[Congressional Record Volume 145, Number 96 (Thursday, July 1, 1999)]
[Senate]
[Pages S8112-S8125]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CHAFEE (for himself, Mr. Rockefeller, Mr. Bond, Mr. Reed, 
        Mr. Jeffords, Mr. Moynihan, Mr. Breaux, Ms. Landrieu, Mr. 
        Kerrey, and Ms. Mikulski):
  S. 1327. A bill to amend part E of title IV of the Social Security 
Act to provide States with more funding and greater flexibility in 
carrying out programs designed to help children make the transition 
from foster care to self-sufficiency, and for other purposes; to the 
Committee on Finance.


                  foster care independence act of 1999

  Mr. CHAFEE. Mr. President, it is a rare opportunity when we can 
provide assistance to one of our nation's most vulnerable groups: 
children in the foster care program. Currently, Independent Living 
Programs for older foster children end at their 18th birthday, 
abandoning these teens in the middle of a critical transition period 
from adolescence to adulthood. Sadly, these young people are left to 
negotiate the rough waters of adulthood without vital health and mental 
health resources and critical life-skills. That is why I am pleased to 
join my colleagues Senators Rockefeller, Bond, Moynihan, and others in 
introducing the Foster Care Independence Act.
  Many of the 20,000 adolescents who leave the foster care rolls each 
year to become adults come from particularly troubled backgrounds. 
Typically, these young people have experienced on average four 
placements in the past seven years of their lives. As a result, they 
lack a sense of permanency and the skills essential to becoming self-
reliant and productive adults. Our bill will cushion the transition to 
adulthood by funding Independent Living Programs and ensuring access to 
the critical health care and mental health services provided by 
Medicaid through a foster child's 21st birthday.
  Most importantly, it doubles the money available to state-
administered

[[Page S8113]]

Independent Living Programs, allowing them to provide the day-to-day 
living needs for 18 to 21-year-olds while they learn valuable life 
skills. This more comprehensive program with a long transition period 
will promote the safety, health, and permanency in the lives of these 
children. It also removes a significant barrier to these children's 
adoption by ensuring that the families who adopt them have access to 
the appropriate resources through age 21.
  In addition, this bill provides them access to the health and mental 
health services offered through Medicaid. Numerous studies of 
adolescents who leave foster care have found that this population has a 
significantly higher-than-normal rate of school drop outs, out-of-
wedlock pregnancies, homelessness, health and mental health problems, 
poverty, and unemployment. They are also more likely to be victims of 
crime and physical assaults. My more comprehensive program addresses 
these grave health and safety concerns by allowing adolescents who age 
out of or are adopted out of foster care to continue to receive crucial 
health, and mental health care benefits through the age of 21.
  I am heartened by the broad, bipartisan support that the Independent 
Living Act of 1999, introduced by my colleague, Representative Nancy 
Johnson, received last week in the House. I urge my colleagues to join 
me in supporting this important measure and ask unanimous consent that 
the full text and summary of the bill printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1327

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Foster 
     Care Independence Act of 1999''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

              TITLE I--IMPROVED INDEPENDENT LIVING PROGRAM

            Subtitle A--Improved Independent Living Program

Sec. 101. Improved independent living program.

               Subtitle B--Related Foster Care Provision

Sec. 111. Increase in amount of assets allowable for children in foster 
              care.

                    Subtitle C--Medicaid Amendments

Sec. 121. State option of medicaid coverage for adolescents leaving 
              foster care.

                 Subtitle D--Welfare-To-Work Amendments

Sec. 131. Children aging out of foster care eligible for services.

                     TITLE II--SSI FRAUD PREVENTION

          Subtitle A--Fraud Prevention and Related Provisions

Sec. 201. Liability of representative payees for overpayments to 
              deceased recipients.
Sec. 202. Recovery of overpayments of SSI benefits from lump sum SSI 
              benefit payments.
Sec. 203. Additional debt collection practices.
Sec. 204. Requirement to provide State prisoner information to Federal 
              and federally assisted benefit programs.
Sec. 205. Rules relating to collection of overpayments from individuals 
              convicted of crimes.
Sec. 206. Treatment of assets held in trust under the SSI program.
Sec. 207. Disposal of resources for less than fair market value under 
              the SSI program.
Sec. 208. Administrative procedure for imposing penalties for false or 
              misleading statements.
Sec. 209. Exclusion of representatives and health care providers 
              convicted of violations from participation in social 
              security programs.
Sec. 210. State data exchanges.
Sec. 211. Study on possible measures to improve fraud prevention and 
              administrative processing.
Sec. 212. Annual report on amounts necessary to combat fraud.
Sec. 213. Computer matches with medicare and medicaid 
              institutionalization data.
Sec. 214. Access to information held by financial institutions.

       Subtitle B--Benefits for Certain Veterans of World War II

Sec. 251. Establishment of program of special benefits for certain 
              World War II veterans.

                        TITLE III--CHILD SUPPORT

Sec. 301. Elimination of enhanced matching for laboratory costs for 
              paternity establishment.
Sec. 302. Elimination of hold harmless provision for State share of 
              distribution of collected child support.

                    TITLE IV--TECHNICAL CORRECTIONS

Sec. 401. Technical corrections relating to amendments made by the 
              Personal Responsibility and Work Opportunity 
              Reconciliation Act of 1996.

              TITLE I--IMPROVED INDEPENDENT LIVING PROGRAM

            Subtitle A--Improved Independent Living Program

     SEC. 101. IMPROVED INDEPENDENT LIVING PROGRAM.

