegation of
misuse of funds, failure to pay a vendor, or a similar
irregularity;
``(V) the number of cases discovered in which there was a
misuse of funds;
``(VI) how any such cases of misuse of funds were dealt with
by the Commissioner;
``(VII) the final disposition of such cases of misuse of
funds, including any criminal penalties imposed; and
``(VIII) such other information as the Commissioner deems
appropriate.''.
SEC. 103. DISQUALIFICATION FROM SERVICE AS REPRESENTATIVE PAYEE OF
PERSONS CONVICTED OF OFFENSES RESULTING IN
IMPRISONMENT FOR MORE THAN 1 YEAR OR FLEEING
PROSECUTION, CUSTODY, OR CONFINEMENT.
(a) Title II Amendments.--Section 205(j)(2) of the Social Security
Act (42 U.S.C. 405(j)(2)) is amended--
(1) in subparagraph (B)(i)--
(A) by striking ``and'' at the end of subclause
(III);
(B) by redesignating subclause (IV) as subclause
(VI); and
(C) by inserting after subclause (III) the following
new subclauses:
``(IV) obtain information concerning whether such person has
been convicted of any other offense under Federal or State law
which resulted in imprisonment for more than 1 year,
``(V) obtain information concerning whether such person is a
person described in section 202(x)(1)(A)(iv), and'';
(2) in subparagraph (B), by adding at the end the following
new clause:
``(iii) Notwithstanding the provisions of section 552a of title 5,
United States Code, or any other provision of Federal or State law
(other than section 6103 of the Internal Revenue Code of 1986 and
section 1106(c) of this Act), the Commissioner shall furnish any
Federal, State, or local law enforcement officer, upon the written
request of the officer, with the current address, social security
account number, and photograph (if applicable) of any person
investigated under this paragraph, if the officer furnishes the
Commissioner with the name of such person and such other identifying
information as may reasonably be required by the Commissioner to
establish the unique identity of such person, and notifies the
Commissioner that--
``(I) such person is described in section 202(x)(1)(A)(iv),
``(II) such person has information that is necessary for the
officer to conduct the officer's official duties, and
``(III) the location or apprehension of such person is within
the officer's official duties.'';
(3) in subparagraph (C)(i)(II), by striking ``subparagraph
(B)(i)(IV),,'' and inserting ``subparagraph (B)(i)(VI)'' and
striking ``section 1631(a)(2)(B)(ii)(IV)'' and inserting
``section 1631(a)(2)(B)(ii)(VI)''; and
(4) in subparagraph (C)(i)--
(A) by striking ``or'' at the end of subclause (II);
(B) by striking the period at the end of subclause
(III) and inserting a comma; and
(C) by adding at the end the following new
subclauses:
``(IV) such person has previously been convicted as described
in subparagraph (B)(i)(IV), unless the Commissioner determines
that such certification would be appropriate notwithstanding
such conviction, or
``(V) such person is person described in section
202(x)(1)(A)(iv).''.
(b) Title VIII Amendments.--Section 807 of such Act (42 U.S.C. 1007)
is amended--
(1) in subsection (b)(2)--
(A) by striking ``and'' at the end of subparagraph
(C);
(B) by redesignating subparagraph (D) as subparagraph
(F); and
(C) by inserting after subparagraph (C) the following
new subparagraphs:
``(D) obtain information concerning whether such
person has been convicted of any other offense under
Federal or State law which resulted in imprisonment for
more than 1 year;
``(E) obtain information concerning whether such
person is a person described in section 804(a)(2);
and'';
(2) in subsection (b), by adding at the end the following new
paragraph:
``(3) Notwithstanding the provisions of section 552a of title
5, United States Code, or any other provision of Federal or
State law (other than section 6103 of the Internal Revenue Code
of 1986 and section 1106(c) of this Act), the Commissioner
shall furnish any Federal, State, or local law enforcement
officer, upon the written request of the officer, with the
current address, social security account number, and photograph
(if applicable) of any person investigated under this
subsection, if the officer furnishes the Commissioner with the
name of such person and such other identifying information as
may reasonably be required by the Commissioner to establish the
unique identity of such person, and notifies the Commissioner
that--
``(A) such person is described in section 804(a)(2),
``(B) such person has information that is necessary
for the officer to conduct the officer's official
duties, and
``(C) the location or apprehension of such person is
within the officer's official duties.''; and
(3) in subsection (d)(1)--
(A) by striking ``or'' at the end of subparagraph
(B);
(B) by striking the period at the end of subparagraph
(C) and inserting a semicolon; and
(C) by adding at the end the following new
subparagraphs:
``(D) such person has previously been convicted as
described in subsection (b)(2)(D), unless the
Commissioner determines that such payment would be
appropriate notwithstanding such conviction; or
``(E) such person is a person described in section
804(a)(2).''.
(c) Title XVI Amendments.--Section 1631(a)(2)(B) of such Act (42
U.S.C. 1383(a)(2)(B)) is amended--
(1) in clause (ii)--
(A) by striking ``and'' at the end of subclause
(III);
(B) by redesignating subclause (IV) as subclause
(VI); and
(C) by inserting after subclause (III) the following
new subclauses:
``(IV) obtain information concerning whether the person has
been convicted of any other offense under Federal or State law
which resulted in imprisonment for more than 1 year;
``(V) obtain information concerning whether such person is a
person described in section 1611(e)(4)(A); and'';
(2) in clause (iii)(II)--
(A) by striking ``clause (ii)(IV)'' and inserting
``clause (ii)(VI)''; and
(B) by striking ``section 205(j)(2)(B)(i)(IV)'' and
inserting ``section 205(j)(2)(B)(i)(VI)'';
(3) in clause (iii)--
(A) by striking ``or'' at the end of subclause (II);
(B) by striking the period at the end of subclause
(III) and inserting a semicolon; and
(C) by adding at the end the following new
subclauses:
``(IV) the person has previously been convicted as described
in clause (ii)(IV) of this subparagraph, unless the
Commissioner determines that the payment would be appropriate
notwithstanding the conviction; or
``(V) such person is a person described in section
1611(e)(4)(A).''; and
(4) by adding at the end the following new clause:
``(xiv) Notwithstanding the provisions of section 552a of title 5,
United States Code, or any other provision of Federal or State law
(other than section 6103 of the Internal Revenue Code of 1986 and
section 1106(c) of this Act), the Commissioner shall furnish any
Federal, State, or local law enforcement officer, upon the written
request of the officer, with the current address, social security
account number, and photograph (if applicable) of any person
investigated under this subparagraph, if the officer furnishes the
Commissioner with the name of such person and such other identifying
information as may reasonably be required by the Commissioner to
establish the unique identity of such person, and notifies the
Commissioner that--
``(I) such person is described in section 1611(e)(4)(A),
``(II) such person has information that is necessary for the
officer to conduct the officer's official duties, and
``(III) the location or apprehension of such person is within
the officer's official duties.''.
(d) Effective Date.--The amendments made by this section shall take
effect on the first day of the thirteenth month beginning after the
date of the enactment of this Act.
(e) Report to the Congress.--The Commissioner of Social Security, in
consultation with the Inspector General of the Social Security
Administration, shall prepare a report evaluating whether the existing
procedures and reviews for the qualification (including
disqualification) of representative payees are sufficient to enable the
Commissioner to protect benefits from being misused by representative
payees. The Commissioner shall submit the report to the Committee on
Ways and Means of the House of Representatives and the Committee on
Finance of the Senate no later than 270 days after the date of the
enactment of this Act. The Commissioner shall include in such report
any recommendations that the Commissioner considers appropriate.
SEC. 104. FEE FORFEITURE IN CASE OF BENEFIT MISUSE BY REPRESENTATIVE
PAYEES.
(a) Title II Amendments.--Section 205(j)(4)(A)(i) of the Social
Security Act (42 U.S.C. 405(j)(4)(A)(i)) is amended--
(1) in the first sentence, by striking ``A'' and inserting
``Except as provided in the next sentence, a''; and
(2) in the second sentence, by striking ``The Secretary'' and
inserting the following:
``A qualified organization may not collect a fee from an individual for
any month with respect to which the Commissioner of Social Security or
a court of competent jurisdiction has determined that the organization
misused all or part of the individual's benefit, and any amount so
collected by the qualified organization for such month shall be treated
as a misused part of the individual's benefit for purposes of
paragraphs (5) and (6). The Commissioner''.
(b) Title XVI Amendments.--Section 1631(a)(2)(D)(i) of such Act (42
U.S.C. 1383(a)(2)(D)(i)) is amended--
(1) in the first sentence, by striking ``A'' and inserting
``Except as provided in the next sentence, a''; and
(2) in the second sentence, by striking ``The Commissioner''
and inserting the following: ``A qualified organization may not
collect a fee from an individual for any month with respect to
which the Commissioner of Social Security or a court of
competent jurisdiction has determined that the organization
misused all or part of the individual's benefit, and any amount
so collected by the qualified organization for such month shall
be treated as a misused part of the individual's benefit for
purposes of subparagraphs (E) and (F). The Commissioner''.
(c) Effective Date.--The amendments made by this section shall apply
to any month involving benefit misuse by a representative payee in any
case with respect to which the Commissioner of Social Security or a
court of competent jurisdiction makes the determination of misuse after
180 days after the date of the enactment of this Act.
SEC. 105. LIABILITY OF REPRESENTATIVE PAYEES FOR MISUSED BENEFITS.
(a) Title II Amendments.--Section 205(j) of the Social Security Act
(42 U.S.C. 405(j)) (as amended by sections 101 and 102) is amended
further--
(1) by redesignating paragraphs (7), (8), and (9) as
paragraphs (8), (9), and (10), respectively;
(2) in paragraphs (2)(C)(v), (3)(F), and (4)(B), by striking
``paragraph (9)'' and inserting ``paragraph (10)'';
(3) in paragraph (6)(A)(ii), by striking ``paragraph (9)''
and inserting ``paragraph (10)''; and
(4) by inserting after paragraph (6) the following new
paragraph:
``(7)(A) If the Commissioner of Social Security or a court of
competent jurisdiction determines that a representative payee that is
not a Federal, State, or local government agency has misused all or
part of an individual's benefit that was paid to such representative
payee under this subsection, the representative payee shall be liable
for the amount misused, and such amount (to the extent not repaid by
the representative payee) shall be treated as an overpayment of
benefits under this title to the representative payee for all purposes
of this Act and related laws pertaining to the recovery of such
overpayments. Subject to subparagraph (B), upon recovering all or any
part of such amount, the Commissioner shall certify an amount equal to
the recovered amount for payment to such individual or such
individual's alternative representative payee.
``(B) The total of the amount certified for payment to such
individual or such individual's alternative representative payee under
subparagraph (A) and the amount certified for payment under paragraph
(5) may not exceed the total benefit amount misused by the
representative payee with respect to such individual.''.
(b) Title VIII Amendment.--Section 807 of such Act (as amended by
section 102(b)(2)) is amended further by adding at the end the
following new subsection:
``(l) Liability for Misused Amounts.--
``(1) In general.--If the Commissioner of Social Security or
a court of competent jurisdiction determines that a
representative payee that is not a Federal, State, or local
government agency has misused all or part of a qualified
individual's benefit that was paid to such representative payee
under this section, the representative payee shall be liable
for the amount misused, and such amount (to the extent not
repaid by the representative payee) shall be treated as an
overpayment of benefits under this title to the representative
payee for all purposes of this Act and related laws pertaining
to the recovery of such overpayments. Subject to paragraph (2),
upon recovering all or any part of such amount, the
Commissioner shall make payment of an amount equal to the
recovered amount to such qualified individual or such qualified
individual's alternative representative payee.
``(2) Limitation.--The total of the amount paid to such
individual or such individual's alternative representative
payee under paragraph (1) and the amount paid under subsection
(i) may not exceed the total benefit amount misused by the
representative payee with respect to such individual.''.
(c) Title XVI Amendments.--Section 1631(a)(2) of such Act (42 U.S.C.
1383(a)(2)) (as amended by section 102(b)(3)) is amended further--
(1) in subparagraph (G)(i)(II), by striking ``section
205(j)(9)'' and inserting ``section 205(j)(10)''; and
(2) by striking subparagraph (H) and inserting the following:
``(H)(i) If the Commissioner of Social Security or a court of
competent jurisdiction determines that a representative payee that is
not a Federal, State, or local government agency has misused all or
part of an individual's benefit that was paid to the representative
payee under this paragraph, the representative payee shall be liable
for the amount misused, and the amount (to the extent not repaid by the
representative payee) shall be treated as an overpayment of benefits
under this title to the representative payee for all purposes of this
Act and related laws pertaining to the recovery of the overpayments.
Subject to clause (ii), upon recovering all or any part of the amount,
the Commissioner shall make payment of an amount equal to the recovered
amount to such individual or such individual's alternative
representative payee.
``(ii) The total of the amount paid to such individual or such
individual's alternative representative payee under clause (i) and the
amount paid under subparagraph (E) may not exceed the total benefit
amount misused by the representative payee with respect to such
individual.''.
(d) Effective Date.--The amendments made by this section shall apply
to benefit misuse by a representative payee in any case with respect to
which the Commissioner of Social Security or a court of competent
jurisdiction makes the determination of misuse after 180 days after the
date of the enactment of this Act.
SEC. 106. AUTHORITY TO REDIRECT DELIVERY OF BENEFIT PAYMENTS WHEN A
REPRESENTATIVE PAYEE FAILS TO PROVIDE REQUIRED
ACCOUNTING.
(a) Title II Amendments.--Section 205(j)(3) of the Social Security
Act (42 U.S.C. 405(j)(3)) (as amended by sections 102(a)(1)(B) and
105(a)(2)) is amended--
(1) by redesignating subparagraphs (E) and (F) as
subparagraphs (F) and (G), respectively; and
(2) by inserting after subparagraph (D) the following new
subparagraph:
``(E) In any case in which the person described in subparagraph (A)
or (D) receiving payments on behalf of another fails to submit a report
required by the Commissioner of Social Security under subparagraph (A)
or (D), the Commissioner may, after furnishing notice to such person
and the individual entitled to such payment, require that such person
appear in person at a field office of the Social Security
Administration serving the area in which the individual resides in
order to receive such payments.''.
(b) Title VIII Amendments.--Section 807(h) of such Act (42 U.S.C.
1007(h)) is amended--
(1) by redesignating paragraphs (3) and (4) as paragraphs (4)
and (5), respectively; and
(2) by inserting after paragraph (2) the following new
paragraph:
``(3) Authority to redirect delivery of benefit payments when
a representative payee fails to provide required accounting.--
In any case in which the person described in paragraph (1) or
(2) receiving benefit payments on behalf of a qualified
individual fails to submit a report required by the
Commissioner of Social Security under paragraph (1) or (2), the
Commissioner may, after furnishing notice to such person and
the qualified individual, require that such person appear in
person at a United States Government facility designated by the
Social Security Administration as serving the area in which the
qualified individual resides in order to receive such benefit
payments.''.
(c) Title XVI Amendment.--Section 1631(a)(2)(C) of such Act (42
U.S.C. 1383(a)(2)(C)) is amended by adding at the end the following new
clause:
``(v) In any case in which the person described in clause (i) or (iv)
receiving payments on behalf of another fails to submit a report
required by the Commissioner of Social Security under clause (i) or
(iv), the Commissioner may, after furnishing notice to the person and
the individual entitled to the payment, require that such person appear
in person at a field office of the Social Security Administration
serving the area in which the individual resides in order to receive
such payments.''.
(d) Effective Date.--The amendment made by this section shall take
effect 180 days after the date of the enactment of this Act.
Subtitle B--Enforcement
SEC. 111. CIVIL MONETARY PENALTY AUTHORITY WITH RESPECT TO WRONGFUL
CONVERSIONS BY REPRESENTATIVE PAYEES.
(a) In General.--Section 1129(a) of the Social Security Act (42
U.S.C. 1320a-8) is amended by adding at the end the following new
paragraph:
``(3) Any person (including an organization, agency, or other entity)
who, having received, while acting in the capacity of a representative
payee pursuant to section 205(j), 807, or 1631(a)(2), a payment under
title II, VIII, or XVI for the use and benefit of another individual,
converts such payment, or any part thereof, to a use that such person
knows or should know is other than for the use and benefit of such
other individual shall be subject to, in addition to any other
penalties that may be prescribed by law, a civil money penalty of not
more than $5,000 for each such conversion. Such person shall also be
subject to an assessment, in lieu of damages sustained by the United
States resulting from the conversion, of not more than twice the amount
of any payments so converted.''.
(b) Effective Date.--The amendment made by this section shall apply
with respect to violations committed after the date of the enactment of
this Act.
TITLE II--PROGRAM PROTECTIONS
SEC. 201. CIVIL MONETARY PENALTY AUTHORITY WITH RESPECT TO KNOWING
WITHHOLDING OF MATERIAL FACTS.
(a) Treatment of Withholding of Material Facts.--
(1) Civil penalties.--Section 1129(a)(1) of the Social
Security Act (42 U.S.C. 1320a-8(a)(1)) is amended--
(A) by striking ``who'' in the first sentence and
inserting ``who--'';
(B) by striking ``makes'' in the first sentence and
all that follows through ``shall be subject to,'' and
inserting the following:
``(A) makes, or causes to be made, a statement or
representation of a material fact, for use in determining any
initial or continuing right to or the amount of monthly
insurance benefits under title II or benefits or payments under
title VIII or XVI, that the person knows or should know is
false or misleading,
``(B) makes such a statement or representation for such use
with knowing disregard for the truth, or
``(C) omits from a statement or representation for such use,
or otherwise withholds disclosure of, a fact which the person
knows or should know is material to the determination of any
initial or continuing right to or the amount of monthly
insurance benefits under title II or benefits or payments under
title VIII or XVI, if the person knows, or should know, that
the statement or representation with such omission is false or
misleading or that the withholding of such disclosure is
misleading,
shall be subject to,'';
(C) by inserting ``or each receipt of such benefits
or payments while withholding disclosure of such fact''
after ``each such statement or representation'' in the
first sentence;
(D) by inserting ``or because of such withholding of
disclosure of a material fact'' after ``because of such
statement or representation'' in the second sentence;
and
(E) by inserting ``or such a withholding of
disclosure'' after ``such a statement or
representation'' in the second sentence.
(2) Administrative procedure for imposing penalties.--Section
1129A(a) of such Act (42 U.S.C. 1320a-8a(a)) is amended--
(A) by striking ``who'' the first place it appears
and inserting ``who--''; and
(B) by striking ``makes'' and all that follows
through ``shall be subject to,'' and inserting the
following:
``(1) makes, or causes to be made, a statement or
representation of a material fact, for use in determining any
initial or continuing right to or the amount of monthly
insurance benefits under title II or benefits or payments under
title XVI that the person knows or should know is false or
misleading,
``(2) makes such a statement or representation for such use
with knowing disregard for the truth, or
``(3) omits from a statement or representation for such use,
or otherwise withholds disclosure of, a fact which the person
knows or should know is material to the determination of any
initial or continuing right to or the amount of monthly
insurance benefits under title II or benefits or payments under
title XVI, if the person knows, or should know, that the
statement or representation with such omission is false or
misleading or that the withholding of such disclosure is
misleading,
shall be subject to,''.
(b) Clarification of Treatment of Recovered Amounts.--Section
1129(e)(2)(B) of such Act (42 U.S.C. 1320a-8(e)(2)(B)) is amended by
striking ``In the case of amounts recovered arising out of a
determination relating to title VIII or XVI,'' and inserting ``In the
case of any other amounts recovered under this section,''.
(c) Conforming Amendments.--
(1) Section 1129(b)(3)(A) of such Act (42 U.S.C. 1320a-
8(b)(3)(A)) is amended by striking ``charging fraud or false
statements''.
(2) Section 1129(c)(1) of such Act (42 U.S.C. 1320a-8(c)(1))
is amended by striking ``and representations'' and inserting
``, representations, or actions''.
(3) Section 1129(e)(1)(A) of such Act (42 U.S.C. 1320a-
8(e)(1)(A)) is amended by striking ``statement or
representation referred to in subsection (a) was made'' and
inserting ``violation occurred''.
(d) Effective Date.--The amendments made by this section shall apply
with respect to violations committed after the date on which the
Commissioner implements the centralized computer file described in
section 202.
SEC. 202. ISSUANCE BY COMMISSIONER OF SOCIAL SECURITY OF RECEIPTS TO
ACKNOWLEDGE SUBMISSION OF REPORTS OF CHANGES IN
WORK OR EARNINGS STATUS OF DISABLED BENEFICIARIES.
Effective as soon as possible, but not later than 1 year after the
date of the enactment of this Act, until such time as the Commissioner
of Social Security implements a centralized computer file recording the
date of the submission of information by a disabled beneficiary (or
representative) regarding a change in the beneficiary's work or
earnings status, the Commissioner shall issue a receipt to the disabled
beneficiary (or representative) each time he or she submits
documentation, or otherwise reports to the Commissioner, on a change in
such status.
SEC. 203. DENIAL OF TITLE II BENEFITS TO PERSONS FLEEING PROSECUTION,
CUSTODY, OR CONFINEMENT, AND TO PERSONS VIOLATING
PROBATION OR PAROLE.
(a) In General.--Section 202(x) of the Social Security Act (42 U.S.C.
402(x)) is amended--
(1) in the heading, by striking ``Prisoners'' and all that
follows and inserting the following: ``Prisoners, Certain Other
Inmates of Publicly Funded Institutions, Fugitives,
Probationers, and Parolees'';
(2) in paragraph (1)(A)(ii)(IV), by striking ``or'' at the
end;
(3) in paragraph (1)(A)(iii), by striking the period at the
end and inserting a comma;
(4) by inserting after paragraph (1)(A)(iii) the following:
``(iv) is fleeing to avoid prosecution, or custody or
confinement after conviction, under the laws of the place from
which the person flees, for a crime, or an attempt to commit a
crime, which is a felony under the laws of the place from which
the person flees, or which, in the case of the State of New
Jersey, is a high misdemeanor under the laws of such State, or
``(v) is violating a condition of probation or parole imposed
under Federal or State law.
In the case of an individual from whom such monthly benefits have been
withheld pursuant to clause (iv) or (v), the Commissioner may, for good
cause shown, pay such withheld benefits to the individual.''; and
(5) in paragraph (3), by adding at the end the following new
subparagraph:
``(C) Notwithstanding the provisions of section 552a of title 5,
United States Code, or any other provision of Federal or State law
(other than section 6103 of the Internal Revenue Code of 1986 and
section 1106(c) of this Act), the Commissioner shall furnish any
Federal, State, or local law enforcement officer, upon the written
request of the officer, with the current address, Social Security
number, and photograph (if applicable) of any beneficiary under this
title, if the officer furnishes the Commissioner with the name of the
beneficiary, and other identifying information as reasonably required
by the Commissioner to establish the unique identity of the
beneficiary, and notifies the Commissioner that--
``(i) the beneficiary--
``(I) is described in clause (iv) or (v) of paragraph
(1)(A); and
``(II) has information that is necessary for the
officer to conduct the officer's official duties; and
``(ii) the location or apprehension of the beneficiary is
within the officer's official duties.''.
(b) Regulations.--Not later than the first day of the first month
that begins on or after the date that is 9 months after the date of the
enactment of this Act, the Commissioner of Social Security shall
promulgate regulations governing payment by the Commissioner, for good
cause shown, of withheld benefits, pursuant to the last sentence of
section 202(x)(1)(A) of the Social Security Act (as amended by
subsection (a)).
(c) Effective Date.--The amendments made by subsection (a) shall take
effect on the first day of the first month that begins on or after the
date that is 9 months after the date of the enactment of this Act.
SEC. 204. REQUIREMENTS RELATING TO OFFERS TO PROVIDE FOR A FEE A
PRODUCT OR SERVICE AVAILABLE WITHOUT CHARGE FROM
THE SOCIAL SECURITY ADMINISTRATION.
(a) In General.--Section 1140 of the Social Security Act (42 U.S.C.
1320b-10) is amended--
(1) in subsection (a), by adding at the end the following new
paragraph:
``(4)(A) No person shall offer, for a fee, to assist an individual to
obtain a product or service that the person knows or should know is
provided free of charge by the Social Security Administration unless,
at the time the offer is made, the person provides to the individual to
whom the offer is tendered a notice that--
``(i) explains that the product or service is available free
of charge from the Social Security Administration, and
``(ii) complies with standards prescribed by the Commissioner
of Social Security respecting the content of such notice and
its placement, visibility, and legibility.
``(B) Subparagraph (A) shall not apply to any offer--
``(i) to serve as a claimant representative in connection
with a claim arising under title II, title VIII, or title XVI;
or
``(ii) to prepare, or assist in the preparation of, an
individual's plan for achieving self-support under title
XVI.''; and
(2) in the heading, by striking ``prohibition of misuse of
symbols, emblems, or names in reference'' and inserting
``prohibitions relating to references''.
(b) Effective Date.--The amendments made by this section shall apply
to offers of assistance made after the sixth month ending after the
Commissioner of Social Security promulgates final regulations
prescribing the standards applicable to the notice required to be
provided in connection with such offer. The Commissioner shall
promulgate such final regulations within 1 year after the date of the
enactment of this Act.
SEC. 205. REFUSAL TO RECOGNIZE CERTAIN INDIVIDUALS AS CLAIMANT
REPRESENTATIVES.
Section 206(a)(1) of the Social Security Act (42 U.S.C. 406(a)(1)) is
amended by inserting after the second sentence the following:
``Notwithstanding the preceding sentences, the Commissioner, after due
notice and opportunity for hearing, (A) may refuse to recognize as a
representative, and may disqualify a representative already recognized,
any attorney who has been disbarred or suspended from any court or bar
to which he or she was previously admitted to practice or who has been
disqualified from participating in or appearing before any Federal
program or agency, and (B) may refuse to recognize, and may disqualify,
as a non-attorney representative any attorney who has been disbarred or
suspended from any court or bar to which he or she was previously
admitted to practice. A representative who has been disqualified or
suspended pursuant to this section from appearing before the Social
Security Administration as a result of collecting or receiving a fee in
excess of the amount authorized shall be barred from appearing before
the Social Security Administration as a representative until full
restitution is made to the claimant and, thereafter, may be considered
for reinstatement only under such rules as the Commissioner may
prescribe.''.
SEC. 206. PENALTY FOR CORRUPT OR FORCIBLE INTERFERENCE WITH
ADMINISTRATION OF SOCIAL SECURITY ACT.
Part A of title XI of the Social Security Act (42 U.S.C. 1301 et
seq.) is amended by inserting after section 1129A the following new
section:
``attempts to interfere with administration of social security act
``Sec. 1129B. Whoever corruptly or by force or threats of force
(including any threatening letter or communication) attempts to
intimidate or impede any officer, employee, or contractor of the Social
Security Administration (including any State employee of a disability
determination service or any other individual designated by the
Commissioner of Social Security) acting in an official capacity to
carry out a duty under this Act, or in any other way corruptly or by
force or threats of force (including any threatening letter or
communication) obstructs or impedes, or attempts to obstruct or impede,
the due administration of this Act, shall be fined not more than
$5,000, imprisoned not more than 3 years, or both, except that if the
offense is committed only by threats of force, the person shall be
fined not more than $3,000, imprisoned not more than 1 year, or both.
In this subsection, the term `threats of force' means threats of harm
to the officer or employee of the United States or to a contractor of
the Social Security Administration, or to a member of the family of
such an officer or employee or contractor.''.
SEC. 207. USE OF SYMBOLS, EMBLEMS, OR NAMES IN REFERENCE TO SOCIAL
SECURITY OR MEDICARE.
(a) In General.--Section 1140(a)(1) of the Social Security Act (42
U.S.C. 1320b-10(a)(1)) is amended--
(1) in subparagraph (A), by inserting `` `Centers for
Medicare & Medicaid Services','' after `` `Health Care
Financing Administration','', by striking ``or `Medicaid', ''
and inserting `` `Medicaid', `Death Benefits Update', `Federal
Benefit Information', `Funeral Expenses', or `Final
Supplemental Plan','' and by inserting `` `CMS','' after ``
`HCFA','';
(2) in subparagraph (B), by inserting ``Centers for Medicare
& Medicaid Services,'' after ``Health Care Financing
Administration,'' each place it appears; and
(3) in the matter following subparagraph (B), by striking
``the Health Care Financing Administration,'' each place it
appears and inserting ``the Centers for Medicare & Medicaid
Services,''.
(b) Effective Date.--The amendments made by this section shall apply
to items sent after 180 days after the date of the enactment of this
Act.
SEC. 208. DISQUALIFICATION FROM PAYMENT DURING TRIAL WORK PERIOD UPON
CONVICTION OF FRAUDULENT CONCEALMENT OF WORK
ACTIVITY.
(a) In General.--Section 222(c) of the Social Security Act (42 U.S.C.
422(c)) is amended by adding at the end the following new paragraph:
``(5) Upon conviction by a Federal court that an individual has
fraudulently concealed work activity during a period of trial work from
the Commissioner of Social Security by--
``(A) providing false information to the Commissioner of
Social Security as to whether the individual had earnings in or
for a particular period, or as to the amount thereof;
``(B) receiving disability insurance benefits under this
title while engaging in work activity under another identity,
including under another social security account number or a
number purporting to be a social security account number; or
``(C) taking other actions to conceal work activity with an
intent fraudulently to secure payment in a greater amount than
is due or when no payment is authorized,
no benefit shall be payable to such individual under this title with
respect to a period of disability for any month before such conviction
during which the individual rendered services during the period of
trial work with respect to which the fraudulently concealed work
activity occurred, and amounts otherwise due under this title as
restitution, penalties, assessments, fines, or other repayments shall
in all cases be in addition to any amounts for which such individual is
liable as overpayments by reason of such concealment.''.
(b) Effective Date.--The amendment made by subsection (a) shall apply
with respect to work activity performed after the date of the enactment
of this Act.
SEC. 209. AUTHORITY FOR JUDICIAL ORDERS OF RESTITUTION.
(a) Amendments to Title II.--Section 208 of the Social Security Act
(42 U.S.C. 408) is amended--
(1) by redesignating subsections (b), (c), and (d) as
subsections (c), (d), and (e), respectively; and
(2) by inserting after subsection (a) the following new
subsection:
``(b)(1) Any Federal court, when sentencing a defendant convicted of
an offense under subsection (a), may order, in addition to or in lieu
of any other penalty authorized by law, that the defendant make
restitution to the Social Security Administration.
``(2) Sections 3612, 3663, and 3664 of title 18, United States Code,
shall apply with respect to the issuance and enforcement of orders of
restitution under this subsection. In so applying such sections, the
Social Security Administration shall be considered the victim.
``(3) If the court does not order restitution, or orders only partial
restitution, under this subsection, the court shall state on the record
the reasons therefor.''.
(b) Amendments to Title VIII.--Section 807(i) of such Act (42 U.S.C.
1007(i)) is amended--
(1) by striking ``(i) Restitution.--In any case where'' and
inserting the following:
``(i) Restitution.--
``(1) In general.--In any case where''; and
(2) by adding at the end the following new paragraph:
``(2) Court order for restitution.--
``(A) In general.--Any Federal court, when sentencing
a defendant convicted of an offense under subsection
(a), may order, in addition to or in lieu of any other
penalty authorized by law, that the defendant make
restitution to the Social Security Administration.
``(B) Related provisions.--Sections 3612, 3663, and
3664 of title 18, United States Code, shall apply with
respect to the issuance and enforcement of orders of
restitution under this paragraph. In so applying such
sections, the Social Security Administration shall be
considered the victim.
``(C) Stated reasons for not ordering restitution.--
If the court does not order restitution, or orders only
partial restitution, under this paragraph, the court
shall state on the record the reasons therefor.''.
(c) Amendments to Title XVI.--Section 1632 of such Act (42 U.S.C.
1383a) is amended--
(1) by redesignating subsection (b) as subsection (c); and
(2) by inserting after subsection (a) the following new
subsection:
``(b)(1) Any Federal court, when sentencing a defendant convicted of
an offense under subsection (a), may order, in addition to or in lieu
of any other penalty authorized by law, that the defendant make
restitution to the Social Security Administration.
``(2) Sections 3612, 3663, and 3664 of title 18, United States Code,
shall apply with respect to the issuance and enforcement of orders of
restitution under this subsection. In so applying such sections, the
Social Security Administration shall be considered the victim.
