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108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     108-46

======================================================================



 
                 SOCIAL SECURITY PROTECTION ACT OF 2003

                                _______
                                

 March 24, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Thomas, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 743]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 743) 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 
protections, and for other purposes, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.

                                CONTENTS

                                                                   Page
 I. Summary and Background...........................................23
        A. Purpose and Summary...................................    23
        B. Background and Need for Legislation...................    24
        C. Legislative History...................................    25
II. Explanation of the Bill..........................................27
    Title I. Protection of Beneficiaries.............................27
        Subtitle A--Representative Payees........................    27
        A. Authority to reissue benefits misused by 
            organizational representative payees (sec. 101 of the 
            bill)................................................    27
        B. Oversight of representative payees (sec. 102 of the 
            bill)................................................    28
        C. Disqualification from service as representative payee 
            of persons convicted of offenses resulting in 
            imprisonment for more than 1 year, or fleeing 
            prosecution, custody, or confinement (sec. 103 of the 
            bill)................................................    29
        D. Fee forfeiture in case of benefit misuse by 
            representative payees (sec. 104 of the bill).........    30
        E. Liability of representative payees for misused 
            benefits (sec. 105 of the bill)......................    31
        F. Authority to redirect delivery of benefit payments 
            when a representative payee fails to provide required 
            accounting (sec. 106 of the bill)....................    31
        Subtitle B--Enforcement..................................    32
        G. Civil monetary penalty authority with respect to 
            wrongful conversions by representative payees (sec. 
            111 of the bill).....................................    32
    Title II. Program Protections....................................33
        A. Civil monetary penalty authority with respect to 
            knowing withholding of material facts (sec. 201 of 
            the bill)............................................    33
        B. Issuance by Commissioner of Social Security of 
            receipts to acknowledge submission of reports of 
            changes in work or earnings status of disabled 
            beneficiaries (sec. 202 of the bill).................    34
        C. Denial of Title II benefits to persons fleeing 
            prosecution, custody, or confinement, and to persons 
            violating probation or parole (sec. 203 of the bill).    35
        D. Requirements relating to offers to provide for a fee a 
            product or service available without charge from the 
            Social Security Administration (sec. 204 of the bill)    36
        E. Refusal to recognize certain individuals as claimant 
            representatives (sec. 205 of the bill)...............    37
        F. Penalty for corrupt or forcible interference with 
            administration of Social Security Act (sec. 206 of 
            the bill)............................................    38
        G. Use of symbols, emblems, or names in reference to 
            Social Security or Medicare (sec. 207 of the bill)...    39
        H. Disqualification from payment during trial work period 
            upon conviction of fraudulent concealment of work 
            activity (sec. 208 of the bill)......................    40
        I. Authority for judicial orders of restitution (sec. 209 
            of the bill).........................................    41
    Title III. Attorney Fee Payment System Improvements..............42
        A. Cap on attorney assessments (sec. 301 of the bill)....    42
        B. Extension of attorney fee payment system to Title XVI 
            claims (sec. 302 of the bill)........................    42
    Title IV. Miscellaneous and Technical Amendments.................43
        Subtitle A--Amendments relating to the Ticket to Work and 
            Work Incentives Improvement Act of 1999..............    43
        A. Application of demonstration authority sunset date to 
            new projects (sec. 401 of the bill)..................    43
        B. Expansion of waiver authority available in connection 
            with demonstration projects providing for reductions 
            in disability insurance benefits based on earnings 
            (sec. 402 of the bill)...............................    44
        C. Funding of demonstration projects provided for 
            reductions in disability insurance benefits based on 
            earnings (sec. 403 of the bill)......................    45
        D. Availability of Federal and State work incentive 
            services to additional individuals (sec. 404 of the 
            bill)................................................    46
        E. Technical amendment clarifying treatment for certain 
            purposes of individual work plans under the Ticket to 
            Work and Self-Sufficiency Program (sec. 405 of the 
            bill)................................................    47
        Subtitle B--Miscellaneous Amendments.....................    49
        F. Elimination of transcript requirement in remand cases 
            fully favorable to the claimant (sec. 411 of the 
            bill)................................................    49
        G. Nonpayment of benefits upon removal from the United 
            States (sec. 412 of the bill)........................    49
        H. Reinstatement of certain reporting requirements (sec. 
            413 of the bill).....................................    50
        I. Clarification of definitions regarding certain 
            survivor benefits (sec. 414 of the bill).............    50
        J. Clarification respecting the FICA and SECA tax 
            exemptions for an individual whose earnings are 
            subject to the laws of a totalization agreement 
            partner (sec. 415 of the bill).......................    51
        K. Coverage under divided retirement system for public 
            employees in Kentucky (sec. 416 of the bill).........    52
        L. Compensation for the Social Security Advisory Board 
            (sec. 417 of the bill)...............................    53
        M. 60-month period of employment requirement for 
            application of government pension offset exemption 
            (sec. 418 of the bill)...............................    54
        Subtitle C--Technical Amendments.........................    55
        N. Technical correction relating to responsible agency 
            head (sec. 421 of the bill)..........................    55
        O. Technical correction relating to retirement benefits 
            of ministers (sec. 422 of the bill)..................    56
        P. Technical corrections relating to domestic employment 
            (sec. 423 of the bill)...............................    56
        Q. Technical corrections of outdated references (sec. 424 
            of the bill).........................................    57
        R. Technical correction respecting self-employment income 
            in community property States (sec. 425 of the bill)..    57
III.Votes of the Committee...........................................58

IV. Budget Effects of the Bill.......................................60
        A. Committee Estimate of Budgetary Effects...............    60
        B. Statement Regarding New Budget Authority and Tax 
            Expenditures Budget Authority........................    60
        C. Cost Estimate Prepared by the Congressional Budget 
            Office...............................................    60
        D. Macroeconomic Impact Analysis.........................    70
 V. Other Matters To Be Discussed Under the Rules of the House.......70
        A. Committee Oversight Findings and Recommendations......    70
        B. Statement of General Performance Goals and Objectives.    70
        C. Constitutional Authority Statement....................    70
        D. Information Relating to Unfunded Mandates.............    71
        E. Applicability of House Rule XXI 5(b)..................    71
        F. Tax Complexity Analysis...............................    71
VI. Changes in Existing Law Made by the Bill, as Reported............71

      The amendment is as follows:
      Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Social Security 
Protection Act of 2003''.
  (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 of 
persons convicted of offenses resulting in imprisonment for more than 1 
year or fleeing prosecution, custody, or confinement.
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 
representative 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. Issuance by Commissioner of Social Security of receipts to 
acknowledge submission of reports of changes in work or earnings status 
of disabled beneficiaries.
Sec. 203. Denial of title II benefits to persons fleeing prosecution, 
custody, or confinement, and to persons violating probation or parole.
Sec. 204. Requirements relating to offers to provide for a fee a 
product or service available without charge from the Social Security 
Administration.
Sec. 205. Refusal to recognize certain individuals as claimant 
representatives.
Sec. 206. Penalty for corrupt or forcible interference with 
administration of Social Security Act.
Sec. 207. Use of symbols, emblems, or names in reference to social 
security or medicare.
Sec. 208. Disqualification from payment during trial work period upon 
conviction of fraudulent concealment of work activity.
Sec. 209. Authority for judicial orders of restitution.

          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.

            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 
demonstration projects providing for reductions in disability insurance 
benefits based on earnings.
Sec. 403. Funding of demonstration projects provided for reductions in 
disability 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 individual work plans under the Ticket to Work and Self-Sufficiency 
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. Clarification of definitions regarding certain survivor 
benefits.
Sec. 415. Clarification respecting the FICA and SECA tax exemptions for 
an individual whose earnings are subject to the laws of a totalization 
agreement partner.
Sec. 416. Coverage under divided retirement system for public employees 
in Kentucky.
Sec. 417. Compensation for the Social Security Advisory Board.
Sec. 418. 60-month period of employment requirement for application of 
government pension offset exemption.

                    Subtitle C--Technical Amendments

Sec. 421. Technical correction relating to responsible agency head.
Sec. 422. Technical correction relating to retirement benefits of 
ministers.
Sec. 423. Technical corrections relating to domestic employment.
Sec. 424. Technical corrections of outdated references.
Sec. 425. 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 that--
          ``(A) is not an individual (regardless of whether it is a 
        `qualified organization' within the meaning of paragraph 
        (4)(B)); 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 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 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 (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 benefits 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 
Commissioner 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)) (as amended by section 
        209(b)(1) of this Act) is amended further by inserting after 
        the first sentence the following new sentences: ``In any case 
        in which a representative payee that--
                  ``(A) 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 Social Security shall 
        pay 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 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 payment under this title for the use and 
benefit of another person under this title and converts such payment, 
or any part thereof, to a use other than for the use and benefit of 
such person. The Commissioner of Social Security may prescribe by 
regulation the meaning of the term `use and benefit' 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 striking 
        ``for his or her benefit'' and inserting ``for his or her use 
        and benefit''.
  (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 that--
          ``(i) 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 individuals 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 pay to 
the beneficiary or the beneficiary's alternative representative payee 
an amount equal to the amount of the benefit so misused. The provisions 
of this subparagraph are subject to the limitations of subparagraph 
(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 period 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 individual'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 benefits 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 
Commissioner 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 Commissioner makes the determination of misuse on or after 
January 1, 1995.

SEC. 102. OVERSIGHT OF REPRESENTATIVE PAYEES.

  (a) Certification of Bonding and Licensing Requirements for 
Nongovernmental Organizational 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 agency 
                licensed or bonded by the State'' in subclause (I) and 
                inserting ``a certified community-based nonprofit 
                social service agency (as defined in paragraph (9))'';
                  (B) in paragraph (3)(F), by striking ``community-
                based nonprofit social service agencies'' and inserting 
                ``certified community-based nonprofit social service 
                agencies (as defined in paragraph (9))'';
                  (C) in paragraph (4)(B), by striking ``any community-
                based nonprofit social service agency which is bonded 
                or licensed in each State in which it serves as a 
                representative payee'' and inserting ``any certified 
                community-based nonprofit social service agency (as 
                defined in paragraph (9))''; and
                  (D) by adding after paragraph (8) (as added by 
                section 101(a)(2) of this Act) the following new 
                paragraph:
  ``(9) For purposes of this subsection, the term `certified community-
based nonprofit social service agency' means a community-based 
nonprofit social service agency which is in compliance with 
requirements, under regulations which shall be prescribed by the 
Commissioner, for annual certification to the Commissioner that it is 
bonded in accordance with requirements specified by the Commissioner 
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 
certification.''.
          (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 subclause (I) and 
                inserting ``a certified community-based nonprofit 
                social service agency (as defined in subparagraph 
                (I))'';
                  (B) in subparagraph (D)(ii)--
                          (i) by striking ``or any community-based'' 
                        and all that follows through ``in accordance'' 
                        in subclause (II) and inserting ``or any 
                        certified community-based nonprofit social 
                        service agency (as defined in subparagraph 
                        (I)), if the agency, in accordance'';
                          (ii) by redesignating items (aa) and (bb) as 
                        subclauses (I) and (II), respectively (and 
                        adjusting the margination accordingly); 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 `certified community-
based nonprofit social service agency' means a community-based 
nonprofit social service agency which is in compliance with 
requirements, under regulations which shall be prescribed by the 
Commissioner, for annual certification to the Commissioner that it is 
bonded in accordance with requirements specified by the Commissioner 
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 the Commissioner. Any such 
annual certification shall include a copy of any independent audit on 
the agency which may have been performed since the previous 
certification.''.
          (3) Effective date.--The amendments made by this subsection 
        shall take effect on the first day of the thirteenth month 
        beginning after the date of the enactment of this Act.
  (b) Periodic Onsite Review.--
          (1) Title ii amendment.--Section 205(j)(6) of such Act (42 
        U.S.C. 405(j)(6)) is amended to read as follows:
  ``(6)(A) In addition to such other reviews of representative payees 
as the Commissioner of Social Security may otherwise conduct, the 
Commissioner shall provide for the periodic onsite review of any person 
or agency located in the United States that receives the benefits 
payable under this title (alone or in combination with benefits payable 
under title VIII or title XVI) to another individual pursuant to the 
appointment of such person or agency as a representative payee under 
this subsection, section 807, or section 1631(a)(2) in any case in 
which--
          ``(i) the representative payee is a person who serves in that 
        capacity with respect to 15 or more such individuals;
          ``(ii) the representative payee is a certified community-
        based nonprofit social service agency (as defined in paragraph 
        (9) of this subsection or section 1631(a)(2)(I)); or
          ``(iii) the representative payee is an agency (other than an 
        agency described in clause (ii)) that serves in that capacity 
        with respect to 50 or more such individuals.
  ``(B) Within 120 days after the end of each fiscal year, the 
Commissioner shall submit to the Committee on Ways and Means of the 
House of Representatives and the Committee on Finance of the Senate a 
report on the results of periodic onsite reviews conducted during the 
fiscal year pursuant to subparagraph (A) and of any other reviews of 
representative payees conducted during such fiscal year in connection 
with benefits under this title. Each such report shall describe in 
detail all problems identified in such reviews and any corrective 
action taken or planned to be taken to correct such problems, and shall 
include--
          ``(i) the number of such reviews;
          ``(ii) the results of such reviews;
          ``(iii) the number of cases in which the representative payee 
        was changed and why;
          ``(iv) the number of cases involving the exercise of 
        expedited, targeted oversight of the representative payee by 
        the Commissioner conducted upon receipt of an allegation of 
        misuse of funds, failure to pay a vendor, or a similar 
        irregularity;
          ``(v) the number of cases discovered in which there was a 
        misuse of funds;
          ``(vi) how any such cases of misuse of funds were dealt with 
        by the Commissioner;
          ``(vii) the final disposition of such cases of misuse of 
        funds, including any criminal penalties imposed; and
          ``(viii) such other information as the Commissioner deems 
        appropriate.''.
          (2) Title viii amendment.--Section 807 of such Act (as 
        amended by section 101(b)(2) of this Act) is amended further by 
        adding at the end the following new subsection:
  ``(k) Periodic Onsite Review.--(1) In addition to such other reviews 
of representative payees as the Commissioner of Social Security may 
otherwise conduct, the Commissioner may provide for the periodic onsite 
review of any person or agency that receives the benefits payable under 
this title (alone or in combination with benefits payable under title 
II or title XVI) to another individual pursuant to the appointment of 
such person or agency as a representative payee under this section, 
section 205(j), or section 1631(a)(2) in any case in which--
          ``(A) the representative payee is a person who serves in that 
        capacity with respect to 15 or more such individuals; or
          ``(B) the representative payee is an agency that serves in 
        that capacity with respect to 50 or more such individuals.
  ``(2) Within 120 days after the end of each fiscal year, the 
Commissioner shall submit to the Committee on Ways and Means of the 
House of Representatives and the Committee on Finance of the Senate a 
report on the results of periodic onsite reviews conducted during the 
fiscal year pursuant to paragraph (1) and of any other reviews of 
representative payees conducted during such fiscal year in connection 
with benefits under this title. Each such report shall describe in 
detail all problems identified in such reviews and any corrective 
action taken or planned to be taken to correct such problems, and shall 
include--
          ``(A) the number of such reviews;
          ``(B) the results of such reviews;
          ``(C) the number of cases in which the representative payee 
        was changed and why;
          ``(D) the number of cases involving the exercise of 
        expedited, targeted oversight of the representative payee by 
        the Commissioner conducted upon receipt of an allegation of 
        misuse of funds, failure to pay a vendor, or a similar 
        irregularity;
          ``(E) the number of cases discovered in which there was a 
        misuse of funds;
          ``(F) how any such cases of misuse of funds were dealt with 
        by the Commissioner;
          ``(G) the final disposition of such cases of misuse of funds, 
        including any criminal penalties imposed; and
          ``(H) such other information as the Commissioner deems 
        appropriate.''.
          (3) Title xvi amendment.--Section 1631(a)(2)(G) of such Act 
        (42 U.S.C. 1383(a)(2)(G)) is amended to read as follows:
  ``(G)(i) In addition to such other reviews of representative payees 
as the Commissioner of Social Security may otherwise conduct, the 
Commissioner shall provide for the periodic onsite review of any person 
or agency that receives the benefits payable under this title (alone or 
in combination with benefits payable under title II or title VIII) to 
another individual pursuant to the appointment of the person or agency 
as a representative payee under this paragraph, section 205(j), or 
section 807 in any case in which--
          ``(I) the representative payee is a person who serves in that 
        capacity with respect to 15 or more such individuals;
          ``(II) the representative payee is a certified community-
        based nonprofit social service agency (as defined in 
        subparagraph (I) of this paragraph or section 205(j)(9)); or
          ``(III) the representative payee is an agency (other than an 
        agency described in subclause (II)) that serves in that 
        capacity with respect to 50 or more such individuals.
  ``(ii) Within 120 days after the end of each fiscal year, the 
Commissioner shall submit to the Committee on Ways and Means of the 
House of Representatives and the Committee on Finance of the Senate a 
report on the results of periodic onsite reviews conducted during the 
fiscal year pursuant to clause (i) and of any other reviews of 
representative payees conducted during such fiscal year in connection 
with benefits under this title. Each such report shall describe in 
detail all problems identified in the reviews and any corrective action 
taken or planned to be taken to correct the problems, and shall 
include--
          ``(I) the number of the reviews;
          ``(II) the results of such reviews;
          ``(III) the number of cases in which the representative payee 
        was changed and why;
          ``(IV) the number of cases involving the exercise of 
        expedited, targeted oversight of the representative payee by 
        the Commissioner conducted upon receipt of an allegation of 
        misuse of funds, failure to pay a vendor, or a similar 
        irregularity;
          ``(V) the number of cases discovered in which there was a 
        misuse of funds;
          ``(VI) how any such cases of misuse of funds were dealt with 
        by the Commissioner;
          ``(VII) the final disposition of such cases of misuse of 
        funds, including any criminal penalties imposed; and
          ``(VIII) such other information as the Commissioner deems 
        appropriate.''.

SEC. 103. DISQUALIFICATION FROM SERVICE AS REPRESENTATIVE PAYEE OF 
                    PERSONS CONVICTED OF OFFENSES RESULTING IN 
                    IMPRISONMENT FOR MORE THAN 1 YEAR OR FLEEING 
                    PROSECUTION, CUSTODY, OR CONFINEMENT.

  (a) Title II Amendments.--Section 205(j)(2) of the Social Security 
Act (42 U.S.C. 405(j)(2)) is amended--
          (1) in subparagraph (B)(i)--
                  (A) by striking ``and'' at the end of subclause 
                (III);
                  (B) by redesignating subclause (IV) as subclause 
                (VI); and
                  (C) by inserting after subclause (III) the following 
                new subclauses:
          ``(IV) obtain information concerning whether such person has 
        been convicted of any other offense under Federal or State law 
        which resulted in imprisonment for more than 1 year,
          ``(V) obtain information concerning whether such person is a 
        person described in section 202(x)(1)(A)(iv), and'';
          (2) in subparagraph (B), by adding at the end the following 
        new clause:
  ``(iii) Notwithstanding the provisions of section 552a of title 5, 
United States Code, or any other provision of Federal or State law 
(other than section 6103 of the Internal Revenue Code of 1986 and 
section 1106(c) of this Act), the Commissioner shall furnish any 
Federal, State, or local law enforcement officer, upon the written 
request of the officer, with the current address, social security 
account number, and photograph (if applicable) of any person 
investigated under this paragraph, if the officer furnishes the 
Commissioner with the name of such person and such other identifying 
information as may reasonably be required by the Commissioner to 
establish the unique identity of such person, and notifies the 
Commissioner that--
          ``(I) such person is described in section 202(x)(1)(A)(iv),
          ``(II) such person has information that is necessary for the 
        officer to conduct the officer's official duties, and
          ``(III) the location or apprehension of such person is within 
        the officer's official duties.'';
          (3) in subparagraph (C)(i)(II), by striking ``subparagraph 
        (B)(i)(IV),,'' and inserting ``subparagraph (B)(i)(VI)'' and 
        striking ``section 1631(a)(2)(B)(ii)(IV)'' and inserting 
        ``section 1631(a)(2)(B)(ii)(VI)''; and
          (4) in subparagraph (C)(i)--
                  (A) by striking ``or'' at the end of subclause (II);
                  (B) by striking the period at the end of subclause 
                (III) and inserting a comma; and
                  (C) by adding at the end the following new 
                subclauses:
          ``(IV) such person has previously been convicted as described 
        in subparagraph (B)(i)(IV), unless the Commissioner determines 
        that such certification would be appropriate notwithstanding 
        such conviction, or
          ``(V) such person is person described in section 
        202(x)(1)(A)(iv).''.
  (b) Title VIII Amendments.--Section 807 of such Act (42 U.S.C. 1007) 
is amended--
          (1) in subsection (b)(2)--
                  (A) by striking ``and'' at the end of subparagraph 
                (C);
                  (B) by redesignating subparagraph (D) as subparagraph 
                (F); and
                  (C) by inserting after subparagraph (C) the following 
                new subparagraphs:
                  ``(D) obtain information concerning whether such 
                person has been convicted of any other offense under 
                Federal or State law which resulted in imprisonment for 
                more than 1 year;
                  ``(E) obtain information concerning whether such 
                person is a person described in section 804(a)(2); 
                and'';
          (2) in subsection (b), by adding at the end the following new 
        paragraph:
          ``(3) Notwithstanding the provisions of section 552a of title 
        5, United States Code, or any other provision of Federal or 
        State law (other than section 6103 of the Internal Revenue Code 
        of 1986 and section 1106(c) of this Act), the Commissioner 
        shall furnish any Federal, State, or local law enforcement 
        officer, upon the written request of the officer, with the 
        current address, social security account number, and photograph 
        (if applicable) of any person investigated under this 
        subsection, if the officer furnishes the Commissioner with the 
        name of such person and such other identifying information as 
        may reasonably be required by the Commissioner to establish the 
        unique identity of such person, and notifies the Commissioner 
        that--
                  ``(A) such person is described in section 804(a)(2),
                  ``(B) such person has information that is necessary 
                for the officer to conduct the officer's official 
                duties, and
                  ``(C) the location or apprehension of such person is 
                within the officer's official duties.''; and
          (3) in subsection (d)(1)--
                  (A) by striking ``or'' at the end of subparagraph 
                (B);
                  (B) by striking the period at the end of subparagraph 
                (C) and inserting a semicolon; and
                  (C) by adding at the end the following new 
                subparagraphs:
                  ``(D) such person has previously been convicted as 
                described in subsection (b)(2)(D), unless the 
                Commissioner determines that such payment would be 
                appropriate notwithstanding such conviction; or
                  ``(E) such person is a person described in section 
                804(a)(2).''.
  (c) Title XVI Amendments.--Section 1631(a)(2)(B) of such Act (42 
U.S.C. 1383(a)(2)(B)) is amended--
          (1) in clause (ii)--
                  (A) by striking ``and'' at the end of subclause 
                (III);
                  (B) by redesignating subclause (IV) as subclause 
                (VI); and
                  (C) by inserting after subclause (III) the following 
                new subclauses:
          ``(IV) obtain information concerning whether the person has 
        been convicted of any other offense under Federal or State law 
        which resulted in imprisonment for more than 1 year;
          ``(V) obtain information concerning whether such person is a 
        person described in section 1611(e)(4)(A); and'';
          (2) in clause (iii)(II)--
                  (A) by striking ``clause (ii)(IV)'' and inserting 
                ``clause (ii)(VI)''; and
                  (B) by striking ``section 205(j)(2)(B)(i)(IV)'' and 
                inserting ``section 205(j)(2)(B)(i)(VI)'';
          (3) in clause (iii)--
                  (A) by striking ``or'' at the end of subclause (II);
                  (B) by striking the period at the end of subclause 
                (III) and inserting a semicolon; and
                  (C) by adding at the end the following new 
                subclauses:
          ``(IV) the person has previously been convicted as described 
        in clause (ii)(IV) of this subparagraph, unless the 
        Commissioner determines that the payment would be appropriate 
        notwithstanding the conviction; or
          ``(V) such person is a person described in section 
        1611(e)(4)(A).''; and
          (4) by adding at the end the following new clause:
  ``(xiv) Notwithstanding the provisions of section 552a of title 5, 
United States Code, or any other provision of Federal or State law 
(other than section 6103 of the Internal Revenue Code of 1986 and 
section 1106(c) of this Act), the Commissioner shall furnish any 
Federal, State, or local law enforcement officer, upon the written 
request of the officer, with the current address, social security 
account number, and photograph (if applicable) of any person 
investigated under this subparagraph, if the officer furnishes the 
Commissioner with the name of such person and such other identifying 
information as may reasonably be required by the Commissioner to 
establish the unique identity of such person, and notifies the 
Commissioner that--
          ``(I) such person is described in section 1611(e)(4)(A),
          ``(II) such person has information that is necessary for the 
        officer to conduct the officer's official duties, and
          ``(III) the location or apprehension of such person is within 
        the officer's official duties.''.
  (d) Effective Date.--The amendments made by this section shall take 
effect on the first day of the thirteenth month beginning after the 
date of the enactment of this Act.
  (e) Report to the Congress.--The Commissioner of Social Security, in 
consultation with the Inspector General of the Social Security 
Administration, shall prepare a report evaluating whether the existing 
procedures and reviews for the qualification (including 
disqualification) of representative payees are sufficient to enable the 
Commissioner to protect benefits from being misused by representative 
payees. The Commissioner shall submit the report to the Committee on 
Ways and Means of the House of Representatives and the Committee on 
Finance of the Senate no later than 270 days after the date of the 
enactment of this Act. The Commissioner shall include in such report 
any recommendations that the Commissioner considers appropriate.

SEC. 104. FEE FORFEITURE IN CASE OF BENEFIT MISUSE BY REPRESENTATIVE 
                    PAYEES.

  (a) Title II Amendments.--Section 205(j)(4)(A)(i) of the Social 
Security Act (42 U.S.C. 405(j)(4)(A)(i)) is amended--
          (1) in the first sentence, by striking ``A'' and inserting 
        ``Except as provided in the next sentence, a''; and
          (2) in the second sentence, by striking ``The Secretary'' and 
        inserting the following:
``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 
misused all or part of the individual's benefit, and any amount so 
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). The Commissioner''.
  (b) Title XVI Amendments.--Section 1631(a)(2)(D)(i) of such Act (42 
U.S.C. 1383(a)(2)(D)(i)) is amended--
          (1) in the first sentence, by striking ``A'' and inserting 
        ``Except as provided in the next sentence, a''; and
          (2) in the second sentence, by striking ``The Commissioner'' 
        and inserting the following: ``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 
        misused all or part of the individual's benefit, and any amount 
        so 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). The Commissioner''.
  (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 or a 
court of competent jurisdiction makes the determination of misuse after 
180 days after the date of the enactment of this Act.

SEC. 105. LIABILITY OF REPRESENTATIVE PAYEES FOR MISUSED BENEFITS.

  (a) Title II Amendments.--Section 205(j) of the Social Security Act 
(42 U.S.C. 405(j)) (as amended by sections 101 and 102) is amended 
further--
          (1) by redesignating paragraphs (7), (8), and (9) as 
        paragraphs (8), (9), and (10), respectively;
          (2) in paragraphs (2)(C)(v), (3)(F), and (4)(B), by striking 
        ``paragraph (9)'' and inserting ``paragraph (10)'';
          (3) in paragraph (6)(A)(ii), by striking ``paragraph (9)'' 
        and inserting ``paragraph (10)''; and
          (4) by inserting after paragraph (6) the following new 
        paragraph:
  ``(7)(A) If the Commissioner of Social Security or a court of 
competent jurisdiction determines that a representative payee that is 
not a Federal, 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 for payment to such individual or such 
individual's alternative representative payee.
  ``(B) The total of the amount certified for payment to such 
individual or such individual's alternative representative payee under 
subparagraph (A) and the amount certified for payment under paragraph 
(5) may not exceed the total benefit amount misused by the 
representative payee with respect to such individual.''.
  (b) Title VIII Amendment.--Section 807 of such Act (as amended by 
section 102(b)(2)) is amended further by adding at the end the 
following new subsection:
  ``(l) Liability for Misused Amounts.--
          ``(1) In general.--If the Commissioner of Social Security or 
        a court of competent jurisdiction determines that a 
        representative payee that is not a Federal, State, or local 
        government agency has misused all or part of a qualified 
        individual's benefit that was paid to such representative payee 
        under this section, 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 paragraph (2), 
        upon recovering all or any part of such amount, the 
        Commissioner shall make payment of an amount equal to the 
        recovered amount to such qualified individual or such qualified 
        individual's alternative representative payee.
          ``(2) Limitation.--The total of the amount paid to such 
        individual or such individual's alternative representative 
        payee under paragraph (1) and the amount paid under subsection 
        (i) may not exceed the total benefit amount misused by the 
        representative payee with respect to such individual.''.
  (c) Title XVI Amendments.--Section 1631(a)(2) of such Act (42 U.S.C. 
1383(a)(2)) (as amended by section 102(b)(3)) is amended further--
          (1) in subparagraph (G)(i)(II), by striking ``section 
        205(j)(9)'' and inserting ``section 205(j)(10)''; and
          (2) by striking subparagraph (H) and inserting the following:
  ``(H)(i) If the Commissioner of Social Security or a court of 
competent jurisdiction determines that a representative payee that is 
not a Federal, State, or local government agency has misused all or 
part of an individual's benefit that was paid to the representative 
payee under this paragraph, the representative payee shall be liable 
for the amount misused, and the 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 the overpayments. 
Subject to clause (ii), upon recovering all or any part of the amount, 
the Commissioner shall make payment of an amount equal to the recovered 
amount to such individual or such individual's alternative 
representative payee.
  ``(ii) The total of the amount paid to such individual or such 
individual's alternative representative payee under clause (i) and the 
amount paid under subparagraph (E) may not exceed the total benefit 
amount misused by the representative payee with respect to such 
individual.''.
  (d) 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 or a court of competent 
jurisdiction makes the determination of misuse after 180 days after the 
date of the enactment of this Act.

SEC. 106. AUTHORITY TO REDIRECT DELIVERY OF BENEFIT PAYMENTS WHEN A 
                    REPRESENTATIVE PAYEE FAILS TO PROVIDE REQUIRED 
                    ACCOUNTING.

  (a) Title II Amendments.--Section 205(j)(3) of the Social Security 
Act (42 U.S.C. 405(j)(3)) (as amended by sections 102(a)(1)(B) and 
105(a)(2)) is amended--
          (1) by redesignating subparagraphs (E) and (F) as 
        subparagraphs (F) and (G), respectively; and
          (2) by inserting after subparagraph (D) the following new 
        subparagraph:
  ``(E) In any case in which the person described in subparagraph (A) 
or (D) receiving payments on behalf of another fails to submit a report 
required by the Commissioner of Social Security under subparagraph (A) 
or (D), the Commissioner may, after furnishing notice to such person 
and the individual entitled to such payment, require that such person 
appear in person at a field office of the Social Security 
Administration serving the area in which the individual resides in 
order to receive such payments.''.
  (b) Title VIII Amendments.--Section 807(h) of such Act (42 U.S.C. 
1007(h)) is amended--
          (1) by redesignating paragraphs (3) and (4) as paragraphs (4) 
        and (5), respectively; and
          (2) by inserting after paragraph (2) the following new 
        paragraph:
          ``(3) Authority to redirect delivery of benefit payments when 
        a representative payee fails to provide required accounting.--
        In any case in which the person described in paragraph (1) or 
        (2) receiving benefit payments on behalf of a qualified 
        individual fails to submit a report required by the 
        Commissioner of Social Security under paragraph (1) or (2), the 
        Commissioner may, after furnishing notice to such person and 
        the qualified individual, require that such person appear in 
        person at a United States Government facility designated by the 
        Social Security Administration as serving the area in which the 
        qualified individual resides in order to receive such benefit 
        payments.''.
  (c) Title XVI Amendment.--Section 1631(a)(2)(C) of such Act (42 
U.S.C. 1383(a)(2)(C)) is amended by adding at the end the following new 
clause:
  ``(v) In any case in which the person described in clause (i) or (iv) 
receiving payments on behalf of another fails to submit a report 
required by the Commissioner of Social Security under clause (i) or 
(iv), the Commissioner may, after furnishing notice to the person and 
the individual entitled to the payment, require that such person appear 
in person at a field office of the Social Security Administration 
serving the area in which the individual resides in order to receive 
such payments.''.
  (d) Effective Date.--The amendment made by this section shall take 
effect 180 days after the date of the enactment of this Act.

                        Subtitle B--Enforcement

SEC. 111. CIVIL MONETARY PENALTY AUTHORITY WITH RESPECT TO WRONGFUL 
                    CONVERSIONS BY REPRESENTATIVE PAYEES.

  (a) In General.--Section 1129(a) of the Social Security Act (42 
U.S.C. 1320a-8) is amended by adding at the end the following new 
paragraph:
  ``(3) Any person (including an organization, agency, or other entity) 
who, having received, while acting in the capacity of a representative 
payee pursuant to section 205(j), 807, or 1631(a)(2), a payment under 
title II, VIII, or 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 conversion. Such person shall also be 
subject to an assessment, in lieu of damages sustained by the United 
States resulting from the conversion, of not more than twice the amount 
of any payments so converted.''.
  (b) Effective Date.--The amendment made by this section shall apply 
with respect to violations committed after the date of the enactment of 
this Act.

                     TITLE II--PROGRAM PROTECTIONS

SEC. 201. CIVIL MONETARY PENALTY AUTHORITY WITH RESPECT TO KNOWING 
                    WITHHOLDING OF MATERIAL FACTS.

  (a) Treatment of Withholding of Material Facts.--
          (1) Civil penalties.--Section 1129(a)(1) of the Social 
        Security Act (42 U.S.C. 1320a-8(a)(1)) is amended--
                  (A) by striking ``who'' in the first sentence and 
                inserting ``who--'';
                  (B) by striking ``makes'' in the first sentence and 
                all that follows through ``shall be subject to,'' and 
                inserting the following:
          ``(A) makes, or causes to be made, a statement or 
        representation of a material fact, for use in determining any 
        initial or continuing right to or the amount of monthly 
        insurance benefits under title II or benefits or payments under 
        title VIII or XVI, that the person knows or should know is 
        false or misleading,
          ``(B) makes such a statement or representation for such use 
        with knowing disregard for the truth, or
          ``(C) omits from a statement or representation for such use, 
        or otherwise withholds disclosure of, a fact which the person 
        knows or should know is material to the determination of any 
        initial or continuing right to or the amount of monthly 
        insurance benefits under title II or benefits or payments under 
        title VIII or XVI, if the person knows, or should know, that 
        the statement or representation with such omission is false or 
        misleading or that the withholding of such disclosure is 
        misleading,
shall be subject to,'';
                  (C) by inserting ``or each receipt of such benefits 
                or payments while withholding disclosure of such fact'' 
                after ``each such statement or representation'' in the 
                first sentence;
                  (D) by inserting ``or because of such withholding of 
                disclosure of a material fact'' after ``because of such 
                statement or representation'' in the second sentence; 
                and
                  (E) by inserting ``or such a withholding of 
                disclosure'' after ``such a statement or 
                representation'' in the second sentence.
          (2) Administrative procedure for imposing penalties.--Section 
        1129A(a) of such Act (42 U.S.C. 1320a-8a(a)) is amended--
                  (A) by striking ``who'' the first place it appears 
                and inserting ``who--''; and
                  (B) by striking ``makes'' and all that follows 
                through ``shall be subject to,'' and inserting the 
                following:
          ``(1) makes, or causes to be made, a statement or 
        representation of a material fact, for use in determining any 
        initial or continuing right to or the amount of monthly 
        insurance benefits under title II or benefits or payments under 
        title XVI that the person knows or should know is false or 
        misleading,
          ``(2) makes such a statement or representation for such use 
        with knowing disregard for the truth, or
          ``(3) omits from a statement or representation for such use, 
        or otherwise withholds disclosure of, a fact which the person 
        knows or should know is material to the determination of any 
        initial or continuing right to or the amount of monthly 
        insurance benefits under title II or benefits or payments under 
        title XVI, if the person knows, or should know, that the 
        statement or representation with such omission is false or 
        misleading or that the withholding of such disclosure is 
        misleading,
shall be subject to,''.
  (b) Clarification of Treatment of Recovered Amounts.--Section 
1129(e)(2)(B) of such Act (42 U.S.C. 1320a-8(e)(2)(B)) is amended by 
striking ``In the case of amounts recovered arising out of a 
determination relating to title VIII or XVI,'' and inserting ``In the 
case of any other amounts recovered under this section,''.
  (c) 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''.
  (d) Effective Date.--The amendments made by this section shall apply 
with respect to violations committed after the date on which the 
Commissioner implements the centralized computer file described in 
section 202.

