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in the case of a hearing before the Secretary under this title
to the extent the Secretary determines necessary to carry
out the preceding sentence. The Secretary shall annually
submit to the Congress a full and complete report on the
Secretary’s activities under this paragraph.
‘‘(C) The representative payee and the referral and
monitoring agency for any individual described in sub-
paragraph (A) shall report to the Secretary any noncompli-
ance with the terms, conditions, and requirements of the
treatment described in subparagraph (A) and with the re-
quirements imposed by the Secretary under subparagraph
(B).
‘‘(D)(i) If the Secretary finds that an individual is
not complying with the terms, conditions, and requirements
of the treatment described in subparagraph (A), or with the
requirements imposed by the Secretary under subparagraph
(B), or both, the Secretary, in lieu of termination, may sus-
pend such individual’s benefits under this title until com-
pliance has been reestablished, including compliance with
any additional requirements determined to be necessary by
the Secretary.
‘‘(ii) Any period of suspension under clause (i) shall
be taken into account in determining any 24-month period
described in subparagraph (E) and shall not be taken into
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account in determining the 36-month period described in
such subparagraph.
‘‘(E)(i) Except as provided in clause (ii), no individ-
ual described in subparagraph (A) shall be entitled to bene-
fits under this title for any month following the 24-month
period beginning with the determination of the disability
described in such subparagraph.
‘‘(ii) If at the end of the 24-month period described
in clause (i), the individual furnishes evidence in accord-
ance with subsection (d)(5) that the individual continues
to be under a disability based in whole or in part on a
medical determination that the individual is a drug addict
or alcoholic, such individual shall continue to be entitled
to benefits under this title based on such disability.
‘‘(iii) Subject to clause (iv), if such an individual con-
tinues to be entitled to such benefits for an additional 24-
month period following a determination under clause (ii),
clauses (i) and (ii) shall apply with regard to any further
entitlement to such benefits following the end of such addi-
tional period.
‘‘(iv) In no event shall such an individual be entitled
to benefits under this title for more than a total of 36
months, unless upon the termination of the 36th month such
individual furnishes evidence in accordance with subsection
(d)(5) that the individual is under a disability which is
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not related in part to a medical determination that the in-
dividual is a drug addict or alcoholic.
‘‘(2)(A) Any benefits under this title payable to any
individual referred to in paragraph (1), including any ben-
efits payable in a lump sum amount, shall be payable only
pursuant to a certification of such payment to a qualified
organization acting as a representative payee of such indi-
vidual pursuant to section 205(j).
‘‘(B) For purposes of subparagraph (A) and section
205(j)(4), the term ‘qualified organization’—
‘‘(i) shall have the meaning given such term by
section 205(j)(4)(B), and
‘‘(ii) shall mean an agency or instrumentality of
a State or a political subdivision of a State.
‘‘(3) Monthly insurance benefits under this title which
would be payable to any individual (other than the disabled
individual to whom benefits are not payable by reason of
this subsection) on the basis of the wages and self-employ-
ment income of such a disabled individual but for the provi-
sions of paragraph (1), shall be payable as though such dis-
abled individual were receiving such benefits which are not
payable under this subsection.’’
(2) CONFORMING AMENDMENTS.—
(A) Section 205(j)(1) of such Act (42 U.S.C.
405(j)(1)) is amended by inserting ’’, or in the
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case of any individual referred to in section
223(j)(1)(A)’’ after ‘‘thereby’’.
(B) Section 205(j)(2)(D)(ii)(II) of such Act
(42 U.S.C. 405(j)(2)(D)(ii)(II)) is amended by
striking ‘‘legally incompetent or under the age of
15’’ and inserting ‘‘legally incompetent, under
the age of 15, or a drug addict or alcoholic re-
ferred to in section 223(j)(1)(A)’’.
(b) SUPPLEMENTAL SECURITY INCOME.—Paragraph
(3) of section 1611(e) of the Social Security Act (42 U.S.C.
1382(e)) is amended to read as follows:
‘‘(3)(A)(i) No person who is an aged, blind, or disabled
individual solely by reason of disability (as determined
under section 1614(a)(3)) shall be an eligible individual or
eligible spouse for purposes of this title with respect to any
month if such individual’s disability is based in whole or
in part on a medical determination that the individual is
a drug addict or alcoholic, unless such individual—
‘‘(I) is undergoing, or on a waiting list for, any
medical or psychological treatment that may be ap-
propriate for such individual’s condition as a drug
addict or alcoholic (as the case may be) and for the
stage of such individual’s rehabilitation at an institu-
tion or facility approved for purposes of this para-
graph by the Secretary (so long as access to such
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treatment is reasonably available, as determined by
the Secretary), and
‘‘(II) demonstrates in such manner as the Sec-
retary requires, including at a continuing disability
review not later than one year after such determina-
tion, that such individual is complying with the
terms, conditions, and requirements of such treatment
and with the requirements imposed by the Secretary
under clause (ii).