``(3) If the court does not order restitution, or orders only partial
restitution, under this subsection, the court shall state on the record
the reasons therefor.''.
(d) Special Account for Receipt of Restitution Payments.--Section
704(b) of such Act (42 U.S.C. 904(b)) is amended by adding at the end
the following new paragraph:
``(3)(A) Except as provided in subparagraph (B), amounts received by
the Social Security Administration pursuant to an order of restitution
under section 208(b), 807(i), or 1632(b) shall be credited to a special
fund established in the Treasury of the United States for amounts so
received or recovered. The amounts so credited, to the extent and in
the amounts provided in advance in appropriations Acts, shall be
available to defray expenses incurred in carrying out titles II, VIII,
and XVI.
``(B) Subparagraph (A) shall not apply with respect to amounts
received in connection with misuse by a representative payee (within
the meaning of sections 205(j), 807, and 1631(a)(2)) of funds paid as
benefits under title II, VIII, or XVI. Such amounts received in
connection with misuse of funds paid as benefits under title II shall
be transferred to the Managing Trustee of the Federal Old-Age and
Survivors Insurance Trust Fund or the Federal Disability Insurance
Trust Fund, as determined appropriate by the Commissioner of Social
Security, and such amounts shall be deposited by the Managing Trustee
into such Trust Fund. All other such amounts shall be deposited by the
Commissioner into the general fund of the Treasury as miscellaneous
receipts.''.
(e) Effective Date.--The amendments made by subsections (a), (b), and
(c) shall apply with respect to violations occurring on or after the
date of the enactment of this Act.
TITLE III--ATTORNEY FEE PAYMENT SYSTEM IMPROVEMENTS
SEC. 301. CAP ON ATTORNEY ASSESSMENTS.
(a) In General.--Section 206(d)(2)(A) of the Social Security Act (42
U.S.C. 406(d)(2)(A)) is amended--
(1) by inserting ``, except that the maximum amount of the
assessment may not exceed the greater of $75 or the adjusted
amount as provided pursuant to the following two sentences''
after ``subparagraph (B)''; and
(2) by adding at the end the following new sentence: ``In the
case of any calendar year beginning after the amendments made
by section 301 of the Social Security Protection Act of 2003
take effect, the dollar amount specified in the preceding
sentence (including a previously adjusted amount) shall be
adjusted annually under the procedures used to adjust benefit
amounts under section 215(i)(2)(A)(ii), except such adjustment
shall be based on the higher of $75 or the previously adjusted
amount that would have been in effect for December of the
preceding year, but for the rounding of such amount pursuant to
the following sentence. Any amount so adjusted that is not a
multiple of $1 shall be rounded to the next lowest multiple of
$1, but in no case less than $75.''.
(b) Effective Date.--The amendments made by this section shall apply
with respect to fees for representation of claimants which are first
required to be certified or paid under section 206 of the Social
Security Act on or after the first day of the first month that begins
after 180 days after the date of the enactment of this Act.
SEC. 302. EXTENSION OF ATTORNEY FEE PAYMENT SYSTEM TO TITLE XVI CLAIMS.
(a) In General.--Section 1631(d)(2) of the Social Security Act (42
U.S.C. 1383(d)(2)) is amended--
(1) in subparagraph (A), in the matter preceding clause (i)--
(A) by striking ``section 206(a)'' and inserting
``section 206'';
(B) by striking ``(other than paragraph (4)
thereof)'' and inserting ``(other than subsections
(a)(4) and (d) thereof)''; and
(C) by striking ``paragraph (2) thereof'' and
inserting ``such section'';
(2) in subparagraph (A)(i), by striking ``in subparagraphs
(A)(ii)(I) and (C)(i),'' and inserting ``in subparagraphs
(A)(ii)(I) and (D)(i) of subsection (a)(2)'', and by striking
``and'' at the end;
(3) by striking subparagraph (A)(ii) and inserting the
following:
``(ii) by substituting, in subsections (a)(2)(B) and
(b)(1)(B)(i), the phrase `section 1631(a)(7)(A) or the
requirements of due process of law' for the phrase `subsection
(g) or (h) of section 223';
``(iii) by substituting, in subsection (a)(2)(C)(i), the
phrase `under title II' for the phrase `under title XVI';
``(iv) by substituting, in subsection (b)(1)(A), the phrase
`pay the amount of such fee' for the phrase `certify the amount
of such fee for payment' and by striking, in subsection
(b)(1)(A), the phrase `or certified for payment'; and
``(v) by substituting, in subsection (b)(1)(B)(ii), the
phrase `deemed to be such amounts as determined before any
applicable reduction under section 1631(g), and reduced by the
amount of any reduction in benefits under this title or title
II made pursuant to section 1127(a)' for the phrase `determined
before any applicable reduction under section 1127(a))'.''; and
(4) by striking subparagraph (B) and inserting the following
new subparagraphs:
``(B) Subject to subparagraph (C), if the claimant is determined to
be entitled to past-due benefits under this title and the person
representing the claimant is an attorney, the Commissioner of Social
Security shall pay out of such past-due benefits to such attorney an
amount equal to the lesser of--
``(i) so much of the maximum fee as does not exceed 25
percent of such past-due benefits (as determined before any
applicable reduction under section 1631(g) and reduced by the
amount of any reduction in benefits under this title or title
II pursuant to section 1127(a)), or
``(ii) the amount of past-due benefits available after any
applicable reductions under sections 1631(g) and 1127(a).
``(C)(i) Whenever a fee for services is required to be paid to an
attorney from a claimant's past-due benefits pursuant to subparagraph
(B), the Commissioner shall impose on the attorney an assessment
calculated in accordance with clause (ii).
``(ii)(I) The amount of an assessment under clause (i) shall be equal
to the product obtained by multiplying the amount of the
representative's fee that would be required to be paid by subparagraph
(B) before the application of this subparagraph, by the percentage
specified in subclause (II), except that the maximum amount of the
assessment may not exceed $75. In the case of any calendar year
beginning after the amendments made by section 302 of the Social
Security Protection Act of 2003 take effect, the dollar amount
specified in the preceding sentence (including a previously adjusted
amount) shall be adjusted annually under the procedures used to adjust
benefit amounts under section 215(i)(2)(A)(ii), except such adjustment
shall be based on the higher of $75 or the previously adjusted amount
that would have been in effect for December of the preceding year, but
for the rounding of such amount pursuant to the following sentence. Any
amount so adjusted that is not a multiple of $1 shall be rounded to the
next lowest multiple of $1, but in no case less than $75.
``(II) The percentage specified in this subclause is such percentage
rate as the Commissioner determines is necessary in order to achieve
full recovery of the costs of determining and approving fees to
attorneys from the past-due benefits of claimants, but not in excess of
6.3 percent.
``(iii) The Commissioner may collect the assessment imposed on an
attorney under clause (i) by offset from the amount of the fee
otherwise required by subparagraph (B) to be paid to the attorney from
a claimant's past-due benefits.
``(iv) An attorney subject to an assessment under clause (i) may not,
directly or indirectly, request or otherwise obtain reimbursement for
such assessment from the claimant whose claim gave rise to the
assessment.
``(v) Assessments on attorneys collected under this subparagraph
shall be deposited in the Treasury in a separate fund created for this
purpose.
``(vi) The assessments authorized under this subparagraph shall be
collected and available for obligation only to the extent and in the
amount provided in advance in appropriations Acts. Amounts so
appropriated are authorized to remain available until expended, for
administrative expenses in carrying out this title and related laws.''.
(b) Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to fees for representation of claimants
which are first required to be certified or paid under section
1631(d)(2) of the Social Security Act on or after the first day
of the first month that begins after 270 days after the date of
the enactment of this Act.
(2) Sunset.--Such amendments shall not apply with respect to
fees for representation of claimants in the case of any claim
for benefits with respect to which the agreement for
representation is entered into after 5 years after the date on
which the Commissioner of Social Security first implements the
amendments made by this section.
(c) Study Regarding Fee-Withholding for Non-Attorney
Representatives.--
(1) Study.--As soon as practicable after the date of the
enactment of this Act, the Comptroller General of the United
States shall undertake a study regarding fee-withholding for
non-attorney representatives representing claimants before the
Social Security Administration.
(2) Matters to be studied.--In conducting the study under
this subsection, the Comptroller General shall--
(A) compare the non-attorney representatives who seek
fee approval for representing claimants before the
Social Security Administration to attorney
representatives who seek such fee approval, with regard
to--
(i) their training, qualifications, and
competency,
(ii) the type and quality of services
provided, and
(iii) the extent to which claimants are
protected through oversight of such
representatives by the Social Security
Administration or other organizations, and
(B) consider the potential results of extending to
non-attorney representatives the fee withholding
procedures that apply under titles II and XVI of the
Social Security Act for the payment of attorney fees,
including the effect on claimants and program
administration.
(3) Report.--Not later than 1 year after the date of the
enactment of this Act, the Comptroller General shall submit to
the Committee on Ways and Means of the House of Representatives
and the Committee on Finance of the Senate a report detailing
the results of the Comptroller General's study conducted
pursuant to this subsection.
TITLE IV--MISCELLANEOUS AND TECHNICAL AMENDMENTS
Subtitle A--Amendments Relating to the Ticket to Work and Work
Incentives Improvement Act of 1999
SEC. 401. APPLICATION OF DEMONSTRATION AUTHORITY SUNSET DATE TO NEW
PROJECTS.
Section 234 of the Social Security Act (42 U.S.C. 434) is amended--
(1) in the first sentence of subsection (c), by striking
``conducted under subsection (a)'' and inserting ``initiated
under subsection (a) on or before December 17, 2004''; and
(2) in subsection (d)(2), by amending the first sentence to
read as follows: ``The authority to initiate projects under the
preceding provisions of this section shall terminate on
December 18, 2004.''.
SEC. 402. EXPANSION OF WAIVER AUTHORITY AVAILABLE IN CONNECTION WITH
DEMONSTRATION PROJECTS PROVIDING FOR REDUCTIONS IN
DISABILITY INSURANCE BENEFITS BASED ON EARNINGS.
Section 302(c) of the Ticket to Work and Work Incentives Improvement
Act of 1999 (42 U.S.C. 434 note) is amended by striking ``(42 U.S.C.
401 et seq.),'' and inserting ``(42 U.S.C. 401 et seq.) and the
requirements of section 1148 of such Act (42 U.S.C. 1320b-19) as they
relate to the program established under title II of such Act,''.
SEC. 403. FUNDING OF DEMONSTRATION PROJECTS PROVIDED FOR REDUCTIONS IN
DISABILITY INSURANCE BENEFITS BASED ON EARNINGS.
Section 302(f) of the Ticket to Work and Work Incentives Improvement
Act of 1999 (42 U.S.C. 434 note) is amended to read as follows:
``(f) Expenditures.--Administrative expenses for demonstration
projects under this section shall be paid from funds available for the
administration of title II or XVIII of the Social Security Act, as
appropriate. Benefits payable to or on behalf of individuals by reason
of participation in projects under this section shall be made from the
Federal Disability Insurance Trust Fund and the Federal Old-Age and
Survivors Insurance Trust Fund, as determined appropriate by the
Commissioner of Social Security, and from the Federal Hospital
Insurance Trust Fund and the Federal Supplementary Medical Insurance
Trust Fund, as determined appropriate by the Secretary of Health and
Human Services, from funds available for benefits under such title II
or XVIII.''.
SEC. 404. AVAILABILITY OF FEDERAL AND STATE WORK INCENTIVE SERVICES TO
ADDITIONAL INDIVIDUALS.
(a) Federal Work Incentives Outreach Program.--
(1) In general.--Section 1149(c)(2) of the Social Security
Act (42 U.S.C. 1320b-20(c)(2)) is amended to read as follows:
``(2) Disabled beneficiary.--The term `disabled beneficiary'
means an individual--
``(A) who is a disabled beneficiary as defined in
section 1148(k)(2) of this Act;
``(B) who is receiving a cash payment described in
section 1616(a) of this Act or a supplementary payment
described in section 212(a)(3) of Public Law 93-66
(without regard to whether such payment is paid by the
Commissioner pursuant to an agreement under section
1616(a) of this Act or under section 212(b) of Public
Law 93-66);
``(C) who, pursuant to section 1619(b) of this Act,
is considered to be receiving benefits under title XVI
of this Act; or
``(D) who is entitled to benefits under part A of
title XVIII of this Act by reason of the penultimate
sentence of section 226(b) of this Act.''.
(2) Effective date.--The amendment made by this subsection
shall apply with respect to grants, cooperative agreements, or
contracts entered into on or after the date of the enactment of
this Act.
(b) State Grants for Work Incentives Assistance.--
(1) Definition of disabled beneficiary.--Section 1150(g)(2)
of such Act (42 U.S.C. 1320b-21(g)(2)) is amended to read as
follows:
``(2) Disabled beneficiary.--The term `disabled beneficiary'
means an individual--
``(A) who is a disabled beneficiary as defined in
section 1148(k)(2) of this Act;
``(B) who is receiving a cash payment described in
section 1616(a) of this Act or a supplementary payment
described in section 212(a)(3) of Public Law 93-66
(without regard to whether such payment is paid by the
Commissioner pursuant to an agreement under section
1616(a) of this Act or under section 212(b) of Public
Law 93-66);
``(C) who, pursuant to section 1619(b) of this Act,
is considered to be receiving benefits under title XVI
of this Act; or
``(D) who is entitled to benefits under part A of
title XVIII of this Act by reason of the penultimate
sentence of section 226(b) of this Act.''.
(2) Advocacy or other services needed to maintain gainful
employment.--Section 1150(b)(2) of such Act (42 U.S.C. 1320b-
21(b)(2)) is amended by striking ``secure or regain'' and
inserting ``secure, maintain, or regain''.
(3) Effective date.--The amendments made by this subsection
shall apply with respect to payments provided after the date of
the enactment of this Act.
SEC. 405. TECHNICAL AMENDMENT CLARIFYING TREATMENT FOR CERTAIN PURPOSES
OF INDIVIDUAL WORK PLANS UNDER THE TICKET TO WORK
AND SELF-SUFFICIENCY PROGRAM.
(a) In General.--Section 1148(g)(1) of the Social Security Act (42
U.S.C. 1320b-19) is amended by adding at the end, after and below
subparagraph (E), the following new sentence:
``An individual work plan established pursuant to this
subsection shall be treated, for purposes of section
51(d)(6)(B)(i) of the Internal Revenue Code of 1986, as an
individualized written plan for employment under a State plan
for vocational rehabilitation services approved under the
Rehabilitation Act of 1973.''.
(b) Effective Date.--The amendment made by subsection (a) shall take
effect as if included in section 505 of the Ticket to Work and Work
Incentives Improvement Act of 1999 (Public Law 106-170; 113 Stat.
1921).
Subtitle B--Miscellaneous Amendments
SEC. 411. ELIMINATION OF TRANSCRIPT REQUIREMENT IN REMAND CASES FULLY
FAVORABLE TO THE CLAIMANT.
(a) In General.--Section 205(g) of the Social Security Act (42 U.S.C.
405(g)) is amended in the sixth sentence by striking ``and a
transcript'' and inserting ``and, in any case in which the Commissioner
has not made a decision fully favorable to the individual, a
transcript''.
(b) Effective Date.--The amendment made by this section shall apply
with respect to final determinations issued (upon remand) on or after
the date of the enactment of this Act.
SEC. 412. NONPAYMENT OF BENEFITS UPON REMOVAL FROM THE UNITED STATES.
(a) In General.--Paragraphs (1) and (2) of section 202(n) of the
Social Security Act (42 U.S.C. 402(n)(1), (2)) are each amended by
striking ``or (1)(E)''.
(b) Effective Date.--The amendment made by this section to section
202(n)(1) of the Social Security Act shall apply to individuals with
respect to whom the Commissioner of Social Security receives a removal
notice from the Attorney General after the date of the enactment of
this Act. The amendment made by this section to section 202(n)(2) of
the Social Security Act shall apply with respect to removals occurring
after the date of the enactment of this Act.
SEC. 413. REINSTATEMENT OF CERTAIN REPORTING REQUIREMENTS.
Section 3003(a)(1) of the Federal Reports Elimination and Sunset Act
of 1995 (31 U.S.C. 1113 note) shall not apply to any report required to
be submitted under any of the following provisions of law:
(1)(A) Section 201(c)(2) of the Social Security Act (42
U.S.C. 401(c)(2)).
(B) Section 1817(b)(2) of the Social Security Act (42 U.S.C.
1395i(b)(2)).
(C) Section 1841(b)(2) of the Social Security Act (42 U.S.C.
1395t(b)(2)).
(2)(A) Section 221(c)(3)(C) of the Social Security Act (42
U.S.C. 421(c)(3)(C)).
(B) Section 221(i)(3) of the Social Security Act (42 U.S.C.
421(i)(3)).
SEC. 414. CLARIFICATION OF DEFINITIONS REGARDING CERTAIN SURVIVOR
BENEFITS.
(a) Widows.--Section 216(c) of the Social Security Act (42 U.S.C.
416(c)) is amended--
(1) by redesignating subclauses (A) through (C) of clause (6)
as subclauses (i) through (iii), respectively;
(2) by redesignating clauses (1) through (6) as clauses (A)
through (F), respectively;
(3) in clause (E) (as redesignated), by inserting ``except as
provided in paragraph (2),'' before ``she was married'';
(4) by inserting ``(1)'' after ``(c)''; and
(5) by adding at the end the following new paragraph:
``(2) The requirements of paragraph (1)(E) in connection with the
surviving wife of an individual shall be treated as satisfied if--
``(A) the individual had been married prior to the
individual's marriage to the surviving wife,
``(B) the prior wife was institutionalized during the
individual's marriage to the prior wife due to mental
incompetence or similar incapacity,
``(C) during the period of the prior wife's
institutionalization, the individual would have divorced the
prior wife and married the surviving wife, but the individual
did not do so because such divorce would have been unlawful, by
reason of the prior wife's institutionalization, under the laws
of the State in which the individual was domiciled at the time
(as determined based on evidence satisfactory to the
Commissioner of Social Security),
``(D) the prior wife continued to remain institutionalized up
to the time of her death, and
``(E) the individual married the surviving wife within 60
days after the prior wife's death.''.
(b) Widowers.--Section 216(g) of such Act (42 U.S.C. 416(g)) is
amended--
(1) by redesignating subclauses (A) through (C) of clause (6)
as subclauses (i) through (iii), respectively;
(2) by redesignating clauses (1) through (6) as clauses (A)
through (F), respectively;
(3) in clause (E) (as redesignated), by inserting ``except as
provided in paragraph (2),'' before ``he was married'';
(4) by inserting ``(1)'' after ``(g)''; and
(5) by adding at the end the following new paragraph:
``(2) The requirements of paragraph (1)(E) in connection with the
surviving husband of an individual shall be treated as satisfied if--
``(A) the individual had been married prior to the
individual's marriage to the surviving husband,
``(B) the prior husband was institutionalized during the
individual's marriage to the prior husband due to mental
incompetence or similar incapacity,
``(C) during the period of the prior husband's
institutionalization, the individual would have divorced the
prior husband and married the surviving husband, but the
individual did not do so because such divorce would have been
unlawful, by reason of the prior husband's
institutionalization, under the laws of the State in which the
individual was domiciled at the time (as determined based on
evidence satisfactory to the Commissioner of Social Security),
``(D) the prior husband continued to remain institutionalized
up to the time of his death, and
``(E) the individual married the surviving husband within 60
days after the prior husband's death.''.
(c) Conforming Amendment.--Section 216(k) of such Act (42 U.S.C.
416(k)) is amended by striking ``clause (5) of subsection (c) or clause
(5) of subsection (g)'' and inserting ``clause (E) of subsection (c)(1)
or clause (E) of subsection (g)(1)''.
(d) Effective Date.--The amendments made by this section shall be
effective with respect to applications for benefits under title II of
the Social Security Act filed during months ending after the date of
the enactment of this Act.
SEC. 415. CLARIFICATION RESPECTING THE FICA AND SECA TAX EXEMPTIONS FOR
AN INDIVIDUAL WHOSE EARNINGS ARE SUBJECT TO THE
LAWS OF A TOTALIZATION AGREEMENT PARTNER.
Sections 1401(c), 3101(c), and 3111(c) of the Internal Revenue Code
of 1986 are each amended by striking ``to taxes or contributions for
similar purposes under'' and inserting ``exclusively to the laws
applicable to''.
SEC. 416. COVERAGE UNDER DIVIDED RETIREMENT SYSTEM FOR PUBLIC EMPLOYEES
IN KENTUCKY.
(a) In General.--Section 218(d)(6)(C) of the Social Security Act (42
U.S.C. 418(d)(6)(C)) is amended by inserting ``Kentucky,'' after
``Illinois,''.
(b) Effective Date.--The amendment made by subsection (a) takes
effect on January 1, 2003.
SEC. 417. COMPENSATION FOR THE SOCIAL SECURITY ADVISORY BOARD.
(a) In General.--Subsection (f) of section 703 of the Social Security
Act (42 U.S.C. 903(f)) is amended to read as follows:
``Compensation, Expenses, and Per Diem
``(f) A member of the Board shall, for each day (including
traveltime) during which the member is attending meetings or
conferences of the Board or otherwise engaged in the business of the
Board, be compensated at the daily rate of basic pay for level IV of
the Executive Schedule. While serving on business of the Board away
from their homes or regular places of business, members may be allowed
travel expenses, including per diem in lieu of subsistence, as
authorized by section 5703 of title 5, United States Code, for persons
in the Government employed intermittently.''.
(b) Effective Date.--The amendment made by this section shall be
effective as of January 1, 2003.
SEC. 418. 60-MONTH PERIOD OF EMPLOYMENT REQUIREMENT FOR APPLICATION OF
GOVERNMENT PENSION OFFSET EXEMPTION.
(a) Wife's Insurance Benefits.--Section 202(b)(4)(A) of the Social
Security Act (42 U.S.C. 402(b)(4)(A)) is amended by striking ``if, on''
and inserting ``if, during any portion of the last 60 months of such
service ending with''.
(b) Husband's Insurance Benefits.--Section 202(c)(2)(A) of such Act
(42 U.S.C. 402(c)(2)(A)) is amended by striking ``if, on'' and
inserting ``if, during any portion of the last 60 months of such
service ending with''.
(c) Widow's Insurance Benefits.--Section 202(e)(7)(A) of such Act (42
U.S.C. 402(e)(7)(A)) is amended by striking ``if, on'' and inserting
``if, during any portion of the last 60 months of such service ending
with''.
(d) Widower's Insurance Benefits.--Section 202(f)(2)(A) of such Act
(42 U.S.C. 402(f)(2)(A)) is amended by striking ``if, on'' and
inserting ``if, during any portion of the last 60 months of such
service ending with''.
(e) Mother's and Father's Insurance Benefits.--Section 202(g)(4)(A)
of the such Act (42 U.S.C. 402(g)(4)(A)) is amended by striking ``if,
on'' and inserting ```if, during any portion of the last 60 months of
such service ending with''.
(f) Effective Date.--The amendments made by this section shall apply
with respect to applications for benefits under title II of the Social
Security Act filed on or after the first day of the first month that
begins after the date of the enactment of this Act, except that such
amendments shall not apply in connection with monthly periodic benefits
of any individual based on earnings while in service described in
section 202(b)(4)(A), 202(c)(2)(A), 202(e)(7)(A), or 202(f)(2)(A) of
the Social Security Act (in the matter preceding clause (i) thereof)--
(1) if the last day of such service occurs before the end of
the 90-day period following the date of the enactment of this
Act, or
(2) in any case in which the last day of such service occurs
after the end of such 90-day period, such individual performed
such service during such 90-day period which constituted
``employment'' as defined in section 210 of such Act, and all
such service subsequently performed by such individual has
constituted such ``employment''.
Subtitle C--Technical Amendments
SEC. 421. TECHNICAL CORRECTION RELATING TO RESPONSIBLE AGENCY HEAD.
Section 1143 of the Social Security Act (42 U.S.C. 1320b-13) is
amended--
(1) by striking ``Secretary'' the first place it appears and
inserting ``Commissioner of Social Security''; and
(2) by striking ``Secretary'' each subsequent place it
appears and inserting ``Commissioner''.
SEC. 422. TECHNICAL CORRECTION RELATING TO RETIREMENT BENEFITS OF
MINISTERS.
(a) In General.--Section 211(a)(7) of the Social Security Act (42
U.S.C. 411(a)(7)) is amended by inserting ``, but shall not include in
any such net earnings from self-employment the rental value of any
parsonage or any parsonage allowance (whether or not excluded under
section 107 of the Internal Revenue Code of 1986) provided after the
individual retires, or any other retirement benefit received by such
individual from a church plan (as defined in section 414(e) of such
Code) after the individual retires'' before the semicolon.
(b) Effective Date.--The amendment made by this section shall apply
to years beginning before, on, or after December 31, 1994.
SEC. 423. TECHNICAL CORRECTIONS RELATING TO DOMESTIC EMPLOYMENT.
(a) Amendment to Internal Revenue Code.--Section 3121(a)(7)(B) of the
Internal Revenue Code of 1986 is amended by striking ``described in
subsection (g)(5)'' and inserting ``on a farm operated for profit''.
(b) Amendment to Social Security Act.--Section 209(a)(6)(B) of the
Social Security Act (42 U.S.C. 409(a)(6)(B)) is amended by striking
``described in section 210(f)(5)'' and inserting ``on a farm operated
for profit''.
(c) Conforming Amendment.--Section 3121(g)(5) of such Code and
section 210(f)(5) of such Act (42 U.S.C. 410(f)(5)) are amended by
striking ``or is domestic service in a private home of the employer''.
SEC. 424. TECHNICAL CORRECTIONS OF OUTDATED REFERENCES.
(a) Correction of Terminology and Citations Respecting Removal From
the United States.--Section 202(n) of the Social Security Act (42
U.S.C. 402(n)) (as amended by section 412) is amended further--
(1) by striking ``deportation'' each place it appears and
inserting ``removal'';
(2) by striking ``deported'' each place it appears and
inserting ``removed'';
(3) in paragraph (1) (in the matter preceding subparagraph
(A)), by striking ``under section 241(a) (other than under
paragraph (1)(C) thereof)'' and inserting ``under section
237(a) (other than paragraph (1)(C) thereof) or 212(a)(6)(A)'';
(4) in paragraph (2), by striking ``under any of the
paragraphs of section 241(a) of the Immigration and Nationality
Act (other than under paragraph (1)(C) thereof)'' and inserting
``under any of the paragraphs of section 237(a) of the
Immigration and Nationality Act (other than paragraph (1)(C)
thereof) or under section 212(a)(6)(A) of such Act'';
(5) in paragraph (3)--
(A) by striking ``paragraph (19) of section 241(a)''
and inserting ``subparagraph (D) of section
237(a)(4)''; and
(B) by striking ``paragraph (19)'' and inserting
``subparagraph (D)''; and
(6) in the heading, by striking ``Deportation'' and inserting
``Removal''.
(b) Correction of Citation Respecting the Tax Deduction Relating to
Health Insurance Costs of Self-Employed Individuals.--Section
211(a)(15) of such Act (42 U.S.C. 411(a)(15)) is amended by striking
``section 162(m)'' and inserting ``section 162(l)''.
(c) Elimination of Reference to Obsolete 20-Day Agricultural Work
Test.--Section 3102(a) of the Internal Revenue Code of 1986 is amended
by striking ``and the employee has not performed agricultural labor for
the employer on 20 days or more in the calendar year for cash
remuneration computed on a time basis''.
SEC. 425. TECHNICAL CORRECTION RESPECTING SELF-EMPLOYMENT INCOME IN
COMMUNITY PROPERTY STATES.
(a) Social Security Act Amendment.--Section 211(a)(5)(A) of the
Social Security Act (42 U.S.C. 411(a)(5)(A)) is amended by striking
``all of the gross income'' and all that follows and inserting ``the
gross income and deductions attributable to such trade or business
shall be treated as the gross income and deductions of the spouse
carrying on such trade or business or, if such trade or business is
jointly operated, treated as the gross income and deductions of each
spouse on the basis of their respective distributive share of the gross
income and deductions;''.
(b) Internal Revenue Code of 1986 Amendment.--Section 1402(a)(5)(A)
of the Internal Revenue Code of 1986 is amended by striking ``all of
the gross income'' and all that follows and inserting ``the gross
income and deductions attributable to such trade or business shall be
treated as the gross income and deductions of the spouse carrying on
such trade or business or, if such trade or business is jointly
operated, treated as the gross income and deductions of each spouse on
the basis of their respective distributive share of the gross income
and deductions; and''.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The ``Social Security Protection Act of 2003,'' H.R. 743,
as amended provides the Social Security Administration (SSA)
with the enhanced tools it needs to fight waste, fraud and
abuse in Social Security programs.
Protects those unable to manage their financial affairs.
The bill protects beneficiaries from representative payees who
misuse benefits and enhances oversight of representative payees
appointed by the SSA to manage Social Security and Supplemental
Security Income (SSI) benefits for individuals who are unable
to manage their own financial affairs. Representative payees
would be held accountable for their actions when they misuse
benefits entrusted to their care.
Deters fraud. The legislation helps stop waste, fraud and
abuse within the Social Security programs by denying benefits
to fugitive felons and persons violating their probation or
parole, creating new penalties to prevent persons from
misrepresenting themselves when they offer Social Security-
related services, prohibiting individuals who fraudulently
conceal work activity from being eligible for a trial work
period, allowing Federal courts to order individuals who break
Social Security law to make restitution to the Social Security
Trust Funds or general fund, and protecting Social Security
employees from harm while conducting their duties.
Helps individuals with disabilities. The bill improves
access to legal representation for individuals with
disabilities applying for benefits who need help negotiating
the complex disability application process, enhances provisions
of the Ticket to Work program to better enable SSA to test ways
of helping individuals with disabilities return to work, and
provides more individuals access to support and services to
help them work. It also encourages more employers to hire
individuals with disabilities by expanding eligibility for the
Work Opportunity Tax Credit.
Finally, the legislation corrects, clarifies, or modifies
various technical aspects of the law.
B. Background and Need for the Legislation
The Social Security and SSI programs touch the lives of
nearly every American and represent close to one-fourth of all
Federal outlays in 2003. Nearly $500 billion in Social Security
and SSI benefits were paid last year to about 50 million
retired and disabled workers and their families and survivors,
as well as disabled or aged low-income individuals. Given the
programs' magnitude and extensive influence over the economic
well-being of American workers and their families, it is
important to address inadequate protections for beneficiaries
and to fight activities that drain resources from Social
Security and undermine the financial security of beneficiaries.
Nearly 8 million Social Security and SSI beneficiaries
cannot, for physical or mental reasons, manage their own
financial affairs. In these cases, the SSA appoints an
individual or organization, called a ``representative payee,''
to manage these individuals' benefits. While most
representative payees are conscientious and honest, some
violate the trust placed in them. In a report issued in June
2002, Analysis of Information Concerning Representative Payee
Misuse of Beneficiaries' Payments, the SSA Inspector General
stated that from January 1997 through December 1999, over 2,400
representative payees misused about $12 million in benefits.
The SSA and the SSA Inspector General have recommended
legislation to raise the standards for persons and
organizations serving as representative payees and to impose
stricter regulation and monetary penalties on those who
mismanage benefits.
In addition to protecting the financial security of
vulnerable beneficiaries, this bill also picks up where P.L.
104-193, the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (PRWORA), left off in ending benefit
payments to fugitive felons and persons who violate their
probation or parole. That legislation denied SSI benefits to
such individuals; however, they are still allowed to receive
Social Security benefits. The Congressional Budget Office
estimates $525 million will be paid in benefits over the next
10 years out of the Social Security Trust Funds to these
persons. In an August 2000 report, Old-Age, Survivors and
Disability Insurance Benefits Paid to Fugitives, the SSA
Inspector General estimated about 17,000 fugitives received
Social Security benefits between PRWORA's enactment and 1999,
and recommended legislation prohibiting payment of Social
Security benefits to fugitive felons and probation or parole
violators, similar to the SSI provision.
The Protection Act also incorporates recommendations by the
SSA Inspector General to provide tools that further safeguard
Social Security programs, help shield Social Security employees
from harm while conducting their duties, expand the Inspector
General's ability to stop perpetrators of fraud through new
civil monetary penalties, and prevent persons from
misrepresenting themselves as they provide Social Security-
related services.