SEC. 202. ISSUANCE BY COMMISSIONER OF SOCIAL SECURITY OF RECEIPTS TO 
                    ACKNOWLEDGE SUBMISSION OF REPORTS OF CHANGES IN 
                    WORK OR EARNINGS STATUS OF DISABLED BENEFICIARIES.

  Effective as soon as possible, but not later than 1 year after the 
date of the enactment of this Act, until such time as the Commissioner 
of Social Security implements a centralized computer file recording the 
date of the submission of information by a disabled beneficiary (or 
representative) regarding a change in the beneficiary's work or 
earnings status, the Commissioner shall issue a receipt to the disabled 
beneficiary (or representative) each time he or she submits 
documentation, or otherwise reports to the Commissioner, on a change in 
such status.

SEC. 203. DENIAL OF TITLE II BENEFITS TO PERSONS FLEEING PROSECUTION, 
                    CUSTODY, OR CONFINEMENT, AND TO PERSONS VIOLATING 
                    PROBATION OR PAROLE.

  (a) In General.--Section 202(x) of the Social Security Act (42 U.S.C. 
402(x)) is amended--
          (1) in the heading, by striking ``Prisoners'' and all that 
        follows and inserting the following: ``Prisoners, Certain Other 
        Inmates of Publicly Funded Institutions, Fugitives, 
        Probationers, and Parolees'';
          (2) in paragraph (1)(A)(ii)(IV), by striking ``or'' at the 
        end;
          (3) in paragraph (1)(A)(iii), by striking the period at the 
        end and inserting a comma;
          (4) by inserting after paragraph (1)(A)(iii) the following:
          ``(iv) is fleeing to avoid prosecution, or custody or 
        confinement after conviction, under the laws of the place from 
        which the person flees, for a crime, or an attempt to commit a 
        crime, which is a felony under the laws of the place from which 
        the person flees, or which, in the case of the State of New 
        Jersey, is a high misdemeanor under the laws of such State, or
          ``(v) is violating a condition of probation or parole imposed 
        under Federal or State law.
In the case of an individual from whom such monthly benefits have been 
withheld pursuant to clause (iv) or (v), the Commissioner may, for good 
cause shown, pay such withheld benefits to the individual.''; and
          (5) in paragraph (3), by adding at the end the following new 
        subparagraph:
  ``(C) Notwithstanding the provisions of section 552a of title 5, 
United States Code, or any other provision of Federal or State law 
(other than section 6103 of the Internal Revenue Code of 1986 and 
section 1106(c) of this Act), the Commissioner shall furnish any 
Federal, State, or local law enforcement officer, upon the written 
request of the officer, with the current address, Social Security 
number, and photograph (if applicable) of any beneficiary under this 
title, if the officer furnishes the Commissioner with the name of the 
beneficiary, and other identifying information as reasonably required 
by the Commissioner to establish the unique identity of the 
beneficiary, and notifies the Commissioner that--
          ``(i) the beneficiary--
                  ``(I) is described in clause (iv) or (v) of paragraph 
                (1)(A); and
                  ``(II) has information that is necessary for the 
                officer to conduct the officer's official duties; and
          ``(ii) the location or apprehension of the beneficiary is 
        within the officer's official duties.''.
  (b) Regulations.--Not later than the first day of the first month 
that begins on or after the date that is 9 months after the date of the 
enactment of this Act, the Commissioner of Social Security shall 
promulgate regulations governing payment by the Commissioner, for good 
cause shown, of withheld benefits, pursuant to the last sentence of 
section 202(x)(1)(A) of the Social Security Act (as amended by 
subsection (a)).
  (c) Effective Date.--The amendments made by subsection (a) shall take 
effect on the first day of the first month that begins on or after the 
date that is 9 months after the date of the enactment of this Act.

SEC. 204. REQUIREMENTS RELATING TO OFFERS TO PROVIDE FOR A FEE A 
                    PRODUCT OR SERVICE AVAILABLE WITHOUT CHARGE FROM 
                    THE SOCIAL SECURITY ADMINISTRATION.

  (a) In General.--Section 1140 of the Social Security Act (42 U.S.C. 
1320b-10) is amended--
          (1) in subsection (a), by adding at the end the following new 
        paragraph:
  ``(4)(A) No person shall offer, for a fee, to assist an individual to 
obtain a product or service that the person knows or should know is 
provided free of charge by the Social Security Administration unless, 
at the time the offer is made, the person provides to the individual to 
whom the offer is tendered a notice that--
          ``(i) explains that the product or service is available free 
        of charge from the Social Security Administration, and
          ``(ii) complies with standards prescribed by the Commissioner 
        of Social Security respecting the content of such notice and 
        its placement, visibility, and legibility.
  ``(B) Subparagraph (A) shall not apply to any offer--
          ``(i) to serve as a claimant representative in connection 
        with a claim arising under title II, title VIII, or title XVI; 
        or
          ``(ii) to prepare, or assist in the preparation of, an 
        individual's plan for achieving self-support under title 
        XVI.''; and
          (2) in the heading, by striking ``prohibition of misuse of 
        symbols, emblems, or names in reference'' and inserting 
        ``prohibitions relating to references''.
  (b) Effective Date.--The amendments made by this section shall apply 
to offers of assistance made after the sixth month ending after the 
Commissioner of Social Security promulgates final regulations 
prescribing the standards applicable to the notice required to be 
provided in connection with such offer. The Commissioner shall 
promulgate such final regulations within 1 year after the date of the 
enactment of this Act.

SEC. 205. REFUSAL TO RECOGNIZE CERTAIN INDIVIDUALS AS CLAIMANT 
                    REPRESENTATIVES.

  Section 206(a)(1) of the Social Security Act (42 U.S.C. 406(a)(1)) is 
amended by inserting after the second sentence the following: 
``Notwithstanding the preceding sentences, the Commissioner, after due 
notice and opportunity for hearing, (A) may refuse to recognize as a 
representative, and may disqualify a representative already recognized, 
any attorney who has been disbarred or suspended from any court or bar 
to which he or she was previously admitted to practice or who has been 
disqualified from participating in or appearing before any Federal 
program or agency, and (B) may refuse to recognize, and may disqualify, 
as a non-attorney representative any attorney who has been disbarred or 
suspended from any court or bar to which he or she was previously 
admitted to practice. A representative who has been disqualified or 
suspended pursuant to this section from appearing before the Social 
Security Administration as a result of collecting or receiving a fee in 
excess of the amount authorized shall be barred from appearing before 
the Social Security Administration as a representative until full 
restitution is made to the claimant and, thereafter, may be considered 
for reinstatement only under such rules as the Commissioner may 
prescribe.''.

SEC. 206. PENALTY FOR CORRUPT OR FORCIBLE INTERFERENCE WITH 
                    ADMINISTRATION OF SOCIAL SECURITY ACT.

  Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.) is amended by inserting after section 1129A the following new 
section:
   ``attempts to interfere with administration of social security act
  ``Sec. 1129B. Whoever corruptly or by force or threats of force 
(including any threatening letter or communication) attempts to 
intimidate or impede any officer, employee, or contractor of the Social 
Security Administration (including any State employee of a disability 
determination service or any other individual designated by the 
Commissioner of Social Security) acting in an official capacity to 
carry out a duty under this Act, or in any other way corruptly or by 
force or threats of force (including any threatening letter or 
communication) obstructs or impedes, or attempts to obstruct or impede, 
the due administration of this Act, shall be fined not more than 
$5,000, imprisoned not more than 3 years, or both, except that if the 
offense is committed only by threats of force, the person shall be 
fined not more than $3,000, imprisoned not more than 1 year, or both. 
In this subsection, the term `threats of force' means threats of harm 
to the officer or employee of the United States or to a contractor of 
the Social Security Administration, or to a member of the family of 
such an officer or employee or contractor.''.

SEC. 207. USE OF SYMBOLS, EMBLEMS, OR NAMES IN REFERENCE TO SOCIAL 
                    SECURITY OR MEDICARE.

  (a) In General.--Section 1140(a)(1) of the Social Security Act (42 
U.S.C. 1320b-10(a)(1)) is amended--
          (1) in subparagraph (A), by inserting `` `Centers for 
        Medicare & Medicaid Services','' after `` `Health Care 
        Financing Administration','', by striking ``or `Medicaid', '' 
        and inserting `` `Medicaid', `Death Benefits Update', `Federal 
        Benefit Information', `Funeral Expenses', or `Final 
        Supplemental Plan','' and by inserting `` `CMS','' after `` 
        `HCFA','';
          (2) in subparagraph (B), by inserting ``Centers for Medicare 
        & Medicaid Services,'' after ``Health Care Financing 
        Administration,'' each place it appears; and
          (3) in the matter following subparagraph (B), by striking 
        ``the Health Care Financing Administration,'' each place it 
        appears and inserting ``the Centers for Medicare & Medicaid 
        Services,''.
  (b) Effective Date.--The amendments made by this section shall apply 
to items sent after 180 days after the date of the enactment of this 
Act.

SEC. 208. DISQUALIFICATION FROM PAYMENT DURING TRIAL WORK PERIOD UPON 
                    CONVICTION OF FRAUDULENT CONCEALMENT OF WORK 
                    ACTIVITY.

  (a) In General.--Section 222(c) of the Social Security Act (42 U.S.C. 
422(c)) is amended by adding at the end the following new paragraph:
  ``(5) Upon conviction by a Federal court that an individual has 
fraudulently concealed work activity during a period of trial work from 
the Commissioner of Social Security by--
          ``(A) providing false information to the Commissioner of 
        Social Security as to whether the individual had earnings in or 
        for a particular period, or as to the amount thereof;
          ``(B) receiving disability insurance benefits under this 
        title while engaging in work activity under another identity, 
        including under another social security account number or a 
        number purporting to be a social security account number; or
          ``(C) taking other actions to conceal work activity with an 
        intent fraudulently to secure payment in a greater amount than 
        is due or when no payment is authorized,
no benefit shall be payable to such individual under this title with 
respect to a period of disability for any month before such conviction 
during which the individual rendered services during the period of 
trial work with respect to which the fraudulently concealed work 
activity occurred, and amounts otherwise due under this title as 
restitution, penalties, assessments, fines, or other repayments shall 
in all cases be in addition to any amounts for which such individual is 
liable as overpayments by reason of such concealment.''.
  (b) Effective Date.--The amendment made by subsection (a) shall apply 
with respect to work activity performed after the date of the enactment 
of this Act.

SEC. 209. AUTHORITY FOR JUDICIAL ORDERS OF RESTITUTION.

  (a) Amendments to Title II.--Section 208 of the Social Security Act 
(42 U.S.C. 408) is amended--
          (1) by redesignating subsections (b), (c), and (d) as 
        subsections (c), (d), and (e), respectively; and
          (2) by inserting after subsection (a) the following new 
        subsection:
  ``(b)(1) Any Federal court, when sentencing a defendant convicted of 
an offense under subsection (a), may order, in addition to or in lieu 
of any other penalty authorized by law, that the defendant make 
restitution to the Social Security Administration.
  ``(2) Sections 3612, 3663, and 3664 of title 18, United States Code, 
shall apply with respect to the issuance and enforcement of orders of 
restitution under this subsection. In so applying such sections, the 
Social Security Administration shall be considered the victim.
  ``(3) If the court does not order restitution, or orders only partial 
restitution, under this subsection, the court shall state on the record 
the reasons therefor.''.
  (b) Amendments to Title VIII.--Section 807(i) of such Act (42 U.S.C. 
1007(i)) is amended--
          (1) by striking ``(i) Restitution.--In any case where'' and 
        inserting the following:
  ``(i) Restitution.--
          ``(1) In general.--In any case where''; and
          (2) by adding at the end the following new paragraph:
          ``(2) Court order for restitution.--
                  ``(A) In general.--Any Federal court, when sentencing 
                a defendant convicted of an offense under subsection 
                (a), may order, in addition to or in lieu of any other 
                penalty authorized by law, that the defendant make 
                restitution to the Social Security Administration.
                  ``(B) Related provisions.--Sections 3612, 3663, and 
                3664 of title 18, United States Code, shall apply with 
                respect to the issuance and enforcement of orders of 
                restitution under this paragraph. In so applying such 
                sections, the Social Security Administration shall be 
                considered the victim.
                  ``(C) Stated reasons for not ordering restitution.--
                If the court does not order restitution, or orders only 
                partial restitution, under this paragraph, the court 
                shall state on the record the reasons therefor.''.
  (c) Amendments to Title XVI.--Section 1632 of such Act (42 U.S.C. 
1383a) is amended--
          (1) by redesignating subsection (b) as subsection (c); and
          (2) by inserting after subsection (a) the following new 
        subsection:
  ``(b)(1) Any Federal court, when sentencing a defendant convicted of 
an offense under subsection (a), may order, in addition to or in lieu 
of any other penalty authorized by law, that the defendant make 
restitution to the Social Security Administration.
  ``(2) Sections 3612, 3663, and 3664 of title 18, United States Code, 
shall apply with respect to the issuance and enforcement of orders of 
restitution under this subsection. In so applying such sections, the 
Social Security Administration shall be considered the victim.
  ``(3) If the court does not order restitution, or orders only partial 
restitution, under this subsection, the court shall state on the record 
the reasons therefor.''.
  (d) Special Account for Receipt of Restitution Payments.--Section 
704(b) of such Act (42 U.S.C. 904(b)) is amended by adding at the end 
the following new paragraph:
  ``(3)(A) Except as provided in subparagraph (B), amounts received by 
the Social Security Administration pursuant to an order of restitution 
under section 208(b), 807(i), or 1632(b) shall be credited to a special 
fund established in the Treasury of the United States for amounts so 
received or recovered. The amounts so credited, to the extent and in 
the amounts provided in advance in appropriations Acts, shall be 
available to defray expenses incurred in carrying out titles II, VIII, 
and XVI.
  ``(B) Subparagraph (A) shall not apply with respect to amounts 
received in connection with misuse by a representative payee (within 
the meaning of sections 205(j), 807, and 1631(a)(2)) of funds paid as 
benefits under title II, VIII, or XVI. Such amounts received in 
connection with misuse of funds paid as benefits under title II shall 
be transferred to the Managing Trustee of the Federal Old-Age and 
Survivors Insurance Trust Fund or the Federal Disability Insurance 
Trust Fund, as determined appropriate by the Commissioner of Social 
Security, and such amounts shall be deposited by the Managing Trustee 
into such Trust Fund. All other such amounts shall be deposited by the 
Commissioner into the general fund of the Treasury as miscellaneous 
receipts.''.
  (e) Effective Date.--The amendments made by subsections (a), (b), and 
(c) shall apply with respect to violations occurring on or after the 
date of the enactment of this Act.

          TITLE III--ATTORNEY FEE PAYMENT SYSTEM IMPROVEMENTS

SEC. 301. CAP ON ATTORNEY ASSESSMENTS.

  (a) In General.--Section 206(d)(2)(A) of the Social Security Act (42 
U.S.C. 406(d)(2)(A)) is amended--
          (1) by inserting ``, except that the maximum amount of the 
        assessment may not exceed the greater of $75 or the adjusted 
        amount as provided pursuant to the following two sentences'' 
        after ``subparagraph (B)''; and
          (2) by adding at the end the following new sentence: ``In the 
        case of any calendar year beginning after the amendments made 
        by section 301 of the Social Security Protection Act of 2003 
        take effect, the dollar amount specified in the preceding 
        sentence (including a previously adjusted amount) shall be 
        adjusted annually under the procedures used to adjust benefit 
        amounts under section 215(i)(2)(A)(ii), except such adjustment 
        shall be based on the higher of $75 or the previously adjusted 
        amount that would have been in effect for December of the 
        preceding year, but for the rounding of such amount pursuant to 
        the following sentence. Any amount so adjusted that is not a 
        multiple of $1 shall be rounded to the next lowest multiple of 
        $1, but in no case less than $75.''.
  (b) Effective Date.--The amendments made by this section shall apply 
with respect to fees for representation of claimants which are first 
required to be certified or paid under section 206 of the Social 
Security Act on or after the first day of the first month that begins 
after 180 days after the date of the enactment of this Act.

SEC. 302. EXTENSION OF ATTORNEY FEE PAYMENT SYSTEM TO TITLE XVI CLAIMS.

  (a) In General.--Section 1631(d)(2) of the Social Security Act (42 
U.S.C. 1383(d)(2)) is amended--
          (1) in subparagraph (A), in the matter preceding clause (i)--
                  (A) by striking ``section 206(a)'' and inserting 
                ``section 206'';
                  (B) by striking ``(other than paragraph (4) 
                thereof)'' and inserting ``(other than subsections 
                (a)(4) and (d) thereof)''; and
                  (C) by striking ``paragraph (2) thereof'' and 
                inserting ``such section'';
          (2) in subparagraph (A)(i), by striking ``in subparagraphs 
        (A)(ii)(I) and (C)(i),'' and inserting ``in subparagraphs 
        (A)(ii)(I) and (D)(i) of subsection (a)(2)'', and by striking 
        ``and'' at the end;
          (3) by striking subparagraph (A)(ii) and inserting the 
        following:
          ``(ii) by substituting, in subsections (a)(2)(B) and 
        (b)(1)(B)(i), the phrase `section 1631(a)(7)(A) or the 
        requirements of due process of law' for the phrase `subsection 
        (g) or (h) of section 223';
          ``(iii) by substituting, in subsection (a)(2)(C)(i), the 
        phrase `under title II' for the phrase `under title XVI';
          ``(iv) by substituting, in subsection (b)(1)(A), the phrase 
        `pay the amount of such fee' for the phrase `certify the amount 
        of such fee for payment' and by striking, in subsection 
        (b)(1)(A), the phrase `or certified for payment'; and
          ``(v) by substituting, in subsection (b)(1)(B)(ii), the 
        phrase `deemed to be such amounts as determined before any 
        applicable reduction under section 1631(g), and reduced by the 
        amount of any reduction in benefits under this title or title 
        II made pursuant to section 1127(a)' for the phrase `determined 
        before any applicable reduction under section 1127(a))'.''; and
          (4) by striking subparagraph (B) and inserting the following 
        new subparagraphs:
  ``(B) Subject to subparagraph (C), if the claimant is determined to 
be entitled to past-due benefits under this title and the person 
representing the claimant is an attorney, the Commissioner of Social 
Security shall pay out of such past-due benefits to such attorney an 
amount equal to the lesser of--
          ``(i) so much of the maximum fee as does not exceed 25 
        percent of such past-due benefits (as determined before any 
        applicable reduction under section 1631(g) and reduced by the 
        amount of any reduction in benefits under this title or title 
        II pursuant to section 1127(a)), or
          ``(ii) the amount of past-due benefits available after any 
        applicable reductions under sections 1631(g) and 1127(a).
  ``(C)(i) Whenever a fee for services is required to be paid to an 
attorney from a claimant's past-due benefits pursuant to subparagraph 
(B), the Commissioner shall impose on the attorney an assessment 
calculated in accordance with clause (ii).
  ``(ii)(I) The amount of an assessment under clause (i) shall be equal 
to the product obtained by multiplying the amount of the 
representative's fee that would be required to be paid by subparagraph 
(B) before the application of this subparagraph, by the percentage 
specified in subclause (II), except that the maximum amount of the 
assessment may not exceed $75. In the case of any calendar year 
beginning after the amendments made by section 302 of the Social 
Security Protection Act of 2003 take effect, the dollar amount 
specified in the preceding sentence (including a previously adjusted 
amount) shall be adjusted annually under the procedures used to adjust 
benefit amounts under section 215(i)(2)(A)(ii), except such adjustment 
shall be based on the higher of $75 or the previously adjusted amount 
that would have been in effect for December of the preceding year, but 
for the rounding of such amount pursuant to the following sentence. Any 
amount so adjusted that is not a multiple of $1 shall be rounded to the 
next lowest multiple of $1, but in no case less than $75.
  ``(II) The percentage specified in this subclause is such percentage 
rate as the Commissioner determines is necessary in order to achieve 
full recovery of the costs of determining and approving fees to 
attorneys from the past-due benefits of claimants, but not in excess of 
6.3 percent.
  ``(iii) The Commissioner may collect the assessment imposed on an 
attorney under clause (i) by offset from the amount of the fee 
otherwise required by subparagraph (B) to be paid to the attorney from 
a claimant's past-due benefits.
  ``(iv) An attorney subject to an assessment under clause (i) may not, 
directly or indirectly, request or otherwise obtain reimbursement for 
such assessment from the claimant whose claim gave rise to the 
assessment.
  ``(v) Assessments on attorneys collected under this subparagraph 
shall be deposited in the Treasury in a separate fund created for this 
purpose.
  ``(vi) The assessments authorized under this subparagraph shall be 
collected and available for obligation only to the extent and in the 
amount provided in advance in appropriations Acts. Amounts so 
appropriated are authorized to remain available until expended, for 
administrative expenses in carrying out this title and related laws.''.
  (b) Effective Date.--
          (1) In general.--The amendments made by this section shall 
        apply with respect to fees for representation of claimants 
        which are first required to be certified or paid under section 
        1631(d)(2) of the Social Security Act on or after the first day 
        of the first month that begins after 270 days after the date of 
        the enactment of this Act.
          (2) Sunset.--Such amendments shall not apply with respect to 
        fees for representation of claimants in the case of any claim 
        for benefits with respect to which the agreement for 
        representation is entered into after 5 years after the date on 
        which the Commissioner of Social Security first implements the 
        amendments made by this section.
  (c) Study Regarding Fee-Withholding for Non-Attorney 
Representatives.--
          (1) Study.--As soon as practicable after the date of the 
        enactment of this Act, the Comptroller General of the United 
        States shall undertake a study regarding fee-withholding for 
        non-attorney representatives representing claimants before the 
        Social Security Administration.
          (2) Matters to be studied.--In conducting the study under 
        this subsection, the Comptroller General shall--
                  (A) compare the non-attorney representatives who seek 
                fee approval for representing claimants before the 
                Social Security Administration to attorney 
                representatives who seek such fee approval, with regard 
                to--
                          (i) their training, qualifications, and 
                        competency,
                          (ii) the type and quality of services 
                        provided, and
                          (iii) the extent to which claimants are 
                        protected through oversight of such 
                        representatives by the Social Security 
                        Administration or other organizations, and
                  (B) consider the potential results of extending to 
                non-attorney representatives the fee withholding 
                procedures that apply under titles II and XVI of the 
                Social Security Act for the payment of attorney fees, 
                including the effect on claimants and program 
                administration.
          (3) Report.--Not later than 1 year after the date of the 
        enactment of this Act, the Comptroller General shall submit to 
        the Committee on Ways and Means of the House of Representatives 
        and the Committee on Finance of the Senate a report detailing 
        the results of the Comptroller General's study conducted 
        pursuant to this subsection.

            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.

  Section 234 of the Social Security Act (42 U.S.C. 434) is amended--
          (1) in the first sentence of subsection (c), by striking 
        ``conducted under subsection (a)'' and inserting ``initiated 
        under subsection (a) on or before December 17, 2004''; and
          (2) in subsection (d)(2), by amending the first sentence to 
        read as follows: ``The authority to initiate projects under the 
        preceding provisions of this section shall terminate on 
        December 18, 2004.''.

SEC. 402. EXPANSION OF WAIVER AUTHORITY AVAILABLE IN CONNECTION WITH 
                    DEMONSTRATION PROJECTS PROVIDING FOR REDUCTIONS IN 
                    DISABILITY INSURANCE BENEFITS BASED ON EARNINGS.

  Section 302(c) of the Ticket to Work and Work Incentives Improvement 
Act of 1999 (42 U.S.C. 434 note) is amended by striking ``(42 U.S.C. 
401 et seq.),'' and inserting ``(42 U.S.C. 401 et seq.) and the 
requirements of section 1148 of such Act (42 U.S.C. 1320b-19) as they 
relate to the program established under title II of such Act,''.

SEC. 403. FUNDING OF DEMONSTRATION PROJECTS PROVIDED FOR REDUCTIONS IN 
                    DISABILITY INSURANCE BENEFITS BASED ON EARNINGS.

  Section 302(f) of the Ticket to Work and Work Incentives Improvement 
Act of 1999 (42 U.S.C. 434 note) is amended to read as follows:
  ``(f) Expenditures.--Administrative expenses for demonstration 
projects under this section shall be paid from funds available for the 
administration of title II or XVIII of the Social Security Act, as 
appropriate. Benefits payable to or on behalf of individuals by reason 
of participation in projects under this section shall be made from the 
Federal Disability Insurance Trust Fund and the Federal Old-Age and 
Survivors Insurance Trust Fund, as determined appropriate by the 
Commissioner of Social Security, and from the Federal Hospital 
Insurance Trust Fund and the Federal Supplementary Medical Insurance 
Trust Fund, as determined appropriate by the Secretary of Health and 
Human Services, from funds available for benefits under such title II 
or XVIII.''.

SEC. 404. AVAILABILITY OF FEDERAL AND STATE WORK INCENTIVE SERVICES TO 
                    ADDITIONAL INDIVIDUALS.

  (a) Federal Work Incentives Outreach Program.--
          (1) In general.--Section 1149(c)(2) of the Social Security 
        Act (42 U.S.C. 1320b-20(c)(2)) is amended to read as follows:
          ``(2) Disabled beneficiary.--The term `disabled beneficiary' 
        means an individual--
                  ``(A) who is a disabled beneficiary as defined in 
                section 1148(k)(2) of this Act;
                  ``(B) who is receiving a cash payment described in 
                section 1616(a) of this Act or a supplementary payment 
                described in section 212(a)(3) of Public Law 93-66 
                (without regard to whether such payment is paid by the 
                Commissioner pursuant to an agreement under section 
                1616(a) of this Act or under section 212(b) of Public 
                Law 93-66);
                  ``(C) who, pursuant to section 1619(b) of this Act, 
                is considered to be receiving benefits under title XVI 
                of this Act; or
                  ``(D) who is entitled to benefits under part A of 
                title XVIII of this Act by reason of the penultimate 
                sentence of section 226(b) of this Act.''.
          (2) Effective date.--The amendment made by this subsection 
        shall apply with respect to grants, cooperative agreements, or 
        contracts entered into on or after the date of the enactment of 
        this Act.
  (b) State Grants for Work Incentives Assistance.--
          (1) Definition of disabled beneficiary.--Section 1150(g)(2) 
        of such Act (42 U.S.C. 1320b-21(g)(2)) is amended to read as 
        follows:
          ``(2) Disabled beneficiary.--The term `disabled beneficiary' 
        means an individual--
                  ``(A) who is a disabled beneficiary as defined in 
                section 1148(k)(2) of this Act;
                  ``(B) who is receiving a cash payment described in 
                section 1616(a) of this Act or a supplementary payment 
                described in section 212(a)(3) of Public Law 93-66 
                (without regard to whether such payment is paid by the 
                Commissioner pursuant to an agreement under section 
                1616(a) of this Act or under section 212(b) of Public 
                Law 93-66);
                  ``(C) who, pursuant to section 1619(b) of this Act, 
                is considered to be receiving benefits under title XVI 
                of this Act; or
                  ``(D) who is entitled to benefits under part A of 
                title XVIII of this Act by reason of the penultimate 
                sentence of section 226(b) of this Act.''.
          (2) Advocacy or other services needed to maintain gainful 
        employment.--Section 1150(b)(2) of such Act (42 U.S.C. 1320b-
        21(b)(2)) is amended by striking ``secure or regain'' and 
        inserting ``secure, maintain, or regain''.
          (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to payments provided after the date of 
        the enactment of this Act.

SEC. 405. TECHNICAL AMENDMENT CLARIFYING TREATMENT FOR CERTAIN PURPOSES 
                    OF INDIVIDUAL WORK PLANS UNDER THE TICKET TO WORK 
                    AND SELF-SUFFICIENCY PROGRAM.

  (a) In General.--Section 1148(g)(1) of the Social Security Act (42 
U.S.C. 1320b-19) is amended by adding at the end, after and below 
subparagraph (E), the following new sentence:
        ``An individual work plan established pursuant to this 
        subsection shall be treated, for purposes of section 
        51(d)(6)(B)(i) of the Internal Revenue Code of 1986, as an 
        individualized written plan for employment under a State plan 
        for vocational rehabilitation services approved under the 
        Rehabilitation Act of 1973.''.
  (b) Effective Date.--The amendment made by subsection (a) shall take 
effect as if included in section 505 of the Ticket to Work and Work 
Incentives Improvement Act of 1999 (Public Law 106-170; 113 Stat. 
1921).

                  Subtitle B--Miscellaneous Amendments

SEC. 411. ELIMINATION OF TRANSCRIPT REQUIREMENT IN REMAND CASES FULLY 
                    FAVORABLE TO THE CLAIMANT.

  (a) In General.--Section 205(g) of the Social Security Act (42 U.S.C. 
405(g)) is amended in the sixth sentence by striking ``and a 
transcript'' and inserting ``and, in any case in which the Commissioner 
has not made a decision fully favorable to the individual, a 
transcript''.
  (b) Effective Date.--The amendment made by this section shall apply 
with respect to final determinations issued (upon remand) on or after 
the date of the enactment of this Act.

SEC. 412. NONPAYMENT OF BENEFITS UPON REMOVAL FROM THE UNITED STATES.

  (a) In General.--Paragraphs (1) and (2) of section 202(n) of the 
Social Security Act (42 U.S.C. 402(n)(1), (2)) are each amended by 
striking ``or (1)(E)''.
  (b) Effective Date.--The amendment made by this section to section 
202(n)(1) of the Social Security Act shall apply to individuals with 
respect to whom the Commissioner of Social Security receives a removal 
notice from the Attorney General after the date of the enactment of 
this Act. The amendment made by this section to section 202(n)(2) of 
the Social Security Act shall apply with respect to removals occurring 
after the date of the enactment of this Act.

SEC. 413. REINSTATEMENT OF CERTAIN REPORTING REQUIREMENTS.

  Section 3003(a)(1) of the Federal Reports Elimination and Sunset Act 
of 1995 (31 U.S.C. 1113 note) shall not apply to any report required to 
be submitted under any of the following provisions of law:
          (1)(A) Section 201(c)(2) of the Social Security Act (42 
        U.S.C. 401(c)(2)).
          (B) Section 1817(b)(2) of the Social Security Act (42 U.S.C. 
        1395i(b)(2)).
          (C) Section 1841(b)(2) of the Social Security Act (42 U.S.C. 
        1395t(b)(2)).
          (2)(A) Section 221(c)(3)(C) of the Social Security Act (42 
        U.S.C. 421(c)(3)(C)).
          (B) Section 221(i)(3) of the Social Security Act (42 U.S.C. 
        421(i)(3)).

SEC. 414. CLARIFICATION OF DEFINITIONS REGARDING CERTAIN SURVIVOR 
                    BENEFITS.

  (a) Widows.--Section 216(c) of the Social Security Act (42 U.S.C. 
416(c)) is amended--
          (1) by redesignating subclauses (A) through (C) of clause (6) 
        as subclauses (i) through (iii), respectively;
          (2) by redesignating clauses (1) through (6) as clauses (A) 
        through (F), respectively;
          (3) in clause (E) (as redesignated), by inserting ``except as 
        provided in paragraph (2),'' before ``she was married'';
          (4) by inserting ``(1)'' after ``(c)''; and
          (5) by adding at the end the following new paragraph:
  ``(2) The requirements of paragraph (1)(E) in connection with the 
surviving wife of an individual shall be treated as satisfied if--
          ``(A) the individual had been married prior to the 
        individual's marriage to the surviving wife,
          ``(B) the prior wife was institutionalized during the 
        individual's marriage to the prior wife due to mental 
        incompetence or similar incapacity,
          ``(C) during the period of the prior wife's 
        institutionalization, the individual would have divorced the 
        prior wife and married the surviving wife, but the individual 
        did not do so because such divorce would have been unlawful, by 
        reason of the prior wife's institutionalization, under the laws 
        of the State in which the individual was domiciled at the time 
        (as determined based on evidence satisfactory to the 
        Commissioner of Social Security),
          ``(D) the prior wife continued to remain institutionalized up 
        to the time of her death, and
          ``(E) the individual married the surviving wife within 60 
        days after the prior wife's death.''.
  (b) Widowers.--Section 216(g) of such Act (42 U.S.C. 416(g)) is 
amended--
          (1) by redesignating subclauses (A) through (C) of clause (6) 
        as subclauses (i) through (iii), respectively;
          (2) by redesignating clauses (1) through (6) as clauses (A) 
        through (F), respectively;
          (3) in clause (E) (as redesignated), by inserting ``except as 
        provided in paragraph (2),'' before ``he was married'';
          (4) by inserting ``(1)'' after ``(g)''; and
          (5) by adding at the end the following new paragraph:
  ``(2) The requirements of paragraph (1)(E) in connection with the 
surviving husband of an individual shall be treated as satisfied if--
          ``(A) the individual had been married prior to the 
        individual's marriage to the surviving husband,
          ``(B) the prior husband was institutionalized during the 
        individual's marriage to the prior husband due to mental 
        incompetence or similar incapacity,
          ``(C) during the period of the prior husband's 
        institutionalization, the individual would have divorced the 
        prior husband and married the surviving husband, but the 
        individual did not do so because such divorce would have been 
        unlawful, by reason of the prior husband's 
        institutionalization, under the laws of the State in which the 
        individual was domiciled at the time (as determined based on 
        evidence satisfactory to the Commissioner of Social Security),
          ``(D) the prior husband continued to remain institutionalized 
        up to the time of his death, and
          ``(E) the individual married the surviving husband within 60 
        days after the prior husband's death.''.
  (c) Conforming Amendment.--Section 216(k) of such Act (42 U.S.C. 
416(k)) is amended by striking ``clause (5) of subsection (c) or clause 
(5) of subsection (g)'' and inserting ``clause (E) of subsection (c)(1) 
or clause (E) of subsection (g)(1)''.
  (d) Effective Date.--The amendments made by this section shall be 
effective with respect to applications for benefits under title II of 
the Social Security Act filed during months ending after the date of 
the enactment of this Act.

SEC. 415. CLARIFICATION RESPECTING THE FICA AND SECA TAX EXEMPTIONS FOR 
                    AN INDIVIDUAL WHOSE EARNINGS ARE SUBJECT TO THE 
                    LAWS OF A TOTALIZATION AGREEMENT PARTNER.

  Sections 1401(c), 3101(c), and 3111(c) of the Internal Revenue Code 
of 1986 are each amended by striking ``to taxes or contributions for 
similar purposes under'' and inserting ``exclusively to the laws 
applicable to''.

SEC. 416. COVERAGE UNDER DIVIDED RETIREMENT SYSTEM FOR PUBLIC EMPLOYEES 
                    IN KENTUCKY.

  (a) In General.--Section 218(d)(6)(C) of the Social Security Act (42 
U.S.C. 418(d)(6)(C)) is amended by inserting ``Kentucky,'' after 
``Illinois,''.
  (b) Effective Date.--The amendment made by subsection (a) takes 
effect on January 1, 2003.

SEC. 417. COMPENSATION FOR THE SOCIAL SECURITY ADVISORY BOARD.

