SEC. 2. REFORM OF MONTHLY INSURANCE BENEFITS
BASED 
ON 
DISABILITY 
INVOLVING 
SUB-
STANCE ABUSE.
(a) SOCIAL SECURITY DISABILITY INSURANCE.—
(1) IN GENERAL.—Section 223 of the Social
Security Act (42 U.S.C. 423) is amended by adding
at the end the following new subsection:
‘‘Limitation on Payment of Benefits by Reason of
Substance Abuse
‘‘(j)(1)(A) Notwithstanding any other provision of
this title, no individual whose disability is based in whole
or in part on a medical determination that the individual
is a drug addict or alcoholic shall be entitled to benefits
under this title based on such disability with respect to
any month, 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 insti-
tution or facility approved for purposes of this para-
graph by the Secretary (so long as access to such
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 treat-
ment and with the requirements imposed by the Sec-
retary under subparagraph (B).
‘‘(B) 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 subparagraph (A), in order to assure such
compliance and to determine the extent to which the impo-
sition of such requirements is contributing to the achieve-
ment of the purposes of this title. The Secretary may re-
tain jurisdiction in the case of a hearing before the Sec-
retary under this title to the extent the Secretary deter-
mines 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 subpara-
graph (A) shall report to the Secretary any noncompliance
with the terms, conditions, and requirements of the treat-
ment described in subparagraph (A) and with the require-
ments imposed by the Secretary under subparagraph (B).
‘‘(D)(i) If the Secretary finds that an individual is
not complying with the terms, conditions, and require-
ments 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 termi-
nation, may suspend such individual’s benefits under this
title until compliance 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
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 ben-
efits 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 ad-
ditional 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 sub-
section (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.
‘‘(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-employment income of such a disabled individual but
for the provisions of paragraph (1), shall be payable as
though such disabled individual were receiving such bene-
fits 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 case of any individual referred to in sec-
tion 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 alco-
holic referred 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 dis-
abled individual solely by reason of disability (as deter-
mined under section 1614(a)(3)) shall be an eligible indi-
vidual or eligible spouse for purposes of this title with re-
spect 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 indi-
vidual—
‘‘(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 insti-
tution or facility approved for purposes of this para-
graph by the Secretary (so long as access to such
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 treat-
ment and with the requirements imposed by the Sec-
retary 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 requirements is contributing to the achievement of
the purposes of this title. The Secretary may retain juris-
diction 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
(i) shall report to the Secretary any noncompliance with
the terms, conditions, and requirements of the treatment
described 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 require-
ments of the treatment described in clause (i), or with the
requirements imposed by the Secretary under clause (ii),
or both, the Secretary, in lieu of termination, may suspend
such individual’s benefits under this title until compliance
has been reestablished, including compliance with any ad-
ditional requirements determined to be necessary by the
Secretary.
‘‘(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-
cordance with section 223(d)(5) that the individual contin-
ues to be under a disability based in whole or in part on
a medical determination that the individual is a drug ad-
dict or alcoholic, such individual shall be entitled to bene-
fits under this title based on such disability.
‘‘(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 re-
gard 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 sec-
tion 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
qualified organization acting as a representative payee of
such individual pursuant to section 1631(a)(2)(A)(ii).
‘‘(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
disability made 90 or more days after the date of
the enactment of this Act.
(2) CURRENT DETERMINATIONS.—
(A) IN GENERAL.—With respect to any in-
dividual described in subparagraph (B), the
Secretary of Health and Human Services shall
provide during the 3-year period beginning after
the date of the enactment of this Act for the
application of the amendments made by this
section to such individual with the time periods
described in such amendments to begin upon
such application.
(B) INDIVIDUAL DESCRIBED.—An individ-
ual is described in this subparagraph if such in-
dividual is entitled to benefits under title II or
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
provisions of, and the amendments made by, this
section.
SEC. 3. 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 individual 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 addict or alcoholic be given high priority for treat-
ment through entities supported by the various States
through any substance abuse block grant authorized under
law.
SEC. 4. 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,
provide for the establishment of referral and monitoring
agencies for each State for the purpose of carrying out
the treatment 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. 5. PROCEEDS FROM CERTAIN CRIMINAL ACTIVITIES
CONSTITUTE 
SUBSTANTIAL 
GAINFUL 
EM-
PLOYMENT.
(a) SOCIAL SECURITY DISABILITY INSURANCE.—
Section 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 individ-
ual’s ability to engage in substantial gainful activity.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to disability determinations con-
ducted on or after the date of the enactment of this Act.
SEC. 6. 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 im-
prisoned 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
amended 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.
‘‘(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
‘social security number’ and ‘social security account num-
ber’ mean such numbers as are assigned by the Secretary
under section 205(c)(2) whether or not, in actual use, such
numbers are called social security numbers.’’
(B) SSI.—Subsection (b)(1) of section
1632 of such Act (42 U.S.C. 1383a) is amend-
ed 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 fel-
ony and upon conviction thereof shall be fined
under title 18, United States Code, or impris-
oned for not more than five years, or both.’’
(b) CIVIL ADMINISTRATIVE PENALTIES.—
(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
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
heading 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.
Æ
HR 4136 IH——2