In addition to addressing waste, fraud, and abuse, the bill
helps individuals with disabilities by making it easier for
them to obtain legal representation when applying for benefits
by improving the attorney fee withholding process. Advocates
for individuals with disabilities and claimants'
representatives have stated in hearings before the Subcommittee
on Social Security that allowing attorneys and claimants for
Social Security benefits to sign an agreement requiring the
Commissioner to pay the attorney directly from the claimant's
past-due benefits has helped ensure there is a pool of private
attorneys who are willing and able to help claimants pursue
benefits. Extending attorney fee withholding to SSI cases would
help expand the pool of attorneys willing to help many low-
income SSI claimants to successfully pursue needed benefits.
Likewise, advocates for claimant representatives have testified
that the SSA's processing fee for withholding the attorney's
fee from past-due benefits is excessive, limits the pool of
attorneys willing to help claimants, and that reducing the fee
would increase availability of representation for claimants.
Besides encouraging representation of claimants seeking
benefits, advocates for individuals with disabilities have
discussed at hearings and consultations with the Subcommittee
on Social Security the need to improve and clarify provisions
of the Ticket to Work program by enhancing demonstration
projects, making work incentive services available to more
individuals, and expanding eligibility for the Work Opportunity
Tax Credit. These recommendations are all intended to encourage
more disabled beneficiaries to return to work or maintain work
effort.
Finally, the bill contains numerous provisions recommended
by the SSA aimed at correcting inequities in the law regarding
benefit coverage and receipt, as well as making technical
corrections to the law. One of these provisions resulted from
an August 2002 General Accounting Office (GAO) report, Social
Security Administration: Revision to the Government Pension
Offset Exemption Should Be Considered. The GAO found that
teachers in Texas, and to a lesser extent in Georgia, were
using a loophole in the law in order to receive higher spouse
or survivor benefits from Social Security. In effect, teachers
contributed to Social Security for as little as one day (an
average of $3 in payroll taxes) and qualified for over $100,000
in spouse or survivor benefits over a lifetime, whereas similar
workers who paid into Social Security throughout their careers
received little or no spouse or survivor benefits. The GAO
recommended amending the law to treat State and local workers
the same as Federal workers in applying the exemption.
C. Legislative History
During the 106th Congress, the Subcommittee held hearings
on Social Security program integrity on March 30, 2000 (106-
38); representative payees on May 4, 2000 (106-57); Social
Security number use and misuse on May 9 and 11 (106-108), and
July 17, 2000 (106-43); and the processing of attorney's fees
on June 14, 2000 (106-70). The information gained from these
hearings led to the introduction of H.R. 4857, the ``Social
Security Number Privacy and Identity Theft Prevention Act of
2000,'' to enhance privacy protections for individuals, prevent
fraudulent misuse of the Social Security number, and provide
additional safeguards for Social Security and Supplemental
Security Income beneficiaries with representative payees. In
addition, H.R. 4633 was introduced to improve the SSA payment
system for representation of claimants. On July 20, 2000, the
Subcommittee ordered favorably reported H.R. 4857, as amended.
The Committee on Ways and Means ordered the bill favorably
reported, as amended on September 28, 2000 (H. Rept. 106-996
Part 1). The bill was not considered by the full House, as
other committees of jurisdiction did not complete consideration
of the bill.
In the 107th Congress, on May 10, 2001, the Subcommittee on
Social Security held a hearing on the integrity of Social
Security programs (107-30). The Subcommittee heard testimony
from SSA Inspector General James G. Huse about the need to
prohibit payment of Social Security benefits to fugitive felons
and improve oversight of representative payees. Fritz
Streckewald, Acting Assistant Deputy Commissioner of Disability
and Income Security Programs of the SSA, testified about the
agency's efforts to improve oversight of representative payees
and stop SSI payments to fugitive felons. Advocates of
individuals with disabilities expressed support for legislation
to improve oversight of representative payees and protect
beneficiaries from benefit misuse by representative payees.
On May 17, 2001, the Subcommittee on Social Security held a
hearing on processing of attorneys' fees (107-24). Barbara
Bovbjerg of the General Accounting Office (GAO) provided
testimony on the estimated costs SSA incurs in withholding
attorneys' fees from past-due benefits of claimants for Title
II benefits, as well as ways the SSA could improve its
processing of attorneys' fees. Advocates for claimants'
representatives testified about the need to reduce the SSA's
processing fees in order to encourage attorneys to accept cases
of claimants seeking Social Security benefits. Advocates for
claimants' representatives and advocates for individuals with
disabilities testified about the need to extend withholding of
attorneys' fees from past-due SSI benefits in order to increase
the pool of attorneys willing to accept SSI cases.
On July 26, 2001, the Subcommittee on Social Security held
a hearing on misleading mailings targeted to seniors (107-44).
SSA Inspector General James G. Huse testified on how use of
certain phrases and other devices gives the false impression of
Federal agency endorsement or origination and is used to
mislead seniors into providing personal information and/or
sending money.
Information obtained during these hearings and those of the
106th Congress led to the introduction of H.R. 4070, the
``Social Security Program Protection Act of 2002.'' On April
25, 2002, the Subcommittee on Social Security ordered favorably
reported to the full Committee H.R. 4070, the ``Social Security
Program Protection Act of 2002,'' on a voice vote, with a
quorum present. On June 25, 2002, H.R. 4070, as amended, was
considered by the House of Representatives under suspension of
the rules. On June 26, 2002, the House of Representatives
agreed to H.R. 4070 by a recorded vote of 425-0. On November
18, 2002, H.R. 4070, as amended, was passed by the Senate by
unanimous consent. The bill, as amended by the Senate, was not
considered by the House of Representatives prior to adjournment
of the 107th Congress.
Information obtained during hearings in the 106th and 107th
Congress, as well as bipartisan support for H.R. 4070, led to
introduction of H.R. 743, the ``Social Security Protection Act
of 2003.'' On February 27, 2003, the Subcommittee on Social
Security held a hearing on the legislation. SSA Inspector
General James G. Huse testified in favor of the bill's
provisions to improve representative payee selection and
monitoring, to stop Social Security benefit payments to
fugitive felons, and to provide civil monetary penalties for
certain fraudulent or misleading activities like withholding
material information in order to obtain or increase benefits.
Barbara Bovbjerg and Dan Bertoni of the GAO provided testimony
on the bill's provision implementing the GAO's recommendation
to address abuse of the GPO exemption. Advocates for
individuals with disabilities testified in support of the
bill's provisions to extend attorney fee withholding to SSI
claims, improve beneficiary protections with regard to
representative payees, and provide improvement and
clarification of certain Ticket to Work provisions. Advocates
for claimants' representatives provided testimony regarding the
bill's provisions to extend attorney fee withholding and cap
the SSA's processing fee on attorney fee withholding.
On March 5, H.R. 743, as amended, was considered by the
House of Representatives under suspension of the rules, and
failed by a vote of 249-180. On March 13, 2003, the Committee
on Ways and Means ordered favorably reported H.R. 743, the
``Social Security Protection Act,'' as amended, by a rollcall
vote of 35-2.
II. EXPLANATION OF THE BILL
TITLE I. PROTECTION OF BENEFICIARIES
Subtitle A. Representative Payees
A. Authority to Reissue Benefits Misused by Organizational
Representative Payees
(Sec. 101 of the Bill)
PRESENT LAW
The Social Security Act requires the re-issuance of
benefits misused by any representative payee when the
Commissioner finds that the Social Security Administration
(SSA) negligently failed to investigate and monitor the payee.
REASON FOR CHANGE
There have been a number of highly publicized cases
involving organizational representative payees that have
misused large sums of monies paid to them on behalf of the
Social Security and Supplemental Security Income (SSI)
beneficiaries they represented. In most instances, these
organizations operated as criminal enterprises, bent not only
on stealing funds from beneficiaries, but also on carefully
concealing the evidence of their wrongdoing. These illegal
activities went undetected until large sums had been stolen. If
the SSA is not shown to be negligent for failing to investigate
and monitor the payee, affected beneficiaries may never be
repaid or may be repaid only when the representative payee
committing misuse makes restitution to the SSA.
Benefit misuse by representative payees who serve a number
of beneficiaries can be difficult to detect, since it often
involves victims that may have no family members or friends
willing or able to help them. Requiring the SSA to reissue
benefit payments to these victims of benefit misuse provides
essential protection from financial hardship. Moreover,
extending the provision to cases involving individual payees
serving fewer beneficiaries may lead to fraudulent claims of
misuse. These claims, which often turn on information available
only from close family members, would be difficult to assess.
Similarly, extension of this provision to these cases could
potentially encourage misuse or poor money management by these
individual representative payees, if they believe the SSA could
eventually pay the beneficiary a second time.
EXPLANATION OF PROVISION
In addition to cases where the SSA negligently failed to
investigate and monitor the payee, the provision also requires
the Commissioner to re-issue benefits under Titles II, VIII and
XVI in any case in which a beneficiary's funds are misused by a
representative payee that is not an individual (regardless of
whether it is a qualified organization such as a State/local
agency or a community nonprofit social service agency) or an
individual payee representing 15 or more beneficiaries.
The new provision defines misuse as any case in which a
representative payee converts the benefits entrusted to his or
her care for purposes other than the ``use and benefit'' of the
beneficiary, and authorizes the Commissioner to define ``use
and benefit'' in regulation.
In crafting a regulatory definition for ``use and
benefit,'' the Commissioner should take special care to
distinguish between the situation in which the representative
payee violates his or her responsibility by converting the
benefits to further the payee's own self interest, and the
situation in which the payee faithfully serves the beneficiary
by using the benefits in a way that principally aids the
beneficiary but which also incidentally aids the payee or
another individual. For instance, cases in which a
representative payee uses the benefits entrusted to his or her
care to help pay the rent on an apartment that he or she and
the beneficiary share should not be considered misuse.
EFFECTIVE DATE
Applies to any cases of benefit misuse by a representative
payee with respect to which the Commissioner makes the
determination of misuse on or after January 1, 1995. This
protects the interests of beneficiaries affected by cases of
egregious misuse that have been identified in recent years.
B. Oversight of Representative Payees
(Sec. 102 of the Bill)
PRESENT LAW
Present law requires community-based nonprofit social
service agencies serving as representative payees to be
licensed or bonded. Payees are not required to submit proof of
bonding or licensing, and they are not subject to independent
audits. In addition, there is no provision requiring periodic
on-site reviews of organizational payees (other than the
accountability monitoring done for State institutions that
serve as representative payees).
REASON FOR CHANGE
Strengthening the bonding and licensing requirements for
community-based nonprofit social service agencies would add
further safeguards to protect beneficiaries' funds. State
licensing provides for some oversight by the State into the
organization's business practices, and bonding provides some
assurances that a surety company has investigated the
organization and approved it for the level of risk associated
with the bond. Requiring annual certification as to the
licensing and bonding of the payee, as well as submission of
audits performed, should help prevent a payee from dropping
their licensing or bonding subsequent to the SSA approving them
as payee.
On-site periodic visits should be conducted regularly to
reduce misuse of funds. To the degree possible, appropriate
auditing and accounting standards should be utilized in
conducting such reviews.
EXPLANATION OF PROVISION
The new provision requires community-based nonprofit social
service agencies serving as representative payees to be both
bonded and licensed (provided that licensing is available in
the State). In addition, such representative payees must submit
yearly proof of bonding and licensing, as well as copies of any
independent audits that were performed on the payee since the
previous certification.
The new provision also requires the Commissioner of Social
Security to conduct periodic onsite reviews of: (1) a person
who serves as a representative payee to 15 or more
beneficiaries; (2) community-based nonprofit social service
agencies serving as representative payees; and, (3) any agency
that serves as the representative payee to 50 or more
beneficiaries. In addition, the Commissioner is required to
submit an annual report to the Committee on Ways and Means of
the House of Representatives and the Committee on Finance of
the Senate on the reviews conducted in the prior fiscal year.
EFFECTIVE DATE
The bonding, licensing, and audit provisions are effective
on the first day of the 13th month following enactment of the
legislation. The periodic on-site review provision is effective
upon enactment.
C. Disqualification From Service as Representative Payee of Persons
Convicted of Offenses Resulting in Imprisonment for More Than 1 Year,
or Fleeing Prosecution, Custody or Confinement
(Sec. 103 of the Bill)
PRESENT LAW
Sections 205, 807, and 1631 of the Social Security Act
disqualify individuals from being representative payees if they
have been convicted of fraudulent conduct involving Social
Security programs.
REASON FOR CHANGE
Prohibiting persons convicted of offenses resulting in
imprisonment for more than one year and persons fleeing
prosecution, custody or confinement for a felony from serving
as representative payees decreases the likelihood of
mismanagement or abuse of beneficiaries' funds. Also, allowing
such persons to serve as representative payees could raise
serious questions about the SSA's stewardship of taxpayer
funds. The agency's report will assist Congress in its
oversight of the representative payee program.
EXPLANATION OF PROVISION
The new provision expands the scope of disqualification to
prohibit an individual from serving as a representative payee
if he or she has been convicted of an offense resulting in
imprisonment for more than one year, unless the Commissioner
determines that payee status would be appropriate despite the
conviction. It also disqualifies persons fleeing prosecution,
custody, or confinement for a felony from being representative
payees. Finally, the Commissioner shall assist law enforcement
officials in apprehending such persons by providing them with
the address, Social Security number, photograph, or other
identifying information.
The new provision requires the Commissioner, in
consultation with the SSA Inspector General, to submit a report
to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate
evaluating existing procedures and reviews conducted for
representative payees to determine whether they are sufficient
to protect benefits from being misused.
EFFECTIVE DATE
The first day of the 13th month beginning after the date of
enactment, except that the report to Congress is due no later
than 270 days after the date of enactment.
D. Fee Forfeiture in Case of Benefit Misuse by Representative Payees
(Sec. 104 of the Bill)
PRESENT LAW
Certain qualified organizations are authorized to collect a
fee for their services. The fee, which is determined by a
statutory formula, is deducted from the beneficiary's benefit
payments.
REASON FOR CHANGE
Payees who misuse their clients' funds are not properly
performing the service for which the fee was paid; therefore,
they should forfeit such fees. Permitting the payee to retain
the fees is tantamount to rewarding the payee for violating his
or her responsibility to use the benefits for the individual's
needs.
EXPLANATION OF PROVISION
The new provision requires representative payees to forfeit
the fee for those months during which the representative payee
misused funds, as determined by the Commissioner of Social
Security or a court of competent jurisdiction.
EFFECTIVE DATE
Applies to any month involving benefit misuse by a
representative payee as determined by the Commissioner or a
court of competent jurisdiction after 180 days after the date
of enactment.
E. Liability of Representative Payees for Misused Benefits
(Sec. 105 of the Bill)
PRESENT LAW
Although the SSA has been provided with expanded authority
to recover overpayments (such as the use of tax refund offsets,
referral to contract collection agencies, notification of
credit bureaus, and administrative offsets of future Federal
benefit payments), these tools cannot be used to recoup
benefits misused by a representative payee.
REASON FOR CHANGE
Treating misused benefits as overpayments to the
representative payee would provide the SSA with additional
means for recovering misused payments.
EXPLANATION OF PROVISION
The new provision treats benefits misused by any
representative payee (except a Federal, State or local
government agency) as an overpayment to the representative
payee, thus subjecting the representative payee to current
overpayment recovery authorities. Any recovered benefits not
already reissued to the beneficiary pursuant to Section 101 of
this legislation would be reissued to either the beneficiary or
their alternate representative payee, up to the total amount
misused.
EFFECTIVE DATE
Applies to benefit misuse by a representative payee in any
case where the Commissioner of Social Security or a court of
competent jurisdiction makes a determination of misuse after
180 days after the date of enactment.
F. Authority To Redirect Delivery of Benefit Payments When a
Representative Payee Fails To Provide Required Accounting
(Sec. 106 of the Bill)
PRESENT LAW
The Social Security Act requires representative payees to
submit accounting reports to the Commissioner of Social
Security regarding how a beneficiary's benefit payments were
used. A report is required at least annually, but may be
required by the Commissioner at any time if the Commissioner
has reason to believe the representative payee is misusing
benefits.
REASON FOR CHANGE
Accounting reports are an important means of monitoring the
activities of representative payees to prevent misuse of
benefits. Redirecting benefit payments to the field office
would enable the agency to promptly address the failure of the
representative payee to file a report.
EXPLANATION OF PROVISION
The new provision authorizes the Commissioner of Social
Security to require a representative payee to receive any
benefits under Titles II, VIII, and XVI in person at a Social
Security field office if the representative payee fails to
provide a required accounting of benefits. The Commissioner
would be required to provide proper notice and the opportunity
for a hearing prior to redirecting benefits to the field
office.
EFFECTIVE DATE
180 days after the date of enactment.
Subtitle B: Enforcement
G. Civil Monetary Penalty Authority With Respect to Wrongful
Conversions by Representative Payees
(Sec. 111 of the Bill)
PRESENT LAW
Section 1129 of the Social Security Act authorizes the
Commissioner to impose a civil monetary penalty (of up to
$5,000 for each violation) along with an assessment (up to
twice the amount wrongly paid), upon any person who knowingly
uses false information or knowingly omits information to
wrongly obtain Title II, VIII or XVI benefits.
REASON FOR CHANGE
Providing authority for SSA to impose civil monetary
penalties along with an assessment of up to twice the amount of
misused benefits would provide the SSA with an additional means
to address benefit misuse by representative payees.
EXPLANATION OF PROVISION
The new provision expands civil monetary penalties
authority under Section 1129 to include misuse of Title II,
VIII or XVI benefits by representative payees. A civil monetary
penalty of up to $5,000 may be imposed for each violation,
along with an assessment of up to twice the amount of misused
benefits.
EFFECTIVE DATE
Applies to violations committed after the date of
enactment.
TITLE II. PROGRAM PROTECTIONS
A. Civil Monetary Penalty Authority With Respect to Knowing Withholding
of Material Facts
(Sec. 201 of the Bill)
PRESENT LAW
Section 1129 of the Social Security Act, 42 U.S.C.
Sec. 1320a-8, authorizes the Commissioner of Social Security to
impose civil monetary penalties and assessments on any person
who makes a statement or representation of a material fact for
use in determining initial or continuing rights to Title II,
VIII, or XVI benefits that the person knows or should know
omits a material fact or is false or misleading. In order for
the penalty or assessment to be imposed, the law requires an
affirmative act on the part of the individual of making (or
causing to be made) a statement that omits a material fact or
is false or misleading.
Section 1129A, 42 U.S.C. 1320a-8a, provides administrative
procedures for imposing penalties of nonpayment of Title II and
XVI benefits (6 months for the first violation) for making
false statements.
REASON FOR CHANGE
Currently the SSA cannot impose civil monetary penalties
and assessments on a person who should have come forward to
notify the SSA of changed circumstances that affect eligibility
or benefit amount, but did not. To be subject to civil monetary
penalties and assessments under the current law, an individual
must have made a statement that omitted a material fact or was
false or misleading. Examples of the types of individuals
intended to be covered under this amendment to Section 1129 and
1129A include (but are not limited to): (1) an individual who
has a joint bank account with a beneficiary in which the SSA
direct deposited the beneficiary's Social Security checks; upon
the death of the beneficiary, this individual fails to advise
the SSA of the beneficiary's death, instead spending the
proceeds from the deceased beneficiary's Social Security
checks; and (2) an individual who is receiving benefits under
one SSN while working under another SSN.
This amendment is intended to close this loophole in the
current law, but is not intended to expand Section 1129 and
1129A to include those individuals whose failure to come
forward to notify the SSA was not done for the purpose of
improperly obtaining or continuing to receive benefits. For
instance, it is not intended that the expanded authority be
used against individuals who do not have the capacity to
understand that their failure to come forward is misleading.
EXPLANATION OF PROVISION
By including the phrase ``or otherwise withholds disclosure
of,'' in Section 1129 and 1129A, civil monetary penalties and
assessments and sanctions could also be imposed for failure to
come forward and notify the SSA of changed circumstances that
affect eligibility or benefit amount when that person knows or
should know that the failure to come forward is misleading.
EFFECTIVE DATE
Applies to violations committed after the date on which the
Commissioner implements the centralized computer file described
in Section 202.
B. Issuance by Commissioner of Social Security of Receipts To
Acknowledge Submission of Reports of Changes in Work or Earnings Status
of Disabled Beneficiaries
(Sec. 202 of the Bill)
PRESENT LAW
Changes in work or earnings status can affect a Title II
disability beneficiary's right to continued entitlement to
disability benefits. Changes in the amount of earned income can
also affect an SSI recipient's continued eligibility for SSI
benefits or his or her monthly benefit amount.
The Commissioner has promulgated regulations that require
Title II disability beneficiaries to report changes in work or
earnings status (20 CFR, Sec. 404.1588) and regulations that
require SSI recipients (or their representative payees) to
report any increase or decrease in income (20 CFR,
Sec. Sec. 416.704-416.714).
REASON FOR CHANGE
Witnesses have testified before the Social Security
Subcommittee and the Human Resources Subcommittee that the SSA
does not currently have an effective system in place for
processing and recording Title II and Title XVI disability
beneficiaries' reports of changes in work and earnings status.
Issuing receipts to disabled beneficiaries who make such
reports would provide them with proof that they had properly
fulfilled their obligation to report these changes.
EXPLANATION OF PROVISION
The new provision requires the Commissioner to issue a
receipt to a disabled beneficiary (or representative of a
beneficiary) who reports a change in his or her work or
earnings status. The Commissioner is required to continue
issuing such receipts until the Commissioner has implemented a
centralized computer file that would record the date on which
the disabled beneficiary (or representative) reported the
change in work or earnings status.
This provision requires the Commissioner to begin issuing
receipts as soon as possible, but no later than one year after
the date of enactment. The Committee on Ways and Means is aware
that the SSA has developed software known as the Modernized
Return to Work System (MRTW). This software will assist SSA
employees in recording information about changes in work and
earnings status and in making determinations of whether such
changes affect continuing entitlement to disability benefits.
The software also has the capability of automatically issuing
receipts. The SSA has informed the Committee on Ways and Means
that this software is already in use in some of the agency's
approximately 1300 local field offices, and that the SSA
expects to put it into operation in the remainder of the field
offices over the next year. The Committee on Ways and Means
expects that the SSA field offices that are already using the
MRTW system will immediately begin issuing receipts to disabled
beneficiaries who report changes in work or earnings status,
and that the SSA will require the other field offices to begin
issuing receipts as these offices begin using the MRTW system
over the next year. For disabled Title XVI beneficiaries, if
the SSA issues a notice to the beneficiary immediately
following the report of earnings that details the effect of the
change in income on the monthly benefit amount, this notice
would serve as a receipt.
EFFECTIVE DATE
Requires the Commissioner to begin issuing receipts as soon
as possible, but no later than one year after the date of
enactment.
C. Denial of Title II Benefits to Persons Fleeing Prosecution, Custody,
or Confinement, and to Persons Violating Probation or Parole
(Sec. 203 of the Bill)
PRESENT LAW
The ``Personal Responsibility and Work Opportunity
Reconciliation Act of 1996,'' (PRWORA) P.L. 104-193, included
provisions making persons ineligible to receive SSI benefits
during any month in which they are fleeing to avoid
prosecution, custody, or confinement for a felony, or if they
are in violation of a condition of probation or parole.
However, this prohibition was not extended to Social Security
benefits under Title II.
REASON FOR CHANGE
There are concerns that Social Security benefits, not just
Supplemental Security Income and other welfare benefits, are
being used to aid flight from justice or other crime. The
Congressional Budget Office has estimated that persons fleeing
to avoid prosecution for a felony or to avoid custody or
confinement after conviction for a felony, or in violation of a
condition of probation or parole, will receive $526 million in
Title II Social Security benefits over the next 10 years. The
Social Security Inspector General (SSA IG) recommended changing
the law to prohibit fugitive felons and other criminals from
receiving benefits.
The provision gives the Commissioner authority to pay
withheld Title II benefits if there is ``good cause.'' The
Commissioner would be required to develop regulations within
one year of the date of enactment. This ``good cause''
discretion is authorized for the Commissioner in cases of Title
II benefits, where it was not authorized or intended for
programs affected under the similar provision in PRWORA,
because workers earn the right to receive benefits for
themselves and their families through their career-long Social
Security payroll tax contributions.
The good cause exception will provide the Commissioner with
the ability to pay benefits under circumstances in which the
Commissioner deems withholding of benefits to be
inappropriate--for example, but not limited to, situations when
Social Security beneficiaries are found to be in flight from a
warrant relating to a crime for which a court of competent
jurisdiction finds the person not guilty, or if the charges are
dismissed; if a warrant for arrest is vacated; or if probation
or parole is not revoked. In such circumstances, it is expected
that the Commissioner would pay benefits withheld from the
beneficiary for which he or she was otherwise eligible but for
the prohibition in this provision.
In testimony received at a February 27, 2003 hearing, the
Subcommittee was made aware of instances with respect to the
SSI program where there may be mitigating circumstances
relating to persons with outstanding warrants for their arrest.
In addition, PRWORA implementing instructions have been found
to vary between agencies. For example, the Department of
Agriculture's Food and Nutrition Service has issued
instructions that in order to be considered ``fleeing,'' the
individual must have knowledge a warrant has been issued for
his or her arrest and that the State agency should verify the
individual has such knowledge. In addition, once the person has
knowledge of the warrant, either by having received it
personally or by being advised of its existence by the State
agency, he or she is technically ``fleeing'' at that time.
Finally, the instructions strongly urge the State agency to
give the individual an opportunity to submit documentation that
the warrant has been satisfied. The Social Security
Administration's procedures do not include such instructions.
The SSA IG is conducting an audit on implementation of the
fugitive felon provision for the Supplemental Security Income
program, which will shed light on the types of crimes
beneficiaries committed, law enforcement's pursuit of such
criminals, the length of time benefits were suspended, the
SSA's handling of these cases, and other issues. The
Subcommittee will continue to closely monitor these issues and
encourages the Commissioner to review the agency's implementing
instructions in light of these circumstances and what
constitutes flight under Federal law.
EXPLANATION OF PROVISION
The new provision denies Social Security benefits under
Title II to persons fleeing prosecution, custody or confinement
for a felony, and to persons violating probation or parole.
However, the Commissioner may, for good cause, pay withheld
benefits. Finally, the Commissioner shall assist law
enforcement officials in apprehending such persons by providing
them with the address, Social Security number, photograph, or
other identifying information.
EFFECTIVE DATE
First day of the first month that begins on or after the
date that is 9 months after the date of enactment.
D. Requirements Relating to Offers To Provide for a Fee a Product or
Service Available Without Charge From the Social Security
Administration
(Sec. 204 of the Bill)
PRESENT LAW
Section 1140 of the Social Security Act prohibits or
restricts various activities involving the use of Social
Security and Medicare symbols, emblems, or references that give
a false impression that an item is approved, endorsed, or
authorized by the Social Security Administration, the Health
Care Financing Administration (now the Centers for Medicare and
Medicaid Services), or the Department of Health and Human
Services. It also provides for the imposition of civil monetary
penalties with respect to violations of the section.
REASON FOR CHANGE
Several individuals and companies offer Social Security
services for a fee even though the same services are available
directly from the SSA free of charge. For example, the SSA's
Inspector General has encountered business entities that have
offered assistance to individuals in changing their names (upon
marriage) or in obtaining a Social Security number (upon the
birth of a child) for a fee, even though these services are
directly available from the SSA for free. The offer from the
business entities either did not state at all, or did not
clearly state, that these services were available from the SSA
for free. These practices can mislead and deceive senior
citizens, newlyweds, new parents, and other individuals seeking
services or products, who may not be aware that the SSA
provides these services for free.
EXPLANATION OF PROVISION
Several individuals and companies offer Social Security-
related services for a fee even though the same services are
available directly from the SSA free of charge. The new
provision requires persons or companies offering such services
to include in their offer a statement that the services they
provide for a fee are available directly from the SSA free of
charge. The statements would be required to comply with
standards promulgated through regulation by the Commissioner of
Social Security with respect to their content, placement,
visibility, and legibility.
EFFECTIVE DATE
Applies to offers of assistance made after the sixth month
following the issuance of these standards. Requires the
Commissioner to promulgate regulations within 1 year after the
date of enactment.
E. Refusal To Recognize Certain Individuals as Claimant Representatives
(Sec. 205 of the Bill)
PRESENT LAW
An attorney in good standing is entitled to represent
claimants before the Commissioner of Social Security. The
Commissioner may prescribe rules and regulations governing the
recognition of persons other than attorneys representing
claimants before the Commissioner. Under present law, attorneys
disbarred in one jurisdiction, but licensed to practice in
another jurisdiction, must be recognized as a claimant's
representative.
REASON FOR CHANGE
This provision would provide additional protections for
beneficiaries who may rely on representatives during all phases
of their benefit application process. As part of their ongoing
oversight of claimant representatives, the Committee on Ways
and Means intends to review whether options to establish
protections for claimants represented by non-attorneys should
be considered.
EXPLANATION OF PROVISION
The new provision authorizes the Commissioner to refuse to
recognize as a representative, or disqualify as a
representative, an attorney who has been disbarred or suspended
from any court or bar, or who has been disqualified from
participating in or appearing before any Federal program or
agency. Due process (i.e., notice and an opportunity for a
hearing) would be required before taking such action. Also, if
a representative has been disqualified or suspended as a result
of collecting an unauthorized fee, full restitution is required
before reinstatement can be considered.
EFFECTIVE DATE
Upon enactment.
F. Penalty for Corrupt or Forcible Interference With Administration of
the Social Security Act
(Sec. 206 of the Bill)
PRESENT LAW
No provision.
REASON FOR CHANGE
This provision extends to SSA employees the same
protections provided to employees of the Internal Revenue
Service under the Internal Revenue Code of 1954. These
protections will allow SSA employees to perform their work with
more confidence that they will be safe from harm.
The Internal Revenue Manual defines the term ``corruptly''
as follows:
``Corruptly'' characterizes an attempt to influence
any official in his or her official capacity under this
title by any improper inducement. For example, an offer
of a bribe or a passing of a bribe to an Internal
Revenue employee for the purpose of influencing him or
her in the performance of his or her official duties is
corrupt interference with the administration of Federal
laws. (Internal Revenue Manual, [9.5] 11.3.2.2, 4-09-
1999.)
EXPLANATION OF PROVISION
The new provision imposes a fine of not more than $5,000,
imprisonment of not more than 3 years, or both, for attempting
to intimidate or impede--corruptly or by using force or threats
of force--any Social Security Administration (SSA) officer,
employee or contractor (including State employees of disability
determination services and any individuals designated by the
Commissioner) while they are acting in their official
capacities under the Social Security Act. If the offense is
committed only by threats of force, the offender is subject to
a fine of not more than $3,000, no more than one year in
prison, or both.
The Committee on Ways and Means expects that judgment will
be used in enforcing this section. Social Security and SSI
disability claimants and beneficiaries, in particular, are
frequently subject to multiple, severe life stressors, which
may include severe physical, psychological, or financial
difficulties. In addition, disability claimants or
beneficiaries who encounter delays in approval of initial
benefit applications or in post-entitlement actions may incur
additional stress, particularly if they have no other source of
income. Under such circumstances, claimants or beneficiaries
may at times express frustration in an angry manner, without
truly intending to threaten or intimidate SSA employees. In
addition, approximately 25 percent of Social Security
disability beneficiaries and 35 percent of disabled SSI
recipients have mental impairments, and such individuals may be
less able to control emotional outbursts. These factors should
be taken into account in enforcing this provision.
EFFECTIVE DATE
Upon enactment.
G. Use of Symbols, Emblems, or Names in Reference to Social Security or
Medicare
(Sec. 207 of the Bill)
PRESENT LAW
Section 1140 of the Social Security Act prohibits (subject
to civil penalties) the use of Social Security or Medicare
symbols, emblems and references on any item in a manner that
conveys the false impression that such item is approved,
endorsed or authorized by the Social Security Administration,
the Health Care Financing Administration (now the Centers for
Medicare and Medicaid Services) or the Department of Health and
Human Services.
