S 693 IS

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.

April 4, 2001

Mr. GRASSLEY (for himself, Mr. BREAUX, and Mr. BURNS) introduced the following bill; which was read twice and referred to the Committee on Finance

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.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the `Social Security Beneficiaries Protection Act'.

SEC. 2. AUTHORITY TO REISSUE BENEFITS MISUSED BY ORGANIZATIONAL REPRESENTATIVE PAYEES.

(a) OASDI AMENDMENT- 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 sentence: `In any case in which a representative payee that is an organization (regardless of whether it is a `qualified organization' within the meaning of paragraph (4)(B)) 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 (6)(B).'.

(b) SSI AMENDMENT- 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 sentence: `In any case in which a representative payee that is an organization (regardless of whether it is a `qualified organization' within the meaning of subparagraph (D)(ii)) misuses all or part of an individual's benefit paid to such 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 such benefit so misused. The provisions of this subparagraph are subject to the limitations of subparagraph (F)(ii).'.

(c) 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 of Social Security makes a determination of misuse after the date of enactment of this Act.

SEC. 3. BONDING AND LICENSING REQUIREMENTS APPLICABLE TO NONGOVERNMENTAL ORGANIZATIONAL REPRESENTATIVE PAYEES.

(a) OASDI AMENDMENT- Section 205(j)(4)(B) of the Social Security Act (42 U.S.C. 405(j)(4)(B)) is amended by striking `is bonded or licensed in each State in which it serves as a representative payee' and inserting `provides a bond that meets the requirements specified by the Commissioner of Social Security and is licensed in each State in which it serves as a representative payee (if licensing is available in such State)'.

(b) SSI AMENDMENT- Section 1631(a)(2)(D)(ii)(I) of such Act (42 U.S.C. 1383(a)(2)(D)(ii)(I)) is amended to read as follows:

`(I) provides a bond that meets the requirements specified by the Commissioner of Social Security and is licensed in each State in which it serves as a representative payee (if licensing is available in such State); and'.

(c) EFFECTIVE DATE- The amendments made by this section shall take effect on the first day of the thirteenth month beginning after the date of enactment of this Act.

SEC. 4. FEE FORFEITURE IN CASE OF BENEFIT MISUSE BY QUALIFIED ORGANIZATIONAL REPRESENTATIVE PAYEES.

(a) OASDI AMENDMENT- Section 205(j)(4)(A) of the Social Security Act (42 U.S.C. 405(j)(4)(A)) is amended--

(1) in clause (i), by striking `A qualified organization' and inserting `Except as provided in clause (iii), a qualified organization'; and

(2) by adding at the end the following new clause:

`(iii) 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 has misused all or part of the individual's benefit, and any amount 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).'.

(b) SSI AMENDMENT- Section 1631(a)(2)(D) of such Act (42 U.S.C. 1383(a)(2)(D)) is amended--

(1) in clause (i), by striking `A qualified organization' and inserting `Except as provided in clause (v), a qualified organization'; and

(2) by adding at the end the following new clause:

`(v) 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 has misused all or part of the individual's benefit, and any amount 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).'.

(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 makes a determination of misuse after the date of enactment of this Act.

SEC. 5. LIABILITY OF NONGOVERNMENTAL REPRESENTATIVE PAYEES FOR MISUSED BENEFITS.

(a) OASDI AMENDMENT- Section 205(j) of the Social Security Act (42 U.S.C. 405(j)) is amended by redesignating paragraphs (6) and (7) as paragraphs (7) and (8), respectively, and inserting after paragraph (5) the following new paragraph:

`(6)(A) If the Commissioner of Social Security or a court of competent jurisdiction determines that a representative payee that is not a 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 to such individual or the individual's alternative representative payee.

`(B) The total of the amount certified to such individual or the individual's alternative representative payee under subparagraph (A) and the amount certified under paragraph (5) shall not exceed the total benefit amount misused by the representative payee with respect to such individual.'.

(b) SSI AMENDMENT- Section 1631(a)(2) of such Act (42 U.S.C. 1383(a)(2)) is amended by redesignating subparagraphs (F), (G), and (H) as subparagraphs (G), (H), and (I), respectively, and inserting after subparagraph (E) the following new subparagraph:

`(F)(i) If the Commissioner of Social Security or a court of competent jurisdiction determines that a representative payee that is not a State or local government agency has misused all or part of an individual's benefit that was paid to such representative payee under this paragraph, 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. Upon recovering all or any part of such amount, the Commissioner shall make payment of an amount equal to the recovered amount to such individual or the individual's alternative representative payee.

`(ii) The total of the amount paid to such individual or the individual's alternative representative payee under clause (i) and the amount paid under subparagraph (E) shall not exceed the total benefit amount misused by the representative payee with respect to such individual.'.

(c) 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 makes a determination of misuse after the date of enactment of this Act.

SEC. 6. EXTENSION OF THE CIVIL MONETARY PENALTY AUTHORITY.

(a) IN GENERAL- Section 1129(a) of the Social Security Act (42 U.S.C. 1320a-8(a)) is amended--

(1) by striking `(A)' and `(B)' and inserting `(i)' and `(ii)', respectively;

(2) by striking `(a)(1)' and inserting `(a)(1)(A)';

(3) by striking `(2)' and inserting `(B)'; and

(4) by adding at the end the following new paragraph:

`(2) Any person (including an organization, agency, or other entity (other than a State or local government agency)) who having received, while acting in the capacity as representative payee pursuant to section 205(j) or section 1631(a)(2), a payment under title II or title 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 violation.'.

(b) 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'.

(c) EFFECTIVE DATE- The amendments made by this section shall be effective with respect to violations committed after the date of enactment of this Act.

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