  (a) In General.--Subsection (f) of section 703 of the Social Security 
Act (42 U.S.C. 903(f)) is amended to read as follows:

                 ``Compensation, Expenses, and Per Diem

  ``(f) A member of the Board shall, for each day (including 
traveltime) during which the member is attending meetings or 
conferences of the Board or otherwise engaged in the business of the 
Board, be compensated at the daily rate of basic pay for level IV of 
the Executive Schedule. While serving on business of the Board away 
from their homes or regular places of business, members may be allowed 
travel expenses, including per diem in lieu of subsistence, as 
authorized by section 5703 of title 5, United States Code, for persons 
in the Government employed intermittently.''.
  (b) Effective Date.--The amendment made by this section shall be 
effective as of January 1, 2003.

SEC. 418. 60-MONTH PERIOD OF EMPLOYMENT REQUIREMENT FOR APPLICATION OF 
                    GOVERNMENT PENSION OFFSET EXEMPTION.

  (a) Wife's Insurance Benefits.--Section 202(b)(4)(A) of the Social 
Security Act (42 U.S.C. 402(b)(4)(A)) is amended by striking ``if, on'' 
and inserting ``if, during any portion of the last 60 months of such 
service ending with''.
  (b) Husband's Insurance Benefits.--Section 202(c)(2)(A) of such Act 
(42 U.S.C. 402(c)(2)(A)) is amended by striking ``if, on'' and 
inserting ``if, during any portion of the last 60 months of such 
service ending with''.
  (c) Widow's Insurance Benefits.--Section 202(e)(7)(A) of such Act (42 
U.S.C. 402(e)(7)(A)) is amended by striking ``if, on'' and inserting 
``if, during any portion of the last 60 months of such service ending 
with''.
  (d) Widower's Insurance Benefits.--Section 202(f)(2)(A) of such Act 
(42 U.S.C. 402(f)(2)(A)) is amended by striking ``if, on'' and 
inserting ``if, during any portion of the last 60 months of such 
service ending with''.
  (e) Mother's and Father's Insurance Benefits.--Section 202(g)(4)(A) 
of the such Act (42 U.S.C. 402(g)(4)(A)) is amended by striking ``if, 
on'' and inserting ```if, during any portion of the last 60 months of 
such service ending with''.
  (f) Effective Date.--The amendments made by this section shall apply 
with respect to applications for benefits under title II of the Social 
Security Act filed on or after the first day of the first month that 
begins after the date of the enactment of this Act, except that such 
amendments shall not apply in connection with monthly periodic benefits 
of any individual based on earnings while in service described in 
section 202(b)(4)(A), 202(c)(2)(A), 202(e)(7)(A), or 202(f)(2)(A) of 
the Social Security Act (in the matter preceding clause (i) thereof)--
          (1) if the last day of such service occurs before the end of 
        the 90-day period following the date of the enactment of this 
        Act, or
          (2) in any case in which the last day of such service occurs 
        after the end of such 90-day period, such individual performed 
        such service during such 90-day period which constituted 
        ``employment'' as defined in section 210 of such Act, and all 
        such service subsequently performed by such individual has 
        constituted such ``employment''.

                    Subtitle C--Technical Amendments

SEC. 421. TECHNICAL CORRECTION RELATING TO RESPONSIBLE AGENCY HEAD.

  Section 1143 of the Social Security Act (42 U.S.C. 1320b-13) is 
amended--
          (1) by striking ``Secretary'' the first place it appears and 
        inserting ``Commissioner of Social Security''; and
          (2) by striking ``Secretary'' each subsequent place it 
        appears and inserting ``Commissioner''.

SEC. 422. TECHNICAL CORRECTION RELATING TO RETIREMENT BENEFITS OF 
                    MINISTERS.

  (a) In General.--Section 211(a)(7) of the Social Security Act (42 
U.S.C. 411(a)(7)) is amended by inserting ``, but shall not include in 
any such net earnings from self-employment the rental value of any 
parsonage or any parsonage allowance (whether or not excluded under 
section 107 of the Internal Revenue Code of 1986) provided after the 
individual retires, or any other retirement benefit received by such 
individual from a church plan (as defined in section 414(e) of such 
Code) after the individual retires'' before the semicolon.
  (b) Effective Date.--The amendment made by this section shall apply 
to years beginning before, on, or after December 31, 1994.

SEC. 423. TECHNICAL CORRECTIONS RELATING TO DOMESTIC EMPLOYMENT.

  (a) Amendment to Internal Revenue Code.--Section 3121(a)(7)(B) of the 
Internal Revenue Code of 1986 is amended by striking ``described in 
subsection (g)(5)'' and inserting ``on a farm operated for profit''.
  (b) Amendment to Social Security Act.--Section 209(a)(6)(B) of the 
Social Security Act (42 U.S.C. 409(a)(6)(B)) is amended by striking 
``described in section 210(f)(5)'' and inserting ``on a farm operated 
for profit''.
  (c) Conforming Amendment.--Section 3121(g)(5) of such Code and 
section 210(f)(5) of such Act (42 U.S.C. 410(f)(5)) are amended by 
striking ``or is domestic service in a private home of the employer''.

SEC. 424. TECHNICAL CORRECTIONS OF OUTDATED REFERENCES.

  (a) Correction of Terminology and Citations Respecting Removal From 
the United States.--Section 202(n) of the Social Security Act (42 
U.S.C. 402(n)) (as amended by section 412) is amended further--
          (1) by striking ``deportation'' each place it appears and 
        inserting ``removal'';
          (2) by striking ``deported'' each place it appears and 
        inserting ``removed'';
          (3) in paragraph (1) (in the matter preceding subparagraph 
        (A)), by striking ``under section 241(a) (other than under 
        paragraph (1)(C) thereof)'' and inserting ``under section 
        237(a) (other than paragraph (1)(C) thereof) or 212(a)(6)(A)'';
          (4) in paragraph (2), by striking ``under any of the 
        paragraphs of section 241(a) of the Immigration and Nationality 
        Act (other than under paragraph (1)(C) thereof)'' and inserting 
        ``under any of the paragraphs of section 237(a) of the 
        Immigration and Nationality Act (other than paragraph (1)(C) 
        thereof) or under section 212(a)(6)(A) of such Act'';
          (5) in paragraph (3)--
                  (A) by striking ``paragraph (19) of section 241(a)'' 
                and inserting ``subparagraph (D) of section 
                237(a)(4)''; and
                  (B) by striking ``paragraph (19)'' and inserting 
                ``subparagraph (D)''; and
          (6) in the heading, by striking ``Deportation'' and inserting 
        ``Removal''.
  (b) Correction of Citation Respecting the Tax Deduction Relating to 
Health Insurance Costs of Self-Employed Individuals.--Section 
211(a)(15) of such Act (42 U.S.C. 411(a)(15)) is amended by striking 
``section 162(m)'' and inserting ``section 162(l)''.
  (c) Elimination of Reference to Obsolete 20-Day Agricultural Work 
Test.--Section 3102(a) of the Internal Revenue Code of 1986 is amended 
by striking ``and the employee has not performed agricultural labor for 
the employer on 20 days or more in the calendar year for cash 
remuneration computed on a time basis''.

SEC. 425. TECHNICAL CORRECTION RESPECTING SELF-EMPLOYMENT INCOME IN 
                    COMMUNITY PROPERTY STATES.

  (a) Social Security Act Amendment.--Section 211(a)(5)(A) of the 
Social Security Act (42 U.S.C. 411(a)(5)(A)) is amended by striking 
``all of the gross income'' and all that follows and inserting ``the 
gross income and deductions attributable to such trade or business 
shall be treated as the gross income and deductions of the spouse 
carrying on such trade or business or, if such trade or business is 
jointly operated, treated as the gross income and deductions of each 
spouse on the basis of their respective distributive share of the gross 
income and deductions;''.
  (b) Internal Revenue Code of 1986 Amendment.--Section 1402(a)(5)(A) 
of the Internal Revenue Code of 1986 is amended by striking ``all of 
the gross income'' and all that follows and inserting ``the gross 
income and deductions attributable to such trade or business shall be 
treated as the gross income and deductions of the spouse carrying on 
such trade or business or, if such trade or business is jointly 
operated, treated as the gross income and deductions of each spouse on 
the basis of their respective distributive share of the gross income 
and deductions; and''.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    The ``Social Security Protection Act of 2003,'' H.R. 743, 
as amended provides the Social Security Administration (SSA) 
with the enhanced tools it needs to fight waste, fraud and 
abuse in Social Security programs.
    Protects those unable to manage their financial affairs. 
The bill protects beneficiaries from representative payees who 
misuse benefits and enhances oversight of representative payees 
appointed by the SSA to manage Social Security and Supplemental 
Security Income (SSI) benefits for individuals who are unable 
to manage their own financial affairs. Representative payees 
would be held accountable for their actions when they misuse 
benefits entrusted to their care.
    Deters fraud. The legislation helps stop waste, fraud and 
abuse within the Social Security programs by denying benefits 
to fugitive felons and persons violating their probation or 
parole, creating new penalties to prevent persons from 
misrepresenting themselves when they offer Social Security-
related services, prohibiting individuals who fraudulently 
conceal work activity from being eligible for a trial work 
period, allowing Federal courts to order individuals who break 
Social Security law to make restitution to the Social Security 
Trust Funds or general fund, and protecting Social Security 
employees from harm while conducting their duties.
    Helps individuals with disabilities. The bill improves 
access to legal representation for individuals with 
disabilities applying for benefits who need help negotiating 
the complex disability application process, enhances provisions 
of the Ticket to Work program to better enable SSA to test ways 
of helping individuals with disabilities return to work, and 
provides more individuals access to support and services to 
help them work. It also encourages more employers to hire 
individuals with disabilities by expanding eligibility for the 
Work Opportunity Tax Credit.
    Finally, the legislation corrects, clarifies, or modifies 
various technical aspects of the law.

               B. Background and Need for the Legislation

    The Social Security and SSI programs touch the lives of 
nearly every American and represent close to one-fourth of all 
Federal outlays in 2003. Nearly $500 billion in Social Security 
and SSI benefits were paid last year to about 50 million 
retired and disabled workers and their families and survivors, 
as well as disabled or aged low-income individuals. Given the 
programs' magnitude and extensive influence over the economic 
well-being of American workers and their families, it is 
important to address inadequate protections for beneficiaries 
and to fight activities that drain resources from Social 
Security and undermine the financial security of beneficiaries.
    Nearly 8 million Social Security and SSI beneficiaries 
cannot, for physical or mental reasons, manage their own 
financial affairs. In these cases, the SSA appoints an 
individual or organization, called a ``representative payee,'' 
to manage these individuals' benefits. While most 
representative payees are conscientious and honest, some 
violate the trust placed in them. In a report issued in June 
2002, Analysis of Information Concerning Representative Payee 
Misuse of Beneficiaries' Payments, the SSA Inspector General 
stated that from January 1997 through December 1999, over 2,400 
representative payees misused about $12 million in benefits. 
The SSA and the SSA Inspector General have recommended 
legislation to raise the standards for persons and 
organizations serving as representative payees and to impose 
stricter regulation and monetary penalties on those who 
mismanage benefits.
    In addition to protecting the financial security of 
vulnerable beneficiaries, this bill also picks up where P.L. 
104-193, the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (PRWORA), left off in ending benefit 
payments to fugitive felons and persons who violate their 
probation or parole. That legislation denied SSI benefits to 
such individuals; however, they are still allowed to receive 
Social Security benefits. The Congressional Budget Office 
estimates $525 million will be paid in benefits over the next 
10 years out of the Social Security Trust Funds to these 
persons. In an August 2000 report, Old-Age, Survivors and 
Disability Insurance Benefits Paid to Fugitives, the SSA 
Inspector General estimated about 17,000 fugitives received 
Social Security benefits between PRWORA's enactment and 1999, 
and recommended legislation prohibiting payment of Social 
Security benefits to fugitive felons and probation or parole 
violators, similar to the SSI provision.
    The Protection Act also incorporates recommendations by the 
SSA Inspector General to provide tools that further safeguard 
Social Security programs, help shield Social Security employees 
from harm while conducting their duties, expand the Inspector 
General's ability to stop perpetrators of fraud through new 
civil monetary penalties, and prevent persons from 
misrepresenting themselves as they provide Social Security-
related services.
    In addition to addressing waste, fraud, and abuse, the bill 
helps individuals with disabilities by making it easier for 
them to obtain legal representation when applying for benefits 
by improving the attorney fee withholding process. Advocates 
for individuals with disabilities and claimants' 
representatives have stated in hearings before the Subcommittee 
on Social Security that allowing attorneys and claimants for 
Social Security benefits to sign an agreement requiring the 
Commissioner to pay the attorney directly from the claimant's 
past-due benefits has helped ensure there is a pool of private 
attorneys who are willing and able to help claimants pursue 
benefits. Extending attorney fee withholding to SSI cases would 
help expand the pool of attorneys willing to help many low-
income SSI claimants to successfully pursue needed benefits. 
Likewise, advocates for claimant representatives have testified 
that the SSA's processing fee for withholding the attorney's 
fee from past-due benefits is excessive, limits the pool of 
attorneys willing to help claimants, and that reducing the fee 
would increase availability of representation for claimants.
    Besides encouraging representation of claimants seeking 
benefits, advocates for individuals with disabilities have 
discussed at hearings and consultations with the Subcommittee 
on Social Security the need to improve and clarify provisions 
of the Ticket to Work program by enhancing demonstration 
projects, making work incentive services available to more 
individuals, and expanding eligibility for the Work Opportunity 
Tax Credit. These recommendations are all intended to encourage 
more disabled beneficiaries to return to work or maintain work 
effort.
    Finally, the bill contains numerous provisions recommended 
by the SSA aimed at correcting inequities in the law regarding 
benefit coverage and receipt, as well as making technical 
corrections to the law. One of these provisions resulted from 
an August 2002 General Accounting Office (GAO) report, Social 
Security Administration: Revision to the Government Pension 
Offset Exemption Should Be Considered. The GAO found that 
teachers in Texas, and to a lesser extent in Georgia, were 
using a loophole in the law in order to receive higher spouse 
or survivor benefits from Social Security. In effect, teachers 
contributed to Social Security for as little as one day (an 
average of $3 in payroll taxes) and qualified for over $100,000 
in spouse or survivor benefits over a lifetime, whereas similar 
workers who paid into Social Security throughout their careers 
received little or no spouse or survivor benefits. The GAO 
recommended amending the law to treat State and local workers 
the same as Federal workers in applying the exemption.

                         C. Legislative History

    During the 106th Congress, the Subcommittee held hearings 
on Social Security program integrity on March 30, 2000 (106-
38); representative payees on May 4, 2000 (106-57); Social 
Security number use and misuse on May 9 and 11 (106-108), and 
July 17, 2000 (106-43); and the processing of attorney's fees 
on June 14, 2000 (106-70). The information gained from these 
hearings led to the introduction of H.R. 4857, the ``Social 
Security Number Privacy and Identity Theft Prevention Act of 
2000,'' to enhance privacy protections for individuals, prevent 
fraudulent misuse of the Social Security number, and provide 
additional safeguards for Social Security and Supplemental 
Security Income beneficiaries with representative payees. In 
addition, H.R. 4633 was introduced to improve the SSA payment 
system for representation of claimants. On July 20, 2000, the 
Subcommittee ordered favorably reported H.R. 4857, as amended. 
The Committee on Ways and Means ordered the bill favorably 
reported, as amended on September 28, 2000 (H. Rept. 106-996 
Part 1). The bill was not considered by the full House, as 
other committees of jurisdiction did not complete consideration 
of the bill.
    In the 107th Congress, on May 10, 2001, the Subcommittee on 
Social Security held a hearing on the integrity of Social 
Security programs (107-30). The Subcommittee heard testimony 
from SSA Inspector General James G. Huse about the need to 
prohibit payment of Social Security benefits to fugitive felons 
and improve oversight of representative payees. Fritz 
Streckewald, Acting Assistant Deputy Commissioner of Disability 
and Income Security Programs of the SSA, testified about the 
agency's efforts to improve oversight of representative payees 
and stop SSI payments to fugitive felons. Advocates of 
individuals with disabilities expressed support for legislation 
to improve oversight of representative payees and protect 
beneficiaries from benefit misuse by representative payees.
    On May 17, 2001, the Subcommittee on Social Security held a 
hearing on processing of attorneys' fees (107-24). Barbara 
Bovbjerg of the General Accounting Office (GAO) provided 
testimony on the estimated costs SSA incurs in withholding 
attorneys' fees from past-due benefits of claimants for Title 
II benefits, as well as ways the SSA could improve its 
processing of attorneys' fees. Advocates for claimants' 
representatives testified about the need to reduce the SSA's 
processing fees in order to encourage attorneys to accept cases 
of claimants seeking Social Security benefits. Advocates for 
claimants' representatives and advocates for individuals with 
disabilities testified about the need to extend withholding of 
attorneys' fees from past-due SSI benefits in order to increase 
the pool of attorneys willing to accept SSI cases.
    On July 26, 2001, the Subcommittee on Social Security held 
a hearing on misleading mailings targeted to seniors (107-44). 
SSA Inspector General James G. Huse testified on how use of 
certain phrases and other devices gives the false impression of 
Federal agency endorsement or origination and is used to 
mislead seniors into providing personal information and/or 
sending money.
    Information obtained during these hearings and those of the 
106th Congress led to the introduction of H.R. 4070, the 
``Social Security Program Protection Act of 2002.'' On April 
25, 2002, the Subcommittee on Social Security ordered favorably 
reported to the full Committee H.R. 4070, the ``Social Security 
Program Protection Act of 2002,'' on a voice vote, with a 
quorum present. On June 25, 2002, H.R. 4070, as amended, was 
considered by the House of Representatives under suspension of 
the rules. On June 26, 2002, the House of Representatives 
agreed to H.R. 4070 by a recorded vote of 425-0. On November 
18, 2002, H.R. 4070, as amended, was passed by the Senate by 
unanimous consent. The bill, as amended by the Senate, was not 
considered by the House of Representatives prior to adjournment 
of the 107th Congress.
    Information obtained during hearings in the 106th and 107th 
Congress, as well as bipartisan support for H.R. 4070, led to 
introduction of H.R. 743, the ``Social Security Protection Act 
of 2003.'' On February 27, 2003, the Subcommittee on Social 
Security held a hearing on the legislation. SSA Inspector 
General James G. Huse testified in favor of the bill's 
provisions to improve representative payee selection and 
monitoring, to stop Social Security benefit payments to 
fugitive felons, and to provide civil monetary penalties for 
certain fraudulent or misleading activities like withholding 
material information in order to obtain or increase benefits. 
Barbara Bovbjerg and Dan Bertoni of the GAO provided testimony 
on the bill's provision implementing the GAO's recommendation 
to address abuse of the GPO exemption. Advocates for 
individuals with disabilities testified in support of the 
bill's provisions to extend attorney fee withholding to SSI 
claims, improve beneficiary protections with regard to 
representative payees, and provide improvement and 
clarification of certain Ticket to Work provisions. Advocates 
for claimants' representatives provided testimony regarding the 
bill's provisions to extend attorney fee withholding and cap 
the SSA's processing fee on attorney fee withholding.
    On March 5, H.R. 743, as amended, was considered by the 
House of Representatives under suspension of the rules, and 
failed by a vote of 249-180. On March 13, 2003, the Committee 
on Ways and Means ordered favorably reported H.R. 743, the 
``Social Security Protection Act,'' as amended, by a rollcall 
vote of 35-2.

                      II. EXPLANATION OF THE BILL


                  TITLE I. PROTECTION OF BENEFICIARIES


                   Subtitle A. Representative Payees


      A. Authority to Reissue Benefits Misused by Organizational 
                         Representative Payees


(Sec. 101 of the Bill)

                              PRESENT LAW

    The Social Security Act requires the re-issuance of 
benefits misused by any representative payee when the 
Commissioner finds that the Social Security Administration 
(SSA) negligently failed to investigate and monitor the payee.

                           REASON FOR CHANGE

    There have been a number of highly publicized cases 
involving organizational representative payees that have 
misused large sums of monies paid to them on behalf of the 
Social Security and Supplemental Security Income (SSI) 
beneficiaries they represented. In most instances, these 
organizations operated as criminal enterprises, bent not only 
on stealing funds from beneficiaries, but also on carefully 
concealing the evidence of their wrongdoing. These illegal 
activities went undetected until large sums had been stolen. If 
the SSA is not shown to be negligent for failing to investigate 
and monitor the payee, affected beneficiaries may never be 
repaid or may be repaid only when the representative payee 
committing misuse makes restitution to the SSA.
    Benefit misuse by representative payees who serve a number 
of beneficiaries can be difficult to detect, since it often 
involves victims that may have no family members or friends 
willing or able to help them. Requiring the SSA to reissue 
benefit payments to these victims of benefit misuse provides 
essential protection from financial hardship. Moreover, 
extending the provision to cases involving individual payees 
serving fewer beneficiaries may lead to fraudulent claims of 
misuse. These claims, which often turn on information available 
only from close family members, would be difficult to assess. 
Similarly, extension of this provision to these cases could 
potentially encourage misuse or poor money management by these 
individual representative payees, if they believe the SSA could 
eventually pay the beneficiary a second time.

                        EXPLANATION OF PROVISION

    In addition to cases where the SSA negligently failed to 
investigate and monitor the payee, the provision also requires 
the Commissioner to re-issue benefits under Titles II, VIII and 
XVI in any case in which a beneficiary's funds are misused by a 
representative payee that is not an individual (regardless of 
whether it is a qualified organization such as a State/local 
agency or a community nonprofit social service agency) or an 
individual payee representing 15 or more beneficiaries.
    The new provision defines misuse as any case in which a 
representative payee converts the benefits entrusted to his or 
her care for purposes other than the ``use and benefit'' of the 
beneficiary, and authorizes the Commissioner to define ``use 
and benefit'' in regulation.
    In crafting a regulatory definition for ``use and 
benefit,'' the Commissioner should take special care to 
distinguish between the situation in which the representative 
payee violates his or her responsibility by converting the 
benefits to further the payee's own self interest, and the 
situation in which the payee faithfully serves the beneficiary 
by using the benefits in a way that principally aids the 
beneficiary but which also incidentally aids the payee or 
another individual. For instance, cases in which a 
representative payee uses the benefits entrusted to his or her 
care to help pay the rent on an apartment that he or she and 
the beneficiary share should not be considered misuse.

                             EFFECTIVE DATE

    Applies to any cases of benefit misuse by a representative 
payee with respect to which the Commissioner makes the 
determination of misuse on or after January 1, 1995. This 
protects the interests of beneficiaries affected by cases of 
egregious misuse that have been identified in recent years.

                 B. Oversight of Representative Payees


(Sec. 102 of the Bill)

                              PRESENT LAW

    Present law requires community-based nonprofit social 
service agencies serving as representative payees to be 
licensed or bonded. Payees are not required to submit proof of 
bonding or licensing, and they are not subject to independent 
audits. In addition, there is no provision requiring periodic 
on-site reviews of organizational payees (other than the 
accountability monitoring done for State institutions that 
serve as representative payees).

                           REASON FOR CHANGE

    Strengthening the bonding and licensing requirements for 
community-based nonprofit social service agencies would add 
further safeguards to protect beneficiaries' funds. State 
licensing provides for some oversight by the State into the 
organization's business practices, and bonding provides some 
assurances that a surety company has investigated the 
organization and approved it for the level of risk associated 
with the bond. Requiring annual certification as to the 
licensing and bonding of the payee, as well as submission of 
audits performed, should help prevent a payee from dropping 
their licensing or bonding subsequent to the SSA approving them 
as payee.
    On-site periodic visits should be conducted regularly to 
reduce misuse of funds. To the degree possible, appropriate 
auditing and accounting standards should be utilized in 
conducting such reviews.

                        EXPLANATION OF PROVISION

    The new provision requires community-based nonprofit social 
service agencies serving as representative payees to be both 
bonded and licensed (provided that licensing is available in 
the State). In addition, such representative payees must submit 
yearly proof of bonding and licensing, as well as copies of any 
independent audits that were performed on the payee since the 
previous certification.
    The new provision also requires the Commissioner of Social 
Security to conduct periodic onsite reviews of: (1) a person 
who serves as a representative payee to 15 or more 
beneficiaries; (2) community-based nonprofit social service 
agencies serving as representative payees; and, (3) any agency 
that serves as the representative payee to 50 or more 
beneficiaries. In addition, the Commissioner is required to 
submit an annual report to the Committee on Ways and Means of 
the House of Representatives and the Committee on Finance of 
the Senate on the reviews conducted in the prior fiscal year.

                             EFFECTIVE DATE

    The bonding, licensing, and audit provisions are effective 
on the first day of the 13th month following enactment of the 
legislation. The periodic on-site review provision is effective 
upon enactment.

  C. Disqualification From Service as Representative Payee of Persons 
 Convicted of Offenses Resulting in Imprisonment for More Than 1 Year, 
             or Fleeing Prosecution, Custody or Confinement


(Sec. 103 of the Bill)

                              PRESENT LAW

    Sections 205, 807, and 1631 of the Social Security Act 
disqualify individuals from being representative payees if they 
have been convicted of fraudulent conduct involving Social 
Security programs.

                           REASON FOR CHANGE

    Prohibiting persons convicted of offenses resulting in 
imprisonment for more than one year and persons fleeing 
prosecution, custody or confinement for a felony from serving 
as representative payees decreases the likelihood of 
mismanagement or abuse of beneficiaries' funds. Also, allowing 
such persons to serve as representative payees could raise 
serious questions about the SSA's stewardship of taxpayer 
funds. The agency's report will assist Congress in its 
oversight of the representative payee program.

                        EXPLANATION OF PROVISION

    The new provision expands the scope of disqualification to 
prohibit an individual from serving as a representative payee 
if he or she has been convicted of an offense resulting in 
imprisonment for more than one year, unless the Commissioner 
determines that payee status would be appropriate despite the 
conviction. It also disqualifies persons fleeing prosecution, 
custody, or confinement for a felony from being representative 
payees. Finally, the Commissioner shall assist law enforcement 
officials in apprehending such persons by providing them with 
the address, Social Security number, photograph, or other 
identifying information.
    The new provision requires the Commissioner, in 
consultation with the SSA Inspector General, to submit a report 
to the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate 
evaluating existing procedures and reviews conducted for 
representative payees to determine whether they are sufficient 
to protect benefits from being misused.

                             EFFECTIVE DATE

    The first day of the 13th month beginning after the date of 
enactment, except that the report to Congress is due no later 
than 270 days after the date of enactment.

  D. Fee Forfeiture in Case of Benefit Misuse by Representative Payees


(Sec. 104 of the Bill)

                              PRESENT LAW

    Certain qualified organizations are authorized to collect a 
fee for their services. The fee, which is determined by a 
statutory formula, is deducted from the beneficiary's benefit 
payments.

                           REASON FOR CHANGE

    Payees who misuse their clients' funds are not properly 
performing the service for which the fee was paid; therefore, 
they should forfeit such fees. Permitting the payee to retain 
the fees is tantamount to rewarding the payee for violating his 
or her responsibility to use the benefits for the individual's 
needs.

                        EXPLANATION OF PROVISION

    The new provision requires representative payees to forfeit 
the fee for those months during which the representative payee 
misused funds, as determined by the Commissioner of Social 
Security or a court of competent jurisdiction.

                             EFFECTIVE DATE

    Applies to any month involving benefit misuse by a 
representative payee as determined by the Commissioner or a 
court of competent jurisdiction after 180 days after the date 
of enactment.

       E. Liability of Representative Payees for Misused Benefits


(Sec. 105 of the Bill)

                              PRESENT LAW

    Although the SSA has been provided with expanded authority 
to recover overpayments (such as the use of tax refund offsets, 
referral to contract collection agencies, notification of 
credit bureaus, and administrative offsets of future Federal 
benefit payments), these tools cannot be used to recoup 
benefits misused by a representative payee.

                           REASON FOR CHANGE

    Treating misused benefits as overpayments to the 
representative payee would provide the SSA with additional 
means for recovering misused payments.

                        EXPLANATION OF PROVISION

    The new provision treats benefits misused by any 
representative payee (except a Federal, State or local 
government agency) as an overpayment to the representative 
payee, thus subjecting the representative payee to current 
overpayment recovery authorities. Any recovered benefits not 
already reissued to the beneficiary pursuant to Section 101 of 
this legislation would be reissued to either the beneficiary or 
their alternate representative payee, up to the total amount 
misused.

                             EFFECTIVE DATE

    Applies to benefit misuse by a representative payee in any 
case where the Commissioner of Social Security or a court of 
competent jurisdiction makes a determination of misuse after 
180 days after the date of enactment.

     F. Authority To Redirect Delivery of Benefit Payments When a 
       Representative Payee Fails To Provide Required Accounting


(Sec. 106 of the Bill)

                              PRESENT LAW

    The Social Security Act requires representative payees to 
submit accounting reports to the Commissioner of Social 
Security regarding how a beneficiary's benefit payments were 
used. A report is required at least annually, but may be 
required by the Commissioner at any time if the Commissioner 
has reason to believe the representative payee is misusing 
benefits.

                           REASON FOR CHANGE

    Accounting reports are an important means of monitoring the 
activities of representative payees to prevent misuse of 
benefits. Redirecting benefit payments to the field office 
would enable the agency to promptly address the failure of the 
representative payee to file a report.

                        EXPLANATION OF PROVISION

    The new provision authorizes the Commissioner of Social 
Security to require a representative payee to receive any 
benefits under Titles II, VIII, and XVI in person at a Social 
Security field office if the representative payee fails to 
provide a required accounting of benefits. The Commissioner 
would be required to provide proper notice and the opportunity 
for a hearing prior to redirecting benefits to the field 
office.

                             EFFECTIVE DATE

    180 days after the date of enactment.

                        Subtitle B: Enforcement


     G. Civil Monetary Penalty Authority With Respect to Wrongful 
                  Conversions by Representative Payees


(Sec. 111 of the Bill)

                              PRESENT LAW

    Section 1129 of the Social Security Act authorizes the 
Commissioner to impose a civil monetary penalty (of up to 
$5,000 for each violation) along with an assessment (up to 
twice the amount wrongly paid), upon any person who knowingly 
uses false information or knowingly omits information to 
wrongly obtain Title II, VIII or XVI benefits.

                           REASON FOR CHANGE

    Providing authority for SSA to impose civil monetary 
penalties along with an assessment of up to twice the amount of 
misused benefits would provide the SSA with an additional means 
to address benefit misuse by representative payees.

                        EXPLANATION OF PROVISION

    The new provision expands civil monetary penalties 
authority under Section 1129 to include misuse of Title II, 
VIII or XVI benefits by representative payees. A civil monetary 
penalty of up to $5,000 may be imposed for each violation, 
along with an assessment of up to twice the amount of misused 
benefits.

                             EFFECTIVE DATE

    Applies to violations committed after the date of 
enactment.

                     TITLE II. PROGRAM PROTECTIONS


A. Civil Monetary Penalty Authority With Respect to Knowing Withholding 
                           of Material Facts


(Sec. 201 of the Bill)

                              PRESENT LAW

    Section 1129 of the Social Security Act, 42 U.S.C. 
Sec. 1320a-8, authorizes the Commissioner of Social Security to 
impose civil monetary penalties and assessments on any person 
who makes a statement or representation of a material fact for 
use in determining initial or continuing rights to Title II, 
VIII, or XVI benefits that the person knows or should know 
omits a material fact or is false or misleading. In order for 
the penalty or assessment to be imposed, the law requires an 
affirmative act on the part of the individual of making (or 
causing to be made) a statement that omits a material fact or 
is false or misleading.
    Section 1129A, 42 U.S.C. 1320a-8a, provides administrative 
procedures for imposing penalties of nonpayment of Title II and 
XVI benefits (6 months for the first violation) for making 
false statements.

                           REASON FOR CHANGE

    Currently the SSA cannot impose civil monetary penalties 
and assessments on a person who should have come forward to 
notify the SSA of changed circumstances that affect eligibility 
or benefit amount, but did not. To be subject to civil monetary 
penalties and assessments under the current law, an individual 
must have made a statement that omitted a material fact or was 
false or misleading. Examples of the types of individuals 
intended to be covered under this amendment to Section 1129 and 
1129A include (but are not limited to): (1) an individual who 
has a joint bank account with a beneficiary in which the SSA 
direct deposited the beneficiary's Social Security checks; upon 
the death of the beneficiary, this individual fails to advise 
the SSA of the beneficiary's death, instead spending the 
proceeds from the deceased beneficiary's Social Security 
checks; and (2) an individual who is receiving benefits under 
one SSN while working under another SSN.
    This amendment is intended to close this loophole in the 
current law, but is not intended to expand Section 1129 and 
1129A to include those individuals whose failure to come 
forward to notify the SSA was not done for the purpose of 
improperly obtaining or continuing to receive benefits. For 
instance, it is not intended that the expanded authority be 
used against individuals who do not have the capacity to 
understand that their failure to come forward is misleading.

                        EXPLANATION OF PROVISION

    By including the phrase ``or otherwise withholds disclosure 
of,'' in Section 1129 and 1129A, civil monetary penalties and 
assessments and sanctions could also be imposed for failure to 
come forward and notify the SSA of changed circumstances that 
affect eligibility or benefit amount when that person knows or 
should know that the failure to come forward is misleading.

                             EFFECTIVE DATE

    Applies to violations committed after the date on which the 
Commissioner implements the centralized computer file described 
in Section 202.

     B. Issuance by Commissioner of Social Security of Receipts To 
Acknowledge Submission of Reports of Changes in Work or Earnings Status 
                       of Disabled Beneficiaries


(Sec. 202 of the Bill)

                              PRESENT LAW

    Changes in work or earnings status can affect a Title II 
disability beneficiary's right to continued entitlement to 
disability benefits. Changes in the amount of earned income can 
also affect an SSI recipient's continued eligibility for SSI 
benefits or his or her monthly benefit amount.
    The Commissioner has promulgated regulations that require 
Title II disability beneficiaries to report changes in work or 
earnings status (20 CFR, Sec. 404.1588) and regulations that 
require SSI recipients (or their representative payees) to 
report any increase or decrease in income (20 CFR, 
Sec. Sec. 416.704-416.714).

                           REASON FOR CHANGE

    Witnesses have testified before the Social Security 
Subcommittee and the Human Resources Subcommittee that the SSA 
does not currently have an effective system in place for 
processing and recording Title II and Title XVI disability 
beneficiaries' reports of changes in work and earnings status. 
Issuing receipts to disabled beneficiaries who make such 
reports would provide them with proof that they had properly 
fulfilled their obligation to report these changes.

                        EXPLANATION OF PROVISION

    The new provision requires the Commissioner to issue a 
receipt to a disabled beneficiary (or representative of a 
beneficiary) who reports a change in his or her work or 
earnings status. The Commissioner is required to continue 
issuing such receipts until the Commissioner has implemented a 
centralized computer file that would record the date on which 
the disabled beneficiary (or representative) reported the 
change in work or earnings status.
    This provision requires the Commissioner to begin issuing 
receipts as soon as possible, but no later than one year after 
the date of enactment. The Committee on Ways and Means is aware 
that the SSA has developed software known as the Modernized 
Return to Work System (MRTW). This software will assist SSA 
employees in recording information about changes in work and 
earnings status and in making determinations of whether such 
changes affect continuing entitlement to disability benefits. 
The software also has the capability of automatically issuing 
receipts. The SSA has informed the Committee on Ways and Means 
that this software is already in use in some of the agency's 
approximately 1300 local field offices, and that the SSA 
expects to put it into operation in the remainder of the field 
offices over the next year. The Committee on Ways and Means 
expects that the SSA field offices that are already using the 
MRTW system will immediately begin issuing receipts to disabled 
beneficiaries who report changes in work or earnings status, 
and that the SSA will require the other field offices to begin 
issuing receipts as these offices begin using the MRTW system 
over the next year. For disabled Title XVI beneficiaries, if 
the SSA issues a notice to the beneficiary immediately 
following the report of earnings that details the effect of the 
change in income on the monthly benefit amount, this notice 
would serve as a receipt.

                             EFFECTIVE DATE

    Requires the Commissioner to begin issuing receipts as soon 
as possible, but no later than one year after the date of 
enactment.