REASON FOR CHANGE
The SSA Inspector General has found these phrases appearing
in mailings, solicitations, or flyers, which, when used with
the SSA's words, symbols, emblems, and references may be
particularly misleading and more likely to convey the false
impression that such item is approved, endorsed, or authorized
by the SSA, the Health Care Financing Administration (now the
Centers for Medicare and Medicaid Services), or the Department
of Health and Human Services. Expansion of this list helps to
ensure that individuals receiving any type of mail,
solicitations or flyers bearing symbols, emblems or names in
reference to Social Security or Medicare are not misled into
believing that these agencies approved or endorsed the services
or products depicted.
EXPLANATION OF PROVISION
The new provision expands the prohibition in present law to
several other references to Social Security and Medicare. This
includes, but is not limited to, ``Death Benefits Update,''
``Federal Benefits Information,'' and ``Final Supplemental
Plan.''
EFFECTIVE DATE
Applies to items sent after 180 days after the date of
enactment.
H. Disqualification From Payment During Trial Work Period Upon
Conviction of Fraudulent Concealment of Work Activity
(Sec. 208 of the Bill)
PRESENT LAW
An individual entitled to disability benefits under Title
II is entitled to a ``trial work period'' to test his or her
ability to work. The trial work period allows beneficiaries to
have earnings from work above a certain amount ($570 a month in
2003) for up to 9 months (which need not be consecutive) within
any 60-month period without any loss of benefits. Presently,
Section 222(c) of the Social Security Act does not prohibit a
person entitled to disability benefits under Title II from
receiving disability benefits during a trial work period, even
if convicted by a Federal court for fraudulently concealing
work activity during that period.
The SSA's Inspector General has pursued prosecution of
Title II disability beneficiaries who fraudulently conceal work
activity by applying several criminal statutes, including
Section 208(a) of the Social Security Act, and Sections 371 and
641 of Title 18 of the United States Code (Crimes and Criminal
Procedures).
REASON FOR CHANGE
Under current law, if an individual is convicted of
fraudulently concealing work activity, the dollar loss to the
government is calculated based on the benefits that the
individual would have received had he or she not concealed the
work activity. During the trial work period, disability
beneficiaries continue to receive their monthly benefit amount
regardless of their work activity. Therefore, the SSA does not
include benefits paid during a trial work period in calculating
the total dollar loss to the government, even if the individual
fraudulently concealed work activity during that period. As a
result, the dollars lost to the government may fall below the
thresholds set by the United States Attorneys in cases
involving fraudulent concealment of work by Title II disability
beneficiaries. In such situations, the case would not be
prosecuted, even if the evidence of fraud were very clear.
This provision rectifies the situation by establishing that
individuals convicted of fraudulently concealing work activity
during the trial work period are not entitled to receive any
disability benefits for trial work period months prior to the
conviction (but within the same period of disability).
EXPLANATION OF PROVISION
Under the new provision, an individual convicted by a
Federal court of fraudulently concealing work activity from the
Commissioner of Social Security would not be entitled to
receive any disability benefits in any trial work period month
and would be liable for repayment of those benefits, in
addition to any restitution, penalties, fines or assessments
otherwise due.
Under this provision, concealing work activity is
considered to be fraudulent if the individual: (1) provided
false information to the SSA about his or her earnings during
that period; (2) worked under another identity, including under
another person's or a false Social Security number; or (3) took
other actions to conceal work activity with the intent to
receive benefits to which he or she was not entitled.
EFFECTIVE DATE
Effective with respect to work activity performed after the
date of enactment.
I. Authority for Judicial Orders of Restitution
(Sec. 209 of the Bill)
PRESENT LAW
A court may order restitution when sentencing a defendant
convicted of various offenses under Titles 18, 21, and 49 of
the United States Code. However, violations of the Social
Security Act (42 U.S.C.) are not included among those for which
the court may order restitution.
REASON FOR CHANGE
This provision would enhance a judge's ability to
compensate the programs and punish persons convicted of
violations including, but not limited to, improper receipt of
Social Security payments and misuse of Social Security numbers.
EXPLANATION OF PROVISION
This provision amends the Social Security Act to allow a
Federal court to order restitution to the Social Security
Administration for violations of the Social Security Act.
Restitution in connection with benefit misuse by a
representative payee would be credited to the Social Security
Trust Funds for cases involving OASDI recipients and to the
general fund for cases involving Supplemental Security Income
and Special Veterans benefits. Other restitution funds,
credited to a special fund established in the Treasury, would
be available to defray expenses incurred in implementing Title
II, Title VIII, and Title XVI. If the court does not order
restitution, or only orders partial restitution, the court must
state the reason on the record.
EFFECTIVE DATE
Effective with respect to violations occurring on or after
the date of enactment.
TITLE III--ATTORNEY FEE PAYMENT SYSTEM IMPROVEMENTS
A. Cap on Attorney Assessments
(Sec. 301 of the Bill)
PRESENT LAW
If there is an agreement between the claimant and the
attorney, the Social Security Act requires the SSA to pay
attorney fees for Title II claims directly to the attorney out
of the claimant's past-due benefits. The SSA charges an
assessment, at a rate not to exceed 6.3 percent of approved
attorney fees, for the costs of determining, processing,
withholding, and distributing attorney fees.
REASON FOR CHANGE
Testimony was given at a House oversight hearing in May
2001 on the SSA's processing of attorney representatives' fees
that the amount of the fee assessment is unfair to these
attorneys, who provide an important service to claimants. The
attorneys who receive fee payments from the agency have their
gross revenue reduced by 6.3 percent. As a result of this
revenue loss and the time it takes for the SSA to issue the fee
payments to attorneys, a number of attorneys have decided to
take fewer or none of these cases. The cap on the amount of the
assessment would help ensure that enough attorneys remain
available to represent claimants before the Social Security
Administration.
The Committee on Ways and Means continues to be concerned
about the agency's processing time for attorney representative
fee payments and expects the SSA to further automate the
payment process as soon as possible.
EXPLANATION OF PROVISION
The new provision imposes a cap of $75 on the 6.3 percent
assessment on approved attorney representative fees for Title
II claims. The cap is indexed annually for inflation.
EFFECTIVE DATE
After 180 days after the date of enactment.
B. Extension of Attorney Fee Payment System to Title XVI Claims
(Sec. 302 of the Bill)
PRESENT LAW
If there is an agreement between the claimant and the
attorney, the Social Security Act requires attorney fees for
Title II claims to be paid by the SSA directly to the attorney
out of the claimant's past-due benefits (subject to an
assessment to cover the SSA's costs). However, attorney fees
for Title XVI claims are not paid directly by the SSA out of
past-due benefits. Instead, the attorney must collect the fee
from the beneficiary.
REASON FOR CHANGE
Withholding the attorney fee payments from the SSI benefit
claim would improve SSI applicants' access to representation,
as more attorneys would be willing to represent claimants if
they are guaranteed payment.
Payment of States first and attorneys second would ensure
that States providing interim assistance to individuals would
not receive less reimbursement, while also providing a method
of ensuring that attorneys receive payment and continue to
provide representation.
EXPLANATION OF PROVISION
The provision would extend direct fee payment to attorneys
out of past-due benefits for Title XVI claims. It would also
authorize the SSA to charge a processing assessment of up to
6.3 percent of the approved attorney fees, subject to a cap of
$75 that is indexed for inflation. The provision would sunset
with respect to agreements for representation entered into
after 5 years after the implementation date.
In addition, in cases where the States would be reimbursed
for interim assistance they had provided to a beneficiary
awaiting a decision on a claim for SSI benefits, the State
would be paid first, and the attorney would be paid second out
of the past-due benefit amount.
The provision also requires the General Accounting Office
to conduct a study of claimant representation in the Social
Security and Supplemental Security Income programs. The study
will include an evaluation of the potential results of
extending the fee withholding process to non-attorney
representatives.
EFFECTIVE DATE
Applies with respect to fees for representation that are
first required to be certified or paid on or after the first
day of the first month that begins after 270 days after the
date of enactment. The GAO report is due to the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate not later than 1 year after
the date of enactment.
TITLE IV: MISCELLANEOUS AND TECHNICAL AMENDMENTS
Subtitle A: Amendments Relating to the Ticket to Work and Work
Incentives Improvement Act of 1999
A. Application of Demonstration Authority Sunset Date to New Projects
(Sec. 401 of the Bill)
PRESENT LAW
Section 234 of the Social Security Act provides the
Commissioner with general authority to conduct demonstration
projects for the disability insurance program. These projects
can test: (1) alternative methods of treating work activity of
individuals entitled to disability benefits; (2) the alteration
of other limitations and conditions that apply to such
individuals (such as an increase in the length of the trial
work period); and, (3) implementation of sliding scale benefit
offsets. To conduct the projects, the Commissioner may waive
compliance with the benefit requirements of Title II and
Section 1148, and the HHS Secretary may waive the benefit
requirements of Title XVIII. The Commissioner's authority to
conduct demonstration projects terminates on December 17, 2004,
five years after its enactment in the ``Ticket to Work and Work
Incentives Improvement Act of 1999'' (P.L. 106-170, ``Ticket to
Work Act'').
REASON FOR CHANGE
The current five-year limitation on waiver authority
restricts the options that may be tested to improve work
incentives and return to work initiatives, as several potential
options the Commissioner may test would extend past the current
five-year limit. Developing a well-designed demonstration
project can require several years, and the current five-year
authority might not allow sufficient time to both design the
project and to conduct it long enough to obtain reliable data.
EXPLANATION OF PROVISION
The new provision clarifies that the Commissioner is
authorized to conduct demonstration projects that extend beyond
December 17, 2004, if such projects are initiated on or before
that date (i.e., initiated within the five-year window after
enactment of the Ticket to Work Act).
EFFECTIVE DATE
Upon enactment.
B. Expansion of Waiver Authority Available in Connection With
Demonstration Projects Providing for Reductions in Disability Insurance
Benefits Based on Earnings
(Sec. 402 of the Bill)
PRESENT LAW
Section 234 of the Social Security Act provides the
Commissioner with general authority to conduct demonstration
projects for the disability insurance program. In addition,
Section 302 of the Ticket to Work Act directs the Commissioner
to conduct demonstration projects for the purpose of evaluating
a program for Title II disability beneficiaries under which
benefits are reduced by $1 for each $2 of the beneficiary's
earnings above a level determined by the Commissioner. To
permit a thorough evaluation of alternative methods, Section
302 of the Ticket to Work Act allows the Commissioner to waive
compliance with the benefit provisions of Title II and allows
the Secretary of Health and Human Services to waive compliance
with the benefit requirements of Title XVIII.
REASON FOR CHANGE
This additional waiver authority is needed to allow the
Commissioner to effectively test the $1-for-$2 benefit offset
in combination with return to work services under the Ticket to
Work program. Under the $1-for-$2 benefit offset, earnings of
many beneficiaries may not be sufficient to completely
eliminate benefits. However, under Section 1148 of the Social
Security Act, benefits must be completely eliminated before
employment networks participating in the Ticket to Work program
are eligible to receive outcome payments. Therefore, employment
networks are likely to be reluctant to accept tickets from
beneficiaries participating in the $1 for $2 benefit offset
demonstration, making it impossible for the SSA to effectively
test the combination of the benefit offset and these return to
work services. Additionally, Section 1148 waiver authority was
provided for the broad Title II disability demonstration
authority under Section 234 of the Social Security Act, but not
for this mandated project.
EXPLANATION OF PROVISION
The new provision allows the Commissioner to also waive
requirements in Section 1148 of the Social Security Act, which
governs the Ticket to Work and Self-Sufficiency Program (Ticket
to Work program), as they relate to Title II.
EFFECTIVE DATE
Upon enactment.
C. Funding of Demonstration Projects Providing for Reductions in
Disability Insurance Benefits Based on Earnings
(Sec. 403 of the Bill)
PRESENT LAW
The Ticket to Work Act provides that the benefits and
administrative expenses of conducting the $1-for-$2
demonstration projects will be paid out of the Old-Age,
Survivors, and Disability Insurance (OASDI) and Federal
Hospital Insurance and Federal Supplementary Medical Insurance
(HI/SMI) Trust Funds, to the extent provided in advance in
appropriations acts.
REASON FOR CHANGE
For demonstration projects conducted under the broader
Title II demonstration project authority under Section 234 of
the Social Security Act, administrative costs are paid out of
otherwise available annually appropriated funds, and benefits
associated with the demonstration projects are paid from the
OASDI or HI/SMI Trust Funds. This provision would make funding
sources for the $1-for-$2 demonstration project under the
Ticket to Work Act consistent with funding sources for other
Title II demonstration projects.
EXPLANATION OF PROVISION
The new provision establishes that administrative expenses
for the $1-for-$2 demonstration project will be paid out of
otherwise available annually-appropriated funds, and that
benefits associated with the demonstration project will be paid
from the OASDI or HI/SMI Trust Funds.
EFFECTIVE DATE
Upon enactment.
D. Availability of Federal and State Work Incentive Services to
Additional Individuals
(Sec. 404 of the Bill)
PRESENT LAW
Section 1149 of the Social Security Act (the act), as added
by the Ticket to Work Act, directs the SSA to establish a
community-based work incentives planning and assistance
programs to provide benefits planning and assistance to
disabled beneficiaries. To establish this program, the SSA is
required to award cooperative agreements (or grants or
contracts) to State or private entities. In fulfillment of this
requirement, the SSA has established the Benefits Planning,
Assistance, and Outreach (BPAO) Program. BPAO projects now
exist in every State.
Section 1150 of the act authorizes the SSA to award grants
to State protection and advocacy (P&A) systems so that they can
provide protection and advocacy services to disabled
beneficiaries. Under this section, services provided by
participating P&A systems may include: (1) information and
advice about obtaining vocational rehabilitation (VR) and
employment services; and (2) advocacy or other services that a
disabled beneficiary may need to secure or regain employment.
The SSA has established the Protection and Advocacy to
Beneficiaries of Social Security (PABSS) Program pursuant to
this authorization.
To be eligible for services under either the BPAO or PABSS
programs, an individual must be a ``disabled beneficiary'' as
defined under Section 1148(k) of the act. Section 1148(k)
defines a disabled beneficiary as an individual entitled to
Title II benefits based on disability or an individual who is
eligible for Federal SSI cash benefits under Title XVI based on
disability or blindness.
REASON FOR CHANGE
The Committee on Ways and Means recognizes that Social
Security and SSI beneficiaries with disabilities face a variety
of barriers and disincentives to becoming employed and staying
in their jobs. The intent of this provision, as with the Ticket
to Work Act, is to encourage disabled individuals to work.
The definition of ``disabled beneficiary'' under section
1148(k) of the act does not include several groups of
beneficiaries, including individuals who are no longer eligible
for SSI benefits because of an earnings increase but remain
eligible for Medicaid under section 1619(b); individuals
receiving only a State supplementation payment; and individuals
who are in an extended period of Medicare eligibility. The
Committee on Ways and Means believes that BPAO and PABSS
services should be available to all of these disabled
beneficiaries regardless of Title II or SSI payment status.
Beneficiaries may have progressed beyond eligibility for
Federal cash benefits, but may still need information about the
effects of work on their benefits, or may need advocacy or
other services to help them maintain or regain employment.
Extending eligibility for the BPAO and PABSS programs to
beneficiaries who are receiving a State supplementation payment
or are still eligible for Medicare or Medicaid, but who are no
longer eligible for Federal cash benefits, will help to prevent
these beneficiaries from returning to the Federal cash benefit
rolls and help them to reach their optimum level of employment.
The Committee on Ways and Means also intends that PABSS
services be available to provide assistance to beneficiaries
who have successfully obtained employment but who continue to
encounter job-related difficulties. Therefore, the new
provision extends the current PABSS assistance (which is
available for securing and regaining employment) to maintaining
employment--thus providing a continuity of services for
disabled individuals throughout the process of initially
securing employment, the course of their being employed and, if
needed, their efforts to regain employment. This provision
would ensure that disabled individuals would not face a
situation in which they would have to wait until they lost
their employment in order to once again be eligible to receive
PABSS services. Payments for services to maintain employment
would be subject to Section 1150(c) of the Social Security Act.
The Committee on Ways and Means will continue to monitor the
implementation of PABSS programs to ensure that assistance is
directed to all areas in which beneficiaries face obstacles in
securing, maintaining, or regaining work.
EXPLANATION OF PROVISION
The new provision expands eligibility for the BPAO and
PABSS programs under Sections 1149 and 1150 of the act to
include not just individuals who are ``disabled beneficiaries''
under Section 1148(k) of the act, but also individuals who (1)
are no longer eligible for SSI benefits because of an increase
in earnings, but remain eligible for Medicaid under Section
1619(b); (2) receive only a State supplementation payment (a
payment that some States provide as a supplement to the Federal
SSI benefit); or (3) are in an extended period of Medicare
eligibility under Title XVIII after a period of Title II
disability has ended. The new provision also expands the types
of services a P&A system may provide under Section 1150 of the
act. Currently P&A systems may provide ``advocacy or other
services that a disabled beneficiary may need to secure or
regain employment,'' while the new provision allows them to
provide ``advocacy or other services that a disabled
beneficiary may need to secure, maintain, or regain
employment.''
EFFECTIVE DATE
The amendment to Section 1149, which affects the BPAO
Program, is effective with respect to grants, cooperative
agreements or contracts entered into on or after the date of
enactment. The amendments to Section 1150, which affect the
PABSS Program, are effective for payments provided after the
date of the enactment.
E. Technical Amendment Clarifying Treatment for Certain Purposes of
Individual Work Plans Under the Ticket to Work and Self-Sufficiency
Program
(Sec. 405 of the Bill)
PRESENT LAW
Under Section 51 of the Internal Revenue Code (IRC),
employers may claim a Work Opportunity Tax Credit (WOTC) if
they hire, among other individuals, individuals with
disabilities who have been referred by a State vocational
rehabilitation (VR) agency. For an individual to qualify as a
vocational rehabilitation referral under Section 51(d)(6)(B) of
the IRC, the individual must be receiving or have completed
vocational rehabilitation services pursuant to: (i) ``an
individualized written plan for employment under a State plan
for vocational rehabilitation services approved under the
Rehabilitation Act of 1973''; or (ii) ``a program of vocational
rehabilitation carried out under chapter 31 of title 38, United
States Code.'' (IRC, Section 51(d)(6)(B)).
The WOTC is equal to 40 percent of the first $6,000 of
wages paid to newly hired employees during their first year of
employment when the employee is retained for at least 400 work
hours. As such, the maximum credit per employee is $2,400, but
the credit may be less depending on the employer's tax bracket.
A lesser credit rate of 25 percent is provided to employers
when the employee remains on the job for 120-399 hours. The
amount of the credit reduces the company's deduction for the
employee's wages.
The Ticket to Work Act established the Ticket to Work and
Self-Sufficiency Program (Ticket to Work program) under Section
1148 of the Social Security Act. Under this program, the SSA
provides a ``ticket'' to eligible Social Security Disability
Insurance beneficiaries and Supplemental Security Income
beneficiaries with disabilities that allows them to obtain
employment and other support services from an approved
``employment network'' of their choice. Employment networks may
include State, local, or private entities that can provide
directly, or arrange for other organizations or entities to
provide, employment services, VR services, or other support
services. State VR agencies have the option of participating in
the Ticket to Work program as employment networks. Employment
networks must work with each beneficiary they serve to develop
an individual work plan (IWP) for that beneficiary that
outlines his or her vocational goals and the services needed to
achieve those goals. For VR agencies that participate in the
Ticket to Work program, the individualized written plan for
employment (as specified under (i) in paragraph one above)
serves in lieu of the IWP.
Under current law, an employer hiring a disabled individual
referred by an employment network does not qualify for the WOTC
unless the employment network is a State VR agency.
REASON FOR CHANGE
The Ticket to Work program was designed to increase choice
available to beneficiaries when they select providers of
employment services. Employers hiring individuals with
disabilities should be able to qualify for the WOTC regardless
of whether the employment referral is made by a public or
private service provider. This amendment updates eligibility
criteria for the WOTC to conform to the expansion of employment
services and the increase in number and range of VR providers
as a result of the enactment of the Ticket to Work Act.
EXPLANATION OF PROVISION
The new provision allows employers who hire disabled
workers through referrals by employment networks under Section
1148 of the Social Security Act to qualify for the WOTC.
Specifically, it provides that, for purposes of Section
51(d)(6)(B)(i) of the IRC of 1986, an IWP under Section 1148 of
the Social Security Act shall be treated as an individualized
written plan for employment under a State plan for vocational
rehabilitation services approved under the Rehabilitation Act
of 1973.
EFFECTIVE DATE
Effective as if it were included in Section 505 of the
Ticket to Work Act.
Subtitle B. Miscellaneous Amendments
F. Elimination of Transcript Requirement in Remand Cases Fully
Favorable to the Claimant
(Sec. 411 of the Bill)
PRESENT LAW
The Social Security Act requires the SSA to file a hearing
transcript with the District Court for any SSA hearing that
follows a court remand of a SSA decision.
reason for change
A claimant whose benefits have been denied is provided a
transcript of a hearing to be used when the claimant appeals
his case in Federal District court. If the Administrative Law
Judge issues a fully favorable decision, then transcribing the
hearing is unnecessary since the claimant would not appeal this
decision.
explanation of provision
The new provision clarifies that the SSA is not required to
file a transcript with the court when the SSA, on remand,
issues a decision fully favorable to the claimant.
effective date
Effective with respect to final determinations issued (upon
remand) on or after the date of enactment.
G. Nonpayment of Benefits Upon Removal From the United States
(Sec. 412 of the Bill)
PRESENT LAW
In most cases, the Social Security Act prohibits the
payment of Social Security benefits to non-citizens who are
deported from the United States. However, the act does not
prohibit the payment of Social Security benefits to non-
citizens who are deported for smuggling other non-citizens into
the United States.
REASON FOR CHANGE
Individuals who are removed from the United States for
smuggling aliens have committed an act that should prohibit
them from receiving Social Security benefits.
EXPLANATION OF PROVISION
The new provision requires the SSA to suspend benefits of
beneficiaries who are removed from the United States for
smuggling aliens.
EFFECTIVE DATE
Applies with respect to removals occurring after the date
of enactment.
H. Reinstatement of Certain Reporting Requirements
(Sec. 413 of the Bill)
PRESENT LAW
The Federal Reports Elimination and Sunset Act of 1995
``sunsetted'' most annual or periodic reports from agencies to
Congress that were listed in a 1993 House inventory of
congressional reports.
REASON FOR CHANGE
The reports to be reinstated provide Congress with
important information needed to evaluate and oversee the Social
Security and Medicare programs.
EXPLANATION OF PROVISION
The new provision reinstates the requirements for several
periodic reports to Congress that were subject to the 1995
``sunset'' act, including annual reports on the financial
solvency of the Social Security and Medicare programs (the
Board of Trustees' reports on the OASDI, HI, and SMI Trust
Funds) and annual reports on certain aspects of the
administration of the Title II disability program (the SSA
Commissioner's reports on pre-effectuation reviews of
disability determinations and continuing disability reviews).
EFFECTIVE DATE
Upon enactment.
I. Clarification of Definitions Regarding Certain Survivor Benefits
(Sec. 414 of the Bill)
PRESENT LAW
Under the definitions of ``widow'' and ``widower'' in
Section 216 of the Social Security Act, a widow or widower must
have been married to the deceased spouse for at least nine
months before his or her death in order to be eligible for
survivor benefits.
REASON FOR CHANGE
This provision allows the Commissioner to issue benefits in
certain unusual cases in which the duration of marriage
requirement could not be met due to a legal impediment over
which the individual had no control and the individual would
have met the legal requirements were it not for the legal
impediment.
EXPLANATION OF PROVISION
The new provision creates an exception to the nine-month
requirement for cases in which the Commissioner finds that the
claimant and the deceased spouse would have been married for
longer than nine months but for the fact that the deceased
spouse was legally prohibited from divorcing a prior spouse who
was institutionalized due to mental incompetence or similar
incapacity.
EFFECTIVE DATE
Effective for benefit applications filed after the date of
enactment.
J. Clarification Respecting the FICA and SECA Tax Exemptions for an
Individual Whose Earnings Are Subject to the Laws of a Totalization
Agreement Partner
(Sec. 415 of the Bill)
PRESENT LAW
In cases where there is an agreement with a foreign country
(i.e., a totalization agreement), a worker's earnings are
exempt from United States Social Security payroll taxes when
those earnings are subject to the foreign country's retirement
system.
REASON FOR CHANGE
In U.S. totalization agreements, a person's work is
generally subject to the Social Security laws of the country in
which the work is performed. In most cases, the worker (whether
subject to the laws of the United States or the other country)
is compulsorily covered and required to pay contributions in
accordance with the laws of that country. In some instances,
however, work that would be compulsorily covered in the U.S. is
excluded from compulsory coverage in the other country (such as
Germany). In such cases, the IRS has questioned the exemption
from U.S. Social Security tax for workers who elect not to make
contributions to the foreign country's retirement system. This
provision would remove any question regarding the exemption and
would be consistent with the general philosophy behind the
coverage rules of totalization agreements.
EXPLANATION OF PROVISION
The new provision clarifies the legal authority to exempt a
worker's earnings from United States Social Security tax in
cases where the earnings were subject to a foreign country's
retirement system in accordance with a U.S. totalization
agreement, but the foreign country's law does not require
compulsory contributions on those earnings. The provision
establishes that such earnings are exempt from United States
Social Security tax whether or not the worker elected to make
contributions to the foreign country's retirement system.
EFFECTIVE DATE
Upon enactment.
K. Coverage Under Divided Retirement System for Public Employees in
Kentucky
(Sec. 416 of the Bill)
PRESENT LAW
Under Section 218 of the Social Security Act, a State may
choose whether or not its State and local government employees
who are covered by a public pension plan may also participate
in the Social Security Old-Age, Survivors, and Disability
Insurance program. (In this context, the term ``public pension
plan'' refers to a pension, annuity, retirement, or similar
fund or system established by a State or a political
subdivision of a State such as a town. Under current law, State
or local government employees not covered by a public pension
plan are, with a few exceptions, required to pay Social
Security payroll taxes.)
Social Security coverage for employees covered under a
State or local government public pension plan is established
through an agreement between the State and the Federal
government. All States have the option of electing Social
Security coverage for employees by a majority vote in a
referendum. If the majority vote is in favor of Social Security
coverage, then the entire group, including those voting against
such coverage, will be covered by Social Security. If the
majority vote is against Social Security coverage, then the
entire group, including those voting in favor of such coverage
and employees hired after the referendum, will not be covered
by Social Security.
In certain States, however, there is an alternative method
for electing Social Security coverage. Under this method,
rather than the majority of votes determining Social Security
coverage for the whole group, employees voting in the
referendum may individually determine whether they want Social
Security coverage, provided that all newly hired employees of
the system are required to participate in Social Security.
After the referendum, the retirement system is divided into two
groups, one composed of members who elected Social Security
coverage plus those hired after the referendum, and the other
composed of those who did not elect Social Security coverage.
Under Section 218(d)(6)(c) of the Social Security Act, 21
States currently have authority to operate such a divided
retirement system.
REASON FOR CHANGE
The governments of the City of Louisville and Jefferson
County merged in January 2003, and formed a new political
subdivision. Under the provision, once the new political
subdivision holds a referendum on Social Security coverage
among its employees, each employee would choose whether or not
to participate in the Social Security system in addition to
their public pension plan. All employees newly hired to the
system after the divided system is in place would be covered
automatically under Social Security.
Currently, some employees of the new government are covered
under Social Security, while others are not. In order to
provide fair and equitable coverage to all employees, a divided
retirement system, such as that currently authorized in 21
other States, was seen as the best solution. It would allow
those who want to keep Social Security coverage or obtain
Social Security coverage to do so, without requiring other
current employees to participate in Social Security as well.
Without this provision, upon holding a referendum on Social
Security coverage, a majority of votes would determine whether
or not the group would participate in Social Security. Since
the number of non-covered employees exceeds the number of
Social Security-covered employees in the new government, those
employees currently covered by Social Security could lose that
coverage. The Kentucky General Assembly has adopted a bill that
will allow the new divided retirement system to go forward
following enactment of this provision.
EXPLANATION OF PROVISION
The new provision permits the State of Kentucky to join the
21 other States in being able to offer a divided retirement
system. This system would permit current State and local
government workers in a public pension plan to elect Social
Security coverage on an individual basis. Those who do not wish
to be covered by Social Security would continue to participate
exclusively in the public pension plan.
EFFECTIVE DATE
Effective retroactively to January 1, 2003.
L. Compensation for the Social Security Advisory Board
(Sec. 417 of the Bill)
PRESENT LAW
The Social Security Advisory Board is an independent,
bipartisan Board established by the Congress under Section 703
of the Social Security Act. The 7-member Board is appointed by
the President and the Congress to advise the President, the
Congress, and the Commissioner of Social Security on matters
related to the Social Security and Supplemental Security Income
programs. Section 703(f) of the Social Security Act provides
that members of the Board serve without compensation, except
that, while engaged in Board business away from their homes or
regular places of business, members may be allowed travel
expenses, including per diem in lieu of subsistence, as
authorized by Section 5703 of Title 5, United States Code for
persons in the Government who are employed intermittently.
REASON FOR CHANGE
Other government advisory boards--such as the Employee
Retirement Income Security Act Advisory Council, the Pension
Benefit Guaranty Corporation Advisory Committee and the Thrift
Savings Plan Board--provide compensation for their members.
This provision allows for similar treatment of Social Security
Advisory Board members with respect to compensation.
EXPLANATION OF PROVISION
The new provision establishes that compensation for Social
Security Advisory Board members will be provided, at the daily
rate of basic pay for level IV of the Executive Schedule, for
each day (including travel time) during which the member is
engaged in performing a function of the Board.
EFFECTIVE DATE
January 1, 2003.
M. 60-Month Period of Employment Requirement for Application of
Government Pension Offset Exemption
(Sec. 418 of the Bill)
PRESENT LAW
The Government Pension Offset (GPO) was enacted in order to
equalize treatment of workers in jobs not covered by Social
Security and workers in jobs covered by Social Security, with
respect to spouse and survivor benefits. Where what is known as
the ``dual-entitlement'' rule reduces a spouse or survivor
benefit dollar-for-dollar by the worker's own Social Security
retirement or disability benefit, the GPO reduces the Social
Security spouse or survivor benefit by two-thirds of the
government pension.
However, under what's known as the ``last day rule,'' State
and local government workers are exempt from the GPO if, on the
last day of employment, their job was covered by Social
Security. In contrast, Federal workers who switched from the
Civil Service Retirement System (CSRS), a system that is not
covered by Social Security, to the Federal Employee Retirement
System (FERS), a system that is covered by Social Security,
must work for 5 years under FERS in order to be exempt from the
GPO.
REASON FOR CHANGE
In August 2002, the GAO published a report titled ``Social
Security Administration: Revision to the Government Pension
Offset Exemption Should Be Considered'' (GAO-02-950). At the
request of Committee on Ways and Means, Subcommittee on Social
Security Chairman E. Clay Shaw, Jr., the GAO investigated use
of the ``last day'' exemption to avoid being subject to the
GPO. The investigation found that over 4,800 individuals in
Texas and Georgia used or planned to use the last day
exemption, with over 3,500 in Texas using it in 2002.
In testimony provided to the Subcommittee on Social
Security February 27, 2003, the GAO stated that the exemption
``allows a select group of individuals with a relatively small
investment of work time and only minimal Social Security
contributions to gain access to potentially many years of full
Social Security spousal benefits.'' The GAO also clarified in
testimony that a spouse who worked in the private sector, paid
payroll taxes for an entire career, and earned a Social
Security retirement or disability benefit as a worker would not
receive a full spousal benefit. The GAO stated that current
usage of last day exemption could cost the Social Security
trust funds $450 million, and that considering the potential
for abuse of the exemption and the likelihood of increased use,
timely action is needed. This provision to conform their
treatment to that of Federal workers was among the
recommendations provided by the GAO to address potential abuse
of the exemption. A provision addressing the GPO last-day
exemption was also included in President Bush's budget request
for 2004.
EXPLANATION OF PROVISION
The new provision requires that State and local government
workers be covered by Social Security during their last 5 years
of employment in order to be exempt from the GPO.
EFFECTIVE DATE
Effective for applications filed on or after the first day
of the first month after the date of enactment. However, the
provision would not apply to individuals whose last day of
employment for the State or local governmental entity occurred
before the end of the 90-day period following the date of
enactment. It would also not apply to persons whose last day of
employment occurred after the end of the 90-day period
following the date of enactment, if during the 90-day period
following the date of enactment the person's job was covered by
Social Security and remained so until their last day of
employment.
