I
107TH CONGRESS
2D SESSION
H. R. 4070
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 pro-
gram protections, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 20, 2002
Mr. SHAW (for himself, Mr. MATSUI, Mr. BECERRA, Mr. BRADY of Texas, Mr.
HAYWORTH, Mr. HERGER, Mr. LEWIS of Kentucky, Mr. POMEROY, and
Mr. RYAN of Wisconsin) introduced the following bill; which was referred
to the Committee on Ways and Means
A BILL
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 protec-
tions, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SEC. 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Social Security Program Protection Act of 2002’’.
(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 upon conviction
of offenses resulting in imprisonment for more than 1 year and
upon fugitive felon status.
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 representa-
tive 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. Disqualification from eligibility for trial work period upon criminal,
civil, or administrative finding of fraudulent concealment of
work activity.
Sec. 203. Denial of title II benefits to fugitive felons and persons fleeing pros-
ecution.
Sec. 204. Requirements relating to offers to provide for a fee a product or serv-
ice available without charge from the Social Security Adminis-
tration.
Sec. 205. Refusal to recognize certain individuals as claimant representatives.
Sec. 206. Penalty for corrupt or forcible interference with administration of So-
cial Security Act.
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.
Sec. 303. Effective date of title.
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 dem-
onstration projects providing for reductions in disability insur-
ance benefits based on earnings.
Sec. 403. Funding of demonstration projects provided for reductions in dis-
ability 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 in-
dividual work plans under the Ticket to Work and Self-Suffi-
ciency 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. Use of symbols, emblems, or names in reference to social security or
medicare.
Sec. 415. Clarification of definitions regarding certain survivor benefits.
Sec. 416. Optional methods for computing net earnings from self-employment.
Sec. 417. Clarification respecting the FICA and SECA tax exemptions for an
individual whose earnings are subject to the laws of a total-
ization agreement partner.
Subtitle C—Technical Amendments
Sec. 431. Technical correction relating to responsible agency head.
Sec. 432. Technical correction relating to retirement benefits of ministers.
Sec. 433. Technical corrections relating to domestic employment.
Sec. 434. Technical corrections of outdated references.
Sec. 435. 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—
‘‘(i) that is not an individual (regardless of
whether it is a ‘qualified organization’ within the
meaning of paragraph (4)(B)); or
‘‘(ii) is an individual who, for any month during
a period when misuse occurs, serves 15 or more indi-
viduals 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 bene-
ficiary’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 para-
graph (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 bene-
fits 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 Com-
missioner 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)) is
amended by inserting after the first sentence the fol-
lowing new sentences: ‘‘In any case in which a rep-
resentative payee—
‘‘(A) that 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 So-
cial Security shall pay to the beneficiary or the bene-
ficiary’s alternative representative payee an amount
equal to the amount of such benefit so misused. The
provisions of this paragraph are subject to the limi-
tations 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 pay-
ment 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 pre-
scribe by regulation the meaning of the term ‘use and ben-
efit’ 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 inserting ‘‘use and’’ before ‘‘ben-
efit’’.
(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—
‘‘(i) that 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 indi-
viduals 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 make payment to the beneficiary or the beneficiary’s
alternative representative payee of an amount equal to the
amount of the benefit so misused. The provisions of this
subparagraph are subject to the limitations of subpara-
graph (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 pe-
riod 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 indi-
vidual’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 bene-
fits 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 Com-
missioner 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 Commis-
sioner makes the determination of misuse on or after Jan-
uary 1, 1995.
SEC. 102. OVERSIGHT OF REPRESENTATIVE PAYEES.
(a) CERTIFICATION OF BONDING AND LICENSING
REQUIREMENTS
FOR
NONGOVERNMENTAL
ORGANIZA-
TIONAL 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 agen-
cy licensed or bonded by the State’’ in sub-
clause (I) and inserting ‘‘a certified community-
based nonprofit social service agency (as de-
fined in paragraph (9))’’;
(B) in paragraph (3)(F), by striking ‘‘com-
munity-based nonprofit social service agencies’’
and inserting ‘‘certified community-based non-
profit social service agencies (as defined in
paragraph (9))’’;
(C) in paragraph (4)(B), by striking ‘‘any
community-based nonprofit social service agen-
cy which is bonded or licensed in each State in
which it serves as a representative payee’’ and
inserting ‘‘any certified community-based non-
profit social service agency (as defined in para-
graph (9))’’; and
(D) by adding after paragraph (8) (as
added by section 201(a)(2) of this Act) the fol-
lowing new paragraph:
‘‘(9) For purposes of this subsection, the term ‘cer-
tified community-based nonprofit social service agency’
means a community based nonprofit social service agency
which is in compliance with requirements, under regula-
tions which shall be prescribed by the Commissioner, for
annual certification to the Commissioner that it is bonded
in accordance with requirements specified by the Commis-
sioner 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 certifi-
cation.’’
(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 sub-
clause (I) and inserting ‘‘a certified community-
based nonprofit social service agency (as de-
fined in subparagraph (I))’’;
(B) in subparagraph (D)(ii)—
(i) by striking ‘‘or any community-
based’’ and all that follows through ‘‘in ac-
cordance’’ in subclause (II) and inserting
‘‘or any certified community-based non-
profit social service agency (as defined in
subparagraph (I)), if the agency, in ac-
cordance’’;
(ii) by redesignating items (aa) and
(bb) as subclauses (I) and (II), respectively
(and adjusting the margination accord-
ingly); 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 ‘cer-
tified community-based nonprofit social service agency’
means a community based nonprofit social service agency
which is in compliance with requirements, under regula-
tions which shall be prescribed by the Commissioner, for
annual certification to the Commissioner that it is bonded
in accordance with requirements specified by the Commis-
sioner 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