C. Denial of Title II Benefits to Persons Fleeing Prosecution, Custody, 
      or Confinement, and to Persons Violating Probation or Parole


(Sec. 203 of the Bill)

                              PRESENT LAW

    The ``Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996,'' (PRWORA) P.L. 104-193, included 
provisions making persons ineligible to receive SSI benefits 
during any month in which they are fleeing to avoid 
prosecution, custody, or confinement for a felony, or if they 
are in violation of a condition of probation or parole. 
However, this prohibition was not extended to Social Security 
benefits under Title II.

                           REASON FOR CHANGE

    There are concerns that Social Security benefits, not just 
Supplemental Security Income and other welfare benefits, are 
being used to aid flight from justice or other crime. The 
Congressional Budget Office has estimated that persons fleeing 
to avoid prosecution for a felony or to avoid custody or 
confinement after conviction for a felony, or in violation of a 
condition of probation or parole, will receive $526 million in 
Title II Social Security benefits over the next 10 years. The 
Social Security Inspector General (SSA IG) recommended changing 
the law to prohibit fugitive felons and other criminals from 
receiving benefits.
    The provision gives the Commissioner authority to pay 
withheld Title II benefits if there is ``good cause.'' The 
Commissioner would be required to develop regulations within 
one year of the date of enactment. This ``good cause'' 
discretion is authorized for the Commissioner in cases of Title 
II benefits, where it was not authorized or intended for 
programs affected under the similar provision in PRWORA, 
because workers earn the right to receive benefits for 
themselves and their families through their career-long Social 
Security payroll tax contributions.
    The good cause exception will provide the Commissioner with 
the ability to pay benefits under circumstances in which the 
Commissioner deems withholding of benefits to be 
inappropriate--for example, but not limited to, situations when 
Social Security beneficiaries are found to be in flight from a 
warrant relating to a crime for which a court of competent 
jurisdiction finds the person not guilty, or if the charges are 
dismissed; if a warrant for arrest is vacated; or if probation 
or parole is not revoked. In such circumstances, it is expected 
that the Commissioner would pay benefits withheld from the 
beneficiary for which he or she was otherwise eligible but for 
the prohibition in this provision.
    In testimony received at a February 27, 2003 hearing, the 
Subcommittee was made aware of instances with respect to the 
SSI program where there may be mitigating circumstances 
relating to persons with outstanding warrants for their arrest. 
In addition, PRWORA implementing instructions have been found 
to vary between agencies. For example, the Department of 
Agriculture's Food and Nutrition Service has issued 
instructions that in order to be considered ``fleeing,'' the 
individual must have knowledge a warrant has been issued for 
his or her arrest and that the State agency should verify the 
individual has such knowledge. In addition, once the person has 
knowledge of the warrant, either by having received it 
personally or by being advised of its existence by the State 
agency, he or she is technically ``fleeing'' at that time. 
Finally, the instructions strongly urge the State agency to 
give the individual an opportunity to submit documentation that 
the warrant has been satisfied. The Social Security 
Administration's procedures do not include such instructions.
    The SSA IG is conducting an audit on implementation of the 
fugitive felon provision for the Supplemental Security Income 
program, which will shed light on the types of crimes 
beneficiaries committed, law enforcement's pursuit of such 
criminals, the length of time benefits were suspended, the 
SSA's handling of these cases, and other issues. The 
Subcommittee will continue to closely monitor these issues and 
encourages the Commissioner to review the agency's implementing 
instructions in light of these circumstances and what 
constitutes flight under Federal law.

                        EXPLANATION OF PROVISION

    The new provision denies Social Security benefits under 
Title II to persons fleeing prosecution, custody or confinement 
for a felony, and to persons violating probation or parole. 
However, the Commissioner may, for good cause, pay withheld 
benefits. Finally, the Commissioner shall assist law 
enforcement officials in apprehending such persons by providing 
them with the address, Social Security number, photograph, or 
other identifying information.

                             EFFECTIVE DATE

    First day of the first month that begins on or after the 
date that is 9 months after the date of enactment.

 D. Requirements Relating to Offers To Provide for a Fee a Product or 
       Service Available Without Charge From the Social Security 
                             Administration


(Sec. 204 of the Bill)

                              PRESENT LAW

    Section 1140 of the Social Security Act prohibits or 
restricts various activities involving the use of Social 
Security and Medicare symbols, emblems, or references that give 
a false impression that an item is approved, endorsed, or 
authorized by the Social Security Administration, the Health 
Care Financing Administration (now the Centers for Medicare and 
Medicaid Services), or the Department of Health and Human 
Services. It also provides for the imposition of civil monetary 
penalties with respect to violations of the section.

                           REASON FOR CHANGE

    Several individuals and companies offer Social Security 
services for a fee even though the same services are available 
directly from the SSA free of charge. For example, the SSA's 
Inspector General has encountered business entities that have 
offered assistance to individuals in changing their names (upon 
marriage) or in obtaining a Social Security number (upon the 
birth of a child) for a fee, even though these services are 
directly available from the SSA for free. The offer from the 
business entities either did not state at all, or did not 
clearly state, that these services were available from the SSA 
for free. These practices can mislead and deceive senior 
citizens, newlyweds, new parents, and other individuals seeking 
services or products, who may not be aware that the SSA 
provides these services for free.

                        EXPLANATION OF PROVISION

    Several individuals and companies offer Social Security-
related services for a fee even though the same services are 
available directly from the SSA free of charge. The new 
provision requires persons or companies offering such services 
to include in their offer a statement that the services they 
provide for a fee are available directly from the SSA free of 
charge. The statements would be required to comply with 
standards promulgated through regulation by the Commissioner of 
Social Security with respect to their content, placement, 
visibility, and legibility.

                             EFFECTIVE DATE

    Applies to offers of assistance made after the sixth month 
following the issuance of these standards. Requires the 
Commissioner to promulgate regulations within 1 year after the 
date of enactment.

E. Refusal To Recognize Certain Individuals as Claimant Representatives


(Sec. 205 of the Bill)

                              PRESENT LAW

    An attorney in good standing is entitled to represent 
claimants before the Commissioner of Social Security. The 
Commissioner may prescribe rules and regulations governing the 
recognition of persons other than attorneys representing 
claimants before the Commissioner. Under present law, attorneys 
disbarred in one jurisdiction, but licensed to practice in 
another jurisdiction, must be recognized as a claimant's 
representative.

                           REASON FOR CHANGE

    This provision would provide additional protections for 
beneficiaries who may rely on representatives during all phases 
of their benefit application process. As part of their ongoing 
oversight of claimant representatives, the Committee on Ways 
and Means intends to review whether options to establish 
protections for claimants represented by non-attorneys should 
be considered.

                        EXPLANATION OF PROVISION

    The new provision authorizes the Commissioner to refuse to 
recognize as a representative, or disqualify as a 
representative, an attorney who has been disbarred or suspended 
from any court or bar, or who has been disqualified from 
participating in or appearing before any Federal program or 
agency. Due process (i.e., notice and an opportunity for a 
hearing) would be required before taking such action. Also, if 
a representative has been disqualified or suspended as a result 
of collecting an unauthorized fee, full restitution is required 
before reinstatement can be considered.

                             EFFECTIVE DATE

    Upon enactment.

F. Penalty for Corrupt or Forcible Interference With Administration of 
                        the Social Security Act


(Sec. 206 of the Bill)

                              PRESENT LAW

    No provision.

                           REASON FOR CHANGE

    This provision extends to SSA employees the same 
protections provided to employees of the Internal Revenue 
Service under the Internal Revenue Code of 1954. These 
protections will allow SSA employees to perform their work with 
more confidence that they will be safe from harm.
    The Internal Revenue Manual defines the term ``corruptly'' 
as follows:

          ``Corruptly'' characterizes an attempt to influence 
        any official in his or her official capacity under this 
        title by any improper inducement. For example, an offer 
        of a bribe or a passing of a bribe to an Internal 
        Revenue employee for the purpose of influencing him or 
        her in the performance of his or her official duties is 
        corrupt interference with the administration of Federal 
        laws. (Internal Revenue Manual, [9.5] 11.3.2.2, 4-09-
        1999.)

                        EXPLANATION OF PROVISION

    The new provision imposes a fine of not more than $5,000, 
imprisonment of not more than 3 years, or both, for attempting 
to intimidate or impede--corruptly or by using force or threats 
of force--any Social Security Administration (SSA) officer, 
employee or contractor (including State employees of disability 
determination services and any individuals designated by the 
Commissioner) while they are acting in their official 
capacities under the Social Security Act. If the offense is 
committed only by threats of force, the offender is subject to 
a fine of not more than $3,000, no more than one year in 
prison, or both.
    The Committee on Ways and Means expects that judgment will 
be used in enforcing this section. Social Security and SSI 
disability claimants and beneficiaries, in particular, are 
frequently subject to multiple, severe life stressors, which 
may include severe physical, psychological, or financial 
difficulties. In addition, disability claimants or 
beneficiaries who encounter delays in approval of initial 
benefit applications or in post-entitlement actions may incur 
additional stress, particularly if they have no other source of 
income. Under such circumstances, claimants or beneficiaries 
may at times express frustration in an angry manner, without 
truly intending to threaten or intimidate SSA employees. In 
addition, approximately 25 percent of Social Security 
disability beneficiaries and 35 percent of disabled SSI 
recipients have mental impairments, and such individuals may be 
less able to control emotional outbursts. These factors should 
be taken into account in enforcing this provision.

                             EFFECTIVE DATE

    Upon enactment.

G. Use of Symbols, Emblems, or Names in Reference to Social Security or 
                                Medicare


(Sec. 207 of the Bill)

                              PRESENT LAW

    Section 1140 of the Social Security Act prohibits (subject 
to civil penalties) the use of Social Security or Medicare 
symbols, emblems and references on any item in a manner that 
conveys the false impression that such item is approved, 
endorsed or authorized by the Social Security Administration, 
the Health Care Financing Administration (now the Centers for 
Medicare and Medicaid Services) or the Department of Health and 
Human Services.

                           REASON FOR CHANGE

    The SSA Inspector General has found these phrases appearing 
in mailings, solicitations, or flyers, which, when used with 
the SSA's words, symbols, emblems, and references may be 
particularly misleading and more likely to convey the false 
impression that such item is approved, endorsed, or authorized 
by the SSA, the Health Care Financing Administration (now the 
Centers for Medicare and Medicaid Services), or the Department 
of Health and Human Services. Expansion of this list helps to 
ensure that individuals receiving any type of mail, 
solicitations or flyers bearing symbols, emblems or names in 
reference to Social Security or Medicare are not misled into 
believing that these agencies approved or endorsed the services 
or products depicted.

                        EXPLANATION OF PROVISION

    The new provision expands the prohibition in present law to 
several other references to Social Security and Medicare. This 
includes, but is not limited to, ``Death Benefits Update,'' 
``Federal Benefits Information,'' and ``Final Supplemental 
Plan.''

                             EFFECTIVE DATE

    Applies to items sent after 180 days after the date of 
enactment.

    H. Disqualification From Payment During Trial Work Period Upon 
         Conviction of Fraudulent Concealment of Work Activity


(Sec. 208 of the Bill)

                              PRESENT LAW

    An individual entitled to disability benefits under Title 
II is entitled to a ``trial work period'' to test his or her 
ability to work. The trial work period allows beneficiaries to 
have earnings from work above a certain amount ($570 a month in 
2003) for up to 9 months (which need not be consecutive) within 
any 60-month period without any loss of benefits. Presently, 
Section 222(c) of the Social Security Act does not prohibit a 
person entitled to disability benefits under Title II from 
receiving disability benefits during a trial work period, even 
if convicted by a Federal court for fraudulently concealing 
work activity during that period.
    The SSA's Inspector General has pursued prosecution of 
Title II disability beneficiaries who fraudulently conceal work 
activity by applying several criminal statutes, including 
Section 208(a) of the Social Security Act, and Sections 371 and 
641 of Title 18 of the United States Code (Crimes and Criminal 
Procedures).

                           REASON FOR CHANGE

    Under current law, if an individual is convicted of 
fraudulently concealing work activity, the dollar loss to the 
government is calculated based on the benefits that the 
individual would have received had he or she not concealed the 
work activity. During the trial work period, disability 
beneficiaries continue to receive their monthly benefit amount 
regardless of their work activity. Therefore, the SSA does not 
include benefits paid during a trial work period in calculating 
the total dollar loss to the government, even if the individual 
fraudulently concealed work activity during that period. As a 
result, the dollars lost to the government may fall below the 
thresholds set by the United States Attorneys in cases 
involving fraudulent concealment of work by Title II disability 
beneficiaries. In such situations, the case would not be 
prosecuted, even if the evidence of fraud were very clear.
    This provision rectifies the situation by establishing that 
individuals convicted of fraudulently concealing work activity 
during the trial work period are not entitled to receive any 
disability benefits for trial work period months prior to the 
conviction (but within the same period of disability).

                        EXPLANATION OF PROVISION

    Under the new provision, an individual convicted by a 
Federal court of fraudulently concealing work activity from the 
Commissioner of Social Security would not be entitled to 
receive any disability benefits in any trial work period month 
and would be liable for repayment of those benefits, in 
addition to any restitution, penalties, fines or assessments 
otherwise due.
    Under this provision, concealing work activity is 
considered to be fraudulent if the individual: (1) provided 
false information to the SSA about his or her earnings during 
that period; (2) worked under another identity, including under 
another person's or a false Social Security number; or (3) took 
other actions to conceal work activity with the intent to 
receive benefits to which he or she was not entitled.

                             EFFECTIVE DATE

    Effective with respect to work activity performed after the 
date of enactment.

            I. Authority for Judicial Orders of Restitution


(Sec. 209 of the Bill)

                              PRESENT LAW

    A court may order restitution when sentencing a defendant 
convicted of various offenses under Titles 18, 21, and 49 of 
the United States Code. However, violations of the Social 
Security Act (42 U.S.C.) are not included among those for which 
the court may order restitution.

                           REASON FOR CHANGE

    This provision would enhance a judge's ability to 
compensate the programs and punish persons convicted of 
violations including, but not limited to, improper receipt of 
Social Security payments and misuse of Social Security numbers.

                        EXPLANATION OF PROVISION

    This provision amends the Social Security Act to allow a 
Federal court to order restitution to the Social Security 
Administration for violations of the Social Security Act. 
Restitution in connection with benefit misuse by a 
representative payee would be credited to the Social Security 
Trust Funds for cases involving OASDI recipients and to the 
general fund for cases involving Supplemental Security Income 
and Special Veterans benefits. Other restitution funds, 
credited to a special fund established in the Treasury, would 
be available to defray expenses incurred in implementing Title 
II, Title VIII, and Title XVI. If the court does not order 
restitution, or only orders partial restitution, the court must 
state the reason on the record.

                             EFFECTIVE DATE

    Effective with respect to violations occurring on or after 
the date of enactment.

          TITLE III--ATTORNEY FEE PAYMENT SYSTEM IMPROVEMENTS


                     A. Cap on Attorney Assessments


(Sec. 301 of the Bill)

                              PRESENT LAW

    If there is an agreement between the claimant and the 
attorney, the Social Security Act requires the SSA to pay 
attorney fees for Title II claims directly to the attorney out 
of the claimant's past-due benefits. The SSA charges an 
assessment, at a rate not to exceed 6.3 percent of approved 
attorney fees, for the costs of determining, processing, 
withholding, and distributing attorney fees.

                           REASON FOR CHANGE

    Testimony was given at a House oversight hearing in May 
2001 on the SSA's processing of attorney representatives' fees 
that the amount of the fee assessment is unfair to these 
attorneys, who provide an important service to claimants. The 
attorneys who receive fee payments from the agency have their 
gross revenue reduced by 6.3 percent. As a result of this 
revenue loss and the time it takes for the SSA to issue the fee 
payments to attorneys, a number of attorneys have decided to 
take fewer or none of these cases. The cap on the amount of the 
assessment would help ensure that enough attorneys remain 
available to represent claimants before the Social Security 
Administration.
    The Committee on Ways and Means continues to be concerned 
about the agency's processing time for attorney representative 
fee payments and expects the SSA to further automate the 
payment process as soon as possible.

                        EXPLANATION OF PROVISION

    The new provision imposes a cap of $75 on the 6.3 percent 
assessment on approved attorney representative fees for Title 
II claims. The cap is indexed annually for inflation.

                             EFFECTIVE DATE

    After 180 days after the date of enactment.

    B. Extension of Attorney Fee Payment System to Title XVI Claims


(Sec. 302 of the Bill)

                              PRESENT LAW

    If there is an agreement between the claimant and the 
attorney, the Social Security Act requires attorney fees for 
Title II claims to be paid by the SSA directly to the attorney 
out of the claimant's past-due benefits (subject to an 
assessment to cover the SSA's costs). However, attorney fees 
for Title XVI claims are not paid directly by the SSA out of 
past-due benefits. Instead, the attorney must collect the fee 
from the beneficiary.

                           REASON FOR CHANGE

    Withholding the attorney fee payments from the SSI benefit 
claim would improve SSI applicants' access to representation, 
as more attorneys would be willing to represent claimants if 
they are guaranteed payment.
    Payment of States first and attorneys second would ensure 
that States providing interim assistance to individuals would 
not receive less reimbursement, while also providing a method 
of ensuring that attorneys receive payment and continue to 
provide representation.

                        EXPLANATION OF PROVISION

    The provision would extend direct fee payment to attorneys 
out of past-due benefits for Title XVI claims. It would also 
authorize the SSA to charge a processing assessment of up to 
6.3 percent of the approved attorney fees, subject to a cap of 
$75 that is indexed for inflation. The provision would sunset 
with respect to agreements for representation entered into 
after 5 years after the implementation date.
    In addition, in cases where the States would be reimbursed 
for interim assistance they had provided to a beneficiary 
awaiting a decision on a claim for SSI benefits, the State 
would be paid first, and the attorney would be paid second out 
of the past-due benefit amount.
    The provision also requires the General Accounting Office 
to conduct a study of claimant representation in the Social 
Security and Supplemental Security Income programs. The study 
will include an evaluation of the potential results of 
extending the fee withholding process to non-attorney 
representatives.

                             EFFECTIVE DATE

    Applies with respect to fees for representation that are 
first required to be certified or paid on or after the first 
day of the first month that begins after 270 days after the 
date of enactment. The GAO report is due to the Committee on 
Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate not later than 1 year after 
the date of enactment.

            TITLE IV: MISCELLANEOUS AND TECHNICAL AMENDMENTS


    Subtitle A: Amendments Relating to the Ticket to Work and Work 
                   Incentives Improvement Act of 1999


 A. Application of Demonstration Authority Sunset Date to New Projects


(Sec. 401 of the Bill)

                              PRESENT LAW

    Section 234 of the Social Security Act provides the 
Commissioner with general authority to conduct demonstration 
projects for the disability insurance program. These projects 
can test: (1) alternative methods of treating work activity of 
individuals entitled to disability benefits; (2) the alteration 
of other limitations and conditions that apply to such 
individuals (such as an increase in the length of the trial 
work period); and, (3) implementation of sliding scale benefit 
offsets. To conduct the projects, the Commissioner may waive 
compliance with the benefit requirements of Title II and 
Section 1148, and the HHS Secretary may waive the benefit 
requirements of Title XVIII. The Commissioner's authority to 
conduct demonstration projects terminates on December 17, 2004, 
five years after its enactment in the ``Ticket to Work and Work 
Incentives Improvement Act of 1999'' (P.L. 106-170, ``Ticket to 
Work Act'').

                           REASON FOR CHANGE

    The current five-year limitation on waiver authority 
restricts the options that may be tested to improve work 
incentives and return to work initiatives, as several potential 
options the Commissioner may test would extend past the current 
five-year limit. Developing a well-designed demonstration 
project can require several years, and the current five-year 
authority might not allow sufficient time to both design the 
project and to conduct it long enough to obtain reliable data.

                        EXPLANATION OF PROVISION

    The new provision clarifies that the Commissioner is 
authorized to conduct demonstration projects that extend beyond 
December 17, 2004, if such projects are initiated on or before 
that date (i.e., initiated within the five-year window after 
enactment of the Ticket to Work Act).

                             EFFECTIVE DATE

    Upon enactment.

     B. Expansion of Waiver Authority Available in Connection With 
Demonstration Projects Providing for Reductions in Disability Insurance 
                       Benefits Based on Earnings


(Sec. 402 of the Bill)

                              PRESENT LAW

    Section 234 of the Social Security Act provides the 
Commissioner with general authority to conduct demonstration 
projects for the disability insurance program. In addition, 
Section 302 of the Ticket to Work Act directs the Commissioner 
to conduct demonstration projects for the purpose of evaluating 
a program for Title II disability beneficiaries under which 
benefits are reduced by $1 for each $2 of the beneficiary's 
earnings above a level determined by the Commissioner. To 
permit a thorough evaluation of alternative methods, Section 
302 of the Ticket to Work Act allows the Commissioner to waive 
compliance with the benefit provisions of Title II and allows 
the Secretary of Health and Human Services to waive compliance 
with the benefit requirements of Title XVIII.

                           REASON FOR CHANGE

    This additional waiver authority is needed to allow the 
Commissioner to effectively test the $1-for-$2 benefit offset 
in combination with return to work services under the Ticket to 
Work program. Under the $1-for-$2 benefit offset, earnings of 
many beneficiaries may not be sufficient to completely 
eliminate benefits. However, under Section 1148 of the Social 
Security Act, benefits must be completely eliminated before 
employment networks participating in the Ticket to Work program 
are eligible to receive outcome payments. Therefore, employment 
networks are likely to be reluctant to accept tickets from 
beneficiaries participating in the $1 for $2 benefit offset 
demonstration, making it impossible for the SSA to effectively 
test the combination of the benefit offset and these return to 
work services. Additionally, Section 1148 waiver authority was 
provided for the broad Title II disability demonstration 
authority under Section 234 of the Social Security Act, but not 
for this mandated project.

                        EXPLANATION OF PROVISION

    The new provision allows the Commissioner to also waive 
requirements in Section 1148 of the Social Security Act, which 
governs the Ticket to Work and Self-Sufficiency Program (Ticket 
to Work program), as they relate to Title II.

                             EFFECTIVE DATE

    Upon enactment.

   C. Funding of Demonstration Projects Providing for Reductions in 
            Disability Insurance Benefits Based on Earnings


(Sec. 403 of the Bill)

                              PRESENT LAW

    The Ticket to Work Act provides that the benefits and 
administrative expenses of conducting the $1-for-$2 
demonstration projects will be paid out of the Old-Age, 
Survivors, and Disability Insurance (OASDI) and Federal 
Hospital Insurance and Federal Supplementary Medical Insurance 
(HI/SMI) Trust Funds, to the extent provided in advance in 
appropriations acts.

                           REASON FOR CHANGE

    For demonstration projects conducted under the broader 
Title II demonstration project authority under Section 234 of 
the Social Security Act, administrative costs are paid out of 
otherwise available annually appropriated funds, and benefits 
associated with the demonstration projects are paid from the 
OASDI or HI/SMI Trust Funds. This provision would make funding 
sources for the $1-for-$2 demonstration project under the 
Ticket to Work Act consistent with funding sources for other 
Title II demonstration projects.

                        EXPLANATION OF PROVISION

    The new provision establishes that administrative expenses 
for the $1-for-$2 demonstration project will be paid out of 
otherwise available annually-appropriated funds, and that 
benefits associated with the demonstration project will be paid 
from the OASDI or HI/SMI Trust Funds.

                             EFFECTIVE DATE

    Upon enactment.

    D. Availability of Federal and State Work Incentive Services to 
                         Additional Individuals


(Sec. 404 of the Bill)

                              PRESENT LAW

    Section 1149 of the Social Security Act (the act), as added 
by the Ticket to Work Act, directs the SSA to establish a 
community-based work incentives planning and assistance 
programs to provide benefits planning and assistance to 
disabled beneficiaries. To establish this program, the SSA is 
required to award cooperative agreements (or grants or 
contracts) to State or private entities. In fulfillment of this 
requirement, the SSA has established the Benefits Planning, 
Assistance, and Outreach (BPAO) Program. BPAO projects now 
exist in every State.
    Section 1150 of the act authorizes the SSA to award grants 
to State protection and advocacy (P&A;) systems so that they can 
provide protection and advocacy services to disabled 
beneficiaries. Under this section, services provided by 
participating P&A; systems may include: (1) information and 
advice about obtaining vocational rehabilitation (VR) and 
employment services; and (2) advocacy or other services that a 
disabled beneficiary may need to secure or regain employment. 
The SSA has established the Protection and Advocacy to 
Beneficiaries of Social Security (PABSS) Program pursuant to 
this authorization.
    To be eligible for services under either the BPAO or PABSS 
programs, an individual must be a ``disabled beneficiary'' as 
defined under Section 1148(k) of the act. Section 1148(k) 
defines a disabled beneficiary as an individual entitled to 
Title II benefits based on disability or an individual who is 
eligible for Federal SSI cash benefits under Title XVI based on 
disability or blindness.

                           REASON FOR CHANGE

    The Committee on Ways and Means recognizes that Social 
Security and SSI beneficiaries with disabilities face a variety 
of barriers and disincentives to becoming employed and staying 
in their jobs. The intent of this provision, as with the Ticket 
to Work Act, is to encourage disabled individuals to work.
    The definition of ``disabled beneficiary'' under section 
1148(k) of the act does not include several groups of 
beneficiaries, including individuals who are no longer eligible 
for SSI benefits because of an earnings increase but remain 
eligible for Medicaid under section 1619(b); individuals 
receiving only a State supplementation payment; and individuals 
who are in an extended period of Medicare eligibility. The 
Committee on Ways and Means believes that BPAO and PABSS 
services should be available to all of these disabled 
beneficiaries regardless of Title II or SSI payment status. 
Beneficiaries may have progressed beyond eligibility for 
Federal cash benefits, but may still need information about the 
effects of work on their benefits, or may need advocacy or 
other services to help them maintain or regain employment. 
Extending eligibility for the BPAO and PABSS programs to 
beneficiaries who are receiving a State supplementation payment 
or are still eligible for Medicare or Medicaid, but who are no 
longer eligible for Federal cash benefits, will help to prevent 
these beneficiaries from returning to the Federal cash benefit 
rolls and help them to reach their optimum level of employment.
    The Committee on Ways and Means also intends that PABSS 
services be available to provide assistance to beneficiaries 
who have successfully obtained employment but who continue to 
encounter job-related difficulties. Therefore, the new 
provision extends the current PABSS assistance (which is 
available for securing and regaining employment) to maintaining 
employment--thus providing a continuity of services for 
disabled individuals throughout the process of initially 
securing employment, the course of their being employed and, if 
needed, their efforts to regain employment. This provision 
would ensure that disabled individuals would not face a 
situation in which they would have to wait until they lost 
their employment in order to once again be eligible to receive 
PABSS services. Payments for services to maintain employment 
would be subject to Section 1150(c) of the Social Security Act. 
The Committee on Ways and Means will continue to monitor the 
implementation of PABSS programs to ensure that assistance is 
directed to all areas in which beneficiaries face obstacles in 
securing, maintaining, or regaining work.

                        EXPLANATION OF PROVISION

    The new provision expands eligibility for the BPAO and 
PABSS programs under Sections 1149 and 1150 of the act to 
include not just individuals who are ``disabled beneficiaries'' 
under Section 1148(k) of the act, but also individuals who (1) 
are no longer eligible for SSI benefits because of an increase 
in earnings, but remain eligible for Medicaid under Section 
1619(b); (2) receive only a State supplementation payment (a 
payment that some States provide as a supplement to the Federal 
SSI benefit); or (3) are in an extended period of Medicare 
eligibility under Title XVIII after a period of Title II 
disability has ended. The new provision also expands the types 
of services a P&A; system may provide under Section 1150 of the 
act. Currently P&A; systems may provide ``advocacy or other 
services that a disabled beneficiary may need to secure or 
regain employment,'' while the new provision allows them to 
provide ``advocacy or other services that a disabled 
beneficiary may need to secure, maintain, or regain 
employment.''

                             EFFECTIVE DATE

    The amendment to Section 1149, which affects the BPAO 
Program, is effective with respect to grants, cooperative 
agreements or contracts entered into on or after the date of 
enactment. The amendments to Section 1150, which affect the 
PABSS Program, are effective for payments provided after the 
date of the enactment.

  E. Technical Amendment Clarifying Treatment for Certain Purposes of 
  Individual Work Plans Under the Ticket to Work and Self-Sufficiency 
                                Program


(Sec. 405 of the Bill)

                              PRESENT LAW

    Under Section 51 of the Internal Revenue Code (IRC), 
employers may claim a Work Opportunity Tax Credit (WOTC) if 
they hire, among other individuals, individuals with 
disabilities who have been referred by a State vocational 
rehabilitation (VR) agency. For an individual to qualify as a 
vocational rehabilitation referral under Section 51(d)(6)(B) of 
the IRC, the individual must be receiving or have completed 
vocational rehabilitation services pursuant to: (i) ``an 
individualized written plan for employment under a State plan 
for vocational rehabilitation services approved under the 
Rehabilitation Act of 1973''; or (ii) ``a program of vocational 
rehabilitation carried out under chapter 31 of title 38, United 
States Code.'' (IRC, Section 51(d)(6)(B)).
    The WOTC is equal to 40 percent of the first $6,000 of 
wages paid to newly hired employees during their first year of 
employment when the employee is retained for at least 400 work 
hours. As such, the maximum credit per employee is $2,400, but 
the credit may be less depending on the employer's tax bracket. 
A lesser credit rate of 25 percent is provided to employers 
when the employee remains on the job for 120-399 hours. The 
amount of the credit reduces the company's deduction for the 
employee's wages.
    The Ticket to Work Act established the Ticket to Work and 
Self-Sufficiency Program (Ticket to Work program) under Section 
1148 of the Social Security Act. Under this program, the SSA 
provides a ``ticket'' to eligible Social Security Disability 
Insurance beneficiaries and Supplemental Security Income 
beneficiaries with disabilities that allows them to obtain 
employment and other support services from an approved 
``employment network'' of their choice. Employment networks may 
include State, local, or private entities that can provide 
directly, or arrange for other organizations or entities to 
provide, employment services, VR services, or other support 
services. State VR agencies have the option of participating in 
the Ticket to Work program as employment networks. Employment 
networks must work with each beneficiary they serve to develop 
an individual work plan (IWP) for that beneficiary that 
outlines his or her vocational goals and the services needed to 
achieve those goals. For VR agencies that participate in the 
Ticket to Work program, the individualized written plan for 
employment (as specified under (i) in paragraph one above) 
serves in lieu of the IWP.
    Under current law, an employer hiring a disabled individual 
referred by an employment network does not qualify for the WOTC 
unless the employment network is a State VR agency.

                           REASON FOR CHANGE

    The Ticket to Work program was designed to increase choice 
available to beneficiaries when they select providers of 
employment services. Employers hiring individuals with 
disabilities should be able to qualify for the WOTC regardless 
of whether the employment referral is made by a public or 
private service provider. This amendment updates eligibility 
criteria for the WOTC to conform to the expansion of employment 
services and the increase in number and range of VR providers 
as a result of the enactment of the Ticket to Work Act.

                        EXPLANATION OF PROVISION

    The new provision allows employers who hire disabled 
workers through referrals by employment networks under Section 
1148 of the Social Security Act to qualify for the WOTC. 
Specifically, it provides that, for purposes of Section 
51(d)(6)(B)(i) of the IRC of 1986, an IWP under Section 1148 of 
the Social Security Act shall be treated as an individualized 
written plan for employment under a State plan for vocational 
rehabilitation services approved under the Rehabilitation Act 
of 1973.

                             EFFECTIVE DATE

    Effective as if it were included in Section 505 of the 
Ticket to Work Act.

                  Subtitle B. Miscellaneous Amendments


    F. Elimination of Transcript Requirement in Remand Cases Fully 
                       Favorable to the Claimant


(Sec. 411 of the Bill)

                              PRESENT LAW

    The Social Security Act requires the SSA to file a hearing 
transcript with the District Court for any SSA hearing that 
follows a court remand of a SSA decision.

                           reason for change

    A claimant whose benefits have been denied is provided a 
transcript of a hearing to be used when the claimant appeals 
his case in Federal District court. If the Administrative Law 
Judge issues a fully favorable decision, then transcribing the 
hearing is unnecessary since the claimant would not appeal this 
decision.

                        explanation of provision

    The new provision clarifies that the SSA is not required to 
file a transcript with the court when the SSA, on remand, 
issues a decision fully favorable to the claimant.

                             effective date

    Effective with respect to final determinations issued (upon 
remand) on or after the date of enactment.

     G. Nonpayment of Benefits Upon Removal From the United States


(Sec. 412 of the Bill)

                              PRESENT LAW

    In most cases, the Social Security Act prohibits the 
payment of Social Security benefits to non-citizens who are 
deported from the United States. However, the act does not 
prohibit the payment of Social Security benefits to non-
citizens who are deported for smuggling other non-citizens into 
the United States.

                           REASON FOR CHANGE

    Individuals who are removed from the United States for 
smuggling aliens have committed an act that should prohibit 
them from receiving Social Security benefits.

                        EXPLANATION OF PROVISION

    The new provision requires the SSA to suspend benefits of 
beneficiaries who are removed from the United States for 
smuggling aliens.

                             EFFECTIVE DATE

    Applies with respect to removals occurring after the date 
of enactment.

           H. Reinstatement of Certain Reporting Requirements


(Sec. 413 of the Bill)

                              PRESENT LAW

    The Federal Reports Elimination and Sunset Act of 1995 
``sunsetted'' most annual or periodic reports from agencies to 
Congress that were listed in a 1993 House inventory of 
congressional reports.

                           REASON FOR CHANGE

    The reports to be reinstated provide Congress with 
important information needed to evaluate and oversee the Social 
Security and Medicare programs.

                        EXPLANATION OF PROVISION

    The new provision reinstates the requirements for several 
periodic reports to Congress that were subject to the 1995 
``sunset'' act, including annual reports on the financial 
solvency of the Social Security and Medicare programs (the 
Board of Trustees' reports on the OASDI, HI, and SMI Trust 
Funds) and annual reports on certain aspects of the 
administration of the Title II disability program (the SSA 
Commissioner's reports on pre-effectuation reviews of 
disability determinations and continuing disability reviews).

                             EFFECTIVE DATE

    Upon enactment.

  I. Clarification of Definitions Regarding Certain Survivor Benefits


(Sec. 414 of the Bill)

                              PRESENT LAW

    Under the definitions of ``widow'' and ``widower'' in 
Section 216 of the Social Security Act, a widow or widower must 
have been married to the deceased spouse for at least nine 
months before his or her death in order to be eligible for 
survivor benefits.

                           REASON FOR CHANGE

    This provision allows the Commissioner to issue benefits in 
certain unusual cases in which the duration of marriage 
requirement could not be met due to a legal impediment over 
which the individual had no control and the individual would 
have met the legal requirements were it not for the legal 
impediment.

                        EXPLANATION OF PROVISION

    The new provision creates an exception to the nine-month 
requirement for cases in which the Commissioner finds that the 
claimant and the deceased spouse would have been married for 
longer than nine months but for the fact that the deceased 
spouse was legally prohibited from divorcing a prior spouse who 
was institutionalized due to mental incompetence or similar 
incapacity.

                             EFFECTIVE DATE

    Effective for benefit applications filed after the date of 
enactment.

  J. Clarification Respecting the FICA and SECA Tax Exemptions for an 
  Individual Whose Earnings Are Subject to the Laws of a Totalization 
                           Agreement Partner


(Sec. 415 of the Bill)

                              PRESENT LAW

    In cases where there is an agreement with a foreign country 
(i.e., a totalization agreement), a worker's earnings are 
exempt from United States Social Security payroll taxes when 
those earnings are subject to the foreign country's retirement 
system.