Subtitle C. Technical Amendments
N. Technical Correction Relating to Responsible Agency Head
(Sec. 421 of the Bill)
PRESENT LAW
Section 1143 of the Social Security Act directs ``the
Secretary of Health and Human Services'' to send periodic
Social Security Statements to individuals.
Reason for Change
The ``Social Security Independence and Program Improvements
Act of 1994'' (P.L. 103-296) made the Social Security
Administration an independent agency separate from the
Department of Health and Human Services. This provision updates
Section 1143 to reflect that change.
EXPLANATION OF PROVISION
The new provision makes a technical correction to this
section by inserting a reference to the Commissioner of Social
Security in place of the reference to the Secretary of Health
and Human Services.
EFFECTIVE DATE
Upon enactment.
O. Technical Correction Relating to Retirement Benefits of Ministers
(Sec. 422 of the Bill)
PRESENT LAW
Section 1456 of the ``Small Business Job Protection Act of
1996'' (P.L. 104-188) established that certain retirement
benefits received by ministers and members of religious orders
(such as the rental value of a parsonage or parsonage
allowance) are not subject to Social Security payroll taxes
under the Internal Revenue Code. However, under Section 211 of
the Social Security Act, these retirement benefits are treated
as net earnings from self-employment for the purpose of
acquiring insured status and calculating Social Security
benefit amounts.
REASON FOR CHANGE
P.L. 104-188 provided that certain retirement benefits
received by ministers and members of religious orders are not
subject to payroll taxes. However, a conforming change was not
made to the Social Security Act to exclude these benefits from
being counted as wages for the purpose of acquiring insured
status and calculating Social Security benefit amounts. This
income is therefore not treated in a uniform manner. This
provision would conform the Social Security Act to the Internal
Revenue Code with respect to such income.
EXPLANATION OF PROVISION
The new provision makes a conforming change to exclude
these benefits received by retired clergy from Social Security-
covered earnings for the purpose of acquiring insured status
and calculating Social Security benefit amounts.
EFFECTIVE DATE
Effective for years beginning before, on, or after December
31, 1994 (same as the effective date of Section 1456 of P.L.
104-188).
P. Technical Correction Relating to Domestic Employment
(Sec. 423 of the Bill)
PRESENT LAW
Current law is ambiguous concerning the Social Security
coverage and tax treatment of domestic service performed on a
farm. Domestic employment on a farm appears to be subject to
two separate coverage thresholds (one for agricultural labor
and another for domestic employees).
REASON FOR CHANGE
Prior to 1994, domestic service on a farm was treated as
agricultural labor and was subject to the coverage threshold
for agricultural labor. According to the SSA, in 1994, when
Congress amended the law with respect to domestic employment,
the intent was that domestic employment on a farm would be
subject to the coverage threshold for domestic employees
instead of the threshold for agricultural labor. However, the
current language is unclear, making it appear as if farm
domestics are subject to both thresholds.
EXPLANATION OF PROVISION
The new provision clarifies that domestic service on a farm
is treated as domestic employment, rather than agricultural
labor, for Social Security coverage and tax purposes.
EFFECTIVE DATE
Upon enactment.
Q. Technical Correction of Outdated References
(Sec. 424 of the Bill)
PRESENT LAW
Section 202(n) and 211(a)(15) of the Social Security Act
and Section 3102(a) of the Internal Revenue Code of 1986 each
contain outdated references that relate to the Social Security
program.
REASON FOR CHANGE
Over the years, provisions in the Social Security Act, the
Internal Revenue Code and other related laws have been deleted,
redesignated or amended. However, necessary conforming changes
have not always been made. Consequently, Social Security law
contains some outdated references.
EXPLANATION OF PROVISION
The new provision corrects outdated references in the
Social Security Act and the Internal Revenue Code by: (1) in
Section 202(n) of the Social Security Act, updating references
respecting removal from the United States; (2) in Section
211(a)(15) of the Social Security Act, correcting a citation
respecting a tax deduction related to health insurance costs of
self-employed individuals; and (3) in Section 3102(a) of the
Internal Revenue Code of 1986, eliminating a reference to an
obsolete 20 day agricultural work test.
EFFECTIVE DATE
Upon enactment.
R. Technical Correction Respecting Self-Employment Income in Community
Property States
(Sec. 425 of the Bill)
PRESENT LAW
The Social Security Act and the Internal Revenue Code
provide that, in the absence of a partnership, all self-
employment income from a trade or business operated by a
married person in a community property State is deemed to be
the husband's unless the wife exercises substantially all of
the management and control of the trade or business.
REASON FOR CHANGE
Present law was found to be unconstitutional in several
court cases in 1980. Since then, income from a trade or
business that is not a partnership in a community property
State has been treated the same as income from a trade or
business that is not a partnership in a non-community property
State--it is taxed and credited to the spouse who is found to
be carrying on the business.
This change will conform the provisions in the Social
Security Act and the Internal Revenue Code to current practice
in both community property and non-community property States.
EXPLANATION OF PROVISION
Under the new provision, self-employment income from a
trade or business that is not a partnership, and that is
operated by a married person in a community property State, is
taxed and credited to the spouse who is carrying on the trade
or business. If the trade or business is jointly operated, the
self-employment income is taxed and credited to each spouse
based on his or her distributive share of gross earnings.
EFFECTIVE DATE
Upon enactment.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statements are made
concerning the votes of the Committee on Ways and Means in its
consideration of the bill, H.R. 743.
MOTION TO REPORT THE BILL
The bill, H.R. 743, as amended, was ordered favorably
reported by a rollcall vote of 35 yeas to 2 nays (with a quorum
being present). The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas..................... X ........ ......... Mr. Rangel....... X ........ .........
Mr. Crane...................... X ........ ......... Mr. Stark........ X ........ .........
Mr. Shaw....................... X ........ ......... Mr. Matsui....... X ........ .........
Mrs. Johnson................... X ........ ......... Mr. Levin........ X ........ .........
Mr. Houghton................... X ........ ......... Mr. Cardin....... X ........ .........
Mr. Herger..................... X ........ ......... Mr. McDermott.... X ........ .........
Mr. McCrery.................... X ........ ......... Mr. Kleczka...... X ........ .........
Mr. Camp....................... X ........ ......... Mr. Lewis (GA)... X ........ .........
Mr. Ramstad.................... X ........ ......... Mr. Neal......... ........ ........ .........
Mr. Nussle..................... ........ ........ ......... Mr. McNulty...... ........ ........ .........
Mr. Johnson.................... X ........ ......... Mr. Jefferson.... X ........ .........
Ms. Dunn....................... X ........ ......... Mr. Tanner....... X ........ .........
Mr. Collins.................... X ........ ......... Mr. Becerra...... X ........ .........
Mr. Portman.................... X ........ ......... Mr. Doggett...... ........ X .........
Mr. English.................... X ........ ......... Mr. Pomeroy...... X ........ .........
Mr. Hayworth................... X ........ ......... Mr. Sandlin...... ........ X .........
Mr. Weller..................... X ........ ......... Ms. Tubbs Jones.. X ........ .........
Mr. Hulshof.................... X ........ .........
Mr. McInnis.................... X ........ .........
Mr. Lewis (KY)................. X ........ .........
Mr. Foley...................... ........ ........ .........
Mr. Brady...................... X ........ .........
Mr. Ryan....................... X ........ .........
Mr. Cantor..................... X ........ .........
----------------------------------------------------------------------------------------------------------------
VOTES ON AMENDMENTS
A rollcall vote was conducted on the following amendments
to the Chairman's amendment in the nature of a substitute.
An amendment by Mr. Jefferson, which would modify the
Government Pension Offset from two-thirds of the government
pension to two-thirds of the amount of the combined government
and Social Security benefit exceeding $2,000 per month (not to
exceed the reduction under current law), was defeated by a
rollcall vote of 14 yeas to 21 nays. The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas..................... ........ X ......... Mr. Rangel....... X ........ .........
Mr. Crane...................... ........ X ......... Mr. Stark........ X ........ .........
Mr. Shaw....................... ........ X ......... Mr. Matsui....... X ........ .........
Mrs. Johnson................... ........ X ......... Mr. Levin........ X ........ .........
Mr. Houghton................... ........ X ......... Mr. Cardin....... X ........ .........
Mr. Herger..................... ........ X ......... Mr. McDermott.... X ........ .........
Mr. McCrery.................... ........ X ......... Mr. Kleczka...... X ........ .........
Mr. Camp....................... ........ X ......... Mr. Lewis (GA)... X ........ .........
Mr. Ramstad.................... ........ X ......... Mr. Neal......... ........ ........ .........
Mr. Nussle..................... ........ ........ ......... Mr. McNulty...... ........ ........ .........
Mr. Johnson.................... ........ X ......... Mr. Jefferson.... X ........ .........
Ms. Dunn....................... ........ ........ ......... Mr. Tanner....... X ........ .........
Mr. Collins.................... ........ X ......... Mr. Becerra...... X ........ .........
Mr. Portman.................... ........ X ......... Mr. Doggett...... X ........ .........
Mr. English.................... ........ X ......... Mr. Pomeroy...... X ........ .........
Mr. Hayworth................... ........ X ......... Mr. Sandlin...... ........ ........ .........
Mr. Weller..................... ........ X ......... Ms. Tubbs Jones.. X ........ .........
Mr. Hulshof.................... ........ X .........
Mr. McInnis.................... ........ X .........
Mr. Lewis (KY)................. ........ X .........
Mr. Foley...................... ........ ........ .........
Mr. Brady...................... ........ X .........
Mr. Ryan....................... ........ X .........
Mr. Cantor..................... ........ X .........
----------------------------------------------------------------------------------------------------------------
An amendment by Mr. Stark, which would reduce the
Government Pension Offset of Social Security spousal and
survivor's benefits from two-thirds to one-third of the
government pension, was defeated by a roll call vote of 15 yeas
to 22 nays. The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas..................... ........ X ......... Mr. Rangel....... X ........ .........
Mr. Crane...................... ........ X ......... Mr. Stark........ X ........ .........
Mr. Shaw....................... ........ X ......... Mr. Matsui....... X ........ .........
Mrs. Johnson................... ........ X ......... Mr. Levin........ X ........ .........
Mr. Houghton................... ........ X ......... Mr. Cardin....... X ........ .........
Mr. Herger..................... ........ X ......... Mr. McDermott.... X ........ .........
Mr. McCrery.................... ........ X ......... Mr. Kleczka...... X ........ .........
Mr. Camp....................... ........ X ......... Mr. Lewis (GA)... X ........ .........
Mr. Ramstad.................... ........ X ......... Mr. Neal......... ........ ........ .........
Mr. Nussle..................... ........ ........ ......... Mr. McNulty...... ........ ........ .........
Mr. Johnson.................... ........ X ......... Mr. Jefferson.... X ........ .........
Ms. Dunn....................... ........ X ......... Mr. Tanner....... X ........ .........
Mr. Collins.................... ........ X ......... Mr. Becerra...... X ........ .........
Mr. Portman.................... ........ X ......... Mr. Doggett...... X ........ .........
Mr. English.................... ........ X ......... Mr. Pomeroy...... X ........ .........
Mr. Hayworth................... ........ X ......... Mr. Sandlin...... X ........ .........
Mr. Weller..................... ........ X ......... Ms. Tubbs Jones.. X ........ .........
Mr. Hulshof.................... ........ X .........
Mr. McInnis.................... ........ X .........
Mr. Lewis (KY)................. ........ X .........
Mr. Foley...................... ........ ........ .........
Mr. Brady...................... ........ X .........
Mr. Ryan....................... ........ X .........
Mr. Cantor..................... ........ X .........
----------------------------------------------------------------------------------------------------------------
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d)(2) of rule XIII of the Rules
of the House of Representatives, the following statement is
made concerning the effects on the budget of the revenue
provisions of the bill, H.R. 743 as reported:
The Committee agrees with the estimate prepared by the
Congressional Budget Office (CBO), which is included below.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states the bill
will reduce direct spending and increase revenues, resulting in
$655 million in savings to the unified budget.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives requiring a cost estimate
prepared by the Congressional Budget Office, the following
report prepared by CBO is provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 20, 2003.
Hon. William ``Bill'' M. Thomas,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 743, the Social
Security Protection Act of 2003.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Kathy
Ruffing.
Sincerely,
Douglas Holtz-Eakin,
Director.
Enclosure.
H.R. 743--Social Security Protection Act of 2003
Summary: H.R. 743 would strengthen oversight of
representative payees (people who handle benefit checks for
others, such as children or mentally impaired adults), bar
Social Security benefits to fugitives, revamp the Social
Security Administration's (SSA's) procedures for paying
attorneys who represent successful claimants, and tighten the
rules for some state and local retirees who switch jobs briefly
in order to boost their Social Security benefits. In all, the
bill contains three dozen provisions, although many would have
little or no budgetary effect.
On balance, enacting H.R. 743 would lead to small net costs
in 2004 but net savings thereafter--by amounts that grow from
$16 million in 2005 to $147 million in 2013. In total, CBO
estimates that enacting the bill would trim direct spending and
boost revenue by a combined $655 million over the 2004-2013
period. About two-thirds of those effects are in Social
Security, which is off-budget.
H.R. 743 would also affect discretionary spending. CBO
estimates that implementing the bill would cost SSA $15 million
to $20 million a year through 2010, and smaller amounts after
that, for extra enforcement and processing activities.
Section 4 of the Unfunded Mandates Reform Act (UMRA)
excludes from the requirements of that act any provision that
relates to the Old-Age, Survivors, and Disability Insurance
program (OASDI) under title II of the Social Security Act. Many
provisions of H.R. 743 would fall within that exclusion. The
other provisions of the bill contain no intergovernmental
mandates as defined in UMRA and would impose no costs on state,
local, or tribal governments. They do contain private-sector
mandates as defined in UMRA. CBO estimates that the costs to
the private sector of those mandates would not exceed the
threshold established by UMRA ($117 million in 2003, adjusted
annually for inflation).
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 743 shown in the following table. The
costs of this legislation fall within budget functions 570
(Medicare), 600 (income security), and 650 (Social Security).
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING (OUTLAYS)
Title I. Protection of beneficiaries:
Authority to reissue benefits misused by organizational
representative payees:
OASDI benefits........................................ 2 * * * * * * * * *
SSI benefits.......................................... 1 * * * * * * * * *
Title II. Program protections:
Denial of benefits to fugitives:
OASDI benefits........................................ -10 -30 -44 -55 -59 -61 -63 -66 -68 -70
Medicare.............................................. -1 -4 -11 -15 -19 -22 -23 -25 -25 -27
Title III. Attorney fee payment system improvements:
Cap of $75 (indexed) on processing charges in title II: 12 24 25 27 28 29 31 32 33 34
OASDI receipts...........................................
Temporary extension of attorney-fee payment system to -1 -4 -4 -4 -4 -5 -5 * * *
title XVI: SSI receipts..................................
Title IV. Miscellaneous and technical amendments: * * * * * * * * * 1
60-month employment requirement for exemption from * * -1 -2 -4 -8 -15 -26 -49 -80
Government Pension Offset: OASDI benefits................
Permission for Kentucky to operate divided retirement * * * * * * * * * 1
systems: OASDI benefits..................................
Total changes in direct spending:
On-budget............................................. * -8 -15 -19 -23 -26 -28 -25 -25 -27
Off-budget (OASDI).................................... 4 -7 -20 -30 -35 -40 -48 -59 -83 -115
-----------------------------------------------------------------------------------------
Total............................................... 4 -14 -35 -49 -58 -66 -75 -84 -109 -142
=========================================================================================
CHANGES IN REVENUES
Title IV. Miscellaneous and technical amendments:
Permission for Kentucky to operate divided retirement
systems:
OASDI revenues........................................ 1 1 2 2 3 3 3 4 4 5
Other revenues........................................ * * * * * * * * * *
Clarification of eligibility for Work Opportunity Credit.. -2 * 0 0 0 0 0 0 0 0
Total changes in revenues:
On-budget............................................. -2 * 0 0 0 0 0 0 0 0
Off-budget (OASDI).................................... 1 1 2 2 3 3 3 4 4 5
-----------------------------------------------------------------------------------------
Total............................................... -1 1 2 2 3 3 3 4 4 5
=========================================================================================
NET CHANGES IN DIRECT SPENDING AND REVENUES (EFFECT ON DEFICITS)
On-budget..................................................... 2 -8 -15 -19 -23 -26 -28 -25 -25 -27
Off-budget (OASDI)............................................ 4 -8 -21 -32 -38 -43 -51 -63 -88 -120
-----------------------------------------------------------------------------------------
Total................................................... 5 -16 -37 -52 -61 -69 -79 -88 -113 -147
=========================================================================================
CHANGES IN SPENDING SUBJECT TO APPROPRIATION (OUTLAYS)
OASDI administrative expenses................................. 4 3 2 2 2 2 2 3 3 4
SSI administrative expenses................................... 14 13 13 14 15 16 16 2 2 2
-----------------------------------------------------------------------------------------
Total................................................... 18 17 15 16 17 18 19 5 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes.--Details may not add to totals because of rounding.
OASDI = Old-Age, Survivors, and Disability Insurance (title II); SSI = Supplemental Security Income (title XVI).
*= Less than $500,000.
Basis of estimate: For this estimate, CBO assumes that H.R.
743 will be enacted in September 2003.
Direct spending and revenues
Title I. Nearly seven million people--three million adults
and four million children--who get Social Security,
Supplemental Security Income (SSI), or both have their checks
sent to a representative payee who helps manage the
beneficiary's finances. The payee must also report certain
events, such as changes in the beneficiary's income or school
attendance, to SSA. In about 85 percent of cases, a family
member serves as a representative payee. But an attorney or
guardian, a social service agency, an institution, or other
nonrelative may act as a payee, especially for a disabled
adult. About 45,000 organizations serve as representative
payees for about 750,000 clients. SSA monitors representative
payees by requiring annual reports and by conducting on-site
reviews every three years of certain payees who serve a large
number of beneficiaries.
H.R. 743 would direct SSA to certify annually that social
service agencies meet licensing and bonding requirements and to
conduct periodic on-site inspections of more representative
payees. It would enhance SSA's ability to recover misused funds
and to impose civil monetary penalties.
Most of the provisions would have negligible effects on
benefit payments or recoveries. One section, however, would
require SSA to pay beneficiaries any amounts that had been
misused by an organizational representative payee. (Currently,
such claimants must show negligence by SSA.) ``Misuse'' means
converting funds to the payee's own use or any purpose other
than the use and benefit of the client. The provision would be
retroactive to January 1, 1995.
According to SSA, representative payees misuse about $3
million in benefits each year. Although SSA's Inspector General
(IG) has found weaknesses in internal controls of
organizational payees, few of the resulting errors would
constitute misuse. Because organizations handle about 12
percent of the dollars flowing through representative payees,
CBO estimates that reimbursing nine years' worth of misused
benefits would cost $3 million in 2004. Extra costs in 2005
through 2013 would be negligible.
Title II. H.R. 743 would forbid fugitive felons and people
fleeing prosecution from collecting Social Security benefits.
CBO estimates that this policy would reduce Social Security
spending by $10 million in 2004 and $525 million over the 2004-
2013 period. CBO also estimates that the policy would save $172
million in Medicare over the 10 years.
CBO used data from a report by SSA's Inspector General to
estimate those savings. The IG extrapolated from a sample of
about 400 cases in 10 states to estimate that fugitives
received between $40 million and $180 million in Social
Security benefits in 1999. The midpoint of that range ($110
million) reflected an estimated 15,000 fugitives with an
average benefit of almost $600 per month. Assuming that their
number and average benefit keep pace with the overall program,
CBO extrapolated that total to $130 million in 2004 and $175
million in 2013.
CBO judges, however, that several obstacles would keep
savings from reaching those figures. First, large-scale
enforcement poses challenges--a fact highlighted by the IG's
work with a small sample. By tapping the National Crime
Information Center (NCIC) and obtaining data directly from some
states that do not report fully to the NCIC, SSA has access to
more than half of fugitive warrants; some, though, lack key
information (such as full name and Social Security number) for
an accurate match. Illustrating that hurdle, an IG study of the
SSI program--three years after fugitives became ineligible--
found that about 20 percent of ineligible recipients were
suspended from the rolls promptly, another 30 percent were
suspended eventually, and 50 percent were apparently missed.
That study covered years before 2000, when SSA began matching
data with the NCIC; nevertheless, the findings lead CBO to
assume that matching will ultimately be about 60 percent
effective.
Second, some people spotted by computer matching will
probably clear their records when their benefits stop,
resulting in little or no long-term savings. CBO found that
many warrants are dated--about 15 percent of state warrants,
for example, are more than 10 years old--and most are for
nonviolent offenses such as drug possession and probation or
parole violation. In such cases, ``fugitives'' with no
subsequent convictions may face nothing worse than a suspended
sentence or probation. Faced with a lifetime cutoff from Social
Security, CBO assumes that some would run that risk. To account
for such cases, CBO subtracted another one-third from potential
savings, bringing the result to 40 percent of the IG's figure.
CBO assumes those savings are attainable about two years after
enactment; initial savings are more modest, as SSA signs data-
sharing agreements with more states and writes regulations.
CBO assumes that 80 percent of fugitives who would be
affected by this provision are disabled beneficiaries who
qualify for Medicare. If they lost their health benefits too,
extra savings in 2013 (when their average Medicare benefit--
about $9,600--almost matches their assumed Social Security
benefit, $9,900) could reach $54 million. However, they would
not lose Medicare eligibility. Technically their Social
Security benefit would be suspended, not terminated. A
suspension does not erase Medicare eligibility. Some Medicare
savings would probably occur simply because beneficiaries fail
to realize they remain eligible, fear using their Medicare
card, or stop paying the premium (which is usually withheld
from Social Security checks) for Part B coverage. CBO assumes
that the resulting drop in use of Medicare benefits would save
about half as much as an outright ban, or about $27 million in
2013.
Title III. Many Social Security claimants, especially
disability applicants who win benefits on appeal, are
represented by attorneys. A standard fee agreement between
attorney and client pledges that the attorney will receive 25
percent of any past-due benefits up to a cap of $5,300. (By the
time someone wins on appeal, past-due benefits typically amount
to about 18 months' worth.) That cap stood at $4,000 for more
than a decade until SSA raised it in 2002. When SSA awards
OASDI benefits in such cases, it pays the attorney fee directly
from the past-due amounts. In contrast, when SSA awards SSI
benefits only, or denies all benefits, the attorney must seek
his or her fee from the client. Processing attorney fees is a
labor-intensive chore, and in 1999 the Congress permitted SSA
to withhold up to 6.3 percent of the amounts paid to offset
some of those costs.
SSA pays attorney fees in about 200,000 OASDI cases and
concurrent (OASDI and SSI) cases a year. The average fee, still
dampened by the $4,000 lid, is now about $2,700, and the
average processing charge about $170. By 2013, CBO expects that
annual volume will be about 240,000, the average fee about
$3,600, and hence the average charge about $225. H.R. 743
proposes to cap the charge at $75 with future adjustments for
inflation. That would erase more than half of expected
receipts, a loss of $34 million in 2013. CBO estimates that
over the 2004-2013 period the proposed cap would cost $275
million.
H.R. 743 also proposes to extend the attorney-fee system
temporarily to SSI, starting nine months after enactment and
ending with agreements for representation that are signed five
years later. Because attorneys are most active in appealed
cases, which may take a year to decide, those five years
actually translate into more than six years of budgetary
effects. SSA now approves, though it does not disburse,
attorney fees in about 55,000 SSI-only cases a year. The
average fee is about $1,900. (Because SSI benefits are lower
than Disability Insurance's (DI's), the average fee--which
cannot exceed 25 percent of past-due benefits--is also lower.)
By 2010, CBO estimates those figures would be about 60,000 and
$2,200 respectively. Extending the payment system, including
the 6.3 percent processing charge, to SSI would bring in about
$9 million. Capping the charge at $87 (the initial $75,
adjusted for inflation), as H.R. 743 also proposes, would
generate $5 million. Total collections over the 10-year period
would be $26 million.
Title IV. This title, labeled ``Miscellaneous and Technical
Amendments,'' contains two provisions with significant
budgetary effects. Both would affect state and local government
employees.
60-month employment requirement for exemption from
Government Pension Offset. State and local governments have
been permitted to join Social Security since the 1950s; since
1983, jurisdictions that had already joined have been barred
from withdrawing. The Census Bureau counts 14 million active
members and 6 million beneficiaries in 2,200 state and local
government retirement plans. About one-quarter are not covered
by Social Security.
Under current law, a retiree with a pension from noncovered
state or local employment cannot collect a full Social Security
benefit as a spouse or widow(er) of a covered worker. Instead,
the government pension offset (GPO) trims the Social Security
benefit by $2 for every $3 of the noncovered pension--often
erasing the Social Security benefit entirely. The GPO's
drafters liken that to the way Social Security treats other
spouses. A wife, for example, cannot collect her own retired-
worker benefit plus an extra 50 percent of her husband's
benefit; instead, she gets the larger amount. In that analogy,
two-thirds of the pension from noncovered work is akin to a
retired-worker benefit.
H.R. 743 would limit a tactic that some public employees
are using to skirt the GPO. The offset applies to state and
local retirees whose last day of employment under their pension
plan was not covered. The General Accounting Office (GAO)
reports that some workers have learned that by switching jobs
for a short time--sometimes just one day--they can avoid a
lifetime of GPO-related reductions. Specifically, GAO found
4,800 such transfers through June 2002. Almost all were in
Texas. H.R. 743 proposes to replace the ``last-day'' rule with
a 60-month requirement--the same rule that applies to federal
civil servants.
GPO had to judge how the job-switching detected by GAO
might evolve over time. Of the 4,800 transfers that GAO found,
3,500 occurred in 2002 alone, where they amounted to a quarter
of retirements in the Teachers' Retirement System of Texas that
year. GAO found only a handful of cases outside Texas but
voiced concern that the practice would spread.
To gauge that possibility, CBO looked at retirement plans
in the six states--California, Colorado, Illinois, Louisiana,
Massachusetts, and Ohio--that with Texas account for 75 percent
of noncovered employees. CBO concluded that conditions in Texas
are uniquely favorable to ``last-day'' switches. Texas combines
a huge noncovered sector, a small covered sector, and a
statewide plan that recognizes service in both. In other
states, employees who sought a covered job would have to change
occupations (for example, from law enforcement to teacher) and
forfeit some advantages of their original plan; in others, such
as Ohio and Massachusetts, no covered positions exist.
California, with its mix of covered and noncovered
jurisdictions, bears the closest resemblance to Texas but has
fewer noncovered jobs and thus fewer employees with an
incentive to switch. If the ``last-day'' rule remains, states
could face pressure to amend their plans to make such transfers
easier. But plan amendments are complex and time-consuming.
Under current law, CBO assumes that annual transfers
spurred by the ``last-day'' rule will climb to 7,000 in 2004--
twice the number in 2002, enough to accommodate further growth
in Texas (where the practice clearly had not peaked) and some
spillover to other states. Under H.R. 743, significant savings
in Social Security would follow in about seven years. That lag
stems from the programs' contrasting rules for eligibility: a
typical retiree under the Texas teachers' plan qualifies for a
pension at age 55 and (if the GPO does not erase it) for Social
Security at age 62. Thus, the first batch of 7,000 annuitants
who retire in calendar 2004 would reach 62 in 2011. Spouses and
widow(er)s affected by the GPO in December 2001 saw their
Social Security reduced by an average of $312 and $479,
respectively. Adjusting those figures for inflation and for the
age and sex of the affected group led CBO to assume those 7,000
would lose an average of $525, or $4 million in December 2011.
Savings in 2001 are just $26 million because the fiscal year
ends in September and birthdays occur throughout the year. By
December 2013, three cohorts of retirees push the monthly
savings up to $10 million; savings in fiscal year 2013 equal
$80 million.
Real-life cases would be more varied than these simple
examples. Some annuitants retire after 55 (and reach 62 years
old before 2011); some are widowed (and qualify for Social
Security at age 60, not at age 62); and others must wait for a
younger spouse to reach 62 years old. But these typical cases
illustrate why CBO estimates small savings through 2010 and
rapidly growing amount after that.
Permission for Kentucky to operate divided retirement
systems. Under section 218 of the Social Security Act, 21 state
are allowed to operate retirement systems in which some but not
all employees are covered under Social Security. In divided
systems, new employees must pay Social Security tax, but
employees already on the payroll may choose their coverage.
H.R. 743 would add Kentucky to the list. A planned merger of
two Louisville-area fire and police departments apparently
spurs the provision. CBO assumes that 200 of the 1,300 workers
affected would choose Social Security, and 60 or so new hires
each year would add to their ranks. Extra Social Security taxes
would grow from $1 million in 2004 to $5 million in 2013.
Workers who switch coverage can avoid or soften the GPO and the
windfall elimination provision, another rule that limits
retired-worker (rather than spouse or survivor) benefits when
beneficiaries get a pension from noncovered employment. Only a
minority of the newly covered employees, through, would qualify
for Social Security in the next 10 years, and CBO estimates
extra costs of $1 million in 2013.
Other provisions. H.R. 743 would correct sections of the
Ticket to Work and Work Incentives Improvement Act of 1999
(Public Law 106-170) that govern SSA's research and
demonstration projects. It would allow SSA to continue waiving
certain provisions of law, when appropriate, for projects
initiated before December 2004. Currently such waivers will
expire abruptly on that date, even for projects already
launched. SSA does not expect to use such waivers extensively
other than for the $1-for-$2 demonstrations (see below), so CBO
ascribes a negligible cost.
DI beneficiaries face limits on their earnings. Applicants
who earn more than $800 a month (labeled substantial gainful
activity, or SGA) in 2003 cannot quality for DI; beneficiaries
who make more than that for a nine-month trial work period and
three-month grace period lose their entire check. The 1999 law
directed SSA to conduct demonstrations in which checks would be
reduced by $1 for each $2 of earnings over certain thresholds.
But that law left unclear how the projects would be funded.
H.R. 743 clarifies that SSA would pay benefits from the trust
fund and other costs--for the design, conduct, and evaluation
of the demonstrations--from its appropriation for
administrative expenses.
In the meantime, statisticians and other experts have
advised SSA to conduct $1-for-$2 demonstrations narrower in
scope than CBO assumed in 1999. In particular, they believe SSA
cannot realistically measure ``induced filers'' via the
demonstrations. Induced filers--workers with severe impairments
who would not otherwise have applied for benefits but who are
attracted by a more liberal treatment of earnings--dominated
CBO's earlier analyses of the demonstrations' costs. (As SSA's
plans became clearer, CBO removed those estimated costs from
its baseline.) CBO expects that targeting the experiments only
at a sample of current recipients would lead to little net
change in benefits.
H.R. 743 would broaden the Work Opportunity Tax Credit to
cover people who use a ticket for vocational rehabilitation
(VR) under the 1999 law. That credit, which expires after
December 2003, allows employers to subtract up to 40 percent of
the first $6,000 of wages from income tax when they hire
members of targeted groups. People referred by state VR
agencies are one such group; H.R. 743 would add DI and SSI
beneficiaries who choose other VR providers, such as private
firms or nonprofit organizations. The first tickets were
distributed in 2002 and nationwide implementation will take
three years. Because the tickets program is still in its early
stages, the Joint Committee on Taxation estimates that
broadening eligibility for the tax credit would reduce revenues
by $2 million in 2004.
Title IV would expand eligibility for widows' and widowers'
benefits in narrow circumstances. To collect Social Security on
a deceased worker's record, a widow or widower must either have
been married to the worker for nine months or be actively
caring for the worker's child. Lawmakers recently learned about
an unusual case in which a worker could not marry his longtime
companion because state law forbade him from divorcing his
wife, who was in a mental institution. When his wife's death
finally permitted him to remarry, he was already terminally ill
and died a few months later. H.R. 743 would waive the duration-
of-marriage requirement in those rare circumstances. Only one
such case has come to light and CBO assumes that the provision
would have little cost.
Spending subject to appropriation
CBO estimates that implementing H.R. 743 would cost SSA $15
million to $20 million a year in extra enforcement and
processing expenses through 2010. Extending the attorney-fee
program to SSI is the biggest piece, accounting for $11 million
to $14 million a year.