‘‘(ii) The Secretary shall provide for the monitoring
and testing of all individuals who are receiving benefits
under this title and who as a condition of such benefits are
required to be undergoing treatment and complying with
the terms, conditions, and requirements thereof as described
in clause (i), in order to assure such compliance and to
determine the extent to which the imposition of such re-
quirements is contributing to the achievement of the pur-
poses of this title. The Secretary may retain jurisdiction
in the case of a hearing before the Secretary under this title
to the extent the Secretary determines necessary to carry
out the preceding sentence. The Secretary shall annually
submit to the Congress a full and complete report on the
Secretary’s activities under this subparagraph.
‘‘(iii) The representative payee and the referral and
monitoring agency for any individual described in clause
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(i) shall report to the Secretary any noncompliance with
the terms, conditions, and requirements of the treatment de-
scribed in clause (i) and with the requirements imposed by
the Secretary under clause (ii).
‘‘(iv)(I) If the Secretary finds that an individual is
not complying with the terms, conditions, and requirements
of the treatment described in clause (i), or with the require-
ments imposed by the Secretary under clause (ii), or both,
the Secretary, in lieu of termination, may suspend such in-
dividual’s benefits under this title until compliance has
been reestablished, including compliance with any addi-
tional requirements determined to be necessary by the Sec-
retary.
‘‘(II) Any period of suspension under subclause (I)
shall be taken into account in determining any 24-month
period described in clause (v) and shall not be taken into
account in determining the 36-month period described in
such clause.
‘‘(v)(I) Except as provided in subclause (II), no indi-
vidual described in clause (i) shall be entitled to benefits
under this title for any month following the 24-month pe-
riod beginning with the determination of the disability de-
scribed in such clause.
‘‘(II) If at the end of the 24-month period described
in subclause (I), the individual furnishes evidence in ac-
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cordance with section 223(d)(5) that the individual contin-
ues to be under a disability based in whole on a medical
determination that the individual is a drug addict or alco-
holic, such individual shall be entitled to benefits under this
title based on such disability for no more than an addi-
tional 36 months.
‘‘(III) Subject to subclause (IV), if such an individual
continues to be entitled to such benefits for an additional
24-month period following a determination under subclause
(II), subclauses (I) and (II) shall apply with regard to any
further entitlement to such benefits following the end of such
additional period.
‘‘(IV) In no event shall such an individual be entitled
to benefits under this title for more than a total of 36
months, unless upon the termination of the 36th month such
individual furnishes evidence in accordance with section
223(d)(5) that the individual is under a disability which
is not related in part to a medical determination that the
individual is a drug addict or alcoholic.
‘‘(B)(i) Any benefits under this title payable to any
individual referred to in subparagraph (A), including any
benefits payable in a lump sum amount, shall be payable
only pursuant to a certification of such payment to a quali-
fied organization acting as a representative payee of such
individual pursuant to section 1631(a)(2)(A)(ii).
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‘‘(ii) For purposes of clause (i) and section
1631(a)(2)(D), the term ‘qualified organization’—
‘‘(I) shall have the meaning given such term by
section 1631(a)(2)(D)(ii), and
‘‘(II) shall mean an agency or instrumentality of
a State or a political subdivision of a State.’’
(c) EFFECTIVE DATES; AUTHORIZATIONS.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall
apply to benefits payable for determinations of dis-
ability made 90 or more days after the date of the en-
actment of this Act.
(2) CURRENT DETERMINATIONS.—
(A) IN GENERAL.—With respect to any in-
dividual described in subparagraph (B), the Sec-
retary of Health and Human Services shall pro-
vide during the 3-year period beginning after the
date of the enactment of this Act for the applica-
tion of the amendments made by this section to
such individual with the time periods described
in such amendments to begin upon such applica-
tion.
(B) INDIVIDUAL DESCRIBED.—An individ-
ual is described in this subparagraph if such in-
dividual is entitled to benefits under title II or
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XVI of the Social Security Act based on a dis-
ability determined before the date described in
paragraph (1) to be based in whole or in part
on a medical determination that the individual
is a drug addict or alcoholic.
(3) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated such sums as
may be necessary to carry out the purposes of the pro-
visions of, and the amendments made by, this section.
SEC. 303. PRIORITY OF TREATMENT.
The Secretary of Health and Human Services, through
the Administrator of the Substance Abuse and Mental
Health Services Administration, shall assure that every in-
dividual receiving disability benefits under title II or XVI
of the Social Security Act based in whole or in part on
a medical determination that the individual is a drug ad-
dict or alcoholic be given high priority for treatment
through entities supported by the various States through
any substance abuse block grant authorized under law.
SEC. 304. ESTABLISHMENT OF REFERRAL MONITORING
AGENCIES REQUIRED IN ALL STATES.
