II

106TH CONGRESS

2D SESSION S. 2477

To amend the Social Security Act to provide additional safeguards for beneficiaries with representative payees under the Old-Age, Survivors, and

Disability Insurance program or the Supplemental Security Income program.

IN THE SENATE OF THE UNITED STATES

APRIL 27, 2000

Mr. GRASSLEY (for himself and Mr. BREAUX) introduced the following bill;

which was read twice and referred to the Committee on Finance

A BILL

To amend the Social Security Act to provide additional safeguards for beneficiaries with representative payees under

the Old-Age, Survivors, and Disability Insurance program or the Supplemental Security Income program.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Social Security Bene5 ficiaries Protection Act’’.
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1 SEC. 2. AUTHORITY TO REISSUE BENEFITS MISUSED BY OR2 GANIZATIONAL REPRESENTATIVE PAYEES.

3 (a) OASDI AMENDMENT.—Section 205(j)(5) of the

4 Social Security Act (42 U.S.C. 405(j)(5)) is amended by

5 inserting after the first sentence the following new sen6 tence: ‘‘In any case in which a representative payee that

7 is an organization (regardless of whether it is a ‘qualified

8 organization’ within the meaning of paragraph (4)(B))

9 misuses all or part of an individual’s benefit paid to such

10 representative payee, the Commissioner of Social Security

11 shall certify for payment to the beneficiary or the bene12 ficiary’s alternative representative payee an amount equal

13 to the amount of such benefit so misused. The provisions

14 of this paragraph are subject to the limitations of para15 graph (6)(B).’’.

16 (b) SSI AMENDMENT.—Section 1631(a)(2)(E) of

17 such Act (42 U.S.C. 1383(a)(2)(E)) is amended by insert18 ing after the first sentence the following new sentence: ‘‘In

19 any case in which a representative payee that is an organi20 zation (regardless of whether it is a ‘qualified organiza21 tion’ within the meaning of paragraph (4)(B)) misuses all

22 or part of an individual’s benefit paid to such representa23 tive payee, the Commissioner of Social Security shall make

24 payment to the beneficiary or the beneficiary’s alternative

25 representative payee of an amount equal to the amount

26 of such benefit so misused. The provisions of this subpara-
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1 graph are subject to the limitations of subparagraph

2 (F)(ii).’’.

3 (c) EFFECTIVE DATE.—The amendments made by

4 this section shall apply to any case of benefit misuse by

5 a representative payee with respect to which the Commis6 sioner of Social Security makes a determination of misuse

7 after the date of enactment of this Act.

8 SEC. 3. BONDING AND LICENSING REQUIREMENTS APPLI9 CABLE TO NONGOVERNMENTAL ORGANIZA10 TIONAL REPRESENTATIVE PAYEES.

11 (a) OASDI AMENDMENT.—Section 205(j)(4)(B) of

12 the Social Security Act (42 U.S.C. 405(j)(4)(B)) is

13 amended by striking ‘‘is bonded or licensed in each State

14 in which it serves as a representative payee’’ and inserting

15 ‘‘provides a bond that meets the requirements specified by

16 the Commissioner of Social Security and is licensed in

17 each State in which it serves as a representative payee

18 (if licensing is available in such State)’’.

19 (b) SSI AMENDMENT.—Section 1631(a)(2)(D)(ii)(I)

20 of such Act (42 U.S.C. 1383(a)(2)(D)(ii)(I)) is amended

21 to read as follows:

22 ‘‘(I) provides a bond that meets the require23 ments specified by the Commissioner of Social Secu24 rity and is licensed in each State in which it serves
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1 as a representative payee (if licensing is available in

2 such State); and’’.

3 (c) EFFECTIVE DATE.—The amendments made by

4 this section shall take effect on the first day of the thir5 teenth month beginning after the date of enactment of this

6 Act.

7 SEC. 4. FEE FORFEITURE IN CASE OF BENEFIT MISUSE BY

8 QUALIFIED ORGANIZATIONAL REPRESENTA9 TIVE PAYEES.

10 (a) OASDI AMENDMENT.—Section 205(j)(4)(A) of

11 the Social Security Act (42 U.S.C. 405(j)(4)(A)) is

12 amended—

13 (1) in clause (i), by striking ‘‘A qualified orga14 nization’’ and inserting ‘‘Except as provided in

15 clause (iii), a qualified organization’’; and

16 (2) by adding at the end the following new

17 clause:

18 ‘‘(iii) A qualified organization may not collect a fee

19 from an individual for any month with respect to which

20 the Commissioner of Social Security or a court of com21 petent jurisdiction has determined that the organization

22 has misused all or part of the individual’s benefit, and any

23 amount collected by the qualified organization for such

24 month shall be treated as a misused part of the individ25 ual’s benefit for purposes of paragraphs (5) and (6).’’.
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1 (b) SSI AMENDMENT.—Section 1631(a)(2)(D) of

2 such Act (42 U.S.C. 1383(a)(2)(D)) is amended—

3 (1) in clause (i), by striking ‘‘A qualified orga4 nization’’ and inserting ‘‘Except as provided in

5 clause (v), a qualified organization’’; and

6 (2) by adding at the end the following new

7 clause:

8 ‘‘(v) A qualified organization may not collect a fee

9 from an individual for any month with respect to which

10 the Commissioner of Social Security or a court of com11 petent jurisdiction has determined that the organization

12 has misused all or part of the individual’s benefit, and any

13 amount collected by the qualified organization for such

14 month shall be treated as a misused part of the individ15 ual’s benefit for purposes of subparagraphs (E) and (F).’’.