Under H.R. 743, SSA would split the first SSI check into at
least two parts--one for the attorney and one for the
beneficiary--as it does in DI. (A third party--the state--may
also claim a share if it paid benefits under a so-called
interim assistance program.) Based on a GAO report, CBO assumes
that each DI case that involves attorney fees will cost SSA
aboiut $235 in 2004. About $50 of that is for fee approval
(which SSA already performs in SSI) but $185 is for fee
processing (which SSA does not do in SSI). Multiplying by the
assumed volume of cases yields expected costs of $11 million in
2004 and slightly more through 2010, when the provision would
expire.
Other provisions--chiefly those that would mandate more on-
site inspections, bonding and licensing, and related scrutiny
of representative payees and require SSA to produce new studies
and reports--would cost an estimated $8 million in 2004 and $4
million to $6 million a year thereafter. The SSI and DI
programs each would account for about half of those amounts.
On-budget effects on direct spending and revenues: The
Congressional Budget Act labels Social Security ``off-budget''
and excludes it from the President's budget, the House and
Senate budget resolutions, and the Balanced Budget and
Emergency Deficit Control Act of 1985. The net changes in
governmental receipts (i.e., revenues) and outlays from direct
spending--excluding Social Security--over the 2004-2013 period
are shown in the following table.
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
----------------------------------------------------------------------------------------------------------------
Changes in outlays................ 0 -8 -15 -19 -23 -26 -28 -25 -25 -27
Changes in receipts............... -2 0 0 0 0 0 0 0 0 0
----------------------------------------------------------------------------------------------------------------
Intergovernmental and private-sector impact: Section 4 of
the Unfunded Mandates Reform Act excludes from the provisions
of that act any provision in a bill that relates to the Old-
Age, Survivors, and Disability Insurance program under title II
of the Social Security Act. The provisions of H.R. 743 that
amend title II would fall within that exclusion.
Other provisions of the bill contain no intergovernmental
mandates as defined in UMRA and would impose no costs on state,
local, or tribal governments. They do, however, contain
private-sector mandates as defined in UMRA. Section 204 would
prohibit private entities from charging a fee for certain
products and services that are available for free from SSA
unless, at the time the offer is made, they provide a statement
to that effect. Section 302 would impose a processing charge on
private attorneys to whom SSA would disburse fees related to
their representation of successful SSI claimants. CBO estimates
that the costs to the private sector of those mandates would
not exceed the threshold established by UMRA ($117 million in
2003, adjusted annually for inflation).
Previous CBO estimate: On March 4, CBO transmitted a cost
estimate for the introduced version of H.R. 743. That estimate
cited a combined $649 million in direct spending reductions and
revenue increases over the 2004-2013 period. The version of the
bill approved by the Committee on Ways and Means on March 13
differs slightly from the introduced version. Changes in the
attorney-fee provisions--rounding the future cap on processing
charges to the next lower $1 (rather than $10) and extending
the program to SSI for five years (rather than three)--would
add $32 million to SSA's receipts over the 2004-2013 period.
CBO changed its estimate of the Medicare savings that would
stem from the ban on Social Security benefits for fugitives,
shrinking them by $25 million. The earlier estimate had assumed
incorrectly that the ban on Social Security benefits also led
to a ban on Medicare benefits. In total, CBO judges that H.R.
743 as ordered reported would trim direct spending and boost
revenues by a combined $655 million over the 10-year period.
Estimate prepared by: Federal Spending: Kathy Ruffing;
Federal Revenues: Edward Harris and Annabelle Bartsch; Impact
on State, Local, and Tribal Governments: Leo Lex; and Impact on
the Private Sector: Ralph Smith.
Estimate Approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
D. Macroeconomic Impact Analysis
In compliance with clause 3(h)(2) of rule XIII of the Rules
of the House of Representatives, the following statement is
made by the Joint Committee on Taxation with respect to the
provisions of the bill amending the Internal Revenue Code of
1986: the effects of the bill on economic activity are so small
as to be incalculable within the context of a model of the
aggregate economy.
V. OTHER MATTERS REQUIRED TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives, the Committee reports that the
need for this legislation resulted from hearings conducted by
the Subcommittee on Social Security in the 106th, 107th, and
108th Congresses. Details of these hearings are included in
Title I. Summary and Background, Part C. Legislative History.
B. Statement of General Performance Goals and Objectives
In compliance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee states that H.R.
743 the bill contains measures that authorize funding for
improving protection of beneficiaries with representative
payees; addressing waste, fraud, and abuse in the program;
enhancing provisions under the Ticket to Work and Work
Incentives Improvement Act; as well as providing compensation
to the Social Security Advisory Board. These measures will
expand the Social Security Administration's ability to meet its
stated goals of (1) ensuring the integrity of Social Security
programs with zero tolerance for fraud and abuse; and, (2)
promoting valued, strong, and responsive Social Security
programs and conducting effective policy development, research,
and program evaluation.
Through reporting requirements in this legislation, as well
as reporting on achievement of performance objectives and
measures laid out in the Social Security Administration's
Annual Performance and Accountability Report, Congress and the
Administration will be able to assess achievement of the
related program objectives, including: (1) aggressively deter,
identify, and resolve fraud; (2) increasing the number of SSDI
and SSI disability beneficiaries who achieve steady employment
and no longer receive cash benefits; and (3) improving the
accuracy of processing post entitlement events.
C. Constitutional Authority Statement
In compliance with clause 3(d)(1) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
Committee's action in reporting this bill is derived from
Article I of the Constitution, Section 8 (``The Congress shall
have Power to lay and collect Taxes, Duties, Imposts and
Excises * * * ''), and from the 16th Amendment to the
Constitution.
D. Information Relating to Unfunded Mandates
This information is provided in accordance with Section 423
of the Unfunded Mandates Reform Act of 1995 (P.L. 104-4).
The Committee has determined that the bill does not impose
a Federal intergovernmental mandate on State, local, or tribal
governments. The Committee has determined that the bill does
contain Federal mandates on the private sector. However, those
mandates would not exceed the threshold established by Section
4 of the Unfunded Mandates Reform Act.
E. Applicability of House Rule XXI 5(b)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' The Committee has
carefully reviewed the provisions of the bill, and states that
the provisions of the bill do not involve any Federal income
tax rate increases within the meaning of the rule.
F. Tax Complexity Analysis
Section 4022(b) of the Internal Revenue Service Reform and
Restructuring Act of 1998 (the ``IRS Reform Act'') requires the
Joint Committee on Taxation (in consultation with the Internal
Revenue Service and the Department of the Treasury) to provide
a tax complexity analysis. The complexity analysis is required
for all legislation reported by the House Committee on Ways and
Means, the Senate Committee on Finance, or any committee of
conference if the legislation includes a provision that
directly or indirectly amends the Internal Revenue Code and has
widespread applicability to individuals or small businesses.
The staff of the Joint Committee on Taxation has determined
that a complexity analysis is not required under section
4022(b) of the IRS Reform Act because the bill contains no
provisions that amend the Internal Revenue Code and that have
``widespread applicability'' to individuals or small
businesses.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
SOCIAL SECURITY ACT
* * * * * * *
TITLE II--FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE BENEFITS
* * * * * * *
AGE AND SURVIVORS INSURANCE BENEFIT PAYMENTS
Old Age Insurance Benefits
Sec. 202. (a) * * *
Wife's Insurance Benefits
(b)(1) * * *
* * * * * * *
(4)(A) The amount of a wife's insurance benefit for each
month (as determined after application of the provisions of
subsections (q) and (k)) shall be reduced (but not below zero)
by an amount equal to two-thirds of the amount of any monthly
periodic benefit payable to the wife (or divorced wife) for
such month which is based upon her earnings while in the
service of the Federal Government or any State (or political
subdivision thereof, as defined in section 218(b)(2)) [if, on]
if, during any portion of the last 60 months of such service
ending with the last day she was employed by such entity--
(i) * * *
* * * * * * *
Husband's Insurance Benefits
(c)(1) * * *
(2)(A) The amount of a husband's insurance benefit for each
month (as determined after application of the provisions of
subsections (q) and (k)) shall be reduced (but not below zero)
by an amount equal to two-thirds of the amount of any monthly
periodic benefit payable to the husband (or divorced husband)
for such month which is based upon his earnings while in the
service of the Federal Government or any State (or political
subdivision thereof, as defined in section 218(b)(2)) [if, on]
if, during any portion of the last 60 months of such service
ending with the last day he was employed by such entity--
(i) * * *
* * * * * * *
Widow's Insurance Benefits
(e)(1) * * *
* * * * * * *
(7)(A) The amount of a widow's insurance benefit for each
month (as determined after application of the provisions of
subsections (q) and (k), paragraph (2)(D), and paragraph (3))
shall be reduced (but not below zero) by an amount equal to
two-thirds of the amount of any monthly periodic benefit
payable to the widow (or surviving divorced wife) for such
month which is based upon her earnings while in the service of
the Federal Government or any State (or political subdivision
thereof, as defined in section 218(b)(2)) [if, on] if, during
any portion of the last 60 months of such service ending with
the last day she was employed by such entity--
(i) * * *
* * * * * * *
Widower's Insurance Benefits
(f)(1) * * *
(2)(A) The amount of a widower's insurance benefit for each
month (as determined after application of the provisions of
subsections (q) and (k), paragraph (3)(D), and paragraph (4))
shall be reduced (but not below zero) by an amount equal to
two-thirds of the amount of any monthly periodic benefit
payable to the widower (or surviving divorced husband) for such
month which is based upon his earnings while in the service of
the Federal Government or any State (or political subdivision
thereof, as defined in section 218(b)(2)) [if, on] if, during
any portion of the last 60 months of such service ending with
the last day he was employed by such entity--
(i) * * *
* * * * * * *
Mother's and Father's Insurance Benefits
(g)(1) * * *
* * * * * * *
(4)(A) The amount of a mother's or father's insurance benefit
for each month (as determined after application of the
provisions of subsection (k)) shall be reduced (but not below
zero) by an amount equal to two-thirds of the amount of any
monthly periodic benefit payable to the individual for such
month which is based upon the individual's earnings while in
the service of the Federal Government or any State (or
political subdivision thereof, as defined in section 218(b)(2))
[if, on] if, during any portion of the last 60 months of such
service ending with the last day the individual was employed by
such entity--
(i) * * *
* * * * * * *
Termination of Benefits Upon [Deportation] Removal of Primary
Beneficiary
(n)(1) If any individual is (after the date of enactment of
this subsection) [deported under section 241(a) (other than
under paragraph (1)(C) or (1)(E) thereof)] removed under
section 237(a) (other than paragraph (1)(C) thereof) or
212(a)(6)(A) of the Immigration and Nationality Act, then,
notwithstanding any other provisions of this title--
(A) no monthly benefit under this section or section
223 shall be paid to such individual, on the basis of
his wages and self employment income, for any month
occurring (i) after the month in which the Commissioner
of Social Security is notified by the Attorney General
that such individual has been so [deported] removed,
and (ii) before the month in which such individual is
thereafter lawfully admitted to the United States for
permanent residence,
* * * * * * *
(2) As soon as practicable after the [deportation] removal of
any individual [under any of the paragraphs of section 241(a)
of the Immigration and Nationality Act (other than under
paragraph (1)(C) or (1)(E) thereof)] under any of the
paragraphs of section 237(a) of the Immigration and Nationality
Act (other than paragraph (1)(C) thereof) or under section
212(a)(6)(A) of such Act, the Attorney General shall notify the
Commissioner of Social Security of such [deportation] removal.
(3) For purposes of paragraphs (1) and (2) of this
subsection, an individual against whom a final order of
[deportation] removal has been issued under [paragraph (19) of
section 241(a)] subparagraph (D) of section 237(a)(4) of the
Immigration and Nationality Act (relating to persecution of
others on account of race, religion, national origin, or
political opinion, under the direction of or in association
with the Nazi government of Germany or its allies) shall be
considered to have been [deported] removed under such
[paragraph (19)] subparagraph (D) as of the date on which such
order became final.
* * * * * * *
Limitation on Payments to [Prisoners and Certain Other Inmates of
Publicly Funded Institutions] Prisoners, Certain Other Inmates of
Publicly Funded Institutions, Fugitives, Probationers, and Parolees
(x)(1)(A) Notwithstanding any other provision of this title,
no monthly benefits shall be paid under this section or under
section 223 to any individual for any month ending with or
during or beginning with or during a period of more than 30
days throughout all of which such individual--
(i) * * *
(ii) is confined by court order in an institution at
public expense in connection with--
(I) * * *
* * * * * * *
(IV) a similar verdict or finding with
respect to such an offense based on similar
factors (such as a mental disease, a mental
defect, or mental incompetence), [or]
(iii) immediately upon completion of confinement as
described in clause (i) pursuant to conviction of a
criminal offense an element of which is sexual
activity, is confined by court order in an institution
at public expense pursuant to a finding that the
individual is a sexually dangerous person or a sexual
predator or a similar finding[.],
(iv) is fleeing to avoid prosecution, or custody or
confinement after conviction, under the laws of the
place from which the person flees, for a crime, or an
attempt to commit a crime, which is a felony under the
laws of the place from which the person flees, or
which, in the case of the State of New Jersey, is a
high misdemeanor under the laws of such State, or
(v) is violating a condition of probation or parole
imposed under Federal or State law.
In the case of an individual from whom such monthly benefits
have been withheld pursuant to clause (iv) or (v), the
Commissioner may, for good cause shown, pay such withheld
benefits to the individual.
* * * * * * *
(3)(A) * * *
* * * * * * *
(C) Notwithstanding the provisions of section 552a of title
5, United States Code, or any other provision of Federal or
State law (other than section 6103 of the Internal Revenue Code
of 1986 and section 1106(c) of this Act), the Commissioner
shall furnish any Federal, State, or local law enforcement
officer, upon the written request of the officer, with the
current address, Social Security number, and photograph (if
applicable) of any beneficiary under this title, if the officer
furnishes the Commissioner with the name of the beneficiary,
and other identifying information as reasonably required by the
Commissioner to establish the unique identity of the
beneficiary, and notifies the Commissioner that--
(i) the beneficiary--
(I) is described in clause (iv) or (v) of
paragraph (1)(A); and
(II) has information that is necessary for
the officer to conduct the officer's official
duties; and
(ii) the location or apprehension of the beneficiary
is within the officer's official duties.
* * * * * * *
EVIDENCE, PROCEDURE, AND CERTIFICATION FOR PAYMENT
Sec. 205. (a) * * *
* * * * * * *
(g) Any individual, after any final decision of the
Commissioner of Social Security made after a hearing to which
he was a party, irrespective of the amount in controversy, may
obtain a review of such decision by a civil action commenced
within sixty days after the mailing to him of notice of such
decision or within such further time as the Commissioner of
Social Security may allow. Such action shall be brought in the
district court of the United States for the judicial district
in which the plaintiff resides, or has his principal place of
business, or, if he does not reside or have his principal place
of business within any such judicial district, in the United
States District Court for the District of Columbia. As part of
the Commissioner's answer the Commissioner of Social Security
shall file a certified copy of the transcript of the record
including the evidence upon which the findings and decision
complained of are based. The court shall have power to enter,
upon the pleadings and transcript of the record, a judgment
affirming, modifying, or reversing the decision of the
Commissioner of Social Security, with or without remanding the
cause for a rehearing. The findings of the Commissioner of
Social Security as to any fact, if supported by substantial
evidence, shall be conclusive, and where a claim has been
denied by the Commissioner of Social Security or a decision is
rendered under subsection (b) hereof which is adverse to an
individual who was a party to the hearing before the
Commissioner of Social Security, because of failure of the
claimant or such individual to submit proof in conformity with
any regulation prescribed under subsection (a) hereof, the
court shall review only the question of conformity with such
regulations and the validity of such regulations. The court
may, on motion of the Commissioner of Social Security made for
good cause shown before the Commissioner files the
Commissioner's answer, remand the case to the Commissioner of
Social Security for further action by the Commissioner of
Social Security, and it may at any time order additional
evidence to be taken before the Commissioner of Social
Security, but only upon a showing that there is new evidence
which is material and that there is good cause for the failure
to incorporate such evidence into the record in a prior
proceeding; and the Commissioner of Social Security shall,
after the case is remanded, and after hearing such additional
evidence if so ordered, modify or affirm the Commissioner's
findings of fact or the Commissioner's decision, or both, and
shall file with the court any such additional and modified
findings of fact and decision, [and a transcript] and, in any
case in which the Commissioner has not made a decision fully
favorable to the individual, a transcript of the additional
record and testimony upon which the Commissioner's action in
modifying or affirming was based. Such additional or modified
findings of fact and decision shall be reviewable only to the
extent provided for review of the original findings of fact and
decision. The judgment of the court shall be final except that
it shall be subject to review in the same manner as a judgment
in other civil actions. Any action instituted in accordance
with this subsection shall survive notwithstanding any change
in the person occupying the office of Commissioner of Social
Security or any vacancy in such office.
* * * * * * *
Representative Payees
(j)(1) * * *
(2)(A) * * *
(B)(i) As part of the investigation referred to in
subparagraph (A)(i), the Commissioner of Social Security
shall--
(I) * * *
* * * * * * *
(III) determine whether such person has been
convicted of a violation of section 208, 811, or 1632,
[and]
(IV) obtain information concerning whether such
person has been convicted of any other offense under
Federal or State law which resulted in imprisonment for
more than 1 year,
(V) obtain information concerning whether such person
is a person described in section 202(x)(1)(A)(iv), and
[(IV)] (VI) determine whether certification of
payment of benefits to such person has been revoked
pursuant to this subsection, the designation of such
person as a representative payee has been revoked
pursuant to section 807(a), or payment of benefits to
such person has been terminated pursuant to section
1631(a)(2)(A)(iii) by reason of misuse of funds paid as
benefits under this title, title VIII, or title XVI.
* * * * * * *
(iii) Notwithstanding the provisions of section 552a of title
5, United States Code, or any other provision of Federal or
State law (other than section 6103 of the Internal Revenue Code
of 1986 and section 1106(c) of this Act), the Commissioner
shall furnish any Federal, State, or local law enforcement
officer, upon the written request of the officer, with the
current address, social security account number, and photograph
(if applicable) of any person investigated under this
paragraph, if the officer furnishes the Commissioner with the
name of such person and such other identifying information as
may reasonably be required by the Commissioner to establish the
unique identity of such person, and notifies the Commissioner
that--
(I) such person is described in section
202(x)(1)(A)(iv),
(II) such person has information that is necessary
for the officer to conduct the officer's official
duties, and
(III) the location or apprehension of such person is
within the officer's official duties.
(C)(i) Benefits of an individual may not be certified for
payment to any other person pursuant to this subsection if--
(I) * * *
(II) except as provided in clause (ii), certification
of payment of benefits to such person under this
subsection has previously been revoked as described in
[subparagraph (B)(i)(IV),,] subparagraph (B)(i)(VI) the
designation of such person as a representative payee
has been revoked pursuant to section 807(a), or payment
of benefits to such person pursuant to section
1631(a)(2)(A)(ii) has previously been terminated as
described in [section 1631(a)(2)(B)(ii)(IV)] section
1631(a)(2)(B)(ii)(VI), [or]
(III) except as provided in clause (iii), such person
is a creditor of such individual who provides such
individual with goods or services for consideration[.],
(IV) such person has previously been convicted as
described in subparagraph (B)(i)(IV), unless the
Commissioner determines that such certification would
be appropriate notwithstanding such conviction, or
(V) such person is person described in section
202(x)(1)(A)(iv).
* * * * * * *
(v) In the case of an individual described in paragraph
(1)(B), when selecting such individual's representative payee,
preference shall be given to--
(I) [a community-based nonprofit social service
agency licensed or bonded by the State] a certified
community-based nonprofit social service agency (as
defined in paragraph (10)),
* * * * * * *
(3)(A) * * *
* * * * * * *
(E) In any case in which the person described in subparagraph
(A) or (D) receiving payments on behalf of another fails to
submit a report required by the Commissioner of Social Security
under subparagraph (A) or (D), the Commissioner may, after
furnishing notice to such person and the individual entitled to
such payment, require that such person appear in person at a
field office of the Social Security Administration serving the
area in which the individual resides in order to receive such
payments.
[(E)] (F) The Commissioner of Social Security shall maintain
a centralized file, which shall be updated periodically and
which shall be in a form which will be readily retrievable by
each servicing office of the Social Security Administration,
of--
(i) * * *
* * * * * * *
[(F)] (G) Each servicing office of the Administration shall
maintain a list, which shall be updated periodically, of public
agencies and [community-based nonprofit social service
agencies] certified community-based nonprofit social service
agencies (as defined in paragraph (10)) which are qualified to
serve as representative payees pursuant to this subsection or
section 807 or 1631(a)(2) and which are located in the area
served by such servicing office.
(4)(A)(i) [A] Except as provided in the next sentence, a
qualified organization may collect from an individual a monthly
fee for expenses (including overhead) incurred by such
organization in providing services performed as such
individual's representative payee pursuant to this subsection
if such fee does not exceed the lesser of--
(I) * * *
(II) $25.00 per month ($50.00 per month in any case
in which the individual is described in
paragraph(1)(B)).
[The Secretary] A qualified organization may not collect a fee
from an individual for any month with respect to which the
Commissioner of Social Security or a court of competent
jurisdiction has determined that the organization misused all
or part of the individual's benefit, and any amount so
collected by the qualified organization for such month shall be
treated as a misused part of the individual's benefit for
purposes of paragraphs (5) and (6). The Commissioner shall
adjust annually (after 1995) each dollar amount set forth in
subclause (II) under procedures providing for adjustments in
the same manner and to the same extent as adjustments are
provided for under the procedures used to adjust benefit
amounts under section 215(i)(2)(A), except that any amount so
adjusted that is not a multiple of $1.00 shall be rounded to
the nearest multiple of $1.00.
* * * * * * *
(B) For purposes of this paragraph, the term ``qualified
organization'' means any State or local government agency whose
mission is to carry out income maintenance, social service, or
health care-related activities, any State or local government
agency with fiduciary responsibilities, or [any community-based
nonprofit social service agency which is bonded or licensed in
each State in which it serves as a representative payee] any
certified community-based nonprofit social service agency (as
defined in paragraph (10)), if such agency, in accordance with
any applicable regulations of the Commissioner of Social
Security--
(i) * * *
* * * * * * *
(5) In cases where the negligent failure of the Commissioner
of Social Security to investigate or monitor a representative
payee results in misuse of benefits by the representative
payee, the Commissioner of Social Security shall certify for
payment to the beneficiary or the beneficiary's alternative
representative payee an amount equal to such misused benefits.
In any case in which a representative payee that--
(A) is not an individual (regardless of whether it is
a ``qualified organization'' within the meaning of
paragraph (4)(B)); or
(B) is an individual who, for any month during a
period when misuse occurs, serves 15 or more
individuals who are beneficiaries under this title,
title VIII, title XVI, or any combination of such
titles;
misuses all or part of an individual's benefit paid to such
representative payee, the Commissioner of Social Security shall
certify for payment to the beneficiary or the beneficiary's
alternative representative payee an amount equal to the amount
of such benefit so misused. The provisions of this paragraph
are subject to the limitations of paragraph (7)(B). The
Commissioner of Social Security shall make a good faith effort
to obtain restitution from the terminated representative payee.
[(6) The Commissioner of Social Security shall include as a
part of the annual report required under section 704
information with respect to the implementation of the preceding
provisions of this subsection, including the number of cases in
which the representative payee was changed, the number of cases
discovered where there has been a misuse of funds, how any such
cases were dealt with by the Commissioner of Social Security,
the final disposition of such cases, including any criminal
penalties imposed, and such other information as the
Commissioner of Social Security determines to be appropriate.]
(6)(A) In addition to such other reviews of representative
payees as the Commissioner of Social Security may otherwise
conduct, the Commissioner shall provide for the periodic onsite
review of any person or agency located in the United States
that receives the benefits payable under this title (alone or
in combination with benefits payable under title VIII or title
XVI) to another individual pursuant to the appointment of such
person or agency as a representative payee under this
subsection, section 807, or section 1631(a)(2) in any case in
which--
(i) the representative payee is a person who serves
in that capacity with respect to 15 or more such
individuals;
(ii) the representative payee is a certified
community-based nonprofit social service agency (as
defined in paragraph (10) of this subsection or section
1631(a)(2)(I)); or
(iii) the representative payee is an agency (other
than an agency described in clause (ii)) that serves in
that capacity with respect to 50 or more such
individuals.
(B) Within 120 days after the end of each fiscal year, the
Commissioner shall submit to the Committee on Ways and Means of
the House of Representatives and the Committee on Finance of
the Senate a report on the results of periodic onsite reviews
conducted during the fiscal year pursuant to subparagraph (A)
and of any other reviews of representative payees conducted
during such fiscal year in connection with benefits under this
title. Each such report shall describe in detail all problems
identified in such reviews and any corrective action taken or
planned to be taken to correct such problems, and shall
include--
(i) the number of such reviews;
(ii) the results of such reviews;
(iii) the number of cases in which the representative
payee was changed and why;
(iv) the number of cases involving the exercise of
expedited, targeted oversight of the representative
payee by the Commissioner conducted upon receipt of an
allegation of misuse of funds, failure to pay a vendor,
or a similar irregularity;
(v) the number of cases discovered in which there was
a misuse of funds;
(vi) how any such cases of misuse of funds were dealt
with by the Commissioner;
(vii) the final disposition of such cases of misuse
of funds, including any criminal penalties imposed; and
(viii) such other information as the Commissioner
deems appropriate.
(7)(A) If the Commissioner of Social Security or a court of
competent jurisdiction determines that a representative payee
that is not a Federal, State, or local government agency has
misused all or part of an individual's benefit that was paid to
such representative payee under this subsection, the
representative payee shall be liable for the amount misused,
and such amount (to the extent not repaid by the representative
payee) shall be treated as an overpayment of benefits under
this title to the representative payee for all purposes of this
Act and related laws pertaining to the recovery of such
overpayments. Subject to subparagraph (B), upon recovering all
or any part of such amount, the Commissioner shall certify an
amount equal to the recovered amount for payment to such
individual or such individual's alternative representative
payee.
(B) The total of the amount certified for payment to such
individual or such individual's alternative representative
payee under subparagraph (A) and the amount certified for
payment under paragraph (5) may not exceed the total benefit
amount misused by the representative payee with respect to such
individual.
[(7)] (8) For purposes of this subsection, the term ``benefit
based on disability'' of an individual means a disability
insurance benefit of such individual under section 223 or a
child's, widow's, or widower's insurance benefit of such
individual under section 202 based on such individual's
disability.
(9) For purposes of this subsection, misuse of benefits by a
representative payee occurs in any case in which the
representative payee receives payment under this title for the
use and benefit of another person and converts such payment, or
any part thereof, to a use other than for the use and benefit
of such other person. The Commissioner of Social Security may
prescribe by regulation the meaning of the term ``use and
benefit'' for purposes of this paragraph.
(10) For purposes of this subsection, the term ``certified
community-based nonprofit social service agency'' means a
community-based nonprofit social service agency which is in
compliance with requirements, under regulations which shall be
prescribed by the Commissioner, for annual certification to the
Commissioner that it is bonded in accordance with requirements
specified by the Commissioner and that it is licensed in each
State in which it serves as a representative payee (if
licensing is available in such State) in accordance with
requirements specified by the Commissioner. Any such annual
certification shall include a copy of any independent audit on
such agency which may have been performed since the previous
certification.
* * * * * * *
REPRESENTATION OF CLAIMANTS
Sec. 206. (a)(1) The Commissioner of Social Security may
prescribe rules and regulations governing the recognition of
agents or other persons, other than attorneys as hereinafter
provided, representing claimants before the Commissioner of
Social Security, and may require of such agents or other
persons, before being recognized as representatives of
claimants that they shall show that they are of good character
and in good repute, possessed of the necessary qualifications
to enable them to render such claimants valuable service, and
otherwise competent to advise and assist such claimants in the
presentation of their cases. An attorney in good standing who
is admitted to practice before the highest court of the State,
Territory, District, or insular possession of his residence or
before the Supreme Court of the United States or the inferior
Federal courts, shall be entitled to represent claimants before
the Commissioner of Social Security. Notwithstanding the
preceding sentences, the Commissioner, after due notice and
opportunity for hearing, (A) may refuse to recognize as a
representative, and may disqualify a representative already
recognized, any attorney who has been disbarred or suspended
from any court or bar to which he or she was previously
admitted to practice or who has been disqualified from
participating in or appearing before any Federal program or
agency, and (B) may refuse to recognize, and may disqualify, as
a non-attorney representative any attorney who has been
disbarred or suspended from any court or bar to which he or she
was previously admitted to practice. A representative who has
been disqualified or suspended pursuant to this section from
appearing before the Social Security Administration as a result
of collecting or receiving a fee in excess of the amount
authorized shall be barred from appearing before the Social
Security Administration as a representative until full
restitution is made to the claimant and, thereafter, may be
considered for reinstatement only under such rules as the
Commissioner may prescribe. The Commissioner of Social Security
may, after due notice and opportunity for hearing, suspend or
prohibit from further practice before the Commissioner any such
person, agent, or attorney who refuses to comply with the
Commissioner's rules and regulations or who violates any
provision of this section for which a penalty is prescribed.
The Commissioner of Social Security may, by rule and
regulation, prescribe the maximum fees which may be charged for
services performed in connection with any claim before the
Commissioner of Social Security under this title, and any
agreement in violation of such rules and regulations shall be
void. Except as provided in paragraph (2)(A), whenever the
Commissioner of Social Security, in any claim before the
Commissioner for benefits under this title, makes a
determination favorable to the claimant, the Commissioner
shall, if the claimant was represented by an attorney in
connection with such claim, fix (in accordance with the
regulations prescribed pursuant to the preceding sentence) a
reasonable fee to compensate such attorney for the services
performed by him in connection with such claim.
* * * * * * *
(d) Assessment on Attorneys.--
(1) * * *
(2) Amount.--
(A) The amount of an assessment under
paragraph (1) shall be equal to the product
obtained by multiplying the amount of the
representative's fee that would be required to
be so certified by subsection (a)(4) or (b)(1)
before the application of this subsection, by
the percentage specified in subparagraph (B),
except that the maximum amount of the
assessment may not exceed the greater of $75 or
the adjusted amount as provided pursuant to the
following two sentences. In the case of any
calendar year beginning after the amendments
made by section 301 of the Social Security
Protection Act of 2003 take effect, the dollar
amount specified in the preceding sentence
(including a previously adjusted amount) shall
be adjusted annually under the procedures used
to adjust benefit amounts under section
215(i)(2)(A)(ii), except such adjustment shall
be based on the higher of $75 or the previously
adjusted amount that would have been in effect
for December of the preceding year, but for the
rounding of such amount pursuant to the
following sentence. Any amount so adjusted that
is not a multiple of $1 shall be rounded to the
next lowest multiple of $1, but in no case less
than $75.
* * * * * * *
PENALTIES
Sec. 208. (a) * * *
(b)(1) Any Federal court, when sentencing a defendant
convicted of an offense under subsection (a), may order, in
addition to or in lieu of any other penalty authorized by law,
that the defendant make restitution to the Social Security
Administration.
(2) Sections 3612, 3663, and 3664 of title 18, United States
Code, shall apply with respect to the issuance and enforcement
of orders of restitution under this subsection. In so applying
such sections, the Social Security Administration shall be
considered the victim.
(3) If the court does not order restitution, or orders only
partial restitution, under this subsection, the court shall
state on the record the reasons therefor.
[(b)] (c) Any person or other entity who is convicted of a
violation of any of the provisions of this section, if such
violation is committed by such person or entity in his role as,
or in applying to become, a certified payee under section
205(j) on behalf of another individual (other than such
person's spouse), upon his second or any subsequent such
conviction shall, in lieu of the penalty set forth in the
preceding provisions of this section, be guilty of a felony and
shall be fined under title 18, United States Code, or
imprisoned for not more than five years, or both. In the case
of any violation described in the preceding sentence, including
a first such violation, if the court determines that such
violation includes a willful misuse of funds by such person or
entity, the court may also require that full or partial
restitution of such funds be made to the individual for whom
such person or entity was the certified payee.
[(c)] (d) Any individual or entity convicted of a felony
under this section or under section 1632(b) may not be
certified as a payee under section 205(j). For the purpose of
subsection (a)(7), the terms ``social security number'' and
``social security account number'' mean such numbers as are
assigned by the Commissioner of Social Security under section
205(c)(2) whether or not, in actual use, such numbers are
called social security numbers.