                           REASON FOR CHANGE

    In U.S. totalization agreements, a person's work is 
generally subject to the Social Security laws of the country in 
which the work is performed. In most cases, the worker (whether 
subject to the laws of the United States or the other country) 
is compulsorily covered and required to pay contributions in 
accordance with the laws of that country. In some instances, 
however, work that would be compulsorily covered in the U.S. is 
excluded from compulsory coverage in the other country (such as 
Germany). In such cases, the IRS has questioned the exemption 
from U.S. Social Security tax for workers who elect not to make 
contributions to the foreign country's retirement system. This 
provision would remove any question regarding the exemption and 
would be consistent with the general philosophy behind the 
coverage rules of totalization agreements.

                        EXPLANATION OF PROVISION

    The new provision clarifies the legal authority to exempt a 
worker's earnings from United States Social Security tax in 
cases where the earnings were subject to a foreign country's 
retirement system in accordance with a U.S. totalization 
agreement, but the foreign country's law does not require 
compulsory contributions on those earnings. The provision 
establishes that such earnings are exempt from United States 
Social Security tax whether or not the worker elected to make 
contributions to the foreign country's retirement system.

                             EFFECTIVE DATE

    Upon enactment.

  K. Coverage Under Divided Retirement System for Public Employees in 
                                Kentucky


(Sec. 416 of the Bill)

                              PRESENT LAW

    Under Section 218 of the Social Security Act, a State may 
choose whether or not its State and local government employees 
who are covered by a public pension plan may also participate 
in the Social Security Old-Age, Survivors, and Disability 
Insurance program. (In this context, the term ``public pension 
plan'' refers to a pension, annuity, retirement, or similar 
fund or system established by a State or a political 
subdivision of a State such as a town. Under current law, State 
or local government employees not covered by a public pension 
plan are, with a few exceptions, required to pay Social 
Security payroll taxes.)
    Social Security coverage for employees covered under a 
State or local government public pension plan is established 
through an agreement between the State and the Federal 
government. All States have the option of electing Social 
Security coverage for employees by a majority vote in a 
referendum. If the majority vote is in favor of Social Security 
coverage, then the entire group, including those voting against 
such coverage, will be covered by Social Security. If the 
majority vote is against Social Security coverage, then the 
entire group, including those voting in favor of such coverage 
and employees hired after the referendum, will not be covered 
by Social Security.
    In certain States, however, there is an alternative method 
for electing Social Security coverage. Under this method, 
rather than the majority of votes determining Social Security 
coverage for the whole group, employees voting in the 
referendum may individually determine whether they want Social 
Security coverage, provided that all newly hired employees of 
the system are required to participate in Social Security. 
After the referendum, the retirement system is divided into two 
groups, one composed of members who elected Social Security 
coverage plus those hired after the referendum, and the other 
composed of those who did not elect Social Security coverage. 
Under Section 218(d)(6)(c) of the Social Security Act, 21 
States currently have authority to operate such a divided 
retirement system.

                           REASON FOR CHANGE

    The governments of the City of Louisville and Jefferson 
County merged in January 2003, and formed a new political 
subdivision. Under the provision, once the new political 
subdivision holds a referendum on Social Security coverage 
among its employees, each employee would choose whether or not 
to participate in the Social Security system in addition to 
their public pension plan. All employees newly hired to the 
system after the divided system is in place would be covered 
automatically under Social Security.
    Currently, some employees of the new government are covered 
under Social Security, while others are not. In order to 
provide fair and equitable coverage to all employees, a divided 
retirement system, such as that currently authorized in 21 
other States, was seen as the best solution. It would allow 
those who want to keep Social Security coverage or obtain 
Social Security coverage to do so, without requiring other 
current employees to participate in Social Security as well.
    Without this provision, upon holding a referendum on Social 
Security coverage, a majority of votes would determine whether 
or not the group would participate in Social Security. Since 
the number of non-covered employees exceeds the number of 
Social Security-covered employees in the new government, those 
employees currently covered by Social Security could lose that 
coverage. The Kentucky General Assembly has adopted a bill that 
will allow the new divided retirement system to go forward 
following enactment of this provision.

                        EXPLANATION OF PROVISION

    The new provision permits the State of Kentucky to join the 
21 other States in being able to offer a divided retirement 
system. This system would permit current State and local 
government workers in a public pension plan to elect Social 
Security coverage on an individual basis. Those who do not wish 
to be covered by Social Security would continue to participate 
exclusively in the public pension plan.

                             EFFECTIVE DATE

    Effective retroactively to January 1, 2003.

         L. Compensation for the Social Security Advisory Board


(Sec. 417 of the Bill)

                              PRESENT LAW

    The Social Security Advisory Board is an independent, 
bipartisan Board established by the Congress under Section 703 
of the Social Security Act. The 7-member Board is appointed by 
the President and the Congress to advise the President, the 
Congress, and the Commissioner of Social Security on matters 
related to the Social Security and Supplemental Security Income 
programs. Section 703(f) of the Social Security Act provides 
that members of the Board serve without compensation, except 
that, while engaged in Board business away from their homes or 
regular places of business, members may be allowed travel 
expenses, including per diem in lieu of subsistence, as 
authorized by Section 5703 of Title 5, United States Code for 
persons in the Government who are employed intermittently.

                           REASON FOR CHANGE

    Other government advisory boards--such as the Employee 
Retirement Income Security Act Advisory Council, the Pension 
Benefit Guaranty Corporation Advisory Committee and the Thrift 
Savings Plan Board--provide compensation for their members. 
This provision allows for similar treatment of Social Security 
Advisory Board members with respect to compensation.

                        EXPLANATION OF PROVISION

    The new provision establishes that compensation for Social 
Security Advisory Board members will be provided, at the daily 
rate of basic pay for level IV of the Executive Schedule, for 
each day (including travel time) during which the member is 
engaged in performing a function of the Board.

                             EFFECTIVE DATE

    January 1, 2003.

    M. 60-Month Period of Employment Requirement for Application of 
                  Government Pension Offset Exemption


(Sec. 418 of the Bill)

                              PRESENT LAW

    The Government Pension Offset (GPO) was enacted in order to 
equalize treatment of workers in jobs not covered by Social 
Security and workers in jobs covered by Social Security, with 
respect to spouse and survivor benefits. Where what is known as 
the ``dual-entitlement'' rule reduces a spouse or survivor 
benefit dollar-for-dollar by the worker's own Social Security 
retirement or disability benefit, the GPO reduces the Social 
Security spouse or survivor benefit by two-thirds of the 
government pension.
    However, under what's known as the ``last day rule,'' State 
and local government workers are exempt from the GPO if, on the 
last day of employment, their job was covered by Social 
Security. In contrast, Federal workers who switched from the 
Civil Service Retirement System (CSRS), a system that is not 
covered by Social Security, to the Federal Employee Retirement 
System (FERS), a system that is covered by Social Security, 
must work for 5 years under FERS in order to be exempt from the 
GPO.

                           REASON FOR CHANGE

    In August 2002, the GAO published a report titled ``Social 
Security Administration: Revision to the Government Pension 
Offset Exemption Should Be Considered'' (GAO-02-950). At the 
request of Committee on Ways and Means, Subcommittee on Social 
Security Chairman E. Clay Shaw, Jr., the GAO investigated use 
of the ``last day'' exemption to avoid being subject to the 
GPO. The investigation found that over 4,800 individuals in 
Texas and Georgia used or planned to use the last day 
exemption, with over 3,500 in Texas using it in 2002.
    In testimony provided to the Subcommittee on Social 
Security February 27, 2003, the GAO stated that the exemption 
``allows a select group of individuals with a relatively small 
investment of work time and only minimal Social Security 
contributions to gain access to potentially many years of full 
Social Security spousal benefits.'' The GAO also clarified in 
testimony that a spouse who worked in the private sector, paid 
payroll taxes for an entire career, and earned a Social 
Security retirement or disability benefit as a worker would not 
receive a full spousal benefit. The GAO stated that current 
usage of last day exemption could cost the Social Security 
trust funds $450 million, and that considering the potential 
for abuse of the exemption and the likelihood of increased use, 
timely action is needed. This provision to conform their 
treatment to that of Federal workers was among the 
recommendations provided by the GAO to address potential abuse 
of the exemption. A provision addressing the GPO last-day 
exemption was also included in President Bush's budget request 
for 2004.

                        EXPLANATION OF PROVISION

    The new provision requires that State and local government 
workers be covered by Social Security during their last 5 years 
of employment in order to be exempt from the GPO.

                             EFFECTIVE DATE

    Effective for applications filed on or after the first day 
of the first month after the date of enactment. However, the 
provision would not apply to individuals whose last day of 
employment for the State or local governmental entity occurred 
before the end of the 90-day period following the date of 
enactment. It would also not apply to persons whose last day of 
employment occurred after the end of the 90-day period 
following the date of enactment, if during the 90-day period 
following the date of enactment the person's job was covered by 
Social Security and remained so until their last day of 
employment.

                    Subtitle C. Technical Amendments


      N. Technical Correction Relating to Responsible Agency Head


(Sec. 421 of the Bill)

                              PRESENT LAW

    Section 1143 of the Social Security Act directs ``the 
Secretary of Health and Human Services'' to send periodic 
Social Security Statements to individuals.

                           Reason for Change

    The ``Social Security Independence and Program Improvements 
Act of 1994'' (P.L. 103-296) made the Social Security 
Administration an independent agency separate from the 
Department of Health and Human Services. This provision updates 
Section 1143 to reflect that change.

                        EXPLANATION OF PROVISION

    The new provision makes a technical correction to this 
section by inserting a reference to the Commissioner of Social 
Security in place of the reference to the Secretary of Health 
and Human Services.

                             EFFECTIVE DATE

    Upon enactment.

  O. Technical Correction Relating to Retirement Benefits of Ministers


(Sec. 422 of the Bill)

                              PRESENT LAW

    Section 1456 of the ``Small Business Job Protection Act of 
1996'' (P.L. 104-188) established that certain retirement 
benefits received by ministers and members of religious orders 
(such as the rental value of a parsonage or parsonage 
allowance) are not subject to Social Security payroll taxes 
under the Internal Revenue Code. However, under Section 211 of 
the Social Security Act, these retirement benefits are treated 
as net earnings from self-employment for the purpose of 
acquiring insured status and calculating Social Security 
benefit amounts.

                           REASON FOR CHANGE

    P.L. 104-188 provided that certain retirement benefits 
received by ministers and members of religious orders are not 
subject to payroll taxes. However, a conforming change was not 
made to the Social Security Act to exclude these benefits from 
being counted as wages for the purpose of acquiring insured 
status and calculating Social Security benefit amounts. This 
income is therefore not treated in a uniform manner. This 
provision would conform the Social Security Act to the Internal 
Revenue Code with respect to such income.

                        EXPLANATION OF PROVISION

    The new provision makes a conforming change to exclude 
these benefits received by retired clergy from Social Security-
covered earnings for the purpose of acquiring insured status 
and calculating Social Security benefit amounts.

                             EFFECTIVE DATE

    Effective for years beginning before, on, or after December 
31, 1994 (same as the effective date of Section 1456 of P.L. 
104-188).

        P. Technical Correction Relating to Domestic Employment


(Sec. 423 of the Bill)

                              PRESENT LAW

    Current law is ambiguous concerning the Social Security 
coverage and tax treatment of domestic service performed on a 
farm. Domestic employment on a farm appears to be subject to 
two separate coverage thresholds (one for agricultural labor 
and another for domestic employees).

                           REASON FOR CHANGE

    Prior to 1994, domestic service on a farm was treated as 
agricultural labor and was subject to the coverage threshold 
for agricultural labor. According to the SSA, in 1994, when 
Congress amended the law with respect to domestic employment, 
the intent was that domestic employment on a farm would be 
subject to the coverage threshold for domestic employees 
instead of the threshold for agricultural labor. However, the 
current language is unclear, making it appear as if farm 
domestics are subject to both thresholds.

                        EXPLANATION OF PROVISION

    The new provision clarifies that domestic service on a farm 
is treated as domestic employment, rather than agricultural 
labor, for Social Security coverage and tax purposes.

                             EFFECTIVE DATE

    Upon enactment.

             Q. Technical Correction of Outdated References


(Sec. 424 of the Bill)

                              PRESENT LAW

    Section 202(n) and 211(a)(15) of the Social Security Act 
and Section 3102(a) of the Internal Revenue Code of 1986 each 
contain outdated references that relate to the Social Security 
program.

                           REASON FOR CHANGE

    Over the years, provisions in the Social Security Act, the 
Internal Revenue Code and other related laws have been deleted, 
redesignated or amended. However, necessary conforming changes 
have not always been made. Consequently, Social Security law 
contains some outdated references.

                        EXPLANATION OF PROVISION

    The new provision corrects outdated references in the 
Social Security Act and the Internal Revenue Code by: (1) in 
Section 202(n) of the Social Security Act, updating references 
respecting removal from the United States; (2) in Section 
211(a)(15) of the Social Security Act, correcting a citation 
respecting a tax deduction related to health insurance costs of 
self-employed individuals; and (3) in Section 3102(a) of the 
Internal Revenue Code of 1986, eliminating a reference to an 
obsolete 20 day agricultural work test.

                             EFFECTIVE DATE

    Upon enactment.

R. Technical Correction Respecting Self-Employment Income in Community 
                            Property States


(Sec. 425 of the Bill)

                              PRESENT LAW

    The Social Security Act and the Internal Revenue Code 
provide that, in the absence of a partnership, all self-
employment income from a trade or business operated by a 
married person in a community property State is deemed to be 
the husband's unless the wife exercises substantially all of 
the management and control of the trade or business.

                           REASON FOR CHANGE

    Present law was found to be unconstitutional in several 
court cases in 1980. Since then, income from a trade or 
business that is not a partnership in a community property 
State has been treated the same as income from a trade or 
business that is not a partnership in a non-community property 
State--it is taxed and credited to the spouse who is found to 
be carrying on the business.
    This change will conform the provisions in the Social 
Security Act and the Internal Revenue Code to current practice 
in both community property and non-community property States.

                        EXPLANATION OF PROVISION

    Under the new provision, self-employment income from a 
trade or business that is not a partnership, and that is 
operated by a married person in a community property State, is 
taxed and credited to the spouse who is carrying on the trade 
or business. If the trade or business is jointly operated, the 
self-employment income is taxed and credited to each spouse 
based on his or her distributive share of gross earnings.

                             EFFECTIVE DATE

    Upon enactment.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statements are made 
concerning the votes of the Committee on Ways and Means in its 
consideration of the bill, H.R. 743.

                       MOTION TO REPORT THE BILL

    The bill, H.R. 743, as amended, was ordered favorably 
reported by a rollcall vote of 35 yeas to 2 nays (with a quorum 
being present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
        Representatives             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.....................        X   ........  .........  Mr. Rangel.......        X   ........  .........
Mr. Crane......................        X   ........  .........  Mr. Stark........        X   ........  .........
Mr. Shaw.......................        X   ........  .........  Mr. Matsui.......        X   ........  .........
Mrs. Johnson...................        X   ........  .........  Mr. Levin........        X   ........  .........
Mr. Houghton...................        X   ........  .........  Mr. Cardin.......        X   ........  .........
Mr. Herger.....................        X   ........  .........  Mr. McDermott....        X   ........  .........
Mr. McCrery....................        X   ........  .........  Mr. Kleczka......        X   ........  .........
Mr. Camp.......................        X   ........  .........  Mr. Lewis (GA)...        X   ........  .........
Mr. Ramstad....................        X   ........  .........  Mr. Neal.........  ........  ........  .........
Mr. Nussle.....................  ........  ........  .........  Mr. McNulty......  ........  ........  .........
Mr. Johnson....................        X   ........  .........  Mr. Jefferson....        X   ........  .........
Ms. Dunn.......................        X   ........  .........  Mr. Tanner.......        X   ........  .........
Mr. Collins....................        X   ........  .........  Mr. Becerra......        X   ........  .........
Mr. Portman....................        X   ........  .........  Mr. Doggett......  ........        X   .........
Mr. English....................        X   ........  .........  Mr. Pomeroy......        X   ........  .........
Mr. Hayworth...................        X   ........  .........  Mr. Sandlin......  ........        X   .........
Mr. Weller.....................        X   ........  .........  Ms. Tubbs Jones..        X   ........  .........
Mr. Hulshof....................        X   ........  .........
Mr. McInnis....................        X   ........  .........
Mr. Lewis (KY).................        X   ........  .........
Mr. Foley......................  ........  ........  .........
Mr. Brady......................        X   ........  .........
Mr. Ryan.......................        X   ........  .........
Mr. Cantor.....................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

                          VOTES ON AMENDMENTS

    A rollcall vote was conducted on the following amendments 
to the Chairman's amendment in the nature of a substitute.
    An amendment by Mr. Jefferson, which would modify the 
Government Pension Offset from two-thirds of the government 
pension to two-thirds of the amount of the combined government 
and Social Security benefit exceeding $2,000 per month (not to 
exceed the reduction under current law), was defeated by a 
rollcall vote of 14 yeas to 21 nays. The vote was as follows:

----------------------------------------------------------------------------------------------------------------
        Representatives             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.....................  ........        X   .........  Mr. Rangel.......        X   ........  .........
Mr. Crane......................  ........        X   .........  Mr. Stark........        X   ........  .........
Mr. Shaw.......................  ........        X   .........  Mr. Matsui.......        X   ........  .........
Mrs. Johnson...................  ........        X   .........  Mr. Levin........        X   ........  .........
Mr. Houghton...................  ........        X   .........  Mr. Cardin.......        X   ........  .........
Mr. Herger.....................  ........        X   .........  Mr. McDermott....        X   ........  .........
Mr. McCrery....................  ........        X   .........  Mr. Kleczka......        X   ........  .........
Mr. Camp.......................  ........        X   .........  Mr. Lewis (GA)...        X   ........  .........
Mr. Ramstad....................  ........        X   .........  Mr. Neal.........  ........  ........  .........
Mr. Nussle.....................  ........  ........  .........  Mr. McNulty......  ........  ........  .........
Mr. Johnson....................  ........        X   .........  Mr. Jefferson....        X   ........  .........
Ms. Dunn.......................  ........  ........  .........  Mr. Tanner.......        X   ........  .........
Mr. Collins....................  ........        X   .........  Mr. Becerra......        X   ........  .........
Mr. Portman....................  ........        X   .........  Mr. Doggett......        X   ........  .........
Mr. English....................  ........        X   .........  Mr. Pomeroy......        X   ........  .........
Mr. Hayworth...................  ........        X   .........  Mr. Sandlin......  ........  ........  .........
Mr. Weller.....................  ........        X   .........  Ms. Tubbs Jones..        X   ........  .........
Mr. Hulshof....................  ........        X   .........
Mr. McInnis....................  ........        X   .........
Mr. Lewis (KY).................  ........        X   .........
Mr. Foley......................  ........  ........  .........
Mr. Brady......................  ........        X   .........
Mr. Ryan.......................  ........        X   .........
Mr. Cantor.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Stark, which would reduce the 
Government Pension Offset of Social Security spousal and 
survivor's benefits from two-thirds to one-third of the 
government pension, was defeated by a roll call vote of 15 yeas 
to 22 nays. The vote was as follows:

----------------------------------------------------------------------------------------------------------------
        Representatives             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.....................  ........        X   .........  Mr. Rangel.......        X   ........  .........
Mr. Crane......................  ........        X   .........  Mr. Stark........        X   ........  .........
Mr. Shaw.......................  ........        X   .........  Mr. Matsui.......        X   ........  .........
Mrs. Johnson...................  ........        X   .........  Mr. Levin........        X   ........  .........
Mr. Houghton...................  ........        X   .........  Mr. Cardin.......        X   ........  .........
Mr. Herger.....................  ........        X   .........  Mr. McDermott....        X   ........  .........
Mr. McCrery....................  ........        X   .........  Mr. Kleczka......        X   ........  .........
Mr. Camp.......................  ........        X   .........  Mr. Lewis (GA)...        X   ........  .........
Mr. Ramstad....................  ........        X   .........  Mr. Neal.........  ........  ........  .........
Mr. Nussle.....................  ........  ........  .........  Mr. McNulty......  ........  ........  .........
Mr. Johnson....................  ........        X   .........  Mr. Jefferson....        X   ........  .........
Ms. Dunn.......................  ........        X   .........  Mr. Tanner.......        X   ........  .........
Mr. Collins....................  ........        X   .........  Mr. Becerra......        X   ........  .........
Mr. Portman....................  ........        X   .........  Mr. Doggett......        X   ........  .........
Mr. English....................  ........        X   .........  Mr. Pomeroy......        X   ........  .........
Mr. Hayworth...................  ........        X   .........  Mr. Sandlin......        X   ........  .........
Mr. Weller.....................  ........        X   .........  Ms. Tubbs Jones..        X   ........  .........
Mr. Hulshof....................  ........        X   .........
Mr. McInnis....................  ........        X   .........
Mr. Lewis (KY).................  ........        X   .........
Mr. Foley......................  ........  ........  .........
Mr. Brady......................  ........        X   .........
Mr. Ryan.......................  ........        X   .........
Mr. Cantor.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

                     IV. BUDGET EFFECTS OF THE BILL


               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d)(2) of rule XIII of the Rules 
of the House of Representatives, the following statement is 
made concerning the effects on the budget of the revenue 
provisions of the bill, H.R. 743 as reported:
    The Committee agrees with the estimate prepared by the 
Congressional Budget Office (CBO), which is included below.

B. Statement Regarding New Budget Authority and Tax Expenditures Budget 
                               Authority

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states the bill 
will reduce direct spending and increase revenues, resulting in 
$655 million in savings to the unified budget.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives requiring a cost estimate 
prepared by the Congressional Budget Office, the following 
report prepared by CBO is provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 20, 2003.
Hon. William ``Bill'' M. Thomas,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 743, the Social 
Security Protection Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kathy 
Ruffing.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 743--Social Security Protection Act of 2003

    Summary: H.R. 743 would strengthen oversight of 
representative payees (people who handle benefit checks for 
others, such as children or mentally impaired adults), bar 
Social Security benefits to fugitives, revamp the Social 
Security Administration's (SSA's) procedures for paying 
attorneys who represent successful claimants, and tighten the 
rules for some state and local retirees who switch jobs briefly 
in order to boost their Social Security benefits. In all, the 
bill contains three dozen provisions, although many would have 
little or no budgetary effect.
    On balance, enacting H.R. 743 would lead to small net costs 
in 2004 but net savings thereafter--by amounts that grow from 
$16 million in 2005 to $147 million in 2013. In total, CBO 
estimates that enacting the bill would trim direct spending and 
boost revenue by a combined $655 million over the 2004-2013 
period. About two-thirds of those effects are in Social 
Security, which is off-budget.
    H.R. 743 would also affect discretionary spending. CBO 
estimates that implementing the bill would cost SSA $15 million 
to $20 million a year through 2010, and smaller amounts after 
that, for extra enforcement and processing activities.
    Section 4 of the Unfunded Mandates Reform Act (UMRA) 
excludes from the requirements of that act any provision that 
relates to the Old-Age, Survivors, and Disability Insurance 
program (OASDI) under title II of the Social Security Act. Many 
provisions of H.R. 743 would fall within that exclusion. The 
other provisions of the bill contain no intergovernmental 
mandates as defined in UMRA and would impose no costs on state, 
local, or tribal governments. They do contain private-sector 
mandates as defined in UMRA. CBO estimates that the costs to 
the private sector of those mandates would not exceed the 
threshold established by UMRA ($117 million in 2003, adjusted 
annually for inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 743 shown in the following table. The 
costs of this legislation fall within budget functions 570 
(Medicare), 600 (income security), and 650 (Social Security).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        By fiscal year, in millions of dollars--
                                                               -----------------------------------------------------------------------------------------
                                                                  2004     2005     2006     2007     2008     2009     2010     2011     2012     2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          CHANGES IN DIRECT SPENDING (OUTLAYS)

Title I. Protection of beneficiaries:
    Authority to reissue benefits misused by organizational
     representative payees:
        OASDI benefits........................................        2        *        *        *        *        *        *        *        *        *
        SSI benefits..........................................        1        *        *        *        *        *        *        *        *        *

Title II. Program protections:
    Denial of benefits to fugitives:
        OASDI benefits........................................      -10      -30      -44      -55      -59      -61      -63      -66      -68      -70
        Medicare..............................................       -1       -4      -11      -15      -19      -22      -23      -25      -25      -27

Title III. Attorney fee payment system improvements:
    Cap of $75 (indexed) on processing charges in title II:          12       24       25       27       28       29       31       32       33       34
     OASDI receipts...........................................
    Temporary extension of attorney-fee payment system to            -1       -4       -4       -4       -4       -5       -5        *        *        *
     title XVI: SSI receipts..................................
Title IV. Miscellaneous and technical amendments:                     *        *        *        *        *        *        *        *        *        1
    60-month employment requirement for exemption from                *        *       -1       -2       -4       -8      -15      -26      -49      -80
     Government Pension Offset: OASDI benefits................
    Permission for Kentucky to operate divided retirement             *        *        *        *        *        *        *        *        *        1
     systems: OASDI benefits..................................
    Total changes in direct spending:
        On-budget.............................................        *       -8      -15      -19      -23      -26      -28      -25      -25      -27
        Off-budget (OASDI)....................................        4       -7      -20      -30      -35      -40      -48      -59      -83     -115
                                                               -----------------------------------------------------------------------------------------
          Total...............................................        4      -14      -35      -49      -58      -66      -75      -84     -109     -142
                                                               =========================================================================================
                                                                   CHANGES IN REVENUES

Title IV. Miscellaneous and technical amendments:
    Permission for Kentucky to operate divided retirement
     systems:
        OASDI revenues........................................        1        1        2        2        3        3        3        4        4        5
        Other revenues........................................        *        *        *        *        *        *        *        *        *        *
    Clarification of eligibility for Work Opportunity Credit..       -2        *        0        0        0        0        0        0        0        0
    Total changes in revenues:
        On-budget.............................................       -2        *        0        0        0        0        0        0        0        0
        Off-budget (OASDI)....................................        1        1        2        2        3        3        3        4        4        5
                                                               -----------------------------------------------------------------------------------------
          Total...............................................       -1        1        2        2        3        3        3        4        4        5
                                                               =========================================================================================
                                            NET CHANGES IN DIRECT SPENDING AND REVENUES (EFFECT ON DEFICITS)

On-budget.....................................................        2       -8      -15      -19      -23      -26      -28      -25      -25      -27
Off-budget (OASDI)............................................        4       -8      -21      -32      -38      -43      -51      -63      -88     -120
                                                               -----------------------------------------------------------------------------------------
      Total...................................................        5      -16      -37      -52      -61      -69      -79      -88     -113     -147
                                                               =========================================================================================
                                                 CHANGES IN SPENDING SUBJECT TO APPROPRIATION (OUTLAYS)

OASDI administrative expenses.................................        4        3        2        2        2        2        2        3        3        4
SSI administrative expenses...................................       14       13       13       14       15       16       16        2        2        2
                                                               -----------------------------------------------------------------------------------------
      Total...................................................       18       17       15       16       17       18       19        5        5        6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes.--Details may not add to totals because of rounding.
OASDI = Old-Age, Survivors, and Disability Insurance (title II); SSI = Supplemental Security Income (title XVI).
*= Less than $500,000.

    Basis of estimate: For this estimate, CBO assumes that H.R. 
743 will be enacted in September 2003.

Direct spending and revenues

    Title I. Nearly seven million people--three million adults 
and four million children--who get Social Security, 
Supplemental Security Income (SSI), or both have their checks 
sent to a representative payee who helps manage the 
beneficiary's finances. The payee must also report certain 
events, such as changes in the beneficiary's income or school 
attendance, to SSA. In about 85 percent of cases, a family 
member serves as a representative payee. But an attorney or 
guardian, a social service agency, an institution, or other 
nonrelative may act as a payee, especially for a disabled 
adult. About 45,000 organizations serve as representative 
payees for about 750,000 clients. SSA monitors representative 
payees by requiring annual reports and by conducting on-site 
reviews every three years of certain payees who serve a large 
number of beneficiaries.
    H.R. 743 would direct SSA to certify annually that social 
service agencies meet licensing and bonding requirements and to 
conduct periodic on-site inspections of more representative 
payees. It would enhance SSA's ability to recover misused funds 
and to impose civil monetary penalties.
    Most of the provisions would have negligible effects on 
benefit payments or recoveries. One section, however, would 
require SSA to pay beneficiaries any amounts that had been 
misused by an organizational representative payee. (Currently, 
such claimants must show negligence by SSA.) ``Misuse'' means 
converting funds to the payee's own use or any purpose other 
than the use and benefit of the client. The provision would be 
retroactive to January 1, 1995.
    According to SSA, representative payees misuse about $3 
million in benefits each year. Although SSA's Inspector General 
(IG) has found weaknesses in internal controls of 
organizational payees, few of the resulting errors would 
constitute misuse. Because organizations handle about 12 
percent of the dollars flowing through representative payees, 
CBO estimates that reimbursing nine years' worth of misused 
benefits would cost $3 million in 2004. Extra costs in 2005 
through 2013 would be negligible.
    Title II. H.R. 743 would forbid fugitive felons and people 
fleeing prosecution from collecting Social Security benefits. 
CBO estimates that this policy would reduce Social Security 
spending by $10 million in 2004 and $525 million over the 2004-
2013 period. CBO also estimates that the policy would save $172 
million in Medicare over the 10 years.
    CBO used data from a report by SSA's Inspector General to 
estimate those savings. The IG extrapolated from a sample of 
about 400 cases in 10 states to estimate that fugitives 
received between $40 million and $180 million in Social 
Security benefits in 1999. The midpoint of that range ($110 
million) reflected an estimated 15,000 fugitives with an 
average benefit of almost $600 per month. Assuming that their 
number and average benefit keep pace with the overall program, 
CBO extrapolated that total to $130 million in 2004 and $175 
million in 2013.
    CBO judges, however, that several obstacles would keep 
savings from reaching those figures. First, large-scale 
enforcement poses challenges--a fact highlighted by the IG's 
work with a small sample. By tapping the National Crime 
Information Center (NCIC) and obtaining data directly from some 
states that do not report fully to the NCIC, SSA has access to 
more than half of fugitive warrants; some, though, lack key 
information (such as full name and Social Security number) for 
an accurate match. Illustrating that hurdle, an IG study of the 
SSI program--three years after fugitives became ineligible--
found that about 20 percent of ineligible recipients were 
suspended from the rolls promptly, another 30 percent were 
suspended eventually, and 50 percent were apparently missed. 
That study covered years before 2000, when SSA began matching 
data with the NCIC; nevertheless, the findings lead CBO to 
assume that matching will ultimately be about 60 percent 
effective.
    Second, some people spotted by computer matching will 
probably clear their records when their benefits stop, 
resulting in little or no long-term savings. CBO found that 
many warrants are dated--about 15 percent of state warrants, 
for example, are more than 10 years old--and most are for 
nonviolent offenses such as drug possession and probation or 
parole violation. In such cases, ``fugitives'' with no 
subsequent convictions may face nothing worse than a suspended 
sentence or probation. Faced with a lifetime cutoff from Social 
Security, CBO assumes that some would run that risk. To account 
for such cases, CBO subtracted another one-third from potential 
savings, bringing the result to 40 percent of the IG's figure. 
CBO assumes those savings are attainable about two years after 
enactment; initial savings are more modest, as SSA signs data-
sharing agreements with more states and writes regulations.
    CBO assumes that 80 percent of fugitives who would be 
affected by this provision are disabled beneficiaries who 
qualify for Medicare. If they lost their health benefits too, 
extra savings in 2013 (when their average Medicare benefit--
about $9,600--almost matches their assumed Social Security 
benefit, $9,900) could reach $54 million. However, they would 
not lose Medicare eligibility. Technically their Social 
Security benefit would be suspended, not terminated. A 
suspension does not erase Medicare eligibility. Some Medicare 
savings would probably occur simply because beneficiaries fail 
to realize they remain eligible, fear using their Medicare 
card, or stop paying the premium (which is usually withheld 
from Social Security checks) for Part B coverage. CBO assumes 
that the resulting drop in use of Medicare benefits would save 
about half as much as an outright ban, or about $27 million in 
2013.
    Title III. Many Social Security claimants, especially 
disability applicants who win benefits on appeal, are 
represented by attorneys. A standard fee agreement between 
attorney and client pledges that the attorney will receive 25 
percent of any past-due benefits up to a cap of $5,300. (By the 
time someone wins on appeal, past-due benefits typically amount 
to about 18 months' worth.) That cap stood at $4,000 for more 
than a decade until SSA raised it in 2002. When SSA awards 
OASDI benefits in such cases, it pays the attorney fee directly 
from the past-due amounts. In contrast, when SSA awards SSI 
benefits only, or denies all benefits, the attorney must seek 
his or her fee from the client. Processing attorney fees is a 
labor-intensive chore, and in 1999 the Congress permitted SSA 
to withhold up to 6.3 percent of the amounts paid to offset 
some of those costs.
    SSA pays attorney fees in about 200,000 OASDI cases and 
concurrent (OASDI and SSI) cases a year. The average fee, still 
dampened by the $4,000 lid, is now about $2,700, and the 
average processing charge about $170. By 2013, CBO expects that 
annual volume will be about 240,000, the average fee about 
$3,600, and hence the average charge about $225. H.R. 743 
proposes to cap the charge at $75 with future adjustments for 
inflation. That would erase more than half of expected 
receipts, a loss of $34 million in 2013. CBO estimates that 
over the 2004-2013 period the proposed cap would cost $275 
million.
    H.R. 743 also proposes to extend the attorney-fee system 
temporarily to SSI, starting nine months after enactment and 
ending with agreements for representation that are signed five 
years later. Because attorneys are most active in appealed 
cases, which may take a year to decide, those five years 
actually translate into more than six years of budgetary 
effects. SSA now approves, though it does not disburse, 
attorney fees in about 55,000 SSI-only cases a year. The 
average fee is about $1,900. (Because SSI benefits are lower 
than Disability Insurance's (DI's), the average fee--which 
cannot exceed 25 percent of past-due benefits--is also lower.) 
By 2010, CBO estimates those figures would be about 60,000 and 
$2,200 respectively. Extending the payment system, including 
the 6.3 percent processing charge, to SSI would bring in about 
$9 million. Capping the charge at $87 (the initial $75, 
adjusted for inflation), as H.R. 743 also proposes, would 
generate $5 million. Total collections over the 10-year period 
would be $26 million.
    Title IV. This title, labeled ``Miscellaneous and Technical 
Amendments,'' contains two provisions with significant 
budgetary effects. Both would affect state and local government 
employees.
    60-month employment requirement for exemption from 
Government Pension Offset. State and local governments have 
been permitted to join Social Security since the 1950s; since 
1983, jurisdictions that had already joined have been barred 
from withdrawing. The Census Bureau counts 14 million active 
members and 6 million beneficiaries in 2,200 state and local 
government retirement plans. About one-quarter are not covered 
by Social Security.
    Under current law, a retiree with a pension from noncovered 
state or local employment cannot collect a full Social Security 
benefit as a spouse or widow(er) of a covered worker. Instead, 
the government pension offset (GPO) trims the Social Security 
benefit by $2 for every $3 of the noncovered pension--often 
erasing the Social Security benefit entirely. The GPO's 
drafters liken that to the way Social Security treats other 
spouses. A wife, for example, cannot collect her own retired-
worker benefit plus an extra 50 percent of her husband's 
benefit; instead, she gets the larger amount. In that analogy, 
two-thirds of the pension from noncovered work is akin to a 
retired-worker benefit.
    H.R. 743 would limit a tactic that some public employees 
are using to skirt the GPO. The offset applies to state and 
local retirees whose last day of employment under their pension 
plan was not covered. The General Accounting Office (GAO) 
reports that some workers have learned that by switching jobs 
for a short time--sometimes just one day--they can avoid a 
lifetime of GPO-related reductions. Specifically, GAO found 
4,800 such transfers through June 2002. Almost all were in 
Texas. H.R. 743 proposes to replace the ``last-day'' rule with 
a 60-month requirement--the same rule that applies to federal 
civil servants.
    GPO had to judge how the job-switching detected by GAO 
might evolve over time. Of the 4,800 transfers that GAO found, 
3,500 occurred in 2002 alone, where they amounted to a quarter 
of retirements in the Teachers' Retirement System of Texas that 
year. GAO found only a handful of cases outside Texas but 
voiced concern that the practice would spread.
    To gauge that possibility, CBO looked at retirement plans 
in the six states--California, Colorado, Illinois, Louisiana, 
Massachusetts, and Ohio--that with Texas account for 75 percent 
of noncovered employees. CBO concluded that conditions in Texas 
are uniquely favorable to ``last-day'' switches. Texas combines 
a huge noncovered sector, a small covered sector, and a 
statewide plan that recognizes service in both. In other 
states, employees who sought a covered job would have to change 
occupations (for example, from law enforcement to teacher) and 
forfeit some advantages of their original plan; in others, such 
as Ohio and Massachusetts, no covered positions exist. 
California, with its mix of covered and noncovered 
jurisdictions, bears the closest resemblance to Texas but has 
fewer noncovered jobs and thus fewer employees with an 
incentive to switch. If the ``last-day'' rule remains, states 
could face pressure to amend their plans to make such transfers 
easier. But plan amendments are complex and time-consuming.
    Under current law, CBO assumes that annual transfers 
spurred by the ``last-day'' rule will climb to 7,000 in 2004--
twice the number in 2002, enough to accommodate further growth 
in Texas (where the practice clearly had not peaked) and some 
spillover to other states. Under H.R. 743, significant savings 
in Social Security would follow in about seven years. That lag 
stems from the programs' contrasting rules for eligibility: a 
typical retiree under the Texas teachers' plan qualifies for a 
pension at age 55 and (if the GPO does not erase it) for Social 
Security at age 62. Thus, the first batch of 7,000 annuitants 
who retire in calendar 2004 would reach 62 in 2011. Spouses and 
widow(er)s affected by the GPO in December 2001 saw their 
Social Security reduced by an average of $312 and $479, 
respectively. Adjusting those figures for inflation and for the 
age and sex of the affected group led CBO to assume those 7,000 
would lose an average of $525, or $4 million in December 2011. 
Savings in 2001 are just $26 million because the fiscal year 
ends in September and birthdays occur throughout the year. By 
December 2013, three cohorts of retirees push the monthly 
savings up to $10 million; savings in fiscal year 2013 equal 
$80 million.
    Real-life cases would be more varied than these simple 
examples. Some annuitants retire after 55 (and reach 62 years 
old before 2011); some are widowed (and qualify for Social 
Security at age 60, not at age 62); and others must wait for a 
younger spouse to reach 62 years old. But these typical cases 
illustrate why CBO estimates small savings through 2010 and 
rapidly growing amount after that.
    Permission for Kentucky to operate divided retirement 
systems. Under section 218 of the Social Security Act, 21 state 
are allowed to operate retirement systems in which some but not 
all employees are covered under Social Security. In divided 
systems, new employees must pay Social Security tax, but 
employees already on the payroll may choose their coverage. 
H.R. 743 would add Kentucky to the list. A planned merger of 
two Louisville-area fire and police departments apparently 
spurs the provision. CBO assumes that 200 of the 1,300 workers 
affected would choose Social Security, and 60 or so new hires 
each year would add to their ranks. Extra Social Security taxes 
would grow from $1 million in 2004 to $5 million in 2013. 
Workers who switch coverage can avoid or soften the GPO and the 
windfall elimination provision, another rule that limits 
retired-worker (rather than spouse or survivor) benefits when 
beneficiaries get a pension from noncovered employment. Only a 
minority of the newly covered employees, through, would qualify 
for Social Security in the next 10 years, and CBO estimates 
extra costs of $1 million in 2013.
    Other provisions. H.R. 743 would correct sections of the 
Ticket to Work and Work Incentives Improvement Act of 1999 
(Public Law 106-170) that govern SSA's research and 
demonstration projects. It would allow SSA to continue waiving 
certain provisions of law, when appropriate, for projects 
initiated before December 2004. Currently such waivers will 
expire abruptly on that date, even for projects already 
launched. SSA does not expect to use such waivers extensively 
other than for the $1-for-$2 demonstrations (see below), so CBO 
ascribes a negligible cost.
    DI beneficiaries face limits on their earnings. Applicants 
who earn more than $800 a month (labeled substantial gainful 
activity, or SGA) in 2003 cannot quality for DI; beneficiaries 
who make more than that for a nine-month trial work period and 
three-month grace period lose their entire check. The 1999 law 
directed SSA to conduct demonstrations in which checks would be 
reduced by $1 for each $2 of earnings over certain thresholds. 
But that law left unclear how the projects would be funded. 
H.R. 743 clarifies that SSA would pay benefits from the trust 
fund and other costs--for the design, conduct, and evaluation 
of the demonstrations--from its appropriation for 
administrative expenses.
    In the meantime, statisticians and other experts have 
advised SSA to conduct $1-for-$2 demonstrations narrower in 
scope than CBO assumed in 1999. In particular, they believe SSA 
cannot realistically measure ``induced filers'' via the 
demonstrations. Induced filers--workers with severe impairments 
who would not otherwise have applied for benefits but who are 
attracted by a more liberal treatment of earnings--dominated 
CBO's earlier analyses of the demonstrations' costs. (As SSA's 
plans became clearer, CBO removed those estimated costs from 
its baseline.) CBO expects that targeting the experiments only 
at a sample of current recipients would lead to little net 
change in benefits.
    H.R. 743 would broaden the Work Opportunity Tax Credit to 
cover people who use a ticket for vocational rehabilitation 
(VR) under the 1999 law. That credit, which expires after 
December 2003, allows employers to subtract up to 40 percent of 
the first $6,000 of wages from income tax when they hire 
members of targeted groups. People referred by state VR 
agencies are one such group; H.R. 743 would add DI and SSI 
beneficiaries who choose other VR providers, such as private 
firms or nonprofit organizations. The first tickets were 
distributed in 2002 and nationwide implementation will take 
three years. Because the tickets program is still in its early 
stages, the Joint Committee on Taxation estimates that 
broadening eligibility for the tax credit would reduce revenues 
by $2 million in 2004.
    Title IV would expand eligibility for widows' and widowers' 
benefits in narrow circumstances. To collect Social Security on 
a deceased worker's record, a widow or widower must either have 
been married to the worker for nine months or be actively 
caring for the worker's child. Lawmakers recently learned about 
an unusual case in which a worker could not marry his longtime 
companion because state law forbade him from divorcing his 
wife, who was in a mental institution. When his wife's death 
finally permitted him to remarry, he was already terminally ill 
and died a few months later. H.R. 743 would waive the duration-
of-marriage requirement in those rare circumstances. Only one 
such case has come to light and CBO assumes that the provision 
would have little cost.