16 (c) EFFECTIVE DATE.—The amendments made by

17 this section shall apply to any month involving benefit mis18 use by a representative payee in any case with respect to

19 which the Commissioner of Social Security makes a deter20 mination of misuse after the date of enactment of this Act.

21 SEC. 5. LIABILITY OF NONGOVERNMENTAL REPRESENTA22 TIVE PAYEES FOR MISUSED BENEFITS.

23 (a) OASDI AMENDMENT.—Section 205(j) of the So24 cial Security Act (42 U.S.C. 405(j)) is amended by redes25 ignating paragraphs (6) and (7) as paragraphs (7) and
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1 (8), respectively, and inserting after paragraph (5) the fol2 lowing new paragraph:

3 ‘‘(6)(A) If the Commissioner of Social Security or a

4 court of competent jurisdiction determines that a rep5 resentative payee that is not a State or local government

6 agency has misused all or part of an individual’s benefit

7 that was paid to such representative payee under this sub8 section, the representative payee shall be liable for the

9 amount misused, and such amount (to the extent not re10 paid by the representative payee) shall be treated as an

11 overpayment of benefits under this title to the representa12 tive payee for all purposes of this Act and related laws

13 pertaining to the recovery of such overpayments. Subject

14 to subparagraph (B), upon recovering all or any part of

15 such amount, the Commissioner shall certify an amount

16 equal to the recovered amount to such individual or the

17 individual’s alternative representative payee.

18 ‘‘(B) The total of the amount certified to such indi19 vidual or the individual’s alternative representative payee

20 under subparagraph (A) and the amount certified under

21 paragraph (5) shall not exceed the total benefit amount

22 misused by the representative payee with respect to such

23 individual.’’.

24 (b) SSI AMENDMENT.—Section 1631(a)(2) of such

25 Act (42 U.S.C. 1383(a)(2)) is amended by redesignating
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1 subparagraphs (F), (G), and (H) as subparagraphs (G),

2 (H), and (I), respectively, and inserting after subpara3 graph (E) the following new subparagraph:

4 ‘‘(F)(i) If the Commissioner of Social Security or a

5 court of competent jurisdiction determines that a rep6 resentative payee that is not a State or local government

7 agency has misused all or part of an individual’s benefit

8 that was paid to such representative payee under this

9 paragraph, the representative payee shall be liable for the

10 amount misused, and such amount (to the extent not re11 paid by the representative payee) shall be treated as an

12 overpayment of benefits under this title to the representa13 tive payee for all purposes of this Act and related laws

14 pertaining to the recovery of such overpayments. Upon re15 covering all or any part of such amount, the Commissioner

16 shall make payment of an amount equal to the recovered

17 amount to such individual or the individual’s alternative

18 representative payee.

19 ‘‘(ii) The total of the amount paid to such individual

20 or the individual’s alternative representative payee under

21 clause (i) and the amount paid under subparagraph (E)

22 shall not exceed the total benefit amount misused by the

23 representative payee with respect to such individual.’’.

24 (c) EFFECTIVE DATE.—The amendments made by

25 this section shall apply to benefit misuse by a representa-
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1 tive payee in any case with respect to which the Commis2 sioner of Social Security makes a determination of misuse

3 after the date of enactment of this Act.

4 SEC. 6. EXTENSION OF THE CIVIL MONETARY PENALTY

5 AUTHORITY.

6 (a) IN GENERAL.—Section 1129(a) of the Social Se7 curity Act (42 U.S.C. 1320a–8(a)) is amended—

8 (1) by striking ‘‘(A)’’ and ‘‘(B)’’ and inserting

9 ‘‘(i)’’ and ‘‘(ii)’’, respectively;

10 (2) by striking ‘‘(a)(1)’’ and inserting ‘‘

11 (a)(1)(A)’’;

12 (3) by striking ‘‘(2)’’ and inserting ‘‘(B)’’; and

13 (4) by adding at the end the following new

14 paragraph:

15 ‘‘(2) Any person (including an organization,

16 agency, or other entity (other than a State or local

17 government agency)) who having received, while act18 ing in the capacity as representative payee pursuant

19 to section 205(j) or section 1631(a)(2), a payment

20 under title II or title XVI for the use and benefit

21 of another individual, converts such payment, or any

22 part thereof, to a use that such person knows or

23 should know is other than for the use and benefit of

24 such other individual, shall be subject to, in addition

25 to any other penalties that may be prescribed by
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1 law, a civil money penalty of not more than $5,000

2 for each such violation.’’.

3 (b) CONFORMING AMENDMENTS.—

4 (1) Section 1129(b)(3)(A) of such Act (42

5 U.S.C. 1320a–8(b)(3)(A)) is amended by striking

6 ‘‘charging fraud or false statements’’.

7 (2) Section 1129(c)(1) of such Act (42 U.S.C.

8 1320a–8(c)(1)) is amended by striking ‘‘and rep9 resentations’’ and inserting ‘‘, representations, or ac10 tions’’.

11 (3) Section 1129(e)(1)(A) of such Act (42

12 U.S.C. 1320a–8(e)(1)(A)) is amended by striking

13 ‘‘statement or representation referred to in sub14 section (a) was made’’ and inserting ‘‘violation oc15 curred’’.

16 (c) EFFECTIVE DATE.—The amendments made by

17 this section shall be effective with respect to violations

18 committed after the date of enactment of this Act.

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