The Secretary of Health and Human Services shall,
within 1 year of the date of the enactment of this Act, pro-
vide for the establishment of referral and monitoring agen-
cies for each State for the purpose of carrying out the treat-
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ment 
requirements 
under 
sections 
223(j)(1) 
and
1611(e)(3)(A) of the Social Security Act (42 U.S.C.
423(j)(1) and 1382(e)(3)(A)).
SEC. 305. PROCEEDS FROM CERTAIN CRIMINAL ACTIVITIES
CONSTITUTE 
SUBSTANTIAL 
GAINFUL 
EM-
PLOYMENT.
(a) SOCIAL SECURITY DISABILITY INSURANCE.—Sec-
tion 223(d)(4) of the Social Security Act (42 U.S.C.
423(d)(4)) is amended by inserting the following after the
first sentence: ‘‘If an individual engages in a criminal ac-
tivity to support substance abuse, any proceeds derived
from such activity shall demonstrate such individual’s abil-
ity to engage in substantial gainful activity.’’.
(b) SUPPLEMENTAL
SECURITY
INCOME.—Section
1614(a)(3)(D) of the Social Security Act (42 U.S.C.
1382(a)(3)(D)) is amended by inserting the following after
the first sentence: ‘‘If an individual engages in a criminal
activity to support substance abuse, any proceeds derived
from such activity shall demonstrate such individual’s abil-
ity to engage in substantial gainful activity.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to disability determinations conducted
on or after the date of the enactment of this Act.
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SEC. 306. CONSISTENT PENALTY PROVISIONS FOR SSDI
AND SSI PROGRAMS.
(a) FELONY PENALTIES FOR FRAUD.—
(1) IN GENERAL.—Subsection (a) of section 1631
of the Social Security Act (42 U.S.C. 1383a) is
amended by striking ‘‘shall be guilty of a mis-
demeanor and upon conviction thereof shall be fined
not more than $1,000 or imprisoned for not more
than one year, or both’’ and inserting ‘‘shall be guilty
of a felony and upon conviction thereof shall be fined
under title 18, United States Code, or imprisoned for
not more than five years, or both’’.
(2) REPRESENTATIVE PAYEES.—
(A) SSDI.—Subsections (b) and (c) of sec-
tion 208 of such Act (42 U.S.C. 408) are amend-
ed to read as follows:
‘‘(b)(1) 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 or an entity described in section
223(j)(2)(B)(ii)), shall be guilty of a felony and upon con-
viction thereof shall be fined under title 18, United States
Code, or imprisoned for not more than five years, or both.
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‘‘(2) In any case in which the court determines that
a violation described in paragraph (1) 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.
‘‘(3) Any person 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).
‘‘(c) For the purpose of subsection (a)(7), the terms ‘so-
cial security number’ and ‘social security account number’
mean such numbers as are assigned by the Secretary under
section 205(c)(2) whether or not, in actual use, such num-
bers are called social security numbers.’’
(B) SSI.—Subsection (b)(1) of section 1632
of such Act (42 U.S.C. 1383a) is amended by
striking ‘‘(other than such person’s spouse)’’ and
all that follows through the period and inserting
‘‘(other than such person’s spouse or an entity
described in section 1611(e)(3)(B)(ii)(II)), shall
be guilty of a felony and upon conviction thereof
shall be fined under title 18, United States Code,
or imprisoned for not more than five years, or
both.’’
(b) CIVIL ADMINISTRATIVE PENALTIES.—
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(1) SSDI.—Section 208 of the Social Security
Act (42 U.S.C. 408) is amended by adding at the end
the following new subsections:
‘‘(e) For administrative penalties for false claims and
statements with respect to which an individual or other en-
tity knows or has reason to know such falsity, see chapter
38 of title 31, United States Code.
‘‘(f) In the case of the second or subsequent imposition
of an administrative or criminal penalty on any person
or other entity under this section, the Secretary may exclude
such person or entity from participation in any program
under this title and titles V, XVI, XVIII, and XX, and may
direct that such person or entity be excluded from any State
health care program (as defined in section 1128(h)) and
any other Federal program as provided by law.’’
(2) SSI.—
(A) IN GENERAL.—Section 1632 of such Act
(42 U.S.C. 1383a) is amended by adding at the
end the following new subsections:
‘‘(c) For administrative penalties for false claims and
statements with respect to which an individual or other en-
tity knows or has reason to know such falsity, see chapter
38 of title 31, United States Code.
‘‘(d) In the case of the second or subsequent imposition
of an administrative or criminal penalty on any person
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or other entity under this section, the Secretary may exclude
such person or entity from participation in any program
under this title and titles II, V, XVIII, and XX, and may
direct that such person or entity be excluded from any State
health care program (as defined in section 1128(h)) and
any other Federal program as provided by law.’’
(B) CONFORMING AMENDMENT.—The head-
ing for section 1632 of such Act (42 U.S.C.
1383a) is amended by striking ‘‘FOR FRAUD’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall be effective on or after the date of the enactment
of this Act.
Attest:
Secretary.
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