Spending subject to appropriation

    CBO estimates that implementing H.R. 743 would cost SSA $15 
million to $20 million a year in extra enforcement and 
processing expenses through 2010. Extending the attorney-fee 
program to SSI is the biggest piece, accounting for $11 million 
to $14 million a year.
    Under H.R. 743, SSA would split the first SSI check into at 
least two parts--one for the attorney and one for the 
beneficiary--as it does in DI. (A third party--the state--may 
also claim a share if it paid benefits under a so-called 
interim assistance program.) Based on a GAO report, CBO assumes 
that each DI case that involves attorney fees will cost SSA 
aboiut $235 in 2004. About $50 of that is for fee approval 
(which SSA already performs in SSI) but $185 is for fee 
processing (which SSA does not do in SSI). Multiplying by the 
assumed volume of cases yields expected costs of $11 million in 
2004 and slightly more through 2010, when the provision would 
expire.
    Other provisions--chiefly those that would mandate more on-
site inspections, bonding and licensing, and related scrutiny 
of representative payees and require SSA to produce new studies 
and reports--would cost an estimated $8 million in 2004 and $4 
million to $6 million a year thereafter. The SSI and DI 
programs each would account for about half of those amounts.
    On-budget effects on direct spending and revenues: The 
Congressional Budget Act labels Social Security ``off-budget'' 
and excludes it from the President's budget, the House and 
Senate budget resolutions, and the Balanced Budget and 
Emergency Deficit Control Act of 1985. The net changes in 
governmental receipts (i.e., revenues) and outlays from direct 
spending--excluding Social Security--over the 2004-2013 period 
are shown in the following table.

----------------------------------------------------------------------------------------------------------------
                                                      By fiscal year, in millions of dollars--
                                   -----------------------------------------------------------------------------
                                     2004   2005   2006    2007    2008    2009    2010    2011    2012    2013
----------------------------------------------------------------------------------------------------------------
Changes in outlays................      0     -8     -15     -19     -23     -26     -28     -25     -25     -27
Changes in receipts...............     -2      0       0       0       0       0       0       0       0       0
----------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: Section 4 of 
the Unfunded Mandates Reform Act excludes from the provisions 
of that act any provision in a bill that relates to the Old-
Age, Survivors, and Disability Insurance program under title II 
of the Social Security Act. The provisions of H.R. 743 that 
amend title II would fall within that exclusion.
    Other provisions of the bill contain no intergovernmental 
mandates as defined in UMRA and would impose no costs on state, 
local, or tribal governments. They do, however, contain 
private-sector mandates as defined in UMRA. Section 204 would 
prohibit private entities from charging a fee for certain 
products and services that are available for free from SSA 
unless, at the time the offer is made, they provide a statement 
to that effect. Section 302 would impose a processing charge on 
private attorneys to whom SSA would disburse fees related to 
their representation of successful SSI claimants. CBO estimates 
that the costs to the private sector of those mandates would 
not exceed the threshold established by UMRA ($117 million in 
2003, adjusted annually for inflation).
    Previous CBO estimate: On March 4, CBO transmitted a cost 
estimate for the introduced version of H.R. 743. That estimate 
cited a combined $649 million in direct spending reductions and 
revenue increases over the 2004-2013 period. The version of the 
bill approved by the Committee on Ways and Means on March 13 
differs slightly from the introduced version. Changes in the 
attorney-fee provisions--rounding the future cap on processing 
charges to the next lower $1 (rather than $10) and extending 
the program to SSI for five years (rather than three)--would 
add $32 million to SSA's receipts over the 2004-2013 period. 
CBO changed its estimate of the Medicare savings that would 
stem from the ban on Social Security benefits for fugitives, 
shrinking them by $25 million. The earlier estimate had assumed 
incorrectly that the ban on Social Security benefits also led 
to a ban on Medicare benefits. In total, CBO judges that H.R. 
743 as ordered reported would trim direct spending and boost 
revenues by a combined $655 million over the 10-year period.
    Estimate prepared by: Federal Spending: Kathy Ruffing; 
Federal Revenues: Edward Harris and Annabelle Bartsch; Impact 
on State, Local, and Tribal Governments: Leo Lex; and Impact on 
the Private Sector: Ralph Smith.
    Estimate Approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                    D. Macroeconomic Impact Analysis

    In compliance with clause 3(h)(2) of rule XIII of the Rules 
of the House of Representatives, the following statement is 
made by the Joint Committee on Taxation with respect to the 
provisions of the bill amending the Internal Revenue Code of 
1986: the effects of the bill on economic activity are so small 
as to be incalculable within the context of a model of the 
aggregate economy.

 V. OTHER MATTERS REQUIRED TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives, the Committee reports that the 
need for this legislation resulted from hearings conducted by 
the Subcommittee on Social Security in the 106th, 107th, and 
108th Congresses. Details of these hearings are included in 
Title I. Summary and Background, Part C. Legislative History.

        B. Statement of General Performance Goals and Objectives

    In compliance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee states that H.R. 
743 the bill contains measures that authorize funding for 
improving protection of beneficiaries with representative 
payees; addressing waste, fraud, and abuse in the program; 
enhancing provisions under the Ticket to Work and Work 
Incentives Improvement Act; as well as providing compensation 
to the Social Security Advisory Board. These measures will 
expand the Social Security Administration's ability to meet its 
stated goals of (1) ensuring the integrity of Social Security 
programs with zero tolerance for fraud and abuse; and, (2) 
promoting valued, strong, and responsive Social Security 
programs and conducting effective policy development, research, 
and program evaluation.
    Through reporting requirements in this legislation, as well 
as reporting on achievement of performance objectives and 
measures laid out in the Social Security Administration's 
Annual Performance and Accountability Report, Congress and the 
Administration will be able to assess achievement of the 
related program objectives, including: (1) aggressively deter, 
identify, and resolve fraud; (2) increasing the number of SSDI 
and SSI disability beneficiaries who achieve steady employment 
and no longer receive cash benefits; and (3) improving the 
accuracy of processing post entitlement events.

                 C. Constitutional Authority Statement

    In compliance with clause 3(d)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
Committee's action in reporting this bill is derived from 
Article I of the Constitution, Section 8 (``The Congress shall 
have Power to lay and collect Taxes, Duties, Imposts and 
Excises * * * ''), and from the 16th Amendment to the 
Constitution.

              D. Information Relating to Unfunded Mandates

    This information is provided in accordance with Section 423 
of the Unfunded Mandates Reform Act of 1995 (P.L. 104-4).
    The Committee has determined that the bill does not impose 
a Federal intergovernmental mandate on State, local, or tribal 
governments. The Committee has determined that the bill does 
contain Federal mandates on the private sector. However, those 
mandates would not exceed the threshold established by Section 
4 of the Unfunded Mandates Reform Act.

                E. Applicability of House Rule XXI 5(b)

    Rule XXI 5(b) of the Rules of the House of Representatives 
provides, in part, that ``A bill or joint resolution, 
amendment, or conference report carrying a Federal income tax 
rate increase may not be considered as passed or agreed to 
unless so determined by a vote of not less than three-fifths of 
the Members voting, a quorum being present.'' The Committee has 
carefully reviewed the provisions of the bill, and states that 
the provisions of the bill do not involve any Federal income 
tax rate increases within the meaning of the rule.

                       F. Tax Complexity Analysis

    Section 4022(b) of the Internal Revenue Service Reform and 
Restructuring Act of 1998 (the ``IRS Reform Act'') requires the 
Joint Committee on Taxation (in consultation with the Internal 
Revenue Service and the Department of the Treasury) to provide 
a tax complexity analysis. The complexity analysis is required 
for all legislation reported by the House Committee on Ways and 
Means, the Senate Committee on Finance, or any committee of 
conference if the legislation includes a provision that 
directly or indirectly amends the Internal Revenue Code and has 
widespread applicability to individuals or small businesses.
    The staff of the Joint Committee on Taxation has determined 
that a complexity analysis is not required under section 
4022(b) of the IRS Reform Act because the bill contains no 
provisions that amend the Internal Revenue Code and that have 
``widespread applicability'' to individuals or small 
businesses.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

SOCIAL SECURITY ACT

           *       *       *       *       *       *       *



TITLE II--FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE BENEFITS

           *       *       *       *       *       *       *



              AGE AND SURVIVORS INSURANCE BENEFIT PAYMENTS

                       Old Age Insurance Benefits

Sec. 202. (a) * * *

                       Wife's Insurance Benefits

  (b)(1) * * *

           *       *       *       *       *       *       *

  (4)(A) The amount of a wife's insurance benefit for each 
month (as determined after application of the provisions of 
subsections (q) and (k)) shall be reduced (but not below zero) 
by an amount equal to two-thirds of the amount of any monthly 
periodic benefit payable to the wife (or divorced wife) for 
such month which is based upon her earnings while in the 
service of the Federal Government or any State (or political 
subdivision thereof, as defined in section 218(b)(2)) [if, on] 
if, during any portion of the last 60 months of such service 
ending with the last day she was employed by such entity--
          (i) * * *

           *       *       *       *       *       *       *


                      Husband's Insurance Benefits

  (c)(1) * * *
  (2)(A) The amount of a husband's insurance benefit for each 
month (as determined after application of the provisions of 
subsections (q) and (k)) shall be reduced (but not below zero) 
by an amount equal to two-thirds of the amount of any monthly 
periodic benefit payable to the husband (or divorced husband) 
for such month which is based upon his earnings while in the 
service of the Federal Government or any State (or political 
subdivision thereof, as defined in section 218(b)(2)) [if, on] 
if, during any portion of the last 60 months of such service 
ending with the last day he was employed by such entity--
          (i) * * *

           *       *       *       *       *       *       *


                       Widow's Insurance Benefits

  (e)(1) * * *

           *       *       *       *       *       *       *

  (7)(A) The amount of a widow's insurance benefit for each 
month (as determined after application of the provisions of 
subsections (q) and (k), paragraph (2)(D), and paragraph (3)) 
shall be reduced (but not below zero) by an amount equal to 
two-thirds of the amount of any monthly periodic benefit 
payable to the widow (or surviving divorced wife) for such 
month which is based upon her earnings while in the service of 
the Federal Government or any State (or political subdivision 
thereof, as defined in section 218(b)(2)) [if, on] if, during 
any portion of the last 60 months of such service ending with 
the last day she was employed by such entity--
          (i) * * *

           *       *       *       *       *       *       *


                      Widower's Insurance Benefits

  (f)(1) * * *
  (2)(A) The amount of a widower's insurance benefit for each 
month (as determined after application of the provisions of 
subsections (q) and (k), paragraph (3)(D), and paragraph (4)) 
shall be reduced (but not below zero) by an amount equal to 
two-thirds of the amount of any monthly periodic benefit 
payable to the widower (or surviving divorced husband) for such 
month which is based upon his earnings while in the service of 
the Federal Government or any State (or political subdivision 
thereof, as defined in section 218(b)(2)) [if, on] if, during 
any portion of the last 60 months of such service ending with 
the last day he was employed by such entity--
          (i) * * *

           *       *       *       *       *       *       *


                Mother's and Father's Insurance Benefits

  (g)(1) * * *

           *       *       *       *       *       *       *

  (4)(A) The amount of a mother's or father's insurance benefit 
for each month (as determined after application of the 
provisions of subsection (k)) shall be reduced (but not below 
zero) by an amount equal to two-thirds of the amount of any 
monthly periodic benefit payable to the individual for such 
month which is based upon the individual's earnings while in 
the service of the Federal Government or any State (or 
political subdivision thereof, as defined in section 218(b)(2)) 
[if, on] if, during any portion of the last 60 months of such 
service ending with the last day the individual was employed by 
such entity--
          (i) * * *

           *       *       *       *       *       *       *


     Termination of Benefits Upon [Deportation] Removal of Primary 
                              Beneficiary

  (n)(1) If any individual is (after the date of enactment of 
this subsection) [deported under section 241(a) (other than 
under paragraph (1)(C) or (1)(E) thereof)] removed under 
section 237(a) (other than paragraph (1)(C) thereof) or 
212(a)(6)(A) of the Immigration and Nationality Act, then, 
notwithstanding any other provisions of this title--
          (A) no monthly benefit under this section or section 
        223 shall be paid to such individual, on the basis of 
        his wages and self employment income, for any month 
        occurring (i) after the month in which the Commissioner 
        of Social Security is notified by the Attorney General 
        that such individual has been so [deported] removed, 
        and (ii) before the month in which such individual is 
        thereafter lawfully admitted to the United States for 
        permanent residence,

           *       *       *       *       *       *       *

  (2) As soon as practicable after the [deportation] removal of 
any individual [under any of the paragraphs of section 241(a) 
of the Immigration and Nationality Act (other than under 
paragraph (1)(C) or (1)(E) thereof)] under any of the 
paragraphs of section 237(a) of the Immigration and Nationality 
Act (other than paragraph (1)(C) thereof) or under section 
212(a)(6)(A) of such Act, the Attorney General shall notify the 
Commissioner of Social Security of such [deportation] removal.
  (3) For purposes of paragraphs (1) and (2) of this 
subsection, an individual against whom a final order of 
[deportation] removal has been issued under [paragraph (19) of 
section 241(a)] subparagraph (D) of section 237(a)(4) of the 
Immigration and Nationality Act (relating to persecution of 
others on account of race, religion, national origin, or 
political opinion, under the direction of or in association 
with the Nazi government of Germany or its allies) shall be 
considered to have been [deported] removed under such 
[paragraph (19)] subparagraph (D) as of the date on which such 
order became final.

           *       *       *       *       *       *       *


   Limitation on Payments to [Prisoners and Certain Other Inmates of 
   Publicly Funded Institutions] Prisoners, Certain Other Inmates of 
  Publicly Funded Institutions, Fugitives, Probationers, and Parolees

  (x)(1)(A) Notwithstanding any other provision of this title, 
no monthly benefits shall be paid under this section or under 
section 223 to any individual for any month ending with or 
during or beginning with or during a period of more than 30 
days throughout all of which such individual--
          (i) * * *
          (ii) is confined by court order in an institution at 
        public expense in connection with--
                  (I) * * *

           *       *       *       *       *       *       *

                  (IV) a similar verdict or finding with 
                respect to such an offense based on similar 
                factors (such as a mental disease, a mental 
                defect, or mental incompetence), [or]
          (iii) immediately upon completion of confinement as 
        described in clause (i) pursuant to conviction of a 
        criminal offense an element of which is sexual 
        activity, is confined by court order in an institution 
        at public expense pursuant to a finding that the 
        individual is a sexually dangerous person or a sexual 
        predator or a similar finding[.],
          (iv) is fleeing to avoid prosecution, or custody or 
        confinement after conviction, under the laws of the 
        place from which the person flees, for a crime, or an 
        attempt to commit a crime, which is a felony under the 
        laws of the place from which the person flees, or 
        which, in the case of the State of New Jersey, is a 
        high misdemeanor under the laws of such State, or
          (v) is violating a condition of probation or parole 
        imposed under Federal or State law.
In the case of an individual from whom such monthly benefits 
have been withheld pursuant to clause (iv) or (v), the 
Commissioner may, for good cause shown, pay such withheld 
benefits to the individual.

           *       *       *       *       *       *       *

  (3)(A) * * *

           *       *       *       *       *       *       *

  (C) Notwithstanding the provisions of section 552a of title 
5, United States Code, or any other provision of Federal or 
State law (other than section 6103 of the Internal Revenue Code 
of 1986 and section 1106(c) of this Act), the Commissioner 
shall furnish any Federal, State, or local law enforcement 
officer, upon the written request of the officer, with the 
current address, Social Security number, and photograph (if 
applicable) of any beneficiary under this title, if the officer 
furnishes the Commissioner with the name of the beneficiary, 
and other identifying information as reasonably required by the 
Commissioner to establish the unique identity of the 
beneficiary, and notifies the Commissioner that--
          (i) the beneficiary--
                  (I) is described in clause (iv) or (v) of 
                paragraph (1)(A); and
                  (II) has information that is necessary for 
                the officer to conduct the officer's official 
                duties; and
          (ii) the location or apprehension of the beneficiary 
        is within the officer's official duties.

           *       *       *       *       *       *       *


           EVIDENCE, PROCEDURE, AND CERTIFICATION FOR PAYMENT

Sec. 205. (a) * * *

           *       *       *       *       *       *       *

  (g) Any individual, after any final decision of the 
Commissioner of Social Security made after a hearing to which 
he was a party, irrespective of the amount in controversy, may 
obtain a review of such decision by a civil action commenced 
within sixty days after the mailing to him of notice of such 
decision or within such further time as the Commissioner of 
Social Security may allow. Such action shall be brought in the 
district court of the United States for the judicial district 
in which the plaintiff resides, or has his principal place of 
business, or, if he does not reside or have his principal place 
of business within any such judicial district, in the United 
States District Court for the District of Columbia. As part of 
the Commissioner's answer the Commissioner of Social Security 
shall file a certified copy of the transcript of the record 
including the evidence upon which the findings and decision 
complained of are based. The court shall have power to enter, 
upon the pleadings and transcript of the record, a judgment 
affirming, modifying, or reversing the decision of the 
Commissioner of Social Security, with or without remanding the 
cause for a rehearing. The findings of the Commissioner of 
Social Security as to any fact, if supported by substantial 
evidence, shall be conclusive, and where a claim has been 
denied by the Commissioner of Social Security or a decision is 
rendered under subsection (b) hereof which is adverse to an 
individual who was a party to the hearing before the 
Commissioner of Social Security, because of failure of the 
claimant or such individual to submit proof in conformity with 
any regulation prescribed under subsection (a) hereof, the 
court shall review only the question of conformity with such 
regulations and the validity of such regulations. The court 
may, on motion of the Commissioner of Social Security made for 
good cause shown before the Commissioner files the 
Commissioner's answer, remand the case to the Commissioner of 
Social Security for further action by the Commissioner of 
Social Security, and it may at any time order additional 
evidence to be taken before the Commissioner of Social 
Security, but only upon a showing that there is new evidence 
which is material and that there is good cause for the failure 
to incorporate such evidence into the record in a prior 
proceeding; and the Commissioner of Social Security shall, 
after the case is remanded, and after hearing such additional 
evidence if so ordered, modify or affirm the Commissioner's 
findings of fact or the Commissioner's decision, or both, and 
shall file with the court any such additional and modified 
findings of fact and decision, [and a transcript] and, in any 
case in which the Commissioner has not made a decision fully 
favorable to the individual, a transcript of the additional 
record and testimony upon which the Commissioner's action in 
modifying or affirming was based. Such additional or modified 
findings of fact and decision shall be reviewable only to the 
extent provided for review of the original findings of fact and 
decision. The judgment of the court shall be final except that 
it shall be subject to review in the same manner as a judgment 
in other civil actions. Any action instituted in accordance 
with this subsection shall survive notwithstanding any change 
in the person occupying the office of Commissioner of Social 
Security or any vacancy in such office.

           *       *       *       *       *       *       *


                         Representative Payees

  (j)(1) * * *
  (2)(A) * * *
  (B)(i) As part of the investigation referred to in 
subparagraph (A)(i), the Commissioner of Social Security 
shall--
          (I) * * *

           *       *       *       *       *       *       *

          (III) determine whether such person has been 
        convicted of a violation of section 208, 811, or 1632, 
        [and]
          (IV) obtain information concerning whether such 
        person has been convicted of any other offense under 
        Federal or State law which resulted in imprisonment for 
        more than 1 year,
          (V) obtain information concerning whether such person 
        is a person described in section 202(x)(1)(A)(iv), and
          [(IV)] (VI) determine whether certification of 
        payment of benefits to such person has been revoked 
        pursuant to this subsection, the designation of such 
        person as a representative payee has been revoked 
        pursuant to section 807(a), or payment of benefits to 
        such person has been terminated pursuant to section 
        1631(a)(2)(A)(iii) by reason of misuse of funds paid as 
        benefits under this title, title VIII, or title XVI.

           *       *       *       *       *       *       *

  (iii) Notwithstanding the provisions of section 552a of title 
5, United States Code, or any other provision of Federal or 
State law (other than section 6103 of the Internal Revenue Code 
of 1986 and section 1106(c) of this Act), the Commissioner 
shall furnish any Federal, State, or local law enforcement 
officer, upon the written request of the officer, with the 
current address, social security account number, and photograph 
(if applicable) of any person investigated under this 
paragraph, if the officer furnishes the Commissioner with the 
name of such person and such other identifying information as 
may reasonably be required by the Commissioner to establish the 
unique identity of such person, and notifies the Commissioner 
that--
          (I) such person is described in section 
        202(x)(1)(A)(iv),
          (II) such person has information that is necessary 
        for the officer to conduct the officer's official 
        duties, and
          (III) the location or apprehension of such person is 
        within the officer's official duties.
  (C)(i) Benefits of an individual may not be certified for 
payment to any other person pursuant to this subsection if--
          (I) * * *
          (II) except as provided in clause (ii), certification 
        of payment of benefits to such person under this 
        subsection has previously been revoked as described in 
        [subparagraph (B)(i)(IV),,] subparagraph (B)(i)(VI) the 
        designation of such person as a representative payee 
        has been revoked pursuant to section 807(a), or payment 
        of benefits to such person pursuant to section 
        1631(a)(2)(A)(ii) has previously been terminated as 
        described in [section 1631(a)(2)(B)(ii)(IV)] section 
        1631(a)(2)(B)(ii)(VI), [or]
          (III) except as provided in clause (iii), such person 
        is a creditor of such individual who provides such 
        individual with goods or services for consideration[.],
          (IV) such person has previously been convicted as 
        described in subparagraph (B)(i)(IV), unless the 
        Commissioner determines that such certification would 
        be appropriate notwithstanding such conviction, or
          (V) such person is person described in section 
        202(x)(1)(A)(iv).

           *       *       *       *       *       *       *

  (v) In the case of an individual described in paragraph 
(1)(B), when selecting such individual's representative payee, 
preference shall be given to--
          (I) [a community-based nonprofit social service 
        agency licensed or bonded by the State] a certified 
        community-based nonprofit social service agency (as 
        defined in paragraph (10)),

           *       *       *       *       *       *       *

  (3)(A) * * *

           *       *       *       *       *       *       *

  (E) In any case in which the person described in subparagraph 
(A) or (D) receiving payments on behalf of another fails to 
submit a report required by the Commissioner of Social Security 
under subparagraph (A) or (D), the Commissioner may, after 
furnishing notice to such person and the individual entitled to 
such payment, require that such person appear in person at a 
field office of the Social Security Administration serving the 
area in which the individual resides in order to receive such 
payments.
  [(E)] (F) The Commissioner of Social Security shall maintain 
a centralized file, which shall be updated periodically and 
which shall be in a form which will be readily retrievable by 
each servicing office of the Social Security Administration, 
of--
          (i) * * *

           *       *       *       *       *       *       *

  [(F)] (G) Each servicing office of the Administration shall 
maintain a list, which shall be updated periodically, of public 
agencies and [community-based nonprofit social service 
agencies] certified community-based nonprofit social service 
agencies (as defined in paragraph (10)) which are qualified to 
serve as representative payees pursuant to this subsection or 
section 807 or 1631(a)(2) and which are located in the area 
served by such servicing office.
  (4)(A)(i) [A] Except as provided in the next sentence, a 
qualified organization may collect from an individual a monthly 
fee for expenses (including overhead) incurred by such 
organization in providing services performed as such 
individual's representative payee pursuant to this subsection 
if such fee does not exceed the lesser of--
          (I) * * *
          (II) $25.00 per month ($50.00 per month in any case 
        in which the individual is described in 
        paragraph(1)(B)).
[The Secretary] 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 misused all 
or part of the individual's benefit, and any amount so 
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). The Commissioner shall 
adjust annually (after 1995) each dollar amount set forth in 
subclause (II) under procedures providing for adjustments in 
the same manner and to the same extent as adjustments are 
provided for under the procedures used to adjust benefit 
amounts under section 215(i)(2)(A), except that any amount so 
adjusted that is not a multiple of $1.00 shall be rounded to 
the nearest multiple of $1.00.

           *       *       *       *       *       *       *

  (B) For purposes of this paragraph, the term ``qualified 
organization'' means any State or local government agency whose 
mission is to carry out income maintenance, social service, or 
health care-related activities, any State or local government 
agency with fiduciary responsibilities, or [any community-based 
nonprofit social service agency which is bonded or licensed in 
each State in which it serves as a representative payee] any 
certified community-based nonprofit social service agency (as 
defined in paragraph (10)), if such agency, in accordance with 
any applicable regulations of the Commissioner of Social 
Security--
          (i) * * *

           *       *       *       *       *       *       *

  (5) In cases where the negligent failure of the Commissioner 
of Social Security to investigate or monitor a representative 
payee results in misuse of benefits by the 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 such misused benefits. 
In any case in which a representative payee that--
          (A) is not an individual (regardless of whether it is 
        a ``qualified organization'' within the meaning of 
        paragraph (4)(B)); 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 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 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 (7)(B). The 
Commissioner of Social Security shall make a good faith effort 
to obtain restitution from the terminated representative payee.
  [(6) The Commissioner of Social Security shall include as a 
part of the annual report required under section 704 
information with respect to the implementation of the preceding 
provisions of this subsection, including the number of cases in 
which the representative payee was changed, the number of cases 
discovered where there has been a misuse of funds, how any such 
cases were dealt with by the Commissioner of Social Security, 
the final disposition of such cases, including any criminal 
penalties imposed, and such other information as the 
Commissioner of Social Security determines to be appropriate.]
  (6)(A) In addition to such other reviews of representative 
payees as the Commissioner of Social Security may otherwise 
conduct, the Commissioner shall provide for the periodic onsite 
review of any person or agency located in the United States 
that receives the benefits payable under this title (alone or 
in combination with benefits payable under title VIII or title 
XVI) to another individual pursuant to the appointment of such 
person or agency as a representative payee under this 
subsection, section 807, or section 1631(a)(2) in any case in 
which--
          (i) the representative payee is a person who serves 
        in that capacity with respect to 15 or more such 
        individuals;
          (ii) the representative payee is a certified 
        community-based nonprofit social service agency (as 
        defined in paragraph (10) of this subsection or section 
        1631(a)(2)(I)); or
          (iii) the representative payee is an agency (other 
        than an agency described in clause (ii)) that serves in 
        that capacity with respect to 50 or more such 
        individuals.
  (B) Within 120 days after the end of each fiscal year, the 
Commissioner shall submit to the Committee on Ways and Means of 
the House of Representatives and the Committee on Finance of 
the Senate a report on the results of periodic onsite reviews 
conducted during the fiscal year pursuant to subparagraph (A) 
and of any other reviews of representative payees conducted 
during such fiscal year in connection with benefits under this 
title. Each such report shall describe in detail all problems 
identified in such reviews and any corrective action taken or 
planned to be taken to correct such problems, and shall 
include--
          (i) the number of such reviews;
          (ii) the results of such reviews;
          (iii) the number of cases in which the representative 
        payee was changed and why;
          (iv) the number of cases involving the exercise of 
        expedited, targeted oversight of the representative 
        payee by the Commissioner conducted upon receipt of an 
        allegation of misuse of funds, failure to pay a vendor, 
        or a similar irregularity;
          (v) the number of cases discovered in which there was 
        a misuse of funds;
          (vi) how any such cases of misuse of funds were dealt 
        with by the Commissioner;
          (vii) the final disposition of such cases of misuse 
        of funds, including any criminal penalties imposed; and
          (viii) such other information as the Commissioner 
        deems appropriate.
  (7)(A) If the Commissioner of Social Security or a court of 
competent jurisdiction determines that a representative payee 
that is not a Federal, 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 for payment to such 
individual or such individual's alternative representative 
payee.
  (B) The total of the amount certified for payment to such 
individual or such individual's alternative representative 
payee under subparagraph (A) and the amount certified for 
payment under paragraph (5) may not exceed the total benefit 
amount misused by the representative payee with respect to such 
individual.
  [(7)] (8) For purposes of this subsection, the term ``benefit 
based on disability'' of an individual means a disability 
insurance benefit of such individual under section 223 or a 
child's, widow's, or widower's insurance benefit of such 
individual under section 202 based on such individual's 
disability.
  (9) For purposes of this subsection, misuse of benefits 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 Commissioner of Social Security may 
prescribe by regulation the meaning of the term ``use and 
benefit'' for purposes of this paragraph.
  (10) For purposes of this subsection, the term ``certified 
community-based nonprofit social service agency'' means a 
community-based nonprofit social service agency which is in 
compliance with requirements, under regulations which shall be 
prescribed by the Commissioner, for annual certification to the 
Commissioner that it is bonded in accordance with requirements 
specified by the Commissioner 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 
certification.