       (a) Findings.--The Congress finds the following:
       (1) The Adoption and Safe Families Act of 1997 establishes 
     that safety, health, and permanency are paramount when 
     planning for children in foster care. States are required to 
     make reasonable efforts to locate permanent families for all 
     children, including older children and teens, for whom 
     reunification with their biological families is not in the 
     best interests of the children.
       (2) Older children who continue to be in foster care as 
     adolescents may become eligible for Independent Living 
     programs. These Independent Living programs are not an 
     alternative to permanency planning for these children. 
     Enrollment in Independent Living programs can occur 
     concurrent with continued efforts to locate, and achieve 
     placement in, permanent families for older children in foster 
     care.
       (3) About 20,000 adolescents leave the Nation's foster care 
     system each year because they have reached 18 years of age 
     and are expected to support themselves. In addition, 
     approximately 5,000 adolescents (foster children over the age 
     of 12) are adopted out of the foster care system each year, 
     of whom approximately 620 are over the age of 16 at the time 
     of their adoption. A large percentage of these children have 
     not yet completed their high school education.
       (4) Congress has received extensive information that 
     adolescents leaving foster care are in trouble. A careful 
     study of all the children aging out of foster care in 
     Wisconsin during 1994 showed high rates of school drop out, 
     out-of-wedlock childbearing, homelessness, poverty, and being 
     the target of crime and physical assaults.
       (5) The Nation's State and local governments, with 
     financial support from the Federal Government, should offer 
     an extensive program of education, health and mental health 
     care, training, employment, financial support, and post 
     adoption support services for adolescents leaving foster care 
     (including those who exit foster care to adoption), with 
     participation in such program beginning several years before 
     high school graduation and continuing, as needed, until the 
     young adults exiting foster care establish independence or 
     reach 21 years of age.
       (b) Improved Independent Living Program.--Section 477 of 
     the Social Security Act (42 U.S.C. 677) is amended to read as 
     follows:

     ``SEC. 477. INDEPENDENT LIVING PROGRAM.

       ``(a) Purpose.--The purpose of this section is to provide 
     States with flexible funding that will enable the States to 
     design and conduct programs--
       ``(1) to identify children who are likely to remain in 
     foster care during their teenage years and that help these 
     children make the transition to self-sufficiency by providing 
     services such as assistance in obtaining a high school 
     diploma, career exploration, vocational training, job 
     placement and retention, training in daily living skills, 
     training in budgeting and financial management skills, 
     substance abuse prevention, and how to maintain their own 
     physical and mental health, including how to access health 
     care, mental health, and community-based peer-support 
     services;
       ``(2) to help children leaving foster care, including those 
     adopted after age 16, obtain the education, training, and 
     services necessary to obtain and maintain employment;
       ``(3) to help children leaving foster care, including those 
     adopted after age 16, prepare for and enter postsecondary 
     training and education institutions;
       ``(4) to provide personal and emotional support to children 
     aging out of foster care, through mentors, the promotion of 
     interactions with dedicated adults, and continued efforts at 
     locating permanent family resources, including adoption, for 
     these children; and
       ``(5) to provide financial assistance, access to health and 
     mental health care, supervised housing, counseling, 
     employment, education, permanency planning, and other 
     appropriate support and services that promote active and 
     responsible citizenship, healthy development, and community 
     membership to former foster care recipients between 18 and 21 
     years of age to complement their own efforts to achieve long-
     term self-sufficiency.
       ``(b) Applications.--
       ``(1) In general.--A State may apply for funds from its 
     allotment under subsection (c) for a period of 5 consecutive 
     fiscal years by submitting to the Secretary, in writing, a 
     plan that meets the requirements of paragraph (2) and the 
     certifications required by paragraph (3) with respect to the 
     plan.
       ``(2) State plan.--A plan meets the requirements of this 
     paragraph if the plan specifies which State agency or 
     agencies will administer, supervise, or oversee the programs 
     carried out under the plan, and describes how the State 
     intends to do the following:

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       ``(A) Design and deliver programs to achieve the purposes 
     of this section in such a way that each child's health, 
     safety, opportunity for a permanent family, and successful, 
     long-term self-sufficiency is of paramount concern.
       ``(B) Ensure that all political subdivisions in the State 
     are served by the programs, though not necessarily in a 
     uniform manner.
       ``(C) Ensure that the programs serve children of various 
     ages and at various stages of achieving independence.
       ``(D) Involve public and private individuals and 
     organizations familiar with, or interested in addressing, the 
     needs of youths aging out of foster care, including young 
     people served by these programs, and, where they exist, 
     organizations of youths who have been in foster care.
       ``(E) Use objective criteria for determining eligibility 
     for benefits and services under the programs, and for 
     ensuring fair and equitable treatment of benefit recipients.
       ``(F) Cooperate in national evaluations of the effects of 
     the programs in achieving the purposes of this section.
       ``(G) Designate an independent living coordinator to 
     oversee the delivery of benefits and services under the 
     programs.
       ``(3) Certifications.--The certifications required by this 
     paragraph with respect to a plan are the following:
       ``(A) A certification by the chief executive officer of the 
     State that the State will provide assistance and services to 
     children who have left foster care after the age of 16 but 
     have not attained 21 years of age.
       ``(B) A certification by the chief executive officer of the 
     State that not more than 30 percent of the amounts paid to 
     the State from its allotment under subsection (c) for a 
     fiscal year will be expended for room or board for children 
     who have left foster care after the age of 16 and have 
     attained 18 but not 21 years of age, and that such room and 
     board services shall be supervised, including interaction 
     between the youths and adults, and the provision of such 
     services shall include a requirement that the participating 
     youths must be actively enrolled in educational, vocational 
     training, or career development programs.
       ``(C) A certification by the chief executive officer of the 
     State that none of the amounts paid to the State from its 
     allotment under subsection (c) will be expended for room or 
     board for any child who has not attained 18 years of age.
       ``(D) A certification by the chief executive officer of the 
     State that the State has consulted widely with public and 
     private individuals and organizations familiar with, or 
     interested in addressing, the needs of youths aging out of 
     foster care, including young people served by the programs 
     under the plan, and, where they exist, organizations of 
     youths who have been in foster care, in developing the plan 
     and that the State has given all interested members of the 
     public at least 30 days to submit comments on the plan.
       ``(E) A certification by the chief executive officer of the 
     State that the State will make every effort to coordinate the 
     State programs receiving funds provided from an allotment 
     made to the State under subsection (c) with other Federal and 
     State programs for youth, especially transitional living 
     youth projects authorized under part B of title III of the 
     Juvenile Justice and Delinquency Prevention Act of 1974 and 
     funded and administered by the Department of Health and Human 
     Services, local housing programs, programs for disabled 
     youth, and school-to-work programs.
       ``(F) A certification by the chief executive officer of the 
     State that each Indian tribe in the State has been informed 
     about the programs to be carried out under the plan; that 
     each such tribe has been given an opportunity to comment on 
     the plan before submission to the Secretary; and that 
     benefits and services under the programs will be made 
     available to Indian children in the State on the same basis 
     as to other children in the State.
       ``(G) A certification by the chief executive officer of the 
     State that the State will use training funds provided under 
     the program of Federal payments for foster care and adoption 
     assistance to provide training to help foster parents, 
     adoptive parents, workers in group homes, and case managers 
     understand and address the issues confronting adolescents 
     preparing for independent living, with such training 
     utilizing a youth development approach, and will, to the 
     extent possible, coordinate such training with the 
     independent living program conducted for adolescents.
       ``(H) A certification by the chief executive officer of the 
     State that the State will ensure that each adolescent 
     participating in any program under this section will have a 
     personal independent living plan, and that adolescents 
     themselves will participate directly in designing their own 
     program activities that prepare them for independent living 
     and in taking personal responsibility for fulfilling their 
     program requirements.
       ``(I) A certification by the chief executive officer of the 
     State that the State has established and will enforce 
     standards and procedures to prevent fraud and abuse in the 
     programs carried out under the plan.
       ``(4) Approval.--The Secretary shall approve an application 
     submitted by a State pursuant to paragraph (1) for a period 
     if--
       ``(A) the application is submitted on or before June 30 of 
     the calendar year in which such period begins; and
       ``(B) the Secretary finds that the application contains the 
     material required by paragraph (1).
       ``(5) Authority to implement certain amendments; 
     notification.--A State with an application approved under 
     paragraph (4) may implement any amendment to the plan 
     contained in the application if the application, 
     incorporating the amendment, would be approvable under 
     paragraph (4). Within 30 days after a State implements any 
     such amendment, the State shall notify the Secretary of the 
     amendment.
       ``(6) Availability.--The State shall make available to the 
     public any application submitted by the State pursuant to 
     paragraph (1), and a brief summary of the plan contained in 
     the application.
       ``(c) Allotments to States.--For fiscal year 2000 and each 
     succeeding fiscal year, the Secretary shall allot the amount 
     specified in subsection (h) that remains after applying 
     subsection (g)(2) among States with applications approved 
     under subsection (b) for the fiscal year in the following 
     manner:
       ``(1) The Secretary shall first allot to each State an 
     amount equal to the amount payable to the State for fiscal 
     year 1998 under this section, as in effect on the day before 
     the date of the enactment of the Foster Care Independence Act 
     of 1999.
       ``(2) From the amount remaining after carrying out 
     paragraph (1), the Secretary shall allot to each State that 
     elects the option under section 1902(a)(10)(A)(ii)(XV) to 
     provide medical assistance to independent foster care 
     adolescents the sum of--
       ``(A) an amount equal to one-half of the amount allotted to 
     the State under paragraph (1), plus
       ``(B) an amount bearing the same ratio to the amount 
     remaining after carrying out paragraph (1) and subparagraph 
     (A) as the number of children in foster care under a program 
     of the State in the most recent fiscal year for which such 
     information is available bears to the total number of 
     children in such foster care in all States for such most 
     recent fiscal year.
       ``(3) Reallotment of unused funds.--The Secretary shall use 
     the formula provided in paragraph (1) of this subsection to 
     reallot among the States with applications approved under 
     subsection (b) for a fiscal year any amount allotted to a 
     State under this subsection for the preceding year that is 
     not payable to the State for the preceding year.
       ``(d) Use of Funds.--
       ``(1) In general.--A State to which an amount is paid from 
     its allotment under subsection (c) may use the amount in any 
     manner that is reasonably calculated to accomplish the 
     purposes of this section.
       ``(2) No supplantation of other funds available for same 
     general purposes.--The amounts paid to a State from its 
     allotment under subsection (c) shall be used to supplement 
     and not supplant any other funds which are available for the 
     same general purposes in the State.
       ``(e) Penalties.--
       ``(1) Use of grant in violation of this part.--If the 
     Secretary is made aware, by an audit conducted under chapter 
     75 of title 31, United States Code, or by any other means, 
     that a program receiving funds from an allotment made to a 
     State under subsection (c) has been operated in a manner that 
     is inconsistent with, or not disclosed in the State 
     application approved under subsection (b), the Secretary 
     shall assess a penalty against the State in an amount equal 
     to not less than 1 percent and not more than 5 percent of the 
     amount of the allotment.
       ``(2) Failure to comply with data reporting requirement.--
     The Secretary shall assess a penalty against a State that 
     fails during a fiscal year to comply with an information 
     collection plan implemented under subsection (f) in an amount 
     equal to not less than 1 percent and not more than 5 percent 
     of the amount allotted to the State for the fiscal year.
       ``(3) Penalties based on degree of noncompliance.--The 
     Secretary shall assess penalties under this subsection based 
     on the degree of noncompliance.
       ``(f) Data Collection and Performance Measurement.--
       ``(1) In general.--The Secretary, in consultation with 
     State and local public officials responsible for 
     administering independent living and other child welfare 
     programs, child welfare advocates, members of Congress, youth 
     service providers, and researchers, shall--
       ``(A) develop outcome measures (such as measures of 
     educational attainment, employment, career goal-setting and 
     development, active participation in personal health care, 
     development of healthy relationships with family, mentors, 
     and other community members, as well as, avoidance of 
     dependency, homelessness, nonmarital childbirth, illegal 
     activities, substance abuse or alcohol dependence, and high-
     risk behaviors) that can be used--
       ``(i) to assess the performance of States in operating 
     independent living programs, and
       ``(ii) to explicitly track all outcomes, particularly those 
     related to educational attainment, for youths who are 
     provided with room and board services under such State 
     programs;
       ``(B) identify data elements needed to track--
       ``(i) the number and characteristics of children receiving 
     services under this section;
       ``(ii) the type and quantity of services being provided; 
     and
       ``(iii) State performance on the outcome measures;