[(d)] (e)(1) Except as provided in paragraph (2), an alien--
(A) * * *
* * * * * * *
DEFINITION OF WAGES
Sec. 209. (a) For the purposes of this title, the term
``wages'' means remuneration paid prior to 1951 which was wages
for the purposes of this title under the law applicable to the
payment of such remuneration, and remuneration paid after 1950
for employment, including the cash value of all remuneration
(including benefits) paid in any medium other than cash; except
that, in the case of remuneration paid after 1950, such term
shall not include--
(1) * * *
* * * * * * *
(6)(A) * * *
(B) Cash remuneration paid by an employer in any
calendar year to an employee for domestic service in a
private home of the employer (including domestic
service [described in section 210(f)(5)] on a farm
operated for profit), if the cash remuneration paid in
such year by the employer to the employee for such
service is less than the applicable dollar threshold
(as defined in section 3121(x) of the Internal Revenue
Code of 1986) for such year;
* * * * * * *
DEFINITION OF EMPLOYMENT
Sec. 210. For the purposes of this title--
Employment
(a) * * *
* * * * * * *
Agricultural Labor
(f) The term ``agricultural labor'' includes all service
performed--
(1) * * *
* * * * * * *
(5) On a farm operated for profit if such service is
not in the course of the employer's trade or business
[or is domestic service in a private home of the
employer].
* * * * * * *
SELF-EMPLOYMENT
Sec. 211. For the purposes of this title--
Net Earnings From Self-Employment
(a) The term ``net earnings from self-employment'' means the
gross income, as computed under subtitle A of the Internal
Revenue Code of 1986, derived by an individual from any trade
or business carried on by such individual, less the deductions
allowed under such subtitle which are attributable to such
trade or business, plus his distributive share (whether or not
distributed) of the ordinary net income or loss, as computed
under section 702(a)(8) of such Code, from any trade or
business carried on by a partnership of which he is a member;
except that in computing such gross income and deductions and
such distributive share of partnership ordinary net income or
loss--
(1) * * *
* * * * * * *
(5)(A) If any of the income derived from a trade or
business (other than a trade or business carried on by
a partnership) is community income under community
property laws applicable to such income, [all of the
gross income and deductions attributable to such trade
or business shall be treated as the gross income and
deductions of the husband unless the wife exercises
substantially all of the management and control of such
trade or business, in which case all of such gross
income and deductions shall be treated as the gross
income and deductions of the wife;] the gross income
and deductions attributable to such trade or business
shall be treated as the gross income and deductions of
the spouse carrying on such trade or business or, if
such trade or business is jointly operated, treated as
the gross income and deductions of each spouse on the
basis of their respective distributive share of the
gross income and deductions;
* * * * * * *
(7) An individual who is a duly ordained,
commissioned, or licensed minister of a church or a
member of a religious order shall compute his net
earnings from self-employment derived from the
performance of service described in subsection (c)(4)
without regard to section 107 (relating to rental value
of parsonages), section 119 (relating to meals and
lodging furnished for the convenience of the employer),
and section 911 (relating to earned income from sources
without the United States) of the Internal Revenue Code
of 1986, but shall not include in any such net earnings
from self-employment the rental value of any parsonage
or any parsonage allowance (whether or not excluded
under section 107 of the Internal Revenue Code of 1986)
provided after the individual retires, or any other
retirement benefit received by such individual from a
church plan (as defined in section 414(e) of such Code)
after the individual retires;
* * * * * * *
(15) The deduction under [section 162(m)] section
162(l) (relating to health insurance costs of self-
employed individuals) shall not be allowed.
* * * * * * *
OTHER DEFINITIONS
Sec. 216. For the purposes of this title--
Spouse; Surviving Spouse
(a) * * *
* * * * * * *
Widow
(c)(1) The term ``widow'' (except when used in the first
sentence of section 202(i)) means the surviving wife of an
individual, but only if [(1)] (A) she is the mother of his son
or daughter, [(2)] (B) she legally adopted his son or daughter
while she was married to him and while such son or daughter was
under the age of eighteen, [(3)] (C) he legally adopted her son
or daughter while she was married to him and while such son or
daughter was under the age of eighteen, [(4)] (D) she was
married to him at the time both of them legally adopted a child
under the age of eighteen, [(5)] (E) except as provided in
paragraph (2), she was married to him for a period of not less
than nine months immediately prior to the day on which he died,
or[(6)] (F) in the month prior to the month of her marriage to
him [(A)] (i) she was entitled to, or on application therefor
and attainment of age 62 in such prior month would have been
entitled to, benefits under subsection (b), (e), or (h) of
section 202, [(B)] (ii) she had attained age eighteen and was
entitled to, or on application therefor would have been
entitled to, benefits under subsection (d) of such section
(subject, however, to section 202(s)), or [(C)] (iii) she was
entitled to, or upon application therefor and attainment of the
required age (if any) would have been entitled to, a widow's,
child's (after attainment of age 18), or parent's insurance
annuity under section 2 of the Railroad Retirement Act of 1974,
as amended.
(2) The requirements of paragraph (1)(E) in connection with
the surviving wife of an individual shall be treated as
satisfied if--
(A) the individual had been married prior to the
individual's marriage to the surviving wife,
(B) the prior wife was institutionalized during the
individual's marriage to the prior wife due to mental
incompetence or similar incapacity,
(C) during the period of the prior wife's
institutionalization, the individual would have
divorced the prior wife and married the surviving wife,
but the individual did not do so because such divorce
would have been unlawful, by reason of the prior wife's
institutionalization, under the laws of the State in
which the individual was domiciled at the time (as
determined based on evidence satisfactory to the
Commissioner of Social Security),
(D) the prior wife continued to remain
institutionalized up to the time of her death, and
(E) the individual married the surviving wife within
60 days after the prior wife's death.
* * * * * * *
Widower
(g)(1) The term ``widower'' (except when used in the first
sentence of section 202(i)) means the surviving husband of an
individual, but only if [(1)] (A) he is the father of her son
or daughter, [(2)] (B) he legally adopted her son or daughter
while he was married to her and while such son or daughter was
under the age of eighteen, [(3)] (C) she legally adopted his
son or daughter while he was married to her and while such son
or daughter was under the age of eighteen, [(4)] (D) he was
married to her at the time both of them legally adopted a child
under the age of eighteen, [(5)] (E) except as provided in
paragraph (2), married to her for a period of not less than
nine months immediately prior to the day on which she died, or
[(6)] (F) in the month before the month of his marriage to her
[(A)] (i) he was entitled to, or on application therefor and
attainment of age 62 in such prior month would have been
entitled to, benefits under subsection (c), (f) or (h) of
section 202, [(B)] (ii) he had attained age eighteen and was
entitled to, or on application therefor would have been
entitled to, benefits under subsection (d) of such section
(subject, however, to section 202(s)), or [(C)] (iii) he was
entitled to, or on application therefor and attainment of the
required age (if any) he would have been entitled to, a
widower's, child's (after attainment of age 18), or parent's
insurance annuity under section 2 of the Railroad Retirement
Act of 1974, as amended.
(2) The requirements of paragraph (1)(E) in connection with
the surviving husband of an individual shall be treated as
satisfied if--
(A) the individual had been married prior to the
individual's marriage to the surviving husband,
(B) the prior husband was institutionalized during
the individual's marriage to the prior husband due to
mental incompetence or similar incapacity,
(C) during the period of the prior husband's
institutionalization, the individual would have
divorced the prior husband and married the surviving
husband, but the individual did not do so because such
divorce would have been unlawful, by reason of the
prior husband's institutionalization, under the laws of
the State in which the individual was domiciled at the
time (as determined based on evidence satisfactory to
the Commissioner of Social Security),
(D) the prior husband continued to remain
institutionalized up to the time of his death, and
(E) the individual married the surviving husband
within 60 days after the prior husband's death.
* * * * * * *
Waiver of Nine-Month Requirement for Widow, Stepchild, or Widower in
Case of Accidental Death or in Case of Serviceman Dying in Line of
Duty, or in Case of Remarriage to the Same Individual
(k) The requirement in [clause (5) of subsection (c) or
clause (5) of subsection (g)] clause (E) of subsection (c)(1)
or clause (E) of subsection (g)(1) that the surviving spouse of
an individual have been married to such individual for a period
of not less than nine months immediately prior to the day on
which such individual died in order to qualify as such
individual's widow or widower, and the requirement in
subsection (e) that the stepchild of a deceased individual have
been such stepchild for not less than nine months immediately
preceding the day on which such individual died in order to
qualify as such individual's child, shall be deemed to be
satisfied, where such individual dies within the applicable
nine-month period, if--
(1) * * *
* * * * * * *
VOLUNTARY AGREEMENTS FOR COVERAGE OF STATE AND LOCAL EMPLOYEES
Purpose of Agreement
Sec. 218. (a) * * *
* * * * * * *
Positions Covered By Retirement Systems
(d)(1) * * *
* * * * * * *
(6)(A) * * *
* * * * * * *
(C) For the purposes of this subsection, any retirement
system established by the State of Alaska, California,
Connecticut, Florida, Georgia, Illinois, Kentucky,
Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New
York, North Dakota, Pennsylvania, Rhode Island, Tennessee,
Texas, Vermont, Washington, Wisconsin, or Hawaii, or any
political subdivision of any such State, which, on, before, or
after the date of enactment of this subparagraph, is divided
into two divisions or parts, one of which is composed of
positions of members of such system who desire coverage under
an agreement under this section and the other of which is
composed of positions of members of such system who do not
desire such coverage, shall, if the State so desires and if it
is provided that there shall be included in such division or
part composed of members desiring such coverage the positions
of individuals who become members of such system after such
coverage is extended, be deemed to be a separate retirement
system with respect to each such division or part. If, in the
case of a separate retirement system which is deemed to exist
by reason of subparagraph (A) and which has been divided into
two divisions or parts pursuant to the first sentence of this
subparagraph, individuals become members of such system by
reason of action taken by a political subdivision after
coverage under an agreement under this section has been
extended to the division or part thereof composed of positions
of individuals who desire such coverage, the positions of such
individuals who become members of such retirement system by
reason of the action so taken shall be included in the division
or part of such system composed of positions of members who do
not desire such coverage if (i) such individuals, on the day
before becoming such members, were in the division or part of
another separate retirement system (deemed to exist by reason
of subparagraph (A)) composed of positions of members of such
system who do not desire coverage under an agreement under this
section, and (ii) all of the positions in the separate
retirement system of which such individuals so become members
and all of the positions in the separate retirement system
referred to in clause (i) would have been covered by a single
retirement system if the State had not taken action to provide
for separate retirement systems under this paragraph.
* * * * * * *
REHABILITATION SERVICES
Referral for Rehabilitation Services
Sec. 222. (a) * * *
* * * * * * *
Period of Trial Work
(c)(1) * * *
* * * * * * *
(5) Upon conviction by a Federal court that an individual has
fraudulently concealed work activity during a period of trial
work from the Commissioner of Social Security by--
(A) providing false information to the Commissioner
of Social Security as to whether the individual had
earnings in or for a particular period, or as to the
amount thereof;
(B) receiving disability insurance benefits under
this title while engaging in work activity under
another identity, including under another social
security account number or a number purporting to be a
social security account number; or
(C) taking other actions to conceal work activity
with an intent fraudulently to secure payment in a
greater amount than is due or when no payment is
authorized,
no benefit shall be payable to such individual under this title
with respect to a period of disability for any month before
such conviction during which the individual rendered services
during the period of trial work with respect to which the
fraudulently concealed work activity occurred, and amounts
otherwise due under this title as restitution, penalties,
assessments, fines, or other repayments shall in all cases be
in addition to any amounts for which such individual is liable
as overpayments by reason of such concealment.
* * * * * * *
DEMONSTRATION PROJECT AUTHORITY
Sec. 234. (a) * * *
* * * * * * *
(c) Authority To Waive Compliance With Benefits
Requirements.--In the case of any experiment or demonstration
project [conducted under subsection (a)] initiated under
subsection (a) on or before December 17, 2004, the Commissioner
may waive compliance with the benefit requirements of this
title and the requirements of section 1148 as they relate to
the program established under this title, and the Secretary may
(upon the request of the Commissioner) waive compliance with
the benefits requirements of title XVIII, insofar as is
necessary for a thorough evaluation of the alternative methods
under consideration. No such experiment or project shall be
actually placed in operation unless at least 90 days prior
thereto a written report, prepared for purposes of notification
and information only and containing a full and complete
description thereof, has been transmitted by the Commissioner
to the Committee on Ways and Means of the House of
Representatives and to the Committee on Finance of the Senate.
Periodic reports on the progress of such experiments and
demonstration projects shall be submitted by the Commissioner
to such committees. When appropriate, such reports shall
include detailed recommendations for changes in administration
or law, or both, to carry out the objectives stated in
subsection (a).
(d) Reports.--
(1) * * *
(2) Termination and final report.--[The authority
under the preceding provisions of this section
(including any waiver granted pursuant to subsection
(c)) shall terminate 5 years after the date of the
enactment of this Act.] The authority to initiate
projects under the preceding provisions of this section
shall terminate on December 18, 2004. Not later than 90
days after the termination of any experiment or
demonstration project carried out under this section,
the Commissioner shall submit to the Committee on Ways
and Means of the House of Representatives and to the
Committee on Finance of the Senate a final report with
respect to that experiment or demonstration project.
* * * * * * *
TITLE VII--ADMINISTRATION
* * * * * * *
SOCIAL SECURITY ADVISORY BOARD
Establishment of Board
Sec. 703. (a) * * *
* * * * * * *
[Expenses and Per Diem
[(f) Members of the Board shall serve without compensation,
except that, while serving on business of the Board away from
their homes or regular places of business, members may be
allowed travel expenses, including per diem in lieu of
subsistence, as authorized by section 5703 of title 5, United
States Code, for persons in the Government employed
intermittently.]
Compensation, Expenses, and Per Diem
(f) A member of the Board shall, for each day (including
traveltime) during which the member is attending meetings or
conferences of the Board or otherwise engaged in the business
of the Board, be compensated at the daily rate of basic pay for
level IV of the Executive Schedule. While serving on business
of the Board away from their homes or regular places of
business, members may be allowed travel expenses, including per
diem in lieu of subsistence, as authorized by section 5703 of
title 5, United States Code, for persons in the Government
employed intermittently.
* * * * * * *
ADMINISTRATIVE DUTIES OF THE COMMISSIONER
Personnel
Sec. 704. (a) * * *
Budgetary Matters
(b)(1) * * *
* * * * * * *
(3)(A) Except as provided in subparagraph (B), amounts
received by the Social Security Administration pursuant to an
order of restitution under section 208(b), 807(i), or 1632(b)
shall be credited to a special fund established in the Treasury
of the United States for amounts so received or recovered. The
amounts so credited, to the extent and in the amounts provided
in advance in appropriations Acts, shall be available to defray
expenses incurred in carrying out titles II, VIII, and XVI.
(B) Subparagraph (A) shall not apply with respect to amounts
received in connection with misuse by a representative payee
(within the meaning of sections 205(j), 807, and 1631(a)(2)) of
funds paid as benefits under title II, VIII, or XVI. Such
amounts received in connection with misuse of funds paid as
benefits under title II shall be transferred to the Managing
Trustee of the Federal Old-Age and Survivors Insurance Trust
Fund or the Federal Disability Insurance Trust Fund, as
determined appropriate by the Commissioner of Social Security,
and such amounts shall be deposited by the Managing Trustee
into such Trust Fund. All other such amounts shall be deposited
by the Commissioner into the general fund of the Treasury as
miscellaneous receipts.
* * * * * * *
TITLE VIII--SPECIAL BENEFITS FOR CERTAIN WORLD WAR II VETERANS
* * * * * * *
SEC. 807. REPRESENTATIVE PAYEES.
(a) In General.--If the Commissioner of Social Security
determines that the interest of any qualified individual under
this title would be served thereby, payment of the qualified
individual's benefit under this title may be made, regardless
of the legal competency or incompetency of the qualified
individual, either directly to the qualified individual, or
[for his or her benefit] for his or her use and benefit, to
another person (the meaning of which term, for purposes of this
section, includes an organization) with respect to whom the
requirements of subsection (b) have been met (in this section
referred to as the qualified individual's ``representative
payee''). If the Commissioner of Social Security determines
that a representative payee has misused any benefit paid to the
representative payee pursuant to this section, section 205( j),
or section 1631(a)(2), the Commissioner of Social Security
shall promptly revoke the person's designation as the qualified
individual's representative payee under this subsection, and
shall make payment to an alternative representative payee or,
if the interest of the qualified individual under this title
would be served thereby, to the qualified individual.
(b) Examination of Fitness of Prospective Representative
Payee.--
(1) * * *
(2) As part of the investigation referred to in
paragraph (1), the Commissioner of Social Security
shall--
(A) * * *
* * * * * * *
(C) determine whether the person has been
convicted of a violation of section 208, 811,
or 1632; [and]
(D) obtain information concerning whether
such person has been convicted of any other
offense under Federal or State law which
resulted in imprisonment for more than 1 year;
(E) obtain information concerning whether
such person is a person described in section
804(a)(2); and
[(D)] (F) determine whether payment of
benefits to the person in the capacity as
representative payee has been revoked or
terminated pursuant to this section, section
205( j), or section 1631(a)(2)(A)(iii) by
reason of misuse of funds paid as benefits
under this title, title II, or XVI,
respectively.
(3) Notwithstanding the provisions of section 552a of
title 5, United States Code, or any other provision of
Federal or State law (other than section 6103 of the
Internal Revenue Code of 1986 and section 1106(c) of
this Act), the Commissioner shall furnish any Federal,
State, or local law enforcement officer, upon the
written request of the officer, with the current
address, social security account number, and photograph
(if applicable) of any person investigated under this
subsection, if the officer furnishes the Commissioner
with the name of such person and such other identifying
information as may reasonably be required by the
Commissioner to establish the unique identity of such
person, and notifies the Commissioner that--
(A) such person is described in section
804(a)(2),
(B) such person has information that is
necessary for the officer to conduct the
officer's official duties, and
(C) the location or apprehension of such
person is within the officer's official duties.
* * * * * * *
(d) Persons Ineligible To Serve as Representative Payees.--
(1) In general.--The benefits of a qualified
individual may not be paid to any other person pursuant
to this section if--
(A) * * *
(B) except as provided in paragraph (2),
payment of benefits to the person in the
capacity of representative payee has been
revoked or terminated under this section,
section 205( j), or section 1631(a)(2)(A)(ii)
by reason of misuse of funds paid as benefits
under this title, title II, or title XVI,
respectively; [or]
(C) except as provided in paragraph (2)(B),
the person is a creditor of the qualified
individual and provides the qualified
individual with goods or services for
consideration[.];
(D) such person has previously been convicted
as described in subsection (b)(2)(D), unless
the Commissioner determines that such payment
would be appropriate notwithstanding such
conviction; or
(E) such person is a person described in
section 804(a)(2).
* * * * * * *
(h) Accountability Monitoring.--
(1) * * *
* * * * * * *
(3) Authority to redirect delivery of benefit
payments when a representative payee fails to provide
required accounting.--In any case in which the person
described in paragraph (1) or (2) receiving benefit
payments on behalf of a qualified individual fails to
submit a report required by the Commissioner of Social
Security under paragraph (1) or (2), the Commissioner
may, after furnishing notice to such person and the
qualified individual, require that such person appear
in person at a United States Government facility
designated by the Social Security Administration as
serving the area in which the qualified individual
resides in order to receive such benefit payments.
[(3)] (4) Maintaining lists of payees.--The
Commissioner of Social Security shall maintain lists
which shall be updated periodically of--
(A) * * *
* * * * * * *
[(4)] (5) Maintaining lists of agencies.--The
Commissioner of Social Security shall maintain lists,
which shall be updated periodically, of public agencies
and community-based nonprofit social service agencies
which are qualified to serve as representative payees
pursuant to this section and which are located in the
jurisdiction in which any qualified individual resides.
(i) [Restitution.--In any case where]
(i) Restitution.--
(1) In general.--In any case where the negligent
failure of the Commissioner of Social Security to
investigate or monitor a representative payee results
in misuse of benefits by the representative payee, the
Commissioner of Social Security shall make payment to
the qualified individual or the individual's
alternative representative payee of an amount equal to
the misused benefits. In any case in which a
representative payee that--
(A) is not an individual; or
(B) is an individual who, for any month
during a period when misuse occurs, serves 15
or more individuals who are beneficiaries under
this title, title II, title XVI, or any
combination of such titles;
misuses all or part of an individual's benefit paid to
such representative payee, the Commissioner of Social
Security shall pay to the beneficiary or the
beneficiary's alternative representative payee an
amount equal to the amount of such benefit so misused.
The provisions of this paragraph are subject to the
limitations of subsection (l)(2). The Commissioner of
Social Security shall make a good faith effort to
obtain restitution from the terminated representative
payee.
(2) Court order for restitution.--
(A) In general.--Any Federal court, when
sentencing a defendant convicted of an offense
under subsection (a), may order, in addition to
or in lieu of any other penalty authorized by
law, that the defendant make restitution to the
Social Security Administration.
(B) Related provisions.--Sections 3612, 3663,
and 3664 of title 18, United States Code, shall
apply with respect to the issuance and
enforcement of orders of restitution under this
paragraph. In so applying such sections, the
Social Security Administration shall be
considered the victim.
(C) Stated reasons for not ordering
restitution.--If the court does not order
restitution, or orders only partial
restitution, under this paragraph, the court
shall state on the record the reasons therefor.
(j) Misuse of Benefits.--For purposes of this title, misuse
of benefits by a representative payee occurs in any case in
which the representative payee receives payment under this
title for the use and benefit of another person under this
title and converts such payment, or any part thereof, to a use
other than for the use and benefit of such person. The
Commissioner of Social Security may prescribe by regulation the
meaning of the term ``use and benefit'' for purposes of this
subsection.
(k) Periodic Onsite Review.--(1) In addition to such other
reviews of representative payees as the Commissioner of Social
Security may otherwise conduct, the Commissioner may provide
for the periodic onsite review of any person or agency that
receives the benefits payable under this title (alone or in
combination with benefits payable under title II or title XVI)
to another individual pursuant to the appointment of such
person or agency as a representative payee under this section,
section 205(j), or section 1631(a)(2) in any case in which--
(A) the representative payee is a person who serves
in that capacity with respect to 15 or more such
individuals; or
(B) the representative payee is an agency that serves
in that capacity with respect to 50 or more such
individuals.
(2) Within 120 days after the end of each fiscal year, the
Commissioner shall submit to the Committee on Ways and Means of
the House of Representatives and the Committee on Finance of
the Senate a report on the results of periodic onsite reviews
conducted during the fiscal year pursuant to paragraph (1) and
of any other reviews of representative payees conducted during
such fiscal year in connection with benefits under this title.
Each such report shall describe in detail all problems
identified in such reviews and any corrective action taken or
planned to be taken to correct such problems, and shall
include--
(A) the number of such reviews;
(B) the results of such reviews;
(C) the number of cases in which the representative
payee was changed and why;
(D) the number of cases involving the exercise of
expedited, targeted oversight of the representative
payee by the Commissioner conducted upon receipt of an
allegation of misuse of funds, failure to pay a vendor,
or a similar irregularity;
(E) the number of cases discovered in which there was
a misuse of funds;
(F) how any such cases of misuse of funds were dealt
with by the Commissioner;
(G) the final disposition of such cases of misuse of
funds, including any criminal penalties imposed; and
(H) such other information as the Commissioner deems
appropriate.
(l) Liability for Misused Amounts.--
(1) In general.--If the Commissioner of Social
Security or a court of competent jurisdiction
determines that a representative payee that is not a
Federal, State, or local government agency has misused
all or part of a qualified individual's benefit that
was paid to such representative payee under this
section, the representative payee shall be liable for
the amount misused, and such amount (to the extent not
repaid by the representative payee) shall be treated as
an overpayment of benefits under this title to the
representative payee for all purposes of this Act and
related laws pertaining to the recovery of such
overpayments. Subject to paragraph (2), upon recovering
all or any part of such amount, the Commissioner shall
make payment of an amount equal to the recovered amount
to such qualified individual or such qualified
individual's alternative representative payee.
(2) Limitation.--The total of the amount paid to such
individual or such individual's alternative
representative payee under paragraph (1) and the amount
paid under subsection (i) may not exceed the total
benefit amount misused by the representative payee with
respect to such individual.
* * * * * * *
TITLE XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE
SIMPLIFICATION
* * * * * * *
Part A--General Provisions
* * * * * * *
SEC. 1129. CIVIL MONETARY PENALTIES AND ASSESSMENTS FOR TITLES II, VIII
AND XVI.
(a)(1) Any person (including an organization, agency, or
other entity) [who makes, or causes to be made, a statement or
representation of a material fact for use in determining any
initial or continuing right to or the amount of--
[(A) monthly insurance benefits under title II,
[(B) benefits or payments under title VIII, or
[(C) benefits or payments under title XVI,
that the person knows or should know is false or misleading or
knows or should know omits a material fact or makes such a
statement with knowing disregard for the truth shall be subject
to,] who--
(A) makes, or causes to be made, a statement or
representation of a material fact, for use in
determining any initial or continuing right to or the
amount of monthly insurance benefits under title II or
benefits or payments under title VIII or XVI, that the
person knows or should know is false or misleading,
(B) makes such a statement or representation for such
use with knowing disregard for the truth, or
(C) omits from a statement or representation for such
use, or otherwise withholds disclosure of, a fact which
the person knows or should know is material to the
determination of any initial or continuing right to or
the amount of monthly insurance benefits under title II
or benefits or payments under title VIII or XVI, if the
person knows, or should know, that the statement or
representation with such omission is false or
misleading or that the withholding of such disclosure
is misleading,
shall be subject to, in addition to any other penalties that
may be prescribed by law, a civil money penalty of not more
than $5,000 for each such statement or representation or each
receipt of such benefits or payments while withholding
disclosure of such fact. Such person also shall be subject to
an assessment, in lieu of damages sustained by the United
States because of such statement or representation or because
of such withholding of disclosure of a material fact, of not
more than twice the amount of benefits or payments paid as a
result of such a statement or representation or such a
withholding of disclosure. In addition, the Commissioner of
Social Security may make a determination in the same proceeding
to recommend that the Secretary exclude, as provided in section
1128, such a person who is a medical provider or physician from
participation in the programs under title XVIII.
* * * * * * *
(3) Any person (including an organization, agency, or other
entity) who, having received, while acting in the capacity of a
representative payee pursuant to section 205(j), 807, or
1631(a)(2), a payment under title II, VIII, or XVI for the use
and benefit of another individual, converts such payment, or
any part thereof, to a use that such person knows or should
know is other than for the use and benefit of such other
individual shall be subject to, in addition to any other
penalties that may be prescribed by law, a civil money penalty
of not more than $5,000 for each such conversion. Such person
shall also be subject to an assessment, in lieu of damages
sustained by the United States resulting from the conversion,
of not more than twice the amount of any payments so converted.
(b)(1) * * *
* * * * * * *
(3) In a proceeding under this section which--
(A) is against a person who has been convicted
(whether upon a verdict after trial or upon a plea of
guilty or nolo contendere) of a Federal or State crime
[charging fraud or false statements]; and
* * * * * * *
(c) In determining pursuant to subsection (a) the amount or
scope of any penalty or assessment, or whether to recommend and
exclusion, the Commissioner of Social Security shall take into
account--
(1) the nature of the statements [and
representations], representations, or actions referred
to in subsection (a) and the circumstances under which
they occurred;
* * * * * * *
(e)(1) Civil money penalties and assessments imposed under
this section may be compromised by the Commissioner of Social
Security and may be recovered--
(A) in a civil action in the name of the United
States brought in United States district court for the
district where the [statement or representation
referred to in subsection (a) was made] violation
occurred, or where the person resides, as determined by
the Commissioner of Social Security;
* * * * * * *
(2) Amounts recovered under this section shall be recovered
under by the Commissioner of Social Security and shall be
disposed of as follows:
(A) * * *
(B) [In the case of amounts recovered arising out of
a determination relating to title VIII or XVI,] In the
case of any other amounts recovered under this section,
the amounts shall be deposited by the Commissioner of
Social Security into the general fund of the Treasury
as miscellaneous receipts.
* * * * * * *
SEC. 1129A. ADMINISTRATIVE PROCEDURE FOR IMPOSING PENALTIES FOR FALSE
OR MISLEADING STATEMENTS.
(a) In General.--Any person [who makes, or causes to be made,
a statement or representation of a material fact for use in
determining any initial or continuing right to or the amount
of--
[(1) monthly insurance benefits under title II; or
[(2) benefits or payments under title XVI,
that the person knows or should know is false or misleading or
knows or should know omits a material fact or who makes such a
statement with knowing disregard for the truth shall be subject
to,] who--
(1) makes, or causes to be made, a statement or
representation of a material fact, for use in
determining any initial or continuing right to or the
amount of monthly insurance benefits under title II or
benefits or payments under title XVI that the person
knows or should know is false or misleading,
(2) makes such a statement or representation for such
use with knowing disregard for the truth, or
(3) omits from a statement or representation for such
use, or otherwise withholds disclosure of, a fact which
the person knows or should know is material to the
determination of any initial or continuing right to or
the amount of monthly insurance benefits under title II
or benefits or payments under title XVI, if the person
knows, or should know, that the statement or
representation with such omission is false or
misleading or that the withholding of such disclosure
is misleading,
shall be subject to, in addition to any other penalties that
may be prescribed by law, a penalty described in subsection (b)
to be imposed by the Commissioner of Social Security.
* * * * * * *
ATTEMPTS TO INTERFERE WITH ADMINISTRATION OF SOCIAL SECURITY ACT
Sec. 1129B. Whoever corruptly or by force or threats of force
(including any threatening letter or communication) attempts to
intimidate or impede any officer, employee, or contractor of
the Social Security Administration (including any State
employee of a disability determination service or any other
individual designated by the Commissioner of Social Security)
acting in an official capacity to carry out a duty under this
Act, or in any other way corruptly or by force or threats of
force (including any threatening letter or communication)
obstructs or impedes, or attempts to obstruct or impede, the
due administration of this Act, shall be fined not more than
$5,000, imprisoned not more than 3 years, or both, except that
if the offense is committed only by threats of force, the
person shall be fined not more than $3,000, imprisoned not more
than 1 year, or both. In this subsection, the term ``threats of
force'' means threats of harm to the officer or employee of the
United States or to a contractor of the Social Security
Administration, or to a member of the family of such an officer
or employee or contractor.
* * * * * * *
[PROHIBITION OF MISUSE OF SYMBOLS, EMBLEMS, OR NAMES IN REFERENCE]
PROHIBITIONS RELATING TO REFERENCES TO SOCIAL SECURITY OR MEDICARE
Sec. 1140. (a)(1) No person may use, in connection with any
item constituting an advertisement, solicitation, circular,
book, pamphlet, or other communication, or a play, motion
picture, broadcast, telecast, or other production, alone or
with other words, letters, symbols, or emblems--
(A) the words ``Social Security'', ``Social Security
Account'', ``Social Security System'', ``Social
Security Administration'', ``Medicare'', ``Health Care
Financing Administration'', ``Centers for Medicare &
Medicaid Services'', ``Department of Health and Human
Services'', ``Health and Human Services'',
``Supplemental Security Income Program'', [or
``Medicaid'',] ``Medicaid'', ``Death Benefits Update'',
``Federal Benefit Information'', ``Funeral Expenses'',
or ``Final Supplemental Plan'', the letters ``SSA'',
``HCFA'', ``CMS'', ``DHHS'', ``HHS'', or ``SSI'', or
any other combination or variation of such words or
letters, or
(B) a symbol or emblem of the Social Security
Administration, Health Care Financing Administration,
Centers for Medicare & Medicaid Services, or Department
of Health and Human Services (including the design of,
or a reasonable facsimile of the design of, the social
security card issued pursuant to section 205(c)(2)(F),
or the Medicare card the check used for payment of
benefits under title II, or envelopes or other
stationery used by the Social Security Administration,
Health Care Financing Administration, Centers for
Medicare & Medicaid Services, or Department of Health
and Human Services) or any other combination or
variation of such symbols or emblems,
in a manner which such person knows or should know would
convey, or in a manner which reasonably could be interpreted or
construed as conveying, the false impression that such item is
approved, endorsed, or authorized by the Social Security
Administration, [the Health Care Financing Administration,] the
Centers for Medicare & Medicaid Services, or the Department of
Health and Human Services or that such person has some
connection with, or authorization from, the Social Security
Administration, [the Health Care Financing Administration,] the
Centers for Medicare & Medicaid Services, or the Department of
Health and Human Services. The preceding provisions of this
subsection shall not apply with respect to the use by any
agency or instrumentality of a State or political subdivision
of a State of any words or letters which identify an agency or
instrumentality of such State or of a political subdivision of
such State or the use by any such agency or instrumentality of
any symbol or emblem of an agency or instrumentality of such
State or a political subdivision of such State.
* * * * * * *
(4)(A) No person shall offer, for a fee, to assist an
individual to obtain a product or service that the person knows
or should know is provided free of charge by the Social
Security Administration unless, at the time the offer is made,
the person provides to the individual to whom the offer is
tendered a notice that--
(i) explains that the product or service is available
free of charge from the Social Security Administration,
and
(ii) complies with standards prescribed by the
Commissioner of Social Security respecting the content
of such notice and its placement, visibility, and
legibility.
(B) Subparagraph (A) shall not apply to any offer--
(i) to serve as a claimant representative in
connection with a claim arising under title II, title
VIII, or title XVI; or
(ii) to prepare, or assist in the preparation of, an
individual's plan for achieving self-support under
title XVI.
* * * * * * *
SOCIAL SECURITY ACCOUNT STATEMENTS
Provision Upon Request
Sec. 1143. (a)(1) Beginning not later than October 1, 1990,
the [Secretary] Commissioner of Social Security shall provide
upon the request of an eligible individual a social security
account statement (hereinafter referred to as the
``statement'').
(2) Each statement shall contain--
(A) the amount of wages paid to and self-employment
income derived by the eligible individual as shown by
the records of the [Secretary] Commissioner at the date
of the request;
(B) an estimate of the aggregate of the employer,
employee, and self-employment contributions of the
eligible individual for old-age, survivors, and
disability insurance as shown by the records of the
[Secretary] Commissioner on the date of the request;
(C) a separate estimate of the aggregate of the
employer, employee, and self-employment contributions
of the eligible individual for hospital insurance as
shown by the records of the [Secretary] Commissioner on
the date of the request; and
* * * * * * *
Notice to Eligible Individuals
(b) The [Secretary] Commissioner shall, to the maximum extent
practicable, take such steps as are necessary to assure that
eligible individuals are informed of the availability of the
statement described in subsection (a).
Mandatory Provision of Statements
(c)(1) By not later than September 30, 1995, the [Secretary]
Commissioner shall provide a statement to each eligible
individual who has attained age 60 by October 1, 1994, and who
is not receiving benefits under title II and for whom a current
mailing address can be determined through such methods as the
[Secretary] Commissioner determines to be appropriate. In
fiscal years 1995 through 1999 the [Secretary] Commissioner
shall provide a statement to each eligible individual who
attains age 60 in such fiscal years and who is not receiving
benefits under title II and for whom a current mailing address
can be determined through such methods as the [Secretary]
Commissioner determines to be appropriate. The [Secretary]
Commissioner shall provide with each statement to an eligible
individual notice that such statement is updated annually and
is available upon request.
(2) Beginning not later than October 1, 1999, the [Secretary]
Commissioner shall provide a statement on an annual basis to
each eligible individual who is not receiving benefits under
title II and for whom a mailing address can be determined
through such methods as the [Secretary] Commissioner determines
to be appropriate. With respect to statements provided to
eligible individuals who have not attained age 50, such
statements need not include estimates of monthly retirement
benefits. However, if such statements provided to eligible
individuals who have not attained age 50 do not include
estimates of retirement benefit amounts, such statements shall
include a description of the benefits (including auxiliary
benefits) that are available upon retirement.
* * * * * * *
THE TICKET TO WORK AND SELF-SUFFICIENCY PROGRAM
Sec. 1148. (a) * * *
* * * * * * *
(g) Individual Work Plans.--
(1) Requirements.--Each employment network shall--
(A) * * *
* * * * * * *
An individual work plan established pursuant to this
subsection shall be treated, for purposes of section
51(d)(6)(B)(i) of the Internal Revenue Code of 1986, as
an individualized written plan for employment under a
State plan for vocational rehabilitation services
approved under the Rehabilitation Act of 1973.
* * * * * * *
WORK INCENTIVES OUTREACH PROGRAM
Sec. 1149. (a) * * *
* * * * * * *
(c) Definitions.--In this section:
(1) * * *
[(2) Disabled beneficiary.--The term ``disabled
beneficiary'' has the meaning given that term in
section 1148(k)(2).]
(2) Disabled beneficiary.--The term ``disabled
beneficiary'' means an individual--
(A) who is a disabled beneficiary as defined
in section 1148(k)(2) of this Act;
(B) who is receiving a cash payment described
in section 1616(a) of this Act or a
supplementary payment described in section
212(a)(3) of Public Law 93-66 (without regard
to whether such payment is paid by the
Commissioner pursuant to an agreement under
section 1616(a) of this Act or under section
212(b) of Public Law 93-66);
(C) who, pursuant to section 1619(b) of this
Act, is considered to be receiving benefits
under title XVI of this Act; or
(D) who is entitled to benefits under part A
of title XVIII of this Act by reason of the
penultimate sentence of section 226(b) of this
Act.
* * * * * * *
STATE GRANTS FOR WORK INCENTIVES ASSISTANCE TO DISABLED BENEFICIARIES
Sec. 1150. (a) * * *
(b) Services Provided.--Services provided to disabled
beneficiaries pursuant to a payment made under this section may
include--
(1) * * *
(2) advocacy or other services that a disabled
beneficiary may need to [secure or regain] secure,
maintain, or regain gainful employment.
* * * * * * *
(g) Definitions.--In this section:
(1) * * *
[(2) Disabled beneficiary.--The term ``disabled
beneficiary'' has the meaning given that term in
section 1148(k)(2).]
(2) Disabled beneficiary.--The term ``disabled
beneficiary'' means an individual--
(A) who is a disabled beneficiary as defined
in section 1148(k)(2) of this Act;
(B) who is receiving a cash payment described
in section 1616(a) of this Act or a
supplementary payment described in section
212(a)(3) of Public Law 93-66 (without regard
to whether such payment is paid by the
Commissioner pursuant to an agreement under
section 1616(a) of this Act or under section
212(b) of Public Law 93-66);
(C) who, pursuant to section 1619(b) of this
Act, is considered to be receiving benefits
under title XVI of this Act; or
(D) who is entitled to benefits under part A
of title XVIII of this Act by reason of the
penultimate sentence of section 226(b) of this
Act.
* * * * * * *
TITLE XVI--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND
DISABLED
* * * * * * *
Part A--Determination of Benefits
* * * * * * *
RESOURCES
Exclusions From Resources
Sec. 1613. (a) In determining the resources of an individual
(and his eligible spouse, if any) there shall be excluded--
(1) * * *
* * * * * * *
(12) any account, including accrued interest or other
earnings thereon, established and maintained in
accordance with section 1631(a)(2)(F); [and]
(13) any gift to, or for the benefit of, an
individual who has not attained 18 years of age and who
has a life-threatening condition, from an organization
described in section 501(c)(3) of the Internal Revenue
Code of 1986 which is exempt from taxation under
section 501(a) of such Code--
(A) * * *
(B) in the case of a cash gift, only to the
extent that the total amount excluded from the
resources of the individual pursuant to this
paragraph in the calendar year in which the
gift is made does not exceed $2,000[.]; and
(14) for the 9-month period beginning after the month
in which received, any amount received by such
individual (or spouse) or any other person whose income
is deemed to be included in such individual's (or
spouse's) income for purposes of this title as
restitution for benefits under this title, title II, or
title VIII that a representative payee of such
individual (or spouse) or such other person under
section 205(j), 807, or 1631(a)(2) has misused.
* * * * * * *
Part B--Procedural and General Provisions
PAYMENTS AND PROCEDURES
Payment of Benefits
Sec. 1631. (a)(1) * * *
(2)(A)(i) * * *
(iv) For purposes of this paragraph, misuse of benefits by a
representative payee occurs in any case in which the
representative payee receives payment under this title for the
use and benefit of another person and converts such payment, or
any part thereof, to a use other than for the use and benefit
of such other person. The Commissioner of Social Security may
prescribe by regulation the meaning of the term ``use and
benefit'' for purposes of this clause.
(B)(i) * * *
(ii) As part of the investigation referred to in clause
(i)(I), the Commissioner of Social Security shall--
(I) * * *
* * * * * * *
(III) determine whether such person has been
convicted of a violation of section 208, 811, or 1632;
[and]
(IV) obtain information concerning whether the person
has been convicted of any other offense under Federal
or State law which resulted in imprisonment for more
than 1 year;
(V) obtain information concerning whether such person
is a person described in section 1611(e)(4)(A); and
[(IV)] (VI) determine whether payment of benefits to
such person has been terminated pursuant to
subparagraph (A)(iii), whether the designation of such
person as a representative payee has been revoked
pursuant to section 807(a), and whether certification
of payment of benefits to such person has been revoked
pursuant to section 205(j), by reason of misuse of
funds paid as benefits under title II, title VIII, or
this title.
(iii) Benefits of an individual may not be paid to any other
person pursuant to subparagraph (A)(ii) if--
(I) * * *
(II) except as provided in clause (iv), payment of
benefits to such person pursuant to subparagraph
(A)(ii) has previously been terminated as described in
[clause (ii)(IV)] clause (ii)(VI), the designation of
such person as a representative payee has been revoked
pursuant to section 807(a), or certification of payment
of benefits to such person under section 205(j) has
previously been revoked as described in [section
205(j)(2)(B)(i)(IV)] section 205(j)(2)(B)(i)(VI); [or]
(III) except as provided in clause (v), such person
is a creditor of such individual who provides such
individual with goods or services for consideration[.];
(IV) the person has previously been convicted as
described in clause (ii)(IV) of this subparagraph,
unless the Commissioner determines that the payment
would be appropriate notwithstanding the conviction; or
(V) such person is a person described in section
1611(e)(4)(A).
* * * * * * *
(vii) In the case of an individual described in subparagraph
(A)(ii)(II), when selecting such individual's representative
payee, preference shall be given to--
(I) [a community-based nonprofit social
service agency licensed or bonded by the State]
a certified community-based nonprofit social
service agency (as defined in subparagraph
(I));
* * * * * * *
(xiv) Notwithstanding the provisions of section 552a of title
5, United States Code, or any other provision of Federal or
State law (other than section 6103 of the Internal Revenue Code
of 1986 and section 1106(c) of this Act), the Commissioner
shall furnish any Federal, State, or local law enforcement
officer, upon the written request of the officer, with the
current address, social security account number, and photograph
(if applicable) of any person investigated under this
subparagraph, if the officer furnishes the Commissioner with
the name of such person and such other identifying information
as may reasonably be required by the Commissioner to establish
the unique identity of such person, and notifies the
Commissioner that--
(I) such person is described in section
1611(e)(4)(A),
(II) such person has information that is necessary
for the officer to conduct the officer's official
duties, and
(III) the location or apprehension of such person is
within the officer's official duties.
(C)(i) * * *
* * * * * * *
(v) In any case in which the person described in clause (i)
or (iv) receiving payments on behalf of another fails to submit
a report required by the Commissioner of Social Security under
clause (i) or (iv), the Commissioner may, after furnishing
notice to the person and the individual entitled to the
payment, require that such person appear in person at a field
office of the Social Security Administration serving the area
in which the individual resides in order to receive such
payments.
(D)(i) [A] Except as provided in the next sentence, a
qualified organization may collect from an individual a monthly
fee for expenses (including overhead) incurred by such
organization in providing services performed as such
individual's representative payee pursuant to subparagraph
(A)(ii) if the fee does not exceed the lesser of--
(I) * * *
* * * * * * *
[The Commissioner] A qualified organization may not collect a
fee from an individual for any month with respect to which the
Commissioner of Social Security or a court of competent
jurisdiction has determined that the organization misused all
or part of the individual's benefit, and any amount so
collected by the qualified organization for such month shall be
treated as a misused part of the individual's benefit for
purposes of subparagraphs (E) and (F). The Commissioner of
Social Security shall adjust annually (after 1995) each dollar
amount set forth in subclause (II) of this clause under
procedures providing for adjustments in the same manner and to
the same extent as adjustments are provided for under the
procedures used to adjust benefit amounts under section
215(i)(2)(A), except that any amount so adjusted that is not a
multiple of $1.00 shall be rounded to the nearest multiple of
$1.00. Any agreement providing for a fee in excess of the
amount permitted under this clause shall be void and shall be
treated as misuse by the organization of such individual's
benefits.
(ii) For purposes of this subparagraph, the term ``qualified
organization'' means any State or local government agency whose
mission is to carry out income maintenance, social service, or
health care-related activities, any State or local government
agency with fiduciary responsibilities, [or any community-based
nonprofit social service agency, which--
[(I) is bonded or licensed in each State in which the
agency serves as a representative payee; and
[(II) in accordance] or any certified community-based
nonprofit social service agency (as defined in
subparagraph (I)), if the agency, in accordance with
any applicable regulations of the Commissioner of
Social Security--
[(aa)] (I) regularly provides services as a
representative payee pursuant to subparagraph (A)(ii)
or section 205(j)(4) or 807 concurrently to 5 or more
individuals; and
[(bb)] (II) demonstrates to the satisfaction of the
Commissioner of Social Security that such agency is not
otherwise a creditor of any such individual.
The Commissioner of Social Security shall prescribe regulations
under which the Commissioner of Social Security may grant an
exception from [subclause (II)(bb)] subclause (II) for any
individual on a case-by-case basis if such exception is in the
best interests of such individual.
* * * * * * *
(E) Restitution.--In cases where the negligent failure of the
Commissioner of Social Security to investigate or monitor a
representative payee results in misuse of benefits by the
representative payee, the Commissioner of Social Security shall
make payment to the beneficiary or the beneficiary's
representative payee of an amount equal to such misused
benefits. In any case in which a representative payee that--
(i) is not an individual (regardless of whether it is
a ``qualified organization'' within the meaning of
subparagraph (D)(ii)); or
(ii) is an individual who, for any month during a
period when misuse occurs, serves 15 or more
individuals who are beneficiaries under this title,
title II, title VIII, or any combination of such
titles;
misuses all or part of an individual's benefit paid to the
representative payee, the Commissioner of Social Security shall
pay to the beneficiary or the beneficiary's alternative
representative payee an amount equal to the amount of the
benefit so misused. The provisions of this subparagraph are
subject to the limitations of subparagraph (H)(ii). The
Commissioner of Social Security shall make a good faith effort
to obtain restitution from the terminated representative payee.
* * * * * * *
[(G) The Commissioner of Social Security shall include as a
part of the annual report required under section 704
information with respect to the implementation of the preceding
provisions of this paragraph, including--
[(i) the number of cases in which the representative
payee was changed;
[(ii) the number of cases discovered where there has
been a misuse of funds;
[(iii) how any such cases were dealt with by the
Commissioner of Social Security;
[(iv) the final disposition of such cases (including
any criminal penalties imposed); and
[(v) such other information as the Commissioner of
Social Security determines to be appropriate.
[(H) The Commissioner of Social Security shall make an
initial report to each House of the Congress on the
implementation of subparagraphs (B) and (C) within 270 days
after the date of the enactment of this subparagraph. The
Commissioner of Social Security shall include in the annual
report required under section 704, information with respect to
the implementation of subparagraphs (B) and (C), including the
same factors as are required to be included in the
Commissioner's report under section 205(j)(4)(B).]
(G)(i) In addition to such other reviews of representative
payees as the Commissioner of Social Security may otherwise
conduct, the Commissioner shall provide for the periodic onsite
review of any person or agency that receives the benefits
payable under this title (alone or in combination with benefits
payable under title II or title VIII) to another individual
pursuant to the appointment of the person or agency as a
representative payee under this paragraph, section 205(j), or
section 807 in any case in which--
(I) the representative payee is a person who serves
in that capacity with respect to 15 or more such
individuals;
(II) the representative payee is a certified
community-based nonprofit social service agency (as
defined in subparagraph (I) of this paragraph or
section 205(j)(10)); or
(III) the representative payee is an agency (other
than an agency described in subclause (II)) that serves
in that capacity with respect to 50 or more such
individuals.
(ii) Within 120 days after the end of each fiscal year, the
Commissioner shall submit to the Committee on Ways and Means of
the House of Representatives and the Committee on Finance of
the Senate a report on the results of periodic onsite reviews
conducted during the fiscal year pursuant to clause (i) and of
any other reviews of representative payees conducted during
such fiscal year in connection with benefits under this title.
Each such report shall describe in detail all problems
identified in the reviews and any corrective action taken or
planned to be taken to correct the problems, and shall
include--
(I) the number of the reviews;
(II) the results of such reviews;
(III) the number of cases in which the representative
payee was changed and why;
(IV) the number of cases involving the exercise of
expedited, targeted oversight of the representative
payee by the Commissioner conducted upon receipt of an
allegation of misuse of funds, failure to pay a vendor,
or a similar irregularity;
(V) the number of cases discovered in which there was
a misuse of funds;
(VI) how any such cases of misuse of funds were dealt
with by the Commissioner;
(VII) the final disposition of such cases of misuse
of funds, including any criminal penalties imposed; and
(VIII) such other information as the Commissioner
deems appropriate.
(H)(i) If the Commissioner of Social Security or a court of
competent jurisdiction determines that a representative payee
that is not a Federal, State, or local government agency has
misused all or part of an individual's benefit that was paid to
the representative payee under this paragraph, the
representative payee shall be liable for the amount misused,
and the amount (to the extent not repaid by the representative
payee) shall be treated as an overpayment of benefits under
this title to the representative payee for all purposes of this
Act and related laws pertaining to the recovery of the
overpayments. Subject to clause (ii), upon recovering all or
any part of the amount, the Commissioner shall make payment of
an amount equal to the recovered amount to such individual or
such individual's alternative representative payee.
(ii) The total of the amount paid to such individual or such
individual's alternative representative payee under clause (i)
and the amount paid under subparagraph (E) may not exceed the
total benefit amount misused by the representative payee with
respect to such individual.
(I) For purposes of this paragraph, the term ``certified
community-based nonprofit social service agency'' means a
community-based nonprofit social service agency which is in
compliance with requirements, under regulations which shall be
prescribed by the Commissioner, for annual certification to the
Commissioner that it is bonded in accordance with requirements
specified by the Commissioner and that it is licensed in each
State in which it serves as a representative payee (if
licensing is available in the State) in accordance with
requirements specified by the Commissioner. Any such annual
certification shall include a copy of any independent audit on
the agency which may have been performed since the previous
certification.
* * * * * * *
Procedures; Prohibitions of Assignments; Representation of Claimants
(d)(1) * * *
(2)(A) The provisions of section 206[(a) (other than
paragraph (4) thereof)] (other than subsections (a)(4) and (d)
thereof) shall apply to this part to the same extent as they
apply in the case of title II, except that [paragraph (2)
thereof] such section shall be applied--
(i) by substituting, [in subparagraphs (A)(ii)(I) and
(C)(i),] in subparagraphs (A)(ii)(I) and (D)(i) of
subsection (a)(2) the phrase ``(as determined before
any applicable reduction under section 1631(g), and
reduced by the amount of any reduction in benefits
under this title or title II made pursuant to section
1127(a))'' for the parenthetical phrase contained
therein; [and
[(ii) by substituting ``section 1631(a)(7)(A) or the
requirements of due process of law'' for ``subsection
(g) or (h) of section 223''.
[(B) The Commissioner of Social Security shall notify each
claimant in writing, together with the notice to such claimant
of an adverse determination, of the options for obtaining
attorneys to represent individuals in presenting their cases
before the Commissioner of Social Security. Such notification
shall also advise the claimant of the availability to
qualifying claimants of legal services organizations which
provide legal services free of charge.]
(ii) by substituting, in subsections (a)(2)(B) and
(b)(1)(B)(i), the phrase ``section 1631(a)(7)(A) or the
requirements of due process of law'' for the phrase
``subsection (g) or (h) of section 223'';
(iii) by substituting, in subsection (a)(2)(C)(i),
the phrase ``under title II'' for the phrase ``under
title XVI'';
(iv) by substituting, in subsection (b)(1)(A), the
phrase ``pay the amount of such fee'' for the phrase
``certify the amount of such fee for payment'' and by
striking, in subsection (b)(1)(A), the phrase ``or
certified for payment''; and
(v) by substituting, in subsection (b)(1)(B)(ii), the
phrase ``deemed to be such amounts as determined before
any applicable reduction under section 1631(g), and
reduced by the amount of any reduction in benefits
under this title or title II made pursuant to section
1127(a)'' for the phrase ``determined before any
applicable reduction under section 1127(a))''.
(B) Subject to subparagraph (C), if the claimant is
determined to be entitled to past-due benefits under this title
and the person representing the claimant is an attorney, the
Commissioner of Social Security shall pay out of such past-due
benefits to such attorney an amount equal to the lesser of--
(i) so much of the maximum fee as does not exceed 25
percent of such past-due benefits (as determined before
any applicable reduction under section 1631(g) and
reduced by the amount of any reduction in benefits
under this title or title II pursuant to section
1127(a)), or
(ii) the amount of past-due benefits available after
any applicable reductions under sections 1631(g) and
1127(a).
(C)(i) Whenever a fee for services is required to be paid to
an attorney from a claimant's past-due benefits pursuant to
subparagraph (B), the Commissioner shall impose on the attorney
an assessment calculated in accordance with clause (ii).
(ii)(I) The amount of an assessment under clause (i) shall be
equal to the product obtained by multiplying the amount of the
representative's fee that would be required to be paid by
subparagraph (B) before the application of this subparagraph,
by the percentage specified in subclause (II), except that the
maximum amount of the assessment may not exceed $75. In the
case of any calendar year beginning after the amendments made
by section 302 of the Social Security Protection Act of 2003
take effect, the dollar amount specified in the preceding
sentence (including a previously adjusted amount) shall be
adjusted annually under the procedures used to adjust benefit
amounts under section 215(i)(2)(A)(ii), except such adjustment
shall be based on the higher of $75 or the previously adjusted
amount that would have been in effect for December of the
preceding year, but for the rounding of such amount pursuant to
the following sentence. Any amount so adjusted that is not a
multiple of $1 shall be rounded to the next lowest multiple of
$1, but in no case less than $75.
(II) The percentage specified in this subclause is such
percentage rate as the Commissioner determines is necessary in
order to achieve full recovery of the costs of determining and
approving fees to attorneys from the past-due benefits of
claimants, but not in excess of 6.3 percent.
(iii) The Commissioner may collect the assessment imposed on
an attorney under clause (i) by offset from the amount of the
fee otherwise required by subparagraph (B) to be paid to the
attorney from a claimant's past-due benefits.
(iv) An attorney subject to an assessment under clause (i)
may not, directly or indirectly, request or otherwise obtain
reimbursement for such assessment from the claimant whose claim
gave rise to the assessment.
(v) Assessments on attorneys collected under this
subparagraph shall be deposited in the Treasury in a separate
fund created for this purpose.
(vi) The assessments authorized under this subparagraph shall
be collected and available for obligation only to the extent
and in the amount provided in advance in appropriations Acts.
Amounts so appropriated are authorized to remain available
until expended, for administrative expenses in carrying out
this title and related laws.
* * * * * * *
PENALTIES FOR FRAUD
Sec. 1632. (a) * * *
(b)(1) Any Federal court, when sentencing a defendant
convicted of an offense under subsection (a), may order, in
addition to or in lieu of any other penalty authorized by law,
that the defendant make restitution to the Social Security
Administration.
(2) Sections 3612, 3663, and 3664 of title 18, United States
Code, shall apply with respect to the issuance and enforcement
of orders of restitution under this subsection. In so applying
such sections, the Social Security Administration shall be
considered the victim.
(3) If the court does not order restitution, or orders only
partial restitution, under this subsection, the court shall
state on the record the reasons therefor.
[(b)] (c)(1) * * *
* * * * * * *
----------
SECTION 302 OF THE TICKET TO WORK AND WORK INCENTIVES IMPROVEMENT ACT
OF 1999
SEC. 302. DEMONSTRATION PROJECTS PROVIDING FOR REDUCTIONS IN DISABILITY
INSURANCE BENEFITS BASED ON EARNINGS.
(a) * * *
* * * * * * *
(c) Waivers.--The Commissioner may waive compliance with the
benefit provisions of title II of the Social Security Act [(42
U.S.C. 401 et seq.),] (42 U.S.C. 401 et seq.) and the
requirements of section 1148 of such Act (42 U.S.C. 1320b-19)
as they relate to the program established under title II of
such Act, and the Secretary of Health and Human Services may
waive compliance with the benefit requirements of title XVIII
of such Act (42 U.S.C. 1395 et seq.), insofar as is necessary
for a thorough evaluation of the alternative methods under
consideration. No such project shall be actually placed in
operation unless at least 90 days prior thereto a written
report, prepared for purposes of notification and information
only and containing a full and complete description thereof,
has been transmitted by the Commissioner to the Committee on
Ways and Means of the House of Representatives and to the
Committee on Finance of the Senate. Periodic reports on the
progress of such projects shall be submitted by the
Commissioner to such committees. When appropriate, such reports
shall include detailed recommendations for changes in
administration or law, or both, to carry out the objectives
stated in subsection (a).
* * * * * * *
[(f ) Expenditures.--Expenditures made for demonstration
projects under this section shall be made from the Federal
Disability Insurance Trust Fund and the Federal Old-Age and
Survivors Insurance Trust Fund, as determined appropriate by
the Commissioner of Social Security, and from the Federal
Hospital Insurance Trust Fund and the Federal Supplementary
Medical Insurance Trust Fund, as determined appropriate by the
Secretary of Health and Human Services, to the extent provided
in advance in appropriation Acts.]
(f) Expenditures.--Administrative expenses for demonstration
projects under this section shall be paid from funds available
for the administration of title II or XVIII of the Social
Security Act, as appropriate. Benefits payable to or on behalf
of individuals by reason of participation in projects under
this section shall be made from the Federal Disability
Insurance Trust Fund and the Federal Old-Age and Survivors
Insurance Trust Fund, as determined appropriate by the
Commissioner of Social Security, and from the Federal Hospital
Insurance Trust Fund and the Federal Supplementary Medical
Insurance Trust Fund, as determined appropriate by the
Secretary of Health and Human Services, from funds available
for benefits under such title II or XVIII.
----------
INTERNAL REVENUE CODE OF 1986
Subtitle A--Income Taxes
* * * * * * *
CHAPTER 2--TAX ON SELF-EMPLOYMENT INCOME
* * * * * * *
SEC. 1401. RATE OF TAX.
(a) * * *
* * * * * * *
(c) Relief from Taxes in Cases Covered by Certain
International Agreements.--During any period in which there is
in effect an agreement entered into pursuant to section 233 of
the Social Security Act with any foreign country, the self-
employment income of an individual shall be exempt from the
taxes imposed by this section to the extent that such self-
employment income is subject under such agreement [to taxes or
contributions for similar purposes under] exclusively to the
laws applicable to the social security system of such foreign
country.
SEC. 1402. DEFINITIONS.
(a) Net earnings from self-employment.--The term ``net
earnings from self-employment'' means the gross income derived
by an individual from any trade or business carried on by such
individual, less the deductions allowed by this subtitle which
are attributable to such trade or business, plus his
distributive share (whether or not distributed) of income or
loss described in section 702(a)(8) from any trade or business
carried on by a partnership of which he is a member; except
that in computing such gross income and deductions and such
distributive share of partnership ordinary income or loss--
(1) * * *
* * * * * * *
(5) if--
(A) any of the income derived from a trade or
business (other than a trade or business
carried on by a partnership) is community
income under community property laws applicable
to such income, [all of the gross income and
deductions attributable to such trade or
business shall be treated as the gross income
and deductions of the husband unless the wife
exercises substantially all of the management
and control of such trade or business, in which
case all of such gross income and deductions
shall be treated as the gross income and
deductions of the wife; and] the gross income
and deductions attributable to such trade or
business shall be treated as the gross income
and deductions of the spouse carrying on such
trade or business or, if such trade or business
is jointly operated, treated as the gross
income and deductions of each spouse on the
basis of their respective distributive share of
the gross income and deductions; and
* * * * * * *
Subtitle C--Employment Taxes
* * * * * * *
CHAPTER 21--FEDERAL INSURANCE CONTRIBUTIONS ACT
* * * * * * *
Subchapter A--Tax on Employees
* * * * * * *
SEC. 3101. RATE OF TAX.
(a) * * *
* * * * * * *
(c) Relief from Taxes in Cases Covered by Certain
International Agreements.--During any period in which there is
in effect an agreement entered into pursuant to section 233 of
the Social Security Act with any foreign country, wages
received by or paid to an individual shall be exempt from the
taxes imposed by this section to the extent that such wages are
subject under such agreement [to taxes or contributions for
similar purposes under] exclusively to the laws applicable to
the social security system of such foreign country.
* * * * * * *
SEC. 3102. DEDUCTION OF TAX FROM WAGES
(a) Requirement.--The tax imposed by section 3101 shall be
collected by the employer of the taxpayer, by deducting the
amount of the tax from the wages as and when paid. An employer
who in any calendar year pays to an employee cash remuneration
to which paragraph (7)(B) of section 3121(a) is applicable may
deduct an amount equivalent to such tax from any such payment
of remuneration, even though at the time of payment the total
amount of such remuneration paid to the employee by the
employer in the calendar year is less than the applicable
dollar threshold (as defined in section 3121(x) for such year;
and an employer who in any calendar year pays to an employee
cash remuneration to which paragraph (7)(C) or (10) of section
3121(a) is applicable may deduct an amount equivalent to such
tax from any such payment of remuneration, even though at the
time of payment the total amount of such remuneration paid to
the employee by the employer in the calendar year is less than
$100; and an employer who in any calendar year pays to an
employee cash remuneration to which paragraph (8)(B) of section
3121(a) is applicable may deduct an amount equivalent to such
tax from any such payment of remuneration, even though at the
time of payment the total amount of such remuneration paid to
the employee by the employer in the calendar year is less than
$150 [and the employee has not performed agricultural labor for
the employer on 20 days or more in the calendar year for cash
remuneration computed on a time basis]; and an employer who is
furnished by an employee a written statement of tips (received
in a calendar month) pursuant to section 6053(a) to which
paragraph (12)(B) of section 3121(a) is applicable may deduct
an amount equivalent to such tax with respect to such tips from
any wages of the employee (exclusive of tips) under his
control, even though at the time such statement is furnished
the total amount of the tips included in statements furnished
to the employer as having been received by the employee in such
calendar month in the course of his employment by such employer
is less than $20.
* * * * * * *
Subchapter B--Tax on Employers
* * * * * * *
SEC. 3111. RATE OF TAX.
(a) * * *
* * * * * * *
(c) Relief from Taxes in Cases Covered by Certain
International Agreements.--During any period in which there is
in effect an agreement entered into pursuant to section 233 of
the Social Security Act with any foreign country, wages
received by or paid to an individual shall be exempt from the
taxes imposed by this section to the extent that such wages are
subject under such agreement [to taxes or contributions for
similar purposes under] exclusively to the laws applicable to
the social security system of such foreign country.
* * * * * * *
Subchapter C--General Provisions
* * * * * * *
SEC. 3121. DEFINITIONS.
(a) Wages.--For purposes of this chapter, the term ``wages''
means all remuneration for employment, including the cash value
of all remuneration (including benefits) paid in any medium
other than cash; except that such term shall not include--
(1) * * *
* * * * * * *
(7)(A) * * *
(B) cash remuneration paid by an employer in any
calendar year to an employee for domestic service in a
private home of the employer (including domestic
service [described in subsection (g)(5)] on a farm
operated for profit), if the cash remuneration paid in
such year by the employer to the employee for such
service is less than the applicable dollar threshold
(as defined in subsection (x)) for such year;
* * * * * * *
(g) Agricultural Labor.--For purposes of this chapter, the
term ``agricultural labor'' includes all service performed--
(1) * * *
* * * * * * *
(5) on a farm operated for profit if such service is
not in the course of the employer's trade or business
[or is domestic service in a private home of the
employer].
* * * * * * *