           *       *       *       *       *       *       *


                      REPRESENTATION OF CLAIMANTS

  Sec. 206. (a)(1) The Commissioner of Social Security may 
prescribe rules and regulations governing the recognition of 
agents or other persons, other than attorneys as hereinafter 
provided, representing claimants before the Commissioner of 
Social Security, and may require of such agents or other 
persons, before being recognized as representatives of 
claimants that they shall show that they are of good character 
and in good repute, possessed of the necessary qualifications 
to enable them to render such claimants valuable service, and 
otherwise competent to advise and assist such claimants in the 
presentation of their cases. An attorney in good standing who 
is admitted to practice before the highest court of the State, 
Territory, District, or insular possession of his residence or 
before the Supreme Court of the United States or the inferior 
Federal courts, shall be entitled to represent claimants before 
the Commissioner of Social Security. Notwithstanding the 
preceding sentences, the Commissioner, after due notice and 
opportunity for hearing, (A) may refuse to recognize as a 
representative, and may disqualify a representative already 
recognized, any attorney who has been disbarred or suspended 
from any court or bar to which he or she was previously 
admitted to practice or who has been disqualified from 
participating in or appearing before any Federal program or 
agency, and (B) may refuse to recognize, and may disqualify, as 
a non-attorney representative any attorney who has been 
disbarred or suspended from any court or bar to which he or she 
was previously admitted to practice. A representative who has 
been disqualified or suspended pursuant to this section from 
appearing before the Social Security Administration as a result 
of collecting or receiving a fee in excess of the amount 
authorized shall be barred from appearing before the Social 
Security Administration as a representative until full 
restitution is made to the claimant and, thereafter, may be 
considered for reinstatement only under such rules as the 
Commissioner may prescribe. The Commissioner of Social Security 
may, after due notice and opportunity for hearing, suspend or 
prohibit from further practice before the Commissioner any such 
person, agent, or attorney who refuses to comply with the 
Commissioner's rules and regulations or who violates any 
provision of this section for which a penalty is prescribed. 
The Commissioner of Social Security may, by rule and 
regulation, prescribe the maximum fees which may be charged for 
services performed in connection with any claim before the 
Commissioner of Social Security under this title, and any 
agreement in violation of such rules and regulations shall be 
void. Except as provided in paragraph (2)(A), whenever the 
Commissioner of Social Security, in any claim before the 
Commissioner for benefits under this title, makes a 
determination favorable to the claimant, the Commissioner 
shall, if the claimant was represented by an attorney in 
connection with such claim, fix (in accordance with the 
regulations prescribed pursuant to the preceding sentence) a 
reasonable fee to compensate such attorney for the services 
performed by him in connection with such claim.

           *       *       *       *       *       *       *

  (d) Assessment on Attorneys.--
          (1) * * *
          (2) Amount.--
                  (A) The amount of an assessment under 
                paragraph (1) shall be equal to the product 
                obtained by multiplying the amount of the 
                representative's fee that would be required to 
                be so certified by subsection (a)(4) or (b)(1) 
                before the application of this subsection, by 
                the percentage specified in subparagraph (B), 
                except that the maximum amount of the 
                assessment may not exceed the greater of $75 or 
                the adjusted amount as provided pursuant to the 
                following two sentences. In the case of any 
                calendar year beginning after the amendments 
                made by section 301 of the Social Security 
                Protection Act of 2003 take effect, the dollar 
                amount specified in the preceding sentence 
                (including a previously adjusted amount) shall 
                be adjusted annually under the procedures used 
                to adjust benefit amounts under section 
                215(i)(2)(A)(ii), except such adjustment shall 
                be based on the higher of $75 or the previously 
                adjusted amount that would have been in effect 
                for December of the preceding year, but for the 
                rounding of such amount pursuant to the 
                following sentence. Any amount so adjusted that 
                is not a multiple of $1 shall be rounded to the 
                next lowest multiple of $1, but in no case less 
                than $75.

           *       *       *       *       *       *       *


                               PENALTIES

  Sec. 208. (a) * * *
  (b)(1) Any Federal court, when sentencing a defendant 
convicted of an offense under subsection (a), may order, in 
addition to or in lieu of any other penalty authorized by law, 
that the defendant make restitution to the Social Security 
Administration.
  (2) Sections 3612, 3663, and 3664 of title 18, United States 
Code, shall apply with respect to the issuance and enforcement 
of orders of restitution under this subsection. In so applying 
such sections, the Social Security Administration shall be 
considered the victim.
  (3) If the court does not order restitution, or orders only 
partial restitution, under this subsection, the court shall 
state on the record the reasons therefor.
  [(b)] (c) 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), upon his second or any subsequent such 
conviction shall, in lieu of the penalty set forth in the 
preceding provisions of this section, be guilty of a felony and 
shall be fined under title 18, United States Code, or 
imprisoned for not more than five years, or both. In the case 
of any violation described in the preceding sentence, including 
a first such violation, if the court determines that such 
violation 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.
  [(c)] (d) Any individual 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). For the purpose of 
subsection (a)(7), the terms ``social security number'' and 
``social security account number'' mean such numbers as are 
assigned by the Commissioner of Social Security under section 
205(c)(2) whether or not, in actual use, such numbers are 
called social security numbers.
  [(d)] (e)(1) Except as provided in paragraph (2), an alien--
          (A) * * *

           *       *       *       *       *       *       *


                          DEFINITION OF WAGES

  Sec. 209. (a) For the purposes of this title, the term 
``wages'' means remuneration paid prior to 1951 which was wages 
for the purposes of this title under the law applicable to the 
payment of such remuneration, and remuneration paid after 1950 
for employment, including the cash value of all remuneration 
(including benefits) paid in any medium other than cash; except 
that, in the case of remuneration paid after 1950, such term 
shall not include--
          (1) * * *

           *       *       *       *       *       *       *

          (6)(A) * * *
          (B) Cash remuneration paid by an employer in any 
        calendar year to an employee for domestic service in a 
        private home of the employer (including domestic 
        service [described in section 210(f)(5)] on a farm 
        operated for profit), if the cash remuneration paid in 
        such year by the employer to the employee for such 
        service is less than the applicable dollar threshold 
        (as defined in section 3121(x) of the Internal Revenue 
        Code of 1986) for such year;

           *       *       *       *       *       *       *


                        DEFINITION OF EMPLOYMENT

Sec. 210. For the purposes of this title--

                               Employment

  (a) * * *

           *       *       *       *       *       *       *


                           Agricultural Labor

  (f) The term ``agricultural labor'' includes all service 
performed--
          (1) * * *

           *       *       *       *       *       *       *

          (5) On a farm operated for profit if such service is 
        not in the course of the employer's trade or business 
        [or is domestic service in a private home of the 
        employer].

           *       *       *       *       *       *       *


                            SELF-EMPLOYMENT

Sec. 211. For the purposes of this title--

                   Net Earnings From Self-Employment

  (a) The term ``net earnings from self-employment'' means the 
gross income, as computed under subtitle A of the Internal 
Revenue Code of 1986, derived by an individual from any trade 
or business carried on by such individual, less the deductions 
allowed under such subtitle which are attributable to such 
trade or business, plus his distributive share (whether or not 
distributed) of the ordinary net income or loss, as computed 
under section 702(a)(8) of such Code, from any trade or 
business carried on by a partnership of which he is a member; 
except that in computing such gross income and deductions and 
such distributive share of partnership ordinary net income or 
loss--
          (1) * * *

           *       *       *       *       *       *       *

          (5)(A) If any of the income derived from a trade or 
        business (other than a trade or business carried on by 
        a partnership) is community income under community 
        property laws applicable to such income, [all of the 
        gross income and deductions attributable to such trade 
        or business shall be treated as the gross income and 
        deductions of the husband unless the wife exercises 
        substantially all of the management and control of such 
        trade or business, in which case all of such gross 
        income and deductions shall be treated as the gross 
        income and deductions of the wife;] the gross income 
        and deductions attributable to such trade or business 
        shall be treated as the gross income and deductions of 
        the spouse carrying on such trade or business or, if 
        such trade or business is jointly operated, treated as 
        the gross income and deductions of each spouse on the 
        basis of their respective distributive share of the 
        gross income and deductions;

           *       *       *       *       *       *       *

          (7) An individual who is a duly ordained, 
        commissioned, or licensed minister of a church or a 
        member of a religious order shall compute his net 
        earnings from self-employment derived from the 
        performance of service described in subsection (c)(4) 
        without regard to section 107 (relating to rental value 
        of parsonages), section 119 (relating to meals and 
        lodging furnished for the convenience of the employer), 
        and section 911 (relating to earned income from sources 
        without the United States) of the Internal Revenue Code 
        of 1986, but shall not include in any such net earnings 
        from self-employment the rental value of any parsonage 
        or any parsonage allowance (whether or not excluded 
        under section 107 of the Internal Revenue Code of 1986) 
        provided after the individual retires, or any other 
        retirement benefit received by such individual from a 
        church plan (as defined in section 414(e) of such Code) 
        after the individual retires;

           *       *       *       *       *       *       *

          (15) The deduction under [section 162(m)] section 
        162(l) (relating to health insurance costs of self-
        employed individuals) shall not be allowed.

           *       *       *       *       *       *       *


                           OTHER DEFINITIONS

Sec. 216. For the purposes of this title--

                        Spouse; Surviving Spouse

  (a) * * *

           *       *       *       *       *       *       *


                                 Widow

  (c)(1) The term ``widow'' (except when used in the first 
sentence of section 202(i)) means the surviving wife of an 
individual, but only if [(1)] (A) she is the mother of his son 
or daughter, [(2)] (B) she legally adopted his son or daughter 
while she was married to him and while such son or daughter was 
under the age of eighteen, [(3)] (C) he legally adopted her son 
or daughter while she was married to him and while such son or 
daughter was under the age of eighteen, [(4)] (D) she was 
married to him at the time both of them legally adopted a child 
under the age of eighteen, [(5)] (E) except as provided in 
paragraph (2), she was married to him for a period of not less 
than nine months immediately prior to the day on which he died, 
or[(6)] (F) in the month prior to the month of her marriage to 
him [(A)] (i) she was entitled to, or on application therefor 
and attainment of age 62 in such prior month would have been 
entitled to, benefits under subsection (b), (e), or (h) of 
section 202, [(B)] (ii) she had attained age eighteen and was 
entitled to, or on application therefor would have been 
entitled to, benefits under subsection (d) of such section 
(subject, however, to section 202(s)), or [(C)] (iii) she was 
entitled to, or upon application therefor and attainment of the 
required age (if any) would have been entitled to, a widow's, 
child's (after attainment of age 18), or parent's insurance 
annuity under section 2 of the Railroad Retirement Act of 1974, 
as amended.
  (2) The requirements of paragraph (1)(E) in connection with 
the surviving wife of an individual shall be treated as 
satisfied if--
          (A) the individual had been married prior to the 
        individual's marriage to the surviving wife,
          (B) the prior wife was institutionalized during the 
        individual's marriage to the prior wife due to mental 
        incompetence or similar incapacity,
          (C) during the period of the prior wife's 
        institutionalization, the individual would have 
        divorced the prior wife and married the surviving wife, 
        but the individual did not do so because such divorce 
        would have been unlawful, by reason of the prior wife's 
        institutionalization, under the laws of the State in 
        which the individual was domiciled at the time (as 
        determined based on evidence satisfactory to the 
        Commissioner of Social Security),
          (D) the prior wife continued to remain 
        institutionalized up to the time of her death, and
          (E) the individual married the surviving wife within 
        60 days after the prior wife's death.

           *       *       *       *       *       *       *


                                Widower

  (g)(1) The term ``widower'' (except when used in the first 
sentence of section 202(i)) means the surviving husband of an 
individual, but only if [(1)] (A) he is the father of her son 
or daughter, [(2)] (B) he legally adopted her son or daughter 
while he was married to her and while such son or daughter was 
under the age of eighteen, [(3)] (C) she legally adopted his 
son or daughter while he was married to her and while such son 
or daughter was under the age of eighteen, [(4)] (D) he was 
married to her at the time both of them legally adopted a child 
under the age of eighteen, [(5)] (E) except as provided in 
paragraph (2), married to her for a period of not less than 
nine months immediately prior to the day on which she died, or 
[(6)] (F) in the month before the month of his marriage to her 
[(A)] (i) he was entitled to, or on application therefor and 
attainment of age 62 in such prior month would have been 
entitled to, benefits under subsection (c), (f) or (h) of 
section 202, [(B)] (ii) he had attained age eighteen and was 
entitled to, or on application therefor would have been 
entitled to, benefits under subsection (d) of such section 
(subject, however, to section 202(s)), or [(C)] (iii) he was 
entitled to, or on application therefor and attainment of the 
required age (if any) he would have been entitled to, a 
widower's, child's (after attainment of age 18), or parent's 
insurance annuity under section 2 of the Railroad Retirement 
Act of 1974, as amended.
  (2) The requirements of paragraph (1)(E) in connection with 
the surviving husband of an individual shall be treated as 
satisfied if--
          (A) the individual had been married prior to the 
        individual's marriage to the surviving husband,
          (B) the prior husband was institutionalized during 
        the individual's marriage to the prior husband due to 
        mental incompetence or similar incapacity,
          (C) during the period of the prior husband's 
        institutionalization, the individual would have 
        divorced the prior husband and married the surviving 
        husband, but the individual did not do so because such 
        divorce would have been unlawful, by reason of the 
        prior husband's institutionalization, under the laws of 
        the State in which the individual was domiciled at the 
        time (as determined based on evidence satisfactory to 
        the Commissioner of Social Security),
          (D) the prior husband continued to remain 
        institutionalized up to the time of his death, and
          (E) the individual married the surviving husband 
        within 60 days after the prior husband's death.

           *       *       *       *       *       *       *


 Waiver of Nine-Month Requirement for Widow, Stepchild, or Widower in 
  Case of Accidental Death or in Case of Serviceman Dying in Line of 
         Duty, or in Case of Remarriage to the Same Individual

  (k) The requirement in [clause (5) of subsection (c) or 
clause (5) of subsection (g)] clause (E) of subsection (c)(1) 
or clause (E) of subsection (g)(1) that the surviving spouse of 
an individual have been married to such individual for a period 
of not less than nine months immediately prior to the day on 
which such individual died in order to qualify as such 
individual's widow or widower, and the requirement in 
subsection (e) that the stepchild of a deceased individual have 
been such stepchild for not less than nine months immediately 
preceding the day on which such individual died in order to 
qualify as such individual's child, shall be deemed to be 
satisfied, where such individual dies within the applicable 
nine-month period, if--
          (1) * * *

           *       *       *       *       *       *       *


     VOLUNTARY AGREEMENTS FOR COVERAGE OF STATE AND LOCAL EMPLOYEES

                          Purpose of Agreement

  Sec. 218. (a) * * *

           *       *       *       *       *       *       *


                Positions Covered By Retirement Systems

  (d)(1) * * *

           *       *       *       *       *       *       *

  (6)(A) * * *

           *       *       *       *       *       *       *

  (C) For the purposes of this subsection, any retirement 
system established by the State of Alaska, California, 
Connecticut, Florida, Georgia, Illinois, Kentucky, 
Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New 
York, North Dakota, Pennsylvania, Rhode Island, Tennessee, 
Texas, Vermont, Washington, Wisconsin, or Hawaii, or any 
political subdivision of any such State, which, on, before, or 
after the date of enactment of this subparagraph, is divided 
into two divisions or parts, one of which is composed of 
positions of members of such system who desire coverage under 
an agreement under this section and the other of which is 
composed of positions of members of such system who do not 
desire such coverage, shall, if the State so desires and if it 
is provided that there shall be included in such division or 
part composed of members desiring such coverage the positions 
of individuals who become members of such system after such 
coverage is extended, be deemed to be a separate retirement 
system with respect to each such division or part. If, in the 
case of a separate retirement system which is deemed to exist 
by reason of subparagraph (A) and which has been divided into 
two divisions or parts pursuant to the first sentence of this 
subparagraph, individuals become members of such system by 
reason of action taken by a political subdivision after 
coverage under an agreement under this section has been 
extended to the division or part thereof composed of positions 
of individuals who desire such coverage, the positions of such 
individuals who become members of such retirement system by 
reason of the action so taken shall be included in the division 
or part of such system composed of positions of members who do 
not desire such coverage if (i) such individuals, on the day 
before becoming such members, were in the division or part of 
another separate retirement system (deemed to exist by reason 
of subparagraph (A)) composed of positions of members of such 
system who do not desire coverage under an agreement under this 
section, and (ii) all of the positions in the separate 
retirement system of which such individuals so become members 
and all of the positions in the separate retirement system 
referred to in clause (i) would have been covered by a single 
retirement system if the State had not taken action to provide 
for separate retirement systems under this paragraph.

           *       *       *       *       *       *       *


                        REHABILITATION SERVICES

                  Referral for Rehabilitation Services

  Sec. 222. (a) * * *

           *       *       *       *       *       *       *


                          Period of Trial Work

  (c)(1) * * *

           *       *       *       *       *       *       *

  (5) Upon conviction by a Federal court that an individual has 
fraudulently concealed work activity during a period of trial 
work from the Commissioner of Social Security by--
          (A) providing false information to the Commissioner 
        of Social Security as to whether the individual had 
        earnings in or for a particular period, or as to the 
        amount thereof;
          (B) receiving disability insurance benefits under 
        this title while engaging in work activity under 
        another identity, including under another social 
        security account number or a number purporting to be a 
        social security account number; or
          (C) taking other actions to conceal work activity 
        with an intent fraudulently to secure payment in a 
        greater amount than is due or when no payment is 
        authorized,
no benefit shall be payable to such individual under this title 
with respect to a period of disability for any month before 
such conviction during which the individual rendered services 
during the period of trial work with respect to which the 
fraudulently concealed work activity occurred, and amounts 
otherwise due under this title as restitution, penalties, 
assessments, fines, or other repayments shall in all cases be 
in addition to any amounts for which such individual is liable 
as overpayments by reason of such concealment.

           *       *       *       *       *       *       *


                    DEMONSTRATION PROJECT AUTHORITY

  Sec. 234. (a) * * *

           *       *       *       *       *       *       *

  (c) Authority To Waive Compliance With Benefits 
Requirements.--In the case of any experiment or demonstration 
project [conducted under subsection (a)] initiated under 
subsection (a) on or before December 17, 2004, the Commissioner 
may waive compliance with the benefit requirements of this 
title and the requirements of section 1148 as they relate to 
the program established under this title, and the Secretary may 
(upon the request of the Commissioner) waive compliance with 
the benefits requirements of title XVIII, insofar as is 
necessary for a thorough evaluation of the alternative methods 
under consideration. No such experiment or project shall be 
actually placed in operation unless at least 90 days prior 
thereto a written report, prepared for purposes of notification 
and information only and containing a full and complete 
description thereof, has been transmitted by the Commissioner 
to the Committee on Ways and Means of the House of 
Representatives and to the Committee on Finance of the Senate. 
Periodic reports on the progress of such experiments and 
demonstration projects shall be submitted by the Commissioner 
to such committees. When appropriate, such reports shall 
include detailed recommendations for changes in administration 
or law, or both, to carry out the objectives stated in 
subsection (a).
  (d) Reports.--
          (1) * * *
          (2) Termination and final report.--[The authority 
        under the preceding provisions of this section 
        (including any waiver granted pursuant to subsection 
        (c)) shall terminate 5 years after the date of the 
        enactment of this Act.] The authority to initiate 
        projects under the preceding provisions of this section 
        shall terminate on December 18, 2004. Not later than 90 
        days after the termination of any experiment or 
        demonstration project carried out under this section, 
        the Commissioner shall submit to the Committee on Ways 
        and Means of the House of Representatives and to the 
        Committee on Finance of the Senate a final report with 
        respect to that experiment or demonstration project.

           *       *       *       *       *       *       *


TITLE VII--ADMINISTRATION

           *       *       *       *       *       *       *


                     SOCIAL SECURITY ADVISORY BOARD

                         Establishment of Board

Sec. 703. (a) * * *

           *       *       *       *       *       *       *


                         [Expenses and Per Diem

  [(f) Members of the Board shall serve without compensation, 
except that, while serving on business of the Board away from 
their homes or regular places of business, members may be 
allowed travel expenses, including per diem in lieu of 
subsistence, as authorized by section 5703 of title 5, United 
States Code, for persons in the Government employed 
intermittently.]

                  Compensation, Expenses, and Per Diem

  (f) A member of the Board shall, for each day (including 
traveltime) during which the member is attending meetings or 
conferences of the Board or otherwise engaged in the business 
of the Board, be compensated at the daily rate of basic pay for 
level IV of the Executive Schedule. While serving on business 
of the Board away from their homes or regular places of 
business, members may be allowed travel expenses, including per 
diem in lieu of subsistence, as authorized by section 5703 of 
title 5, United States Code, for persons in the Government 
employed intermittently.

           *       *       *       *       *       *       *


               ADMINISTRATIVE DUTIES OF THE COMMISSIONER

                               Personnel

Sec. 704. (a) * * *

                           Budgetary Matters

  (b)(1) * * *

           *       *       *       *       *       *       *

  (3)(A) Except as provided in subparagraph (B), amounts 
received by the Social Security Administration pursuant to an 
order of restitution under section 208(b), 807(i), or 1632(b) 
shall be credited to a special fund established in the Treasury 
of the United States for amounts so received or recovered. The 
amounts so credited, to the extent and in the amounts provided 
in advance in appropriations Acts, shall be available to defray 
expenses incurred in carrying out titles II, VIII, and XVI.
  (B) Subparagraph (A) shall not apply with respect to amounts 
received in connection with misuse by a representative payee 
(within the meaning of sections 205(j), 807, and 1631(a)(2)) of 
funds paid as benefits under title II, VIII, or XVI. Such 
amounts received in connection with misuse of funds paid as 
benefits under title II shall be transferred to the Managing 
Trustee of the Federal Old-Age and Survivors Insurance Trust 
Fund or the Federal Disability Insurance Trust Fund, as 
determined appropriate by the Commissioner of Social Security, 
and such amounts shall be deposited by the Managing Trustee 
into such Trust Fund. All other such amounts shall be deposited 
by the Commissioner into the general fund of the Treasury as 
miscellaneous receipts.

           *       *       *       *       *       *       *


TITLE VIII--SPECIAL BENEFITS FOR CERTAIN WORLD WAR II VETERANS

           *       *       *       *       *       *       *


SEC. 807. REPRESENTATIVE PAYEES.

  (a) In General.--If the Commissioner of Social Security 
determines that the interest of any qualified individual under 
this title would be served thereby, payment of the qualified 
individual's benefit under this title may be made, regardless 
of the legal competency or incompetency of the qualified 
individual, either directly to the qualified individual, or 
[for his or her benefit] for his or her use and benefit, to 
another person (the meaning of which term, for purposes of this 
section, includes an organization) with respect to whom the 
requirements of subsection (b) have been met (in this section 
referred to as the qualified individual's ``representative 
payee''). If the Commissioner of Social Security determines 
that a representative payee has misused any benefit paid to the 
representative payee pursuant to this section, section 205( j), 
or section 1631(a)(2), the Commissioner of Social Security 
shall promptly revoke the person's designation as the qualified 
individual's representative payee under this subsection, and 
shall make payment to an alternative representative payee or, 
if the interest of the qualified individual under this title 
would be served thereby, to the qualified individual.
  (b) Examination of Fitness of Prospective Representative 
Payee.--
          (1) * * *
          (2) As part of the investigation referred to in 
        paragraph (1), the Commissioner of Social Security 
        shall--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) determine whether the person has been 
                convicted of a violation of section 208, 811, 
                or 1632; [and]
                  (D) obtain information concerning whether 
                such person has been convicted of any other 
                offense under Federal or State law which 
                resulted in imprisonment for more than 1 year;
                  (E) obtain information concerning whether 
                such person is a person described in section 
                804(a)(2); and
                  [(D)] (F) determine whether payment of 
                benefits to the person in the capacity as 
                representative payee has been revoked or 
                terminated pursuant to this section, section 
                205( j), or section 1631(a)(2)(A)(iii) by 
                reason of misuse of funds paid as benefits 
                under this title, title II, or XVI, 
                respectively.
          (3) Notwithstanding the provisions of section 552a of 
        title 5, United States Code, or any other provision of 
        Federal or State law (other than section 6103 of the 
        Internal Revenue Code of 1986 and section 1106(c) of 
        this Act), the Commissioner shall furnish any Federal, 
        State, or local law enforcement officer, upon the 
        written request of the officer, with the current 
        address, social security account number, and photograph 
        (if applicable) of any person investigated under this 
        subsection, if the officer furnishes the Commissioner 
        with the name of such person and such other identifying 
        information as may reasonably be required by the 
        Commissioner to establish the unique identity of such 
        person, and notifies the Commissioner that--
                  (A) such person is described in section 
                804(a)(2),
                  (B) such person has information that is 
                necessary for the officer to conduct the 
                officer's official duties, and
                  (C) the location or apprehension of such 
                person is within the officer's official duties.

           *       *       *       *       *       *       *

  (d) Persons Ineligible To Serve as Representative Payees.--
          (1) In general.--The benefits of a qualified 
        individual may not be paid to any other person pursuant 
        to this section if--
                  (A) * * *
                  (B) except as provided in paragraph (2), 
                payment of benefits to the person in the 
                capacity of representative payee has been 
                revoked or terminated under this section, 
                section 205( j), or section 1631(a)(2)(A)(ii) 
                by reason of misuse of funds paid as benefits 
                under this title, title II, or title XVI, 
                respectively; [or]
                  (C) except as provided in paragraph (2)(B), 
                the person is a creditor of the qualified 
                individual and provides the qualified 
                individual with goods or services for 
                consideration[.];
                  (D) such person has previously been convicted 
                as described in subsection (b)(2)(D), unless 
                the Commissioner determines that such payment 
                would be appropriate notwithstanding such 
                conviction; or
                  (E) such person is a person described in 
                section 804(a)(2).

           *       *       *       *       *       *       *

  (h) Accountability Monitoring.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Authority to redirect delivery of benefit 
        payments when a representative payee fails to provide 
        required accounting.--In any case in which the person 
        described in paragraph (1) or (2) receiving benefit 
        payments on behalf of a qualified individual fails to 
        submit a report required by the Commissioner of Social 
        Security under paragraph (1) or (2), the Commissioner 
        may, after furnishing notice to such person and the 
        qualified individual, require that such person appear 
        in person at a United States Government facility 
        designated by the Social Security Administration as 
        serving the area in which the qualified individual 
        resides in order to receive such benefit payments.
          [(3)] (4) Maintaining lists of payees.--The 
        Commissioner of Social Security shall maintain lists 
        which shall be updated periodically of--
                  (A) * * *

           *       *       *       *       *       *       *

          [(4)] (5) Maintaining lists of agencies.--The 
        Commissioner of Social Security shall maintain lists, 
        which shall be updated periodically, of public agencies 
        and community-based nonprofit social service agencies 
        which are qualified to serve as representative payees 
        pursuant to this section and which are located in the 
        jurisdiction in which any qualified individual resides.
  (i) [Restitution.--In any case where]
  (i) Restitution.--
          (1) In general.--In any case where the negligent 
        failure of the Commissioner of Social Security to 
        investigate or monitor a representative payee results 
        in misuse of benefits by the representative payee, the 
        Commissioner of Social Security shall make payment to 
        the qualified individual or the individual's 
        alternative representative payee of an amount equal to 
        the misused benefits. In any case in which a 
        representative payee that--
                  (A) 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 Social 
        Security shall pay 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 subsection (l)(2). The Commissioner of 
        Social Security shall make a good faith effort to 
        obtain restitution from the terminated representative 
        payee.
          (2) Court order for restitution.--
                  (A) In general.--Any Federal court, when 
                sentencing a defendant convicted of an offense 
                under subsection (a), may order, in addition to 
                or in lieu of any other penalty authorized by 
                law, that the defendant make restitution to the 
                Social Security Administration.
                  (B) Related provisions.--Sections 3612, 3663, 
                and 3664 of title 18, United States Code, shall 
                apply with respect to the issuance and 
                enforcement of orders of restitution under this 
                paragraph. In so applying such sections, the 
                Social Security Administration shall be 
                considered the victim.
                  (C) Stated reasons for not ordering 
                restitution.--If the court does not order 
                restitution, or orders only partial 
                restitution, under this paragraph, the court 
                shall state on the record the reasons therefor.
  (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 payment under this 
title for the use and benefit of another person under this 
title and converts such payment, or any part thereof, to a use 
other than for the use and benefit of such person. The 
Commissioner of Social Security may prescribe by regulation the 
meaning of the term ``use and benefit'' for purposes of this 
subsection.
  (k) Periodic Onsite Review.--(1) In addition to such other 
reviews of representative payees as the Commissioner of Social 
Security may otherwise conduct, the Commissioner may provide 
for the periodic onsite review of any person or agency that 
receives the benefits payable under this title (alone or in 
combination with benefits payable under title II or title XVI) 
to another individual pursuant to the appointment of such 
person or agency as a representative payee under this section, 
section 205(j), or section 1631(a)(2) in any case in which--
          (A) the representative payee is a person who serves 
        in that capacity with respect to 15 or more such 
        individuals; or
          (B) the representative payee is an agency that serves 
        in that capacity with respect to 50 or more such 
        individuals.
  (2) Within 120 days after the end of each fiscal year, the 
Commissioner shall submit to the Committee on Ways and Means of 
the House of Representatives and the Committee on Finance of 
the Senate a report on the results of periodic onsite reviews 
conducted during the fiscal year pursuant to paragraph (1) and 
of any other reviews of representative payees conducted during 
such fiscal year in connection with benefits under this title. 
Each such report shall describe in detail all problems 
identified in such reviews and any corrective action taken or 
planned to be taken to correct such problems, and shall 
include--
          (A) the number of such reviews;
          (B) the results of such reviews;
          (C) the number of cases in which the representative 
        payee was changed and why;
          (D) the number of cases involving the exercise of 
        expedited, targeted oversight of the representative 
        payee by the Commissioner conducted upon receipt of an 
        allegation of misuse of funds, failure to pay a vendor, 
        or a similar irregularity;
          (E) the number of cases discovered in which there was 
        a misuse of funds;
          (F) how any such cases of misuse of funds were dealt 
        with by the Commissioner;
          (G) the final disposition of such cases of misuse of 
        funds, including any criminal penalties imposed; and
          (H) such other information as the Commissioner deems 
        appropriate.
  (l) Liability for Misused Amounts.--
          (1) In general.--If the Commissioner of Social 
        Security or a court of competent jurisdiction 
        determines that a representative payee that is not a 
        Federal, State, or local government agency has misused 
        all or part of a qualified individual's benefit that 
        was paid to such representative payee under this 
        section, 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 paragraph (2), upon recovering 
        all or any part of such amount, the Commissioner shall 
        make payment of an amount equal to the recovered amount 
        to such qualified individual or such qualified 
        individual's alternative representative payee.
          (2) Limitation.--The total of the amount paid to such 
        individual or such individual's alternative 
        representative payee under paragraph (1) and the amount 
        paid under subsection (i) may not exceed the total 
        benefit amount misused by the representative payee with 
        respect to such individual.

           *       *       *       *       *       *       *


     TITLE XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE 
SIMPLIFICATION

           *       *       *       *       *       *       *


Part A--General Provisions

           *       *       *       *       *       *       *


SEC. 1129. CIVIL MONETARY PENALTIES AND ASSESSMENTS FOR TITLES II, VIII 
                    AND XVI.

  (a)(1) Any person (including an organization, agency, or 
other entity) [who makes, or causes to be made, a statement or 
representation of a material fact for use in determining any 
initial or continuing right to or the amount of--
          [(A) monthly insurance benefits under title II,
          [(B) benefits or payments under title VIII, or
          [(C) benefits or payments under title XVI,
that the person knows or should know is false or misleading or 
knows or should know omits a material fact or makes such a 
statement with knowing disregard for the truth shall be subject 
to,] who--
          (A) makes, or causes to be made, a statement or 
        representation of a material fact, for use in 
        determining any initial or continuing right to or the 
        amount of monthly insurance benefits under title II or 
        benefits or payments under title VIII or XVI, that the 
        person knows or should know is false or misleading,
          (B) makes such a statement or representation for such 
        use with knowing disregard for the truth, or
          (C) omits from a statement or representation for such 
        use, or otherwise withholds disclosure of, a fact which 
        the person knows or should know is material to the 
        determination of any initial or continuing right to or 
        the amount of monthly insurance benefits under title II 
        or benefits or payments under title VIII or XVI, if the 
        person knows, or should know, that the statement or 
        representation with such omission is false or 
        misleading or that the withholding of such disclosure 
        is misleading,
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 statement or representation or each 
receipt of such benefits or payments while withholding 
disclosure of such fact. Such person also shall be subject to 
an assessment, in lieu of damages sustained by the United 
States because of such statement or representation or because 
of such withholding of disclosure of a material fact, of not 
more than twice the amount of benefits or payments paid as a 
result of such a statement or representation or such a 
withholding of disclosure. In addition, the Commissioner of 
Social Security may make a determination in the same proceeding 
to recommend that the Secretary exclude, as provided in section 
1128, such a person who is a medical provider or physician from 
participation in the programs under title XVIII.

           *       *       *       *       *       *       *

  (3) Any person (including an organization, agency, or other 
entity) who, having received, while acting in the capacity of a 
representative payee pursuant to section 205(j), 807, or 
1631(a)(2), a payment under title II, VIII, or 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 conversion. Such person 
shall also be subject to an assessment, in lieu of damages 
sustained by the United States resulting from the conversion, 
of not more than twice the amount of any payments so converted.
  (b)(1) * * *

           *       *       *       *       *       *       *

  (3) In a proceeding under this section which--
          (A) is against a person who has been convicted 
        (whether upon a verdict after trial or upon a plea of 
        guilty or nolo contendere) of a Federal or State crime 
        [charging fraud or false statements]; and

           *       *       *       *       *       *       *

  (c) In determining pursuant to subsection (a) the amount or 
scope of any penalty or assessment, or whether to recommend and 
exclusion, the Commissioner of Social Security shall take into 
account--
          (1) the nature of the statements [and 
        representations], representations, or actions referred 
        to in subsection (a) and the circumstances under which 
        they occurred;

           *       *       *       *       *       *       *

  (e)(1) Civil money penalties and assessments imposed under 
this section may be compromised by the Commissioner of Social 
Security and may be recovered--
          (A) in a civil action in the name of the United 
        States brought in United States district court for the 
        district where the [statement or representation 
        referred to in subsection (a) was made] violation 
        occurred, or where the person resides, as determined by 
        the Commissioner of Social Security;

           *       *       *       *       *       *       *

  (2) Amounts recovered under this section shall be recovered 
under by the Commissioner of Social Security and shall be 
disposed of as follows:
          (A) * * *
          (B) [In the case of amounts recovered arising out of 
        a determination relating to title VIII or XVI,] In the 
        case of any other amounts recovered under this section, 
        the amounts shall be deposited by the Commissioner of 
        Social Security into the general fund of the Treasury 
        as miscellaneous receipts.

           *       *       *       *       *       *       *


SEC. 1129A. ADMINISTRATIVE PROCEDURE FOR IMPOSING PENALTIES FOR FALSE 
                    OR MISLEADING STATEMENTS.

  (a) In General.--Any person [who makes, or causes to be made, 
a statement or representation of a material fact for use in 
determining any initial or continuing right to or the amount 
of--
          [(1) monthly insurance benefits under title II; or
          [(2) benefits or payments under title XVI,
that the person knows or should know is false or misleading or 
knows or should know omits a material fact or who makes such a 
statement with knowing disregard for the truth shall be subject 
to,] who--
          (1) makes, or causes to be made, a statement or 
        representation of a material fact, for use in 
        determining any initial or continuing right to or the 
        amount of monthly insurance benefits under title II or 
        benefits or payments under title XVI that the person 
        knows or should know is false or misleading,
          (2) makes such a statement or representation for such 
        use with knowing disregard for the truth, or
          (3) omits from a statement or representation for such 
        use, or otherwise withholds disclosure of, a fact which 
        the person knows or should know is material to the 
        determination of any initial or continuing right to or 
        the amount of monthly insurance benefits under title II 
        or benefits or payments under title XVI, if the person 
        knows, or should know, that the statement or 
        representation with such omission is false or 
        misleading or that the withholding of such disclosure 
        is misleading,
shall be subject to, in addition to any other penalties that 
may be prescribed by law, a penalty described in subsection (b) 
to be imposed by the Commissioner of Social Security.