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       ``(C) develop and implement a plan to collect the needed 
     information beginning with the 2nd fiscal year beginning 
     after the date of the enactment of this section; and
       ``(D) ensure that the data collection plan described in 
     subparagraph (C) will be coordinated with the development and 
     implementation of other data collection efforts required 
     under the Adoption and Safe Families Act of 1997 and the 
     Adoption and Foster Care Reporting System and the Statewide 
     Automated Child Welfare Information Systems.
       ``(2) Report to the congress.--Within 12 months after the 
     date of the enactment of this section, the Secretary 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 plans and timetable for collecting from 
     the States the information described in paragraph (1).
       ``(g) Evaluations.--
       ``(1) In general.--The Secretary shall conduct evaluations 
     of such State programs funded under this section as the 
     Secretary deems to be innovative or of potential national 
     significance. The evaluation of any such program shall 
     include information on the effects of the program on 
     education, employment, and personal development. To the 
     maximum extent practicable, the evaluations shall be based on 
     rigorous scientific standards including random assignment to 
     treatment and control groups. The Secretary is encouraged to 
     work directly with State and local governments to design 
     methods for conducting the evaluations, directly or by grant, 
     contract, or cooperative agreement.
       ``(2) Funding of evaluations.--The Secretary shall reserve 
     1.5 percent of the amount specified in subsection (h) for a 
     fiscal year to carry out, during the fiscal year, evaluation, 
     technical assistance, performance measurement, and data 
     collection activities related to this section, directly or 
     through grants, contracts, or cooperative agreements with 
     appropriate entities.
       ``(h) Limitations on Authorization of Appropriations.--To 
     carry out this section, there are authorized to be 
     appropriated to the Secretary $140,000,000 for each fiscal 
     year.''.
       (c) Payments to States.--Section 474(a)(4) of such Act (42 
     U.S.C. 674(a)(4)) is amended to read as follows:
       ``(4) the lesser of--
       ``(A) 80 percent of the amount (if any) by which--
       ``(i) the total amount expended by the State during the 
     fiscal year in which the quarter occurs to carry out programs 
     in accordance with the State application approved under 
     section 477(b) for the period in which the quarter occurs 
     (including any amendment that meets the requirements of 
     section 477(b)(5)); exceeds
       ``(ii) the total amount of any penalties assessed against 
     the State under section 477(e) during the fiscal year in 
     which the quarter occurs; or
       ``(B) the amount allotted to the State under section 477 
     for the fiscal year in which the quarter occurs, reduced by 
     the total of the amounts payable to the State under this 
     paragraph for all prior quarters in the fiscal year.''.
       (d) Regulations.--Not later than 12 months after the date 
     of the enactment of this Act, the Secretary of Health and 
     Human Services shall issue such regulations as may be 
     necessary to carry out the amendments made by this section.

               Subtitle B--Related Foster Care Provision

     SEC. 111. INCREASE IN AMOUNT OF ASSETS ALLOWABLE FOR CHILDREN 
                   IN FOSTER CARE.

       Section 472(a) of the Social Security Act (42 U.S.C. 
     672(a)) is amended by adding at the end the following: ``In 
     determining whether a child would have received aid under a 
     State plan approved under section 402 (as in effect on July 
     16, 1996), a child whose resources (determined pursuant to 
     section 402(a)(7)(B), as so in effect) have a combined value 
     of not more than $10,000 shall be considered to be a child 
     whose resources have a combined value of not more than $1,000 
     (or such lower amount as the State may determine for purposes 
     of such section 402(a)(7)(B)).''.

                    Subtitle C--Medicaid Amendments

     SEC. 121. STATE OPTION OF MEDICAID COVERAGE FOR ADOLESCENTS 
                   LEAVING FOSTER CARE.

       (a) In General.--Title XIX of the Social Security Act is 
     amended--
       (1) in section 1902(a)(10)(A)(ii) (42 U.S.C. 
     1396a(a)(10)(A)(ii))--
       (A) by striking ``or'' at the end of subclause (XIII);
       (B) by adding ``or'' at the end of subclause (XIV); and
       (C) by adding at the end the following new subclause:

       ``(XV) who are independent foster care adolescents (as 
     defined in (section 1905(v)(1));''; and

       (2) in section 1905 (42 U.S.C. 1396d), by adding at the end 
     the following new subsection:
       ``(v)(1) For purposes of this title, the term `independent 
     foster care adolescent' means an individual--
       ``(A) who is under 21 years of age;
       ``(B)(i) who, on the individual's 18th birthday, was in 
     foster care under the responsibility of a State, (ii) who is 
     described in subparagraph (A), (B), or (C) of section 
     477(a)(2) (regardless of whether or not the State has 
     exercised the option described in such subparagraph (B) or 
     (C)), or (iii) who was adopted after the individual's 16th 
     birthday and before the individual's 18th birthday and with 
     respect to whose adoption there was in effect an adoption 
     assistance agreement described in section 473; and
       ``(C) who meets the income and resource standards (if any) 
     established by the State consistent with paragraph (2).

     The State may waive the application of any resource or income 
     standard otherwise applicable under subparagraph (C) for 
     reasonable classifications of adolescents.
       ``(2) The income and resource standards (if any) 
     established by a State under paragraph (1)(C) may not be less 
     than the corresponding income and resource standards applied 
     by the State under section 1931(b) and the income and 
     resource methodologies (if any) used in applying such 
     paragraph may not be more restrictive than the methodologies 
     referred to in paragraph (2)(C) of such section.''.
       (b) Conforming Amendment.--Section 1903(f)(4) of such Act 
     (42 U.S.C. 1396b(f)(4)) is amended by inserting 
     ``1902(a)(10)(A)(ii)(XV),'' after 1902(a)(10)(A)(ii)((X),''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to medical assistance for items and services 
     furnished on or after October 1, 1999, without regard to 
     whether or not final regulations to carry out such amendments 
     have been promulgated by such date.

                 Subtitle D--Welfare-To-Work Amendments

     SEC. 131. CHILDREN AGING OUT OF FOSTER CARE ELIGIBLE FOR 
                   SERVICES.

       (a) Recipients With Characteristics of Long-Term 
     Dependency; Children Aging Out of Foster Care.--Clause (iii) 
     of section 403(a)(5)(C) of the Social Security Act (42 U.S.C. 
     603(a)(5)(C)(iii)) is amended--
       (1) in subclause (I), by striking ``or'' at the end;
       (2) in subclause (II), by striking the period at the end 
     and inserting ``; or''; and
       (3) by inserting after subclause (II) the following new 
     subclause:

       ``(III) to children--

       ``(aa) who have attained 18 years of age but not 25 years 
     of age; and
       ``(bb) who, on the day before attaining 18 years of age 
     were recipients of foster care maintenance payments (as 
     defined in section 475(4)) under part E or were in foster 
     care under the responsibility of a State.''.
       (b) Conforming Amendment.--Section 403(a)(5)(C)(iii) of the 
     Social Security Act (42 U.S.C. 603(a)(5)(C)(iii)) is amended 
     by inserting ``hard to employ'' before ``individuals'' in the 
     heading.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 1999.

                     TITLE II--SSI FRAUD PREVENTION

          Subtitle A--Fraud Prevention and Related Provisions

     SEC. 201. LIABILITY OF REPRESENTATIVE PAYEES FOR OVERPAYMENTS 
                   TO DECEASED RECIPIENTS.

       (a) Amendment to Title II.--Section 204(a)(2) of the Social 
     Security Act (42 U.S.C. 404(a)(2)) is amended by adding at 
     the end the following new sentence: ``If any payment of more 
     than the correct amount is made to a representative payee on 
     behalf of an individual after the individual's death, the 
     representative payee shall be liable for the repayment of the 
     overpayment, and the Commissioner of Social Security shall 
     establish an overpayment control record under the social 
     security account number of the representative payee.''.
       (b) Amendment to Title XVI.--Section 1631(b)(2) of such Act 
     (42 U.S.C. 1383(b)(2)) is amended by adding at the end the 
     following new sentence: ``If any payment of more than the 
     correct amount is made to a representative payee on behalf of 
     an individual after the individual's death, the 
     representative payee shall be liable for the repayment of the 
     overpayment, and the Commissioner of Social Security shall 
     establish an overpayment control record under the social 
     security account number of the representative payee.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to overpayments made 12 months or more after the 
     date of the enactment of this Act.

     SEC. 202. RECOVERY OF OVERPAYMENTS OF SSI BENEFITS FROM LUMP 
                   SUM SSI BENEFIT PAYMENTS.

       (a) In General.--Section 1631(b)(1)(B)(ii) of the Social 
     Security Act (42 U.S.C. 1383(b)(1)(B)(ii)) is amended--
       (1) by inserting ``monthly'' before ``benefit payments''; 
     and
       (2) by inserting ``and in the case of an individual or 
     eligible spouse to whom a lump sum is payable under this 
     title (including under section 1616(a) of this Act or under 
     an agreement entered into under section 212(a) of Public Law 
     93-66) shall, as at least one means of recovering such 
     overpayment, make the adjustment or recovery from the lump 
     sum payment in an amount equal to not less than the lesser of 
     the amount of the overpayment or 50 percent of the lump sum 
     payment,'' before ``unless fraud''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect 12 months after the date of the enactment 
     of this Act and shall apply to amounts incorrectly paid which 
     remain outstanding on or after such date.

     SEC. 203. ADDITIONAL DEBT COLLECTION PRACTICES.

       (a) In General.--Section 1631(b) of the Social Security Act 
     (42 U.S.C. 1383(b)) is amended--
       (1) by redesignating paragraphs (4) and (5) as paragraphs 
     (5) and (6), respectively; and

[[Page S8116]]

       (2) by inserting after paragraph (3) the following new 
     paragraph:
       ``(4)(A) With respect to any delinquent amount, the 
     Commissioner of Social Security may use the collection 
     practices described in sections 3711(f), 3716, 3717, and 3718 
     of title 31, United States Code, and in section 5514 of title 
     5, United States Code, all as in effect immediately after the 
     enactment of the Debt Collection Improvement Act of 1996.
       ``(B) For purposes of subparagraph (A), the term 
     `delinquent amount' means an amount--
       ``(i) in excess of the correct amount of payment under this 
     title;
       ``(ii) paid to a person after such person has attained 18 
     years of age; and
       ``(iii) determined by the Commissioner of Social Security, 
     under regulations, to be otherwise unrecoverable under this 
     section after such person ceases to be a beneficiary under 
     this title.''.
       (b) Conforming Amendments.--Section 3701(d)(2) of title 31, 
     United States Code, is amended by striking ``section 204(f)'' 
     and inserting ``sections 204(f) and 1631(b)(4)''.
       (c) Technical Amendments.--Section 204(f) of the Social 
     Security Act (42 U.S.C. 404(f)) is amended--
       (1) by striking ``3711(e)'' and inserting ``3711(f)''; and
       (2) by inserting ``all'' before ``as in effect''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to debt outstanding on or after the date of the 
     enactment of this Act.

     SEC. 204. REQUIREMENT TO PROVIDE STATE PRISONER INFORMATION 
                   TO FEDERAL AND FEDERALLY ASSISTED BENEFIT 
                   PROGRAMS.

       Section 1611(e)(1)(I)(ii)(II) of the Social Security Act 
     (42 U.S.C. 1382(e)(1)(I)(ii)(II)) is amended by striking ``is 
     authorized to'' and inserting ``shall''.

     SEC. 205. RULES RELATING TO COLLECTION OF OVERPAYMENTS FROM 
                   INDIVIDUALS CONVICTED OF CRIMES.

       (a) Waivers Inapplicable to Overpayments by Reason of 
     Payment in Months in Which Beneficiary Is a Prisoner or a 
     Fugitive.--
       (1) Amendment to title ii.--Section 204(b) of the Social 
     Security Act (42 U.S.C. 404(b)) is amended--
       (A) by inserting ``(1)'' after ``(b)''; and
       (B) by adding at the end the following new paragraph:
       ``(2) Paragraph (1) shall not apply with respect to any 
     payment to any person made during a month in which such 
     benefit was not payable under section 202(x).''.
       (2) Amendment to title xvi.--Section 1631(b)(1)(B)(i) of 
     such Act (42 U.S.C. 1383(b)(1)(B)(i)) is amended by inserting 
     ``unless (I) section 1611(e)(1) prohibits payment to the 
     person of a benefit under this title for the month by reason 
     of confinement of a type described in clause (i) or (ii) of 
     section 202(x)(1)(A), or (II) section 1611(e)(5) prohibits 
     payment to the person of a benefit under this title for the 
     month,'' after ``administration of this title''.
       (b) 10-Year Period of Ineligibility for Persons Failing To 
     Notify Commissioner of Overpayments in Months in Which 
     Beneficiary Is a Prisoner or a Fugitive or Failing To Comply 
     With Repayment Schedule for Such Overpayments.--
       (1) Amendment to title ii.--Section 202(x) of such Act (42 
     U.S.C. 402(x)) is amended by adding at the end the following 
     new paragraph:
       ``(4)(A) No person shall be considered entitled to monthly 
     insurance benefits under this section based on the person's 
     disability or to disability insurance benefits under section 
     223 otherwise payable during the 10-year period that begins 
     on the date the person--
       ``(i) knowingly fails to timely notify the Commissioner of 
     Social Security, in connection with any application for 
     benefits under this title, of any prior receipt by such 
     person of any benefit under this title or title XVI in any 
     month in which such benefit was not payable under the 
     preceding provisions of this subsection, or
       ``(ii) knowingly fails to comply with any schedule imposed 
     by the Commissioner which is for repayment of overpayments 
     comprised of payments described in subparagraph (A) and which 
     is in compliance with section 204.
       ``(B) The Commissioner of Social Security shall, in 
     addition to any other relevant factors, take into account any 
     mental or linguistic limitations of a person (including any 
     lack of facility with the English language) in determining 
     whether the person has knowingly failed to comply with a 
     requirement of clause (i) or (ii) of subparagraph (A).''.
       (2) Amendment to title xvi.--Section 1611(e)(1) of such Act 
     (42 U.S.C. 1382(e)(1)) is amended by adding at the end the 
     following new subparagraph:
       ``(J)(i) A person shall not be considered an eligible 
     individual or eligible spouse for purposes of benefits under 
     this title by reason of disability, during the 10-year period 
     that begins on the date the person--
       ``(I) knowingly fails to timely notify the Commissioner of 
     Social Security, in an application for benefits under this 
     title, of any prior receipt by the person of a benefit under 
     this title or title II in a month in which payment to the 
     person of a benefit under this title was prohibited by--
       ``(aa) the preceding provisions of this paragraph by reason 
     of confinement of a type described in clause (i) or (ii) of 
     section 202(x)(1)(A); or
       ``(bb) section 1611(e)(4); or
       ``(II) knowingly fails to comply with any schedule imposed 
     by the Commissioner which is for repayment of overpayments 
     comprised of payments described in clause (i) of this 
     subparagraph and which is in compliance with section 1631(b).
       ``(ii) The Commissioner of Social Security shall, in 
     addition to any other relevant factors, take into account any 
     mental or linguistic limitations of a person (including any 
     lack of facility with the English language) in determining 
     whether the person has knowingly failed to comply with a 
     requirement of subclause (I) or (II) of clause (i).''.
       (c) Continued Collection Efforts Against Prisoners.--
       (1) Amendment to title ii.--Section 204(b) of such Act (42 
     U.S.C. 404(b)), as amended by subsection (a)(1) of this 
     section, is amended further by adding at the end the 
     following new paragraph:
       ``(3) The Commissioner shall not refrain from recovering 
     overpayments from resources currently available to any 
     overpaid person or to such person's estate solely because 
     such individual is confined as described in clause (i) or 
     (ii) of section 202(x)(1)(A).''.
       (2) Amendment to title xvi.--Section 1631(b)(1)(A) of such 
     Act (42 U.S.C. 1383(b)(1)(A)) is amended by adding after and 
     below clause (ii) the following flush left sentence:

     ``The Commissioner shall not refrain from recovering 
     overpayments from resources currently available to any 
     individual solely because the individual is confined as 
     described in clause (i) or (ii) of section 202(x)(1)(A).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to overpayments made in, and to benefits payable 
     for, months beginning 24 months or more after the date of the 
     enactment of this Act.

     SEC. 206. TREATMENT OF ASSETS HELD IN TRUST UNDER THE SSI 
                   PROGRAM.

       (a) Treatment as Resource.--Section 1613 of the Social 
     Security Act (42 U.S.C. 1382b) is amended by adding at the 
     end the following new subsection:

                                ``Trusts

       ``(e)(1) In determining the resources of an individual, 
     paragraph (3) shall apply to a trust (other than a trust 
     described in paragraph (5)) established by the individual.
       ``(2)(A) For purposes of this subsection, an individual 
     shall be considered to have established a trust if any assets 
     of the individual (or of the individual's spouse) are 
     transferred to the trust other than by will.
       ``(B) In the case of an irrevocable trust to which are 
     transferred the assets of an individual (or of the 
     individual's spouse) and the assets of any other person, this 
     subsection shall apply to the portion of the trust 
     attributable to the assets of the individual (or of the 
     individual's spouse).
       ``(C) This subsection shall apply to a trust without regard 
     to--
       ``(i) the purposes for which the trust is established;
       ``(ii) whether the trustees have or exercise any discretion 
     under the trust;
       ``(iii) any restrictions on when or whether distributions 
     may be made from the trust; or
       ``(iv) any restrictions on the use of distributions from 
     the trust.
       ``(3)(A) In the case of a revocable trust established by an 
     individual, the corpus of the trust shall be considered a 
     resource available to the individual.
       ``(B) In the case of an irrevocable trust established by an 
     individual, if there are any circumstances under which 
     payment from the trust could be made to or for the benefit of 
     the individual or the individual's spouse, the portion of the 
     corpus from which payment to or for the benefit of the 
     individual or the individual's spouse could be made shall be 
     considered a resource available to the individual.
       ``(4) The Commissioner of Social Security may waive the 
     application of this subsection with respect to an individual 
     if the Commissioner determines that such application would 
     work an undue hardship (as determined on the basis of 
     criteria established by the Commissioner) on the individual.
       ``(5) This subsection shall not apply to a trust described 
     in subparagraph (A) or (C) of section 1917(d)(4).
       ``(6) For purposes of this subsection--
       ``(A) the term `trust' includes any legal instrument or 
     device that is similar to a trust;
       ``(B) the term `corpus' means, with respect to a trust, all 
     property and other interests held by the trust, including 
     accumulated earnings and any other addition to the trust 
     after its establishment (except that such term does not 
     include any such earnings or addition in the month in which 
     the earnings or addition is credited or otherwise transferred 
     to the trust); and
       ``(C) the term `asset' includes any income or resource of 
     the individual or of the individual's spouse, including--
       ``(i) any income excluded by section 1612(b);
       ``(ii) any resource otherwise excluded by this section; and
       ``(iii) any other payment or property to which the 
     individual or the individual's spouse is entitled but does 
     not receive or have access to because of action by--
       ``(I) the individual or spouse;
       ``(II) a person or entity (including a court) with legal 
     authority to act in place of, or on behalf of, the individual 
     or spouse; or
       ``(III) a person or entity (including a court) acting at 
     the direction of, or on the request of, the individual or 
     spouse.''.
       (b) Treatment as Income.--Section 1612(a)(2) of such Act 
     (42 U.S.C. 1382a(a)(2)) is amended--

[[Page S8117]]

       (1) by striking ``and'' at the end of subparagraph (E);
       (2) by striking the period at the end of subparagraph (F) 
     and inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(G) any earnings of, and additions to, the corpus of a 
     trust established by an individual (within the meaning of 
     section 1613(e)), of which the individual is a beneficiary, 
     to which section 1613(e) applies, and, in the case of an 
     irrevocable trust, with respect to which circumstances exist 
     under which a payment from the earnings or additions could be 
     made to or for the benefit of the individual.''.
       (c) Conforming Amendments.--Section 1902(a)(10) of the 
     Social Security Act (42 U.S.C. 1396a(a)(10)) is amended--
       (1) by striking ``and'' at the end of subparagraph (E);
       (2) by adding ``and'' at the end of subparagraph (F); and
       (3) by inserting after subparagraph (F) the following new 
     subparagraph:
       ``(G) that, in applying eligibility criteria of the 
     supplemental security income program under title XVI for 
     purposes of determining eligibility for medical assistance 
     under the State plan of an individual who is not receiving 
     supplemental security income, the State will disregard the 
     provisions of section 1613(e);''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on January 1, 2000, and shall apply to 
     trusts established on or after such date.

     SEC. 207. DISPOSAL OF RESOURCES FOR LESS THAN FAIR MARKET 
                   VALUE UNDER THE SSI PROGRAM.

       (a) In General.--Section 1613(c) of the Social Security Act 
     (42 U.S.C. 1382b(c)) is amended--
       (1) in the caption, by striking ``Notification of Medicaid 
     Policy Restricting Eligibility of Institutionalized 
     Individuals for Benefits Based on'';
       (2) in paragraph (1)--
       (A) in subparagraph (A)--
       (i) by inserting ``paragraph (1) and'' after ``provisions 
     of'';
       (ii) by striking ``title XIX'' the first place it appears 
     and inserting ``this title and title XIX, respectively,'';
       (iii) by striking ``subparagraph (B)'' and inserting 
     ``clause (ii)'';
       (iv) by striking ``paragraph (2)'' and inserting 
     ``subparagraph (B)'';
       (B) in subparagraph (B)--
       (i) by striking ``by the State agency''; and
       (ii) by striking ``section 1917(c)'' and all that follows 
     and inserting ``paragraph (1) or section 1917(c).''; and
       (C) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively;
       (3) in paragraph (2)--
       (A) by striking ``(2)'' and inserting ``(B)''; and
       (B) by striking ``paragraph (1)(B)'' and inserting 
     ``subparagraph (A)(ii)'';
       (4) by striking ``(c)(1)'' and inserting ``(2)(A)''; and
       (5) by inserting before paragraph (2) (as so redesignated 
     by paragraph (4) of this subsection) the following new 
     subsection:
       ``(c)(1)(A)(i) If an individual or the spouse of an 
     individual disposes of resources for less than fair market 
     value on or after the look-back date described in clause 
     (ii)(I), the individual is ineligible for benefits under this 
     title for months during the period beginning on the date 
     described in clause (iii) and equal to the number of months 
     calculated as provided in clause (iv).
       ``(ii)(I) The look-back date described in this subclause is 
     a date that is 36 months before the date described in 
     subclause (II).
       ``(II) The date described in this subclause is the date on 
     which the individual applies for benefits under this title 
     or, if later, the date on which the individual (or the spouse 
     of the individual) disposes of resources for less than fair 
     market value.
       ``(iii) The date described in this clause is the first day 
     of the first month in or after which resources were disposed 
     of for less than fair market value and which does not occur 
     in any other period of ineligibility under this paragraph.
       ``(iv) The number of months calculated under this clause 
     shall be equal to--
       ``(I) the total, cumulative uncompensated value of all 
     resources so disposed of by the individual (or the spouse of 
     the individual) on or after the look-back date described in 
     clause (ii)(I); divided by
       ``(II) the amount of the maximum monthly benefit payable 
     under section 1611(b), plus the amount (if any) of the 
     maximum State supplementary payment corresponding to the 
     State's payment level applicable to the individual's living 
     arrangement and eligibility category that would otherwise be 
     payable to the individual by the Commissioner pursuant to an 
     agreement under section 1616(a) of this Act or section 212(b) 
     of Public Law 93-66, for the month in which occurs the date 
     described in clause (ii)(II),

     rounded, in the case of any fraction, to the nearest whole 
     number, but shall not in any case exceed 36 months.
       ``(B)(i) Notwithstanding subparagraph (A), this subsection 
     shall not apply to a transfer of a resource to a trust if the 
     portion of the trust attributable to the resource is 
     considered a resource available to the individual pursuant to 
     subsection (e)(3) (or would be so considered but for the 
     application of subsection (e)(4)).
       ``(ii) In the case of a trust established by an individual 
     or an individual's spouse (within the meaning of subsection 
     (e)), if from such portion of the trust, if any, that is 
     considered a resource available to the individual pursuant to 
     subsection (e)(3) (or would be so considered but for the 
     application of subsection (e)(4)) or the residue of the 
     portion on the termination of the trust--
       ``(I) there is made a payment other than to or for the 
     benefit of the individual; or
       ``(II) no payment could under any circumstance be made to 
     the individual,

     then, for purposes of this subsection, the payment described 
     in clause (I) or the foreclosure of payment described in 
     clause (II) shall be considered a transfer of resources by 
     the individual or the individual's spouse as of the date of 
     the payment or foreclosure, as the case may be.
       ``(C) An individual shall not be ineligible for benefits 
     under this title by reason of the application of this 
     paragraph to a disposal of resources by the individual or the 
     spouse of the individual, to the extent that--
       ``(i) the resources are a home and title to the home was 
     transferred to--
       ``(I) the spouse of the transferor;
       ``(II) a child of the transferor who has not attained 21 
     years of age, or is blind or disabled;
       ``(III) a sibling of the transferor who has an equity 
     interest in such home and who was residing in the 
     transferor's home for a period of at least 1 year immediately 
     before the date the transferor becomes an institutionalized 
     individual; or
       ``(IV) a son or daughter of the transferor (other than a 
     child described in subclause (II)) who was residing in the 
     transferor's home for a period of at least 2 years 
     immediately before the date the transferor becomes an 
     institutionalized individual, and who provided care to the 
     transferor which permitted the transferor to reside at home 
     rather than in such an institution or facility;
       ``(ii) the resources--
       ``(I) were transferred to the transferor's spouse or to 
     another for the sole benefit of the transferor's spouse;
       ``(II) were transferred from the transferor's spouse to 
     another for the sole benefit of the transferor's spouse;
       ``(III) were transferred to, or to a trust (including a 
     trust described in section 1917(d)(4)) established solely for 
     the benefit of, the transferor's child who is blind or 
     disabled; or
       ``(IV) were transferred to a trust (including a trust 
     described in section 1917(d)(4)) established solely for the 
     benefit of an individual who has not attained 65 years of age 
     and who is disabled;
       ``(iii) a satisfactory showing is made to the Commissioner 
     of Social Security (in accordance with regulations 
     promulgated by the Commissioner) that--
       ``(I) the individual who disposed of the resources intended 
     to dispose of the resources either at fair market value, or 
     for other valuable consideration;
       ``(II) the resources were transferred exclusively for a 
     purpose other than to qualify for benefits under this title; 
     or
       ``(III) all resources transferred for less than fair market 
     value have been returned to the transferor; or
       ``(iv) the Commissioner determines, under procedures 
     established by the Commissioner, that the denial of 
     eligibility would work an undue hardship as determined on the 
     basis of criteria established by the Commissioner.
       ``(D) For purposes of this subsection, in the case of a 
     resource held by an individual in common with another person 
     or persons in a joint tenancy, tenancy in common, or similar 
     arrangement, the resource (or the affected portion of such 
     resource) shall be considered to be disposed of by the 
     individual when any action is taken, either by the individual 
     or by any other person, that reduces or eliminates the 
     individual's ownership or control of such resource.
       ``(E) In the case of a transfer by the spouse of an 
     individual that results in a period of ineligibility for the 
     individual under this subsection, the Commissioner shall 
     apportion the period (or any portion of the period) among the 
     individual and the individual's spouse if the spouse becomes 
     eligible for benefits under this title.
       ``(F) For purposes of this paragraph--
       ``(i) the term `benefits under this title' includes 
     payments of the type described in section 1616(a) of this Act 
     and of the type described in section 212(b) of Public Law 93-
     66;
       ``(ii) the term `institutionalized individual' has the 
     meaning given such term in section 1917(e)(3); and
       ``(iii) the term `trust' has the meaning given such term in 
     subsection (e)(6)(A) of this section.''.
       (b) Conforming Amendment.--Section 1902(a)(10) of the 
     Social Security Act (42 U.S.C. 1396a(a)(10)), as amended by 
     section 206(c) of this Act, is amended by striking ``section 
     1613(e)'' and inserting ``subsections (c) and (e) of section 
     1613''.
       (c) Effective Date.--The amendments made by this section 
     shall be effective with respect to disposals made on or after 
     the date of the enactment of this Act.

     SEC. 208. ADMINISTRATIVE PROCEDURE FOR IMPOSING PENALTIES FOR 
                   FALSE OR MISLEADING STATEMENTS.

       (a) In General.--Part A of title XI of the Social Security 
     Act (42 U.S.C. 1301 et seq.) is amended by inserting after 
     section 1129 the following new section:

[[Page S8118]]

     ``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 makes such a 
     statement with knowing disregard for the truth 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.
       ``(b) Penalty.--The penalty described in this subsection 
     is--
       ``(1) nonpayment of benefits under title II that would 
     otherwise be payable to the person; and
       ``(2) ineligibility for cash benefits under title XVI,

     for each month that begins during the applicable period 
     described in subsection (c).
       ``(c) Duration of Penalty.--The duration of the applicable 
     period, with respect to a determination by the Commissioner 
     under subsection (a) that a person has engaged in conduct 
     described in subsection (a), shall be--
       ``(1) 