           *       *       *       *       *       *       *


    ATTEMPTS TO INTERFERE WITH ADMINISTRATION OF SOCIAL SECURITY ACT

  Sec. 1129B. Whoever corruptly or by force or threats of force 
(including any threatening letter or communication) attempts to 
intimidate or impede any officer, employee, or contractor of 
the Social Security Administration (including any State 
employee of a disability determination service or any other 
individual designated by the Commissioner of Social Security) 
acting in an official capacity to carry out a duty under this 
Act, or in any other way corruptly or by force or threats of 
force (including any threatening letter or communication) 
obstructs or impedes, or attempts to obstruct or impede, the 
due administration of this Act, shall be fined not more than 
$5,000, imprisoned not more than 3 years, or both, except that 
if the offense is committed only by threats of force, the 
person shall be fined not more than $3,000, imprisoned not more 
than 1 year, or both. In this subsection, the term ``threats of 
force'' means threats of harm to the officer or employee of the 
United States or to a contractor of the Social Security 
Administration, or to a member of the family of such an officer 
or employee or contractor.

           *       *       *       *       *       *       *


  [PROHIBITION OF MISUSE OF SYMBOLS, EMBLEMS, OR NAMES IN REFERENCE] 
   PROHIBITIONS RELATING TO REFERENCES TO SOCIAL SECURITY OR MEDICARE

  Sec. 1140. (a)(1) No person may use, in connection with any 
item constituting an advertisement, solicitation, circular, 
book, pamphlet, or other communication, or a play, motion 
picture, broadcast, telecast, or other production, alone or 
with other words, letters, symbols, or emblems--
          (A) the words ``Social Security'', ``Social Security 
        Account'', ``Social Security System'', ``Social 
        Security Administration'', ``Medicare'', ``Health Care 
        Financing Administration'', ``Centers for Medicare & 
        Medicaid Services'', ``Department of Health and Human 
        Services'', ``Health and Human Services'', 
        ``Supplemental Security Income Program'', [or 
        ``Medicaid'',] ``Medicaid'', ``Death Benefits Update'', 
        ``Federal Benefit Information'', ``Funeral Expenses'', 
        or ``Final Supplemental Plan'', the letters ``SSA'', 
        ``HCFA'', ``CMS'', ``DHHS'', ``HHS'', or ``SSI'', or 
        any other combination or variation of such words or 
        letters, or
          (B) a symbol or emblem of the Social Security 
        Administration, Health Care Financing Administration, 
        Centers for Medicare & Medicaid Services, or Department 
        of Health and Human Services (including the design of, 
        or a reasonable facsimile of the design of, the social 
        security card issued pursuant to section 205(c)(2)(F), 
        or the Medicare card the check used for payment of 
        benefits under title II, or envelopes or other 
        stationery used by the Social Security Administration, 
        Health Care Financing Administration, Centers for 
        Medicare & Medicaid Services, or Department of Health 
        and Human Services) or any other combination or 
        variation of such symbols or emblems,
in a manner which such person knows or should know would 
convey, or in a manner which reasonably could be interpreted or 
construed as conveying, the false impression that such item is 
approved, endorsed, or authorized by the Social Security 
Administration, [the Health Care Financing Administration,] the 
Centers for Medicare & Medicaid Services, or the Department of 
Health and Human Services or that such person has some 
connection with, or authorization from, the Social Security 
Administration, [the Health Care Financing Administration,] the 
Centers for Medicare & Medicaid Services, or the Department of 
Health and Human Services. The preceding provisions of this 
subsection shall not apply with respect to the use by any 
agency or instrumentality of a State or political subdivision 
of a State of any words or letters which identify an agency or 
instrumentality of such State or of a political subdivision of 
such State or the use by any such agency or instrumentality of 
any symbol or emblem of an agency or instrumentality of such 
State or a political subdivision of such State.

           *       *       *       *       *       *       *

  (4)(A) No person shall offer, for a fee, to assist an 
individual to obtain a product or service that the person knows 
or should know is provided free of charge by the Social 
Security Administration unless, at the time the offer is made, 
the person provides to the individual to whom the offer is 
tendered a notice that--
          (i) explains that the product or service is available 
        free of charge from the Social Security Administration, 
        and
          (ii) complies with standards prescribed by the 
        Commissioner of Social Security respecting the content 
        of such notice and its placement, visibility, and 
        legibility.
  (B) Subparagraph (A) shall not apply to any offer--
          (i) to serve as a claimant representative in 
        connection with a claim arising under title II, title 
        VIII, or title XVI; or
          (ii) to prepare, or assist in the preparation of, an 
        individual's plan for achieving self-support under 
        title XVI.

           *       *       *       *       *       *       *


                   SOCIAL SECURITY ACCOUNT STATEMENTS

                         Provision Upon Request

  Sec. 1143. (a)(1) Beginning not later than October 1, 1990, 
the [Secretary] Commissioner of Social Security shall provide 
upon the request of an eligible individual a social security 
account statement (hereinafter referred to as the 
``statement'').
  (2) Each statement shall contain--
          (A) the amount of wages paid to and self-employment 
        income derived by the eligible individual as shown by 
        the records of the [Secretary] Commissioner at the date 
        of the request;
          (B) an estimate of the aggregate of the employer, 
        employee, and self-employment contributions of the 
        eligible individual for old-age, survivors, and 
        disability insurance as shown by the records of the 
        [Secretary] Commissioner on the date of the request;
          (C) a separate estimate of the aggregate of the 
        employer, employee, and self-employment contributions 
        of the eligible individual for hospital insurance as 
        shown by the records of the [Secretary] Commissioner on 
        the date of the request; and

           *       *       *       *       *       *       *


                     Notice to Eligible Individuals

  (b) The [Secretary] Commissioner shall, to the maximum extent 
practicable, take such steps as are necessary to assure that 
eligible individuals are informed of the availability of the 
statement described in subsection (a).

                   Mandatory Provision of Statements

  (c)(1) By not later than September 30, 1995, the [Secretary] 
Commissioner shall provide a statement to each eligible 
individual who has attained age 60 by October 1, 1994, and who 
is not receiving benefits under title II and for whom a current 
mailing address can be determined through such methods as the 
[Secretary] Commissioner determines to be appropriate. In 
fiscal years 1995 through 1999 the [Secretary] Commissioner 
shall provide a statement to each eligible individual who 
attains age 60 in such fiscal years and who is not receiving 
benefits under title II and for whom a current mailing address 
can be determined through such methods as the [Secretary] 
Commissioner determines to be appropriate. The [Secretary] 
Commissioner shall provide with each statement to an eligible 
individual notice that such statement is updated annually and 
is available upon request.
  (2) Beginning not later than October 1, 1999, the [Secretary] 
Commissioner shall provide a statement on an annual basis to 
each eligible individual who is not receiving benefits under 
title II and for whom a mailing address can be determined 
through such methods as the [Secretary] Commissioner determines 
to be appropriate. With respect to statements provided to 
eligible individuals who have not attained age 50, such 
statements need not include estimates of monthly retirement 
benefits. However, if such statements provided to eligible 
individuals who have not attained age 50 do not include 
estimates of retirement benefit amounts, such statements shall 
include a description of the benefits (including auxiliary 
benefits) that are available upon retirement.

           *       *       *       *       *       *       *


            THE TICKET TO WORK AND SELF-SUFFICIENCY PROGRAM

  Sec. 1148. (a) * * *

           *       *       *       *       *       *       *

  (g) Individual Work Plans.--
          (1) Requirements.--Each employment network shall--
                  (A) * * *

           *       *       *       *       *       *       *

        An individual work plan established pursuant to this 
        subsection shall be treated, for purposes of section 
        51(d)(6)(B)(i) of the Internal Revenue Code of 1986, as 
        an individualized written plan for employment under a 
        State plan for vocational rehabilitation services 
        approved under the Rehabilitation Act of 1973.

           *       *       *       *       *       *       *


                    WORK INCENTIVES OUTREACH PROGRAM

  Sec. 1149. (a) * * *

           *       *       *       *       *       *       *

  (c) Definitions.--In this section:
          (1) * * *
          [(2) Disabled beneficiary.--The term ``disabled 
        beneficiary'' has the meaning given that term in 
        section 1148(k)(2).]
          (2) Disabled beneficiary.--The term ``disabled 
        beneficiary'' means an individual--
                  (A) who is a disabled beneficiary as defined 
                in section 1148(k)(2) of this Act;
                  (B) who is receiving a cash payment described 
                in section 1616(a) of this Act or a 
                supplementary payment described in section 
                212(a)(3) of Public Law 93-66 (without regard 
                to whether such payment is paid by the 
                Commissioner pursuant to an agreement under 
                section 1616(a) of this Act or under section 
                212(b) of Public Law 93-66);
                  (C) who, pursuant to section 1619(b) of this 
                Act, is considered to be receiving benefits 
                under title XVI of this Act; or
                  (D) who is entitled to benefits under part A 
                of title XVIII of this Act by reason of the 
                penultimate sentence of section 226(b) of this 
                Act.

           *       *       *       *       *       *       *


 STATE GRANTS FOR WORK INCENTIVES ASSISTANCE TO DISABLED BENEFICIARIES

  Sec. 1150. (a) * * *
  (b) Services Provided.--Services provided to disabled 
beneficiaries pursuant to a payment made under this section may 
include--
          (1) * * *
          (2) advocacy or other services that a disabled 
        beneficiary may need to [secure or regain] secure, 
        maintain, or regain gainful employment.

           *       *       *       *       *       *       *

  (g) Definitions.--In this section:
          (1) * * *
          [(2) Disabled beneficiary.--The term ``disabled 
        beneficiary'' has the meaning given that term in 
        section 1148(k)(2).]
          (2) Disabled beneficiary.--The term ``disabled 
        beneficiary'' means an individual--
                  (A) who is a disabled beneficiary as defined 
                in section 1148(k)(2) of this Act;
                  (B) who is receiving a cash payment described 
                in section 1616(a) of this Act or a 
                supplementary payment described in section 
                212(a)(3) of Public Law 93-66 (without regard 
                to whether such payment is paid by the 
                Commissioner pursuant to an agreement under 
                section 1616(a) of this Act or under section 
                212(b) of Public Law 93-66);
                  (C) who, pursuant to section 1619(b) of this 
                Act, is considered to be receiving benefits 
                under title XVI of this Act; or
                  (D) who is entitled to benefits under part A 
                of title XVIII of this Act by reason of the 
                penultimate sentence of section 226(b) of this 
                Act.

           *       *       *       *       *       *       *


   TITLE XVI--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND 
DISABLED

           *       *       *       *       *       *       *


Part A--Determination of Benefits

           *       *       *       *       *       *       *


                               RESOURCES

                       Exclusions From Resources

  Sec. 1613. (a) In determining the resources of an individual 
(and his eligible spouse, if any) there shall be excluded--
          (1) * * *

           *       *       *       *       *       *       *

          (12) any account, including accrued interest or other 
        earnings thereon, established and maintained in 
        accordance with section 1631(a)(2)(F); [and]
          (13) any gift to, or for the benefit of, an 
        individual who has not attained 18 years of age and who 
        has a life-threatening condition, from an organization 
        described in section 501(c)(3) of the Internal Revenue 
        Code of 1986 which is exempt from taxation under 
        section 501(a) of such Code--
                  (A) * * *
                  (B) in the case of a cash gift, only to the 
                extent that the total amount excluded from the 
                resources of the individual pursuant to this 
                paragraph in the calendar year in which the 
                gift is made does not exceed $2,000[.]; and
          (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 individual'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.

           *       *       *       *       *       *       *


               Part B--Procedural and General Provisions

                        PAYMENTS AND PROCEDURES

                          Payment of Benefits

  Sec. 1631. (a)(1) * * *
  (2)(A)(i) * * *
  (iv) For purposes of this paragraph, misuse of benefits 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 Commissioner of Social Security may 
prescribe by regulation the meaning of the term ``use and 
benefit'' for purposes of this clause.
  (B)(i) * * *
  (ii) As part of the investigation referred to in clause 
(i)(I), the Commissioner of Social Security shall--
          (I) * * *

           *       *       *       *       *       *       *

          (III) determine whether such person has been 
        convicted of a violation of section 208, 811, or 1632; 
        [and]
          (IV) obtain information concerning whether the person 
        has been convicted of any other offense under Federal 
        or State law which resulted in imprisonment for more 
        than 1 year;
          (V) obtain information concerning whether such person 
        is a person described in section 1611(e)(4)(A); and
          [(IV)] (VI) determine whether payment of benefits to 
        such person has been terminated pursuant to 
        subparagraph (A)(iii), whether the designation of such 
        person as a representative payee has been revoked 
        pursuant to section 807(a), and whether certification 
        of payment of benefits to such person has been revoked 
        pursuant to section 205(j), by reason of misuse of 
        funds paid as benefits under title II, title VIII, or 
        this title.
  (iii) Benefits of an individual may not be paid to any other 
person pursuant to subparagraph (A)(ii) if--
          (I) * * *
          (II) except as provided in clause (iv), payment of 
        benefits to such person pursuant to subparagraph 
        (A)(ii) has previously been terminated as described in 
        [clause (ii)(IV)] clause (ii)(VI), the designation of 
        such person as a representative payee has been revoked 
        pursuant to section 807(a), or certification of payment 
        of benefits to such person under section 205(j) has 
        previously been revoked as described in [section 
        205(j)(2)(B)(i)(IV)] section 205(j)(2)(B)(i)(VI); [or]
          (III) except as provided in clause (v), such person 
        is a creditor of such individual who provides such 
        individual with goods or services for consideration[.];
          (IV) the person has previously been convicted as 
        described in clause (ii)(IV) of this subparagraph, 
        unless the Commissioner determines that the payment 
        would be appropriate notwithstanding the conviction; or
          (V) such person is a person described in section 
        1611(e)(4)(A).

           *       *       *       *       *       *       *

  (vii) In the case of an individual described in subparagraph 
(A)(ii)(II), when selecting such individual's representative 
payee, preference shall be given to--
                  (I) [a community-based nonprofit social 
                service agency licensed or bonded by the State] 
                a certified community-based nonprofit social 
                service agency (as defined in subparagraph 
                (I));

           *       *       *       *       *       *       *

  (xiv) Notwithstanding the provisions of section 552a of title 
5, United States Code, or any other provision of Federal or 
State law (other than section 6103 of the Internal Revenue Code 
of 1986 and section 1106(c) of this Act), the Commissioner 
shall furnish any Federal, State, or local law enforcement 
officer, upon the written request of the officer, with the 
current address, social security account number, and photograph 
(if applicable) of any person investigated under this 
subparagraph, if the officer furnishes the Commissioner with 
the name of such person and such other identifying information 
as may reasonably be required by the Commissioner to establish 
the unique identity of such person, and notifies the 
Commissioner that--
          (I) such person is described in section 
        1611(e)(4)(A),
          (II) such person has information that is necessary 
        for the officer to conduct the officer's official 
        duties, and
          (III) the location or apprehension of such person is 
        within the officer's official duties.
  (C)(i) * * *

           *       *       *       *       *       *       *

  (v) In any case in which the person described in clause (i) 
or (iv) receiving payments on behalf of another fails to submit 
a report required by the Commissioner of Social Security under 
clause (i) or (iv), the Commissioner may, after furnishing 
notice to the person and the individual entitled to the 
payment, require that such person appear in person at a field 
office of the Social Security Administration serving the area 
in which the individual resides in order to receive such 
payments.
  (D)(i) [A] Except as provided in the next sentence, a 
qualified organization may collect from an individual a monthly 
fee for expenses (including overhead) incurred by such 
organization in providing services performed as such 
individual's representative payee pursuant to subparagraph 
(A)(ii) if the fee does not exceed the lesser of--
          (I) * * *

           *       *       *       *       *       *       *

[The Commissioner] 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 misused all 
or part of the individual's benefit, and any amount so 
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). The Commissioner of 
Social Security shall adjust annually (after 1995) each dollar 
amount set forth in subclause (II) of this clause under 
procedures providing for adjustments in the same manner and to 
the same extent as adjustments are provided for under the 
procedures used to adjust benefit amounts under section 
215(i)(2)(A), except that any amount so adjusted that is not a 
multiple of $1.00 shall be rounded to the nearest multiple of 
$1.00. Any agreement providing for a fee in excess of the 
amount permitted under this clause shall be void and shall be 
treated as misuse by the organization of such individual's 
benefits.
  (ii) For purposes of this subparagraph, the term ``qualified 
organization'' means any State or local government agency whose 
mission is to carry out income maintenance, social service, or 
health care-related activities, any State or local government 
agency with fiduciary responsibilities, [or any community-based 
nonprofit social service agency, which--
          [(I) is bonded or licensed in each State in which the 
        agency serves as a representative payee; and
          [(II) in accordance] or any certified community-based 
        nonprofit social service agency (as defined in 
        subparagraph (I)), if the agency, in accordance with 
        any applicable regulations of the Commissioner of 
        Social Security--
          [(aa)] (I) regularly provides services as a 
        representative payee pursuant to subparagraph (A)(ii) 
        or section 205(j)(4) or 807 concurrently to 5 or more 
        individuals; and
          [(bb)] (II) demonstrates to the satisfaction of the 
        Commissioner of Social Security that such agency is not 
        otherwise a creditor of any such individual.
The Commissioner of Social Security shall prescribe regulations 
under which the Commissioner of Social Security may grant an 
exception from [subclause (II)(bb)] subclause (II) for any 
individual on a case-by-case basis if such exception is in the 
best interests of such individual.

           *       *       *       *       *       *       *

  (E) Restitution.--In cases where the negligent failure of the 
Commissioner of Social Security to investigate or monitor a 
representative payee results in misuse of benefits by the 
representative payee, the Commissioner of Social Security shall 
make payment to the beneficiary or the beneficiary's 
representative payee of an amount equal to such misused 
benefits. In any case in which a representative payee that--
          (i) 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 
        individuals 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 
pay to the beneficiary or the beneficiary's alternative 
representative payee an amount equal to the amount of the 
benefit so misused. The provisions of this subparagraph are 
subject to the limitations of subparagraph (H)(ii). The 
Commissioner of Social Security shall make a good faith effort 
to obtain restitution from the terminated representative payee.

           *       *       *       *       *       *       *

  [(G) The Commissioner of Social Security shall include as a 
part of the annual report required under section 704 
information with respect to the implementation of the preceding 
provisions of this paragraph, including--
          [(i) the number of cases in which the representative 
        payee was changed;
          [(ii) the number of cases discovered where there has 
        been a misuse of funds;
          [(iii) how any such cases were dealt with by the 
        Commissioner of Social Security;
          [(iv) the final disposition of such cases (including 
        any criminal penalties imposed); and
          [(v) such other information as the Commissioner of 
        Social Security determines to be appropriate.
  [(H) The Commissioner of Social Security shall make an 
initial report to each House of the Congress on the 
implementation of subparagraphs (B) and (C) within 270 days 
after the date of the enactment of this subparagraph. The 
Commissioner of Social Security shall include in the annual 
report required under section 704, information with respect to 
the implementation of subparagraphs (B) and (C), including the 
same factors as are required to be included in the 
Commissioner's report under section 205(j)(4)(B).]
  (G)(i) In addition to such other reviews of representative 
payees as the Commissioner of Social Security may otherwise 
conduct, the Commissioner shall provide for the periodic onsite 
review of any person or agency that receives the benefits 
payable under this title (alone or in combination with benefits 
payable under title II or title VIII) to another individual 
pursuant to the appointment of the person or agency as a 
representative payee under this paragraph, section 205(j), or 
section 807 in any case in which--
          (I) the representative payee is a person who serves 
        in that capacity with respect to 15 or more such 
        individuals;
          (II) the representative payee is a certified 
        community-based nonprofit social service agency (as 
        defined in subparagraph (I) of this paragraph or 
        section 205(j)(10)); or
          (III) the representative payee is an agency (other 
        than an agency described in subclause (II)) that serves 
        in that capacity with respect to 50 or more such 
        individuals.
  (ii) Within 120 days after the end of each fiscal year, the 
Commissioner shall submit to the Committee on Ways and Means of 
the House of Representatives and the Committee on Finance of 
the Senate a report on the results of periodic onsite reviews 
conducted during the fiscal year pursuant to clause (i) and of 
any other reviews of representative payees conducted during 
such fiscal year in connection with benefits under this title. 
Each such report shall describe in detail all problems 
identified in the reviews and any corrective action taken or 
planned to be taken to correct the problems, and shall 
include--
          (I) the number of the reviews;
          (II) the results of such reviews;
          (III) the number of cases in which the representative 
        payee was changed and why;
          (IV) the number of cases involving the exercise of 
        expedited, targeted oversight of the representative 
        payee by the Commissioner conducted upon receipt of an 
        allegation of misuse of funds, failure to pay a vendor, 
        or a similar irregularity;
          (V) the number of cases discovered in which there was 
        a misuse of funds;
          (VI) how any such cases of misuse of funds were dealt 
        with by the Commissioner;
          (VII) the final disposition of such cases of misuse 
        of funds, including any criminal penalties imposed; and
          (VIII) such other information as the Commissioner 
        deems appropriate.
  (H)(i) If the Commissioner of Social Security or a court of 
competent jurisdiction determines that a representative payee 
that is not a Federal, State, or local government agency has 
misused all or part of an individual's benefit that was paid to 
the representative payee under this paragraph, the 
representative payee shall be liable for the amount misused, 
and the 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 the 
overpayments. Subject to clause (ii), upon recovering all or 
any part of the amount, the Commissioner shall make payment of 
an amount equal to the recovered amount to such individual or 
such individual's alternative representative payee.
  (ii) The total of the amount paid to such individual or such 
individual's alternative representative payee under clause (i) 
and the amount paid under subparagraph (E) may not exceed the 
total benefit amount misused by the representative payee with 
respect to such individual.
  (I) For purposes of this paragraph, the term ``certified 
community-based nonprofit social service agency'' means a 
community-based nonprofit social service agency which is in 
compliance with requirements, under regulations which shall be 
prescribed by the Commissioner, for annual certification to the 
Commissioner that it is bonded in accordance with requirements 
specified by the Commissioner 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 the Commissioner. Any such annual 
certification shall include a copy of any independent audit on 
the agency which may have been performed since the previous 
certification.

           *       *       *       *       *       *       *


  Procedures; Prohibitions of Assignments; Representation of Claimants

  (d)(1) * * *
  (2)(A) The provisions of section 206[(a) (other than 
paragraph (4) thereof)] (other than subsections (a)(4) and (d) 
thereof) shall apply to this part to the same extent as they 
apply in the case of title II, except that [paragraph (2) 
thereof] such section shall be applied--
          (i) by substituting, [in subparagraphs (A)(ii)(I) and 
        (C)(i),] in subparagraphs (A)(ii)(I) and (D)(i) of 
        subsection (a)(2) the phrase ``(as determined before 
        any applicable reduction under section 1631(g), and 
        reduced by the amount of any reduction in benefits 
        under this title or title II made pursuant to section 
        1127(a))'' for the parenthetical phrase contained 
        therein; [and
          [(ii) by substituting ``section 1631(a)(7)(A) or the 
        requirements of due process of law'' for ``subsection 
        (g) or (h) of section 223''.
  [(B) The Commissioner of Social Security shall notify each 
claimant in writing, together with the notice to such claimant 
of an adverse determination, of the options for obtaining 
attorneys to represent individuals in presenting their cases 
before the Commissioner of Social Security. Such notification 
shall also advise the claimant of the availability to 
qualifying claimants of legal services organizations which 
provide legal services free of charge.]
          (ii) by substituting, in subsections (a)(2)(B) and 
        (b)(1)(B)(i), the phrase ``section 1631(a)(7)(A) or the 
        requirements of due process of law'' for the phrase 
        ``subsection (g) or (h) of section 223'';
          (iii) by substituting, in subsection (a)(2)(C)(i), 
        the phrase ``under title II'' for the phrase ``under 
        title XVI'';
          (iv) by substituting, in subsection (b)(1)(A), the 
        phrase ``pay the amount of such fee'' for the phrase 
        ``certify the amount of such fee for payment'' and by 
        striking, in subsection (b)(1)(A), the phrase ``or 
        certified for payment''; and
          (v) by substituting, in subsection (b)(1)(B)(ii), the 
        phrase ``deemed to be such amounts as determined before 
        any applicable reduction under section 1631(g), and 
        reduced by the amount of any reduction in benefits 
        under this title or title II made pursuant to section 
        1127(a)'' for the phrase ``determined before any 
        applicable reduction under section 1127(a))''.
  (B) Subject to subparagraph (C), if the claimant is 
determined to be entitled to past-due benefits under this title 
and the person representing the claimant is an attorney, the 
Commissioner of Social Security shall pay out of such past-due 
benefits to such attorney an amount equal to the lesser of--
          (i) so much of the maximum fee as does not exceed 25 
        percent of such past-due benefits (as determined before 
        any applicable reduction under section 1631(g) and 
        reduced by the amount of any reduction in benefits 
        under this title or title II pursuant to section 
        1127(a)), or
          (ii) the amount of past-due benefits available after 
        any applicable reductions under sections 1631(g) and 
        1127(a).
  (C)(i) Whenever a fee for services is required to be paid to 
an attorney from a claimant's past-due benefits pursuant to 
subparagraph (B), the Commissioner shall impose on the attorney 
an assessment calculated in accordance with clause (ii).
  (ii)(I) The amount of an assessment under clause (i) shall be 
equal to the product obtained by multiplying the amount of the 
representative's fee that would be required to be paid by 
subparagraph (B) before the application of this subparagraph, 
by the percentage specified in subclause (II), except that the 
maximum amount of the assessment may not exceed $75. In the 
case of any calendar year beginning after the amendments made 
by section 302 of the Social Security Protection Act of 2003 
take effect, the dollar amount specified in the preceding 
sentence (including a previously adjusted amount) shall be 
adjusted annually under the procedures used to adjust benefit 
amounts under section 215(i)(2)(A)(ii), except such adjustment 
shall be based on the higher of $75 or the previously adjusted 
amount that would have been in effect for December of the 
preceding year, but for the rounding of such amount pursuant to 
the following sentence. Any amount so adjusted that is not a 
multiple of $1 shall be rounded to the next lowest multiple of 
$1, but in no case less than $75.
  (II) The percentage specified in this subclause is such 
percentage rate as the Commissioner determines is necessary in 
order to achieve full recovery of the costs of determining and 
approving fees to attorneys from the past-due benefits of 
claimants, but not in excess of 6.3 percent.
  (iii) The Commissioner may collect the assessment imposed on 
an attorney under clause (i) by offset from the amount of the 
fee otherwise required by subparagraph (B) to be paid to the 
attorney from a claimant's past-due benefits.
  (iv) An attorney subject to an assessment under clause (i) 
may not, directly or indirectly, request or otherwise obtain 
reimbursement for such assessment from the claimant whose claim 
gave rise to the assessment.
  (v) Assessments on attorneys collected under this 
subparagraph shall be deposited in the Treasury in a separate 
fund created for this purpose.
  (vi) The assessments authorized under this subparagraph shall 
be collected and available for obligation only to the extent 
and in the amount provided in advance in appropriations Acts. 
Amounts so appropriated are authorized to remain available 
until expended, for administrative expenses in carrying out 
this title and related laws.

           *       *       *       *       *       *       *


                          PENALTIES FOR FRAUD

  Sec. 1632. (a) * * *
  (b)(1) Any Federal court, when sentencing a defendant 
convicted of an offense under subsection (a), may order, in 
addition to or in lieu of any other penalty authorized by law, 
that the defendant make restitution to the Social Security 
Administration.
  (2) Sections 3612, 3663, and 3664 of title 18, United States 
Code, shall apply with respect to the issuance and enforcement 
of orders of restitution under this subsection. In so applying 
such sections, the Social Security Administration shall be 
considered the victim.
  (3) If the court does not order restitution, or orders only 
partial restitution, under this subsection, the court shall 
state on the record the reasons therefor.
  [(b)] (c)(1) * * *

           *       *       *       *       *       *       *

                              ----------                              


 SECTION 302 OF THE TICKET TO WORK AND WORK INCENTIVES IMPROVEMENT ACT 
                                OF 1999

SEC. 302. DEMONSTRATION PROJECTS PROVIDING FOR REDUCTIONS IN DISABILITY 
                    INSURANCE BENEFITS BASED ON EARNINGS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Waivers.--The Commissioner may waive compliance with the 
benefit provisions of title II of the Social Security Act [(42 
U.S.C. 401 et seq.),] (42 U.S.C. 401 et seq.) and the 
requirements of section 1148 of such Act (42 U.S.C. 1320b-19) 
as they relate to the program established under title II of 
such Act, and the Secretary of Health and Human Services may 
waive compliance with the benefit requirements of title XVIII 
of such Act (42 U.S.C. 1395 et seq.), insofar as is necessary 
for a thorough evaluation of the alternative methods under 
consideration. No such project shall be actually placed in 
operation unless at least 90 days prior thereto a written 
report, prepared for purposes of notification and information 
only and containing a full and complete description thereof, 
has been transmitted by the Commissioner to the Committee on 
Ways and Means of the House of Representatives and to the 
Committee on Finance of the Senate. Periodic reports on the 
progress of such projects shall be submitted by the 
Commissioner to such committees. When appropriate, such reports 
shall include detailed recommendations for changes in 
administration or law, or both, to carry out the objectives 
stated in subsection (a).

           *       *       *       *       *       *       *

  [(f ) Expenditures.--Expenditures made for demonstration 
projects under this section shall be made from the Federal 
Disability Insurance Trust Fund and the Federal Old-Age and 
Survivors Insurance Trust Fund, as determined appropriate by 
the Commissioner of Social Security, and from the Federal 
Hospital Insurance Trust Fund and the Federal Supplementary 
Medical Insurance Trust Fund, as determined appropriate by the 
Secretary of Health and Human Services, to the extent provided 
in advance in appropriation Acts.]
  (f) Expenditures.--Administrative expenses for demonstration 
projects under this section shall be paid from funds available 
for the administration of title II or XVIII of the Social 
Security Act, as appropriate. Benefits payable to or on behalf 
of individuals by reason of participation in projects under 
this section shall be made from the Federal Disability 
Insurance Trust Fund and the Federal Old-Age and Survivors 
Insurance Trust Fund, as determined appropriate by the 
Commissioner of Social Security, and from the Federal Hospital 
Insurance Trust Fund and the Federal Supplementary Medical 
Insurance Trust Fund, as determined appropriate by the 
Secretary of Health and Human Services, from funds available 
for benefits under such title II or XVIII.
                              ----------                              


                     INTERNAL REVENUE CODE OF 1986

Subtitle A--Income Taxes

           *       *       *       *       *       *       *


CHAPTER 2--TAX ON SELF-EMPLOYMENT INCOME

           *       *       *       *       *       *       *


SEC. 1401. RATE OF TAX.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Relief from Taxes in Cases Covered by Certain 
International Agreements.--During any period in which there is 
in effect an agreement entered into pursuant to section 233 of 
the Social Security Act with any foreign country, the self-
employment income of an individual shall be exempt from the 
taxes imposed by this section to the extent that such self-
employment income is subject under such agreement [to taxes or 
contributions for similar purposes under] exclusively to the 
laws applicable to the social security system of such foreign 
country.

SEC. 1402. DEFINITIONS.

  (a) Net earnings from self-employment.--The term ``net 
earnings from self-employment'' means the gross income derived 
by an individual from any trade or business carried on by such 
individual, less the deductions allowed by this subtitle which 
are attributable to such trade or business, plus his 
distributive share (whether or not distributed) of income or 
loss described in section 702(a)(8) from any trade or business 
carried on by a partnership of which he is a member; except 
that in computing such gross income and deductions and such 
distributive share of partnership ordinary income or loss--
          (1) * * *

           *       *       *       *       *       *       *

          (5) if--
                  (A) any of the income derived from a trade or 
                business (other than a trade or business 
                carried on by a partnership) is community 
                income under community property laws applicable 
                to such income, [all of the gross income and 
                deductions attributable to such trade or 
                business shall be treated as the gross income 
                and deductions of the husband unless the wife 
                exercises substantially all of the management 
                and control of such trade or business, in which 
                case all of such gross income and deductions 
                shall be treated as the gross income and 
                deductions of the wife; and] the gross income 
                and deductions attributable to such trade or 
                business shall be treated as the gross income 
                and deductions of the spouse carrying on such 
                trade or business or, if such trade or business 
                is jointly operated, treated as the gross 
                income and deductions of each spouse on the 
                basis of their respective distributive share of 
                the gross income and deductions; and

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Subtitle C--Employment Taxes

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CHAPTER 21--FEDERAL INSURANCE CONTRIBUTIONS ACT

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Subchapter A--Tax on Employees

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SEC. 3101. RATE OF TAX.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Relief from Taxes in Cases Covered by Certain 
International Agreements.--During any period in which there is 
in effect an agreement entered into pursuant to section 233 of 
the Social Security Act with any foreign country, wages 
received by or paid to an individual shall be exempt from the 
taxes imposed by this section to the extent that such wages are 
subject under such agreement [to taxes or contributions for 
similar purposes under] exclusively to the laws applicable to 
the social security system of such foreign country.

           *       *       *       *       *       *       *


SEC. 3102. DEDUCTION OF TAX FROM WAGES

  (a) Requirement.--The tax imposed by section 3101 shall be 
collected by the employer of the taxpayer, by deducting the 
amount of the tax from the wages as and when paid. An employer 
who in any calendar year pays to an employee cash remuneration 
to which paragraph (7)(B) of section 3121(a) is applicable may 
deduct an amount equivalent to such tax from any such payment 
of remuneration, even though at the time of payment the total 
amount of such remuneration paid to the employee by the 
employer in the calendar year is less than the applicable 
dollar threshold (as defined in section 3121(x) for such year; 
and an employer who in any calendar year pays to an employee 
cash remuneration to which paragraph (7)(C) or (10) of section 
3121(a) is applicable may deduct an amount equivalent to such 
tax from any such payment of remuneration, even though at the 
time of payment the total amount of such remuneration paid to 
the employee by the employer in the calendar year is less than 
$100; and an employer who in any calendar year pays to an 
employee cash remuneration to which paragraph (8)(B) of section 
3121(a) is applicable may deduct an amount equivalent to such 
tax from any such payment of remuneration, even though at the 
time of payment the total amount of such remuneration paid to 
the employee by the employer in the calendar year is less than 
$150 [and the employee has not performed agricultural labor for 
the employer on 20 days or more in the calendar year for cash 
remuneration computed on a time basis]; and an employer who is 
furnished by an employee a written statement of tips (received 
in a calendar month) pursuant to section 6053(a) to which 
paragraph (12)(B) of section 3121(a) is applicable may deduct 
an amount equivalent to such tax with respect to such tips from 
any wages of the employee (exclusive of tips) under his 
control, even though at the time such statement is furnished 
the total amount of the tips included in statements furnished 
to the employer as having been received by the employee in such 
calendar month in the course of his employment by such employer 
is less than $20.

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Subchapter B--Tax on Employers

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SEC. 3111. RATE OF TAX.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Relief from Taxes in Cases Covered by Certain 
International Agreements.--During any period in which there is 
in effect an agreement entered into pursuant to section 233 of 
the Social Security Act with any foreign country, wages 
received by or paid to an individual shall be exempt from the 
taxes imposed by this section to the extent that such wages are 
subject under such agreement [to taxes or contributions for 
similar purposes under] exclusively to the laws applicable to 
the social security system of such foreign country.

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Subchapter C--General Provisions

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SEC. 3121. DEFINITIONS.

  (a) Wages.--For purposes of this chapter, the term ``wages'' 
means all remuneration for employment, including the cash value 
of all remuneration (including benefits) paid in any medium 
other than cash; except that such term shall not include--
          (1) * * *

           *       *       *       *       *       *       *

          (7)(A) * * *
          (B) cash remuneration paid by an employer in any 
        calendar year to an employee for domestic service in a 
        private home of the employer (including domestic 
        service [described in subsection (g)(5)] on a farm 
        operated for profit), if the cash remuneration paid in 
        such year by the employer to the employee for such 
        service is less than the applicable dollar threshold 
        (as defined in subsection (x)) for such year;

           *       *       *       *       *       *       *

  (g) Agricultural Labor.--For purposes of this chapter, the 
term ``agricultural labor'' includes all service performed--
          (1) * * *

           *       *       *       *       *       *       *

          (5) on a farm operated for profit if such service is 
        not in the course of the employer's trade or business 
        [or is domestic service in a private home of the 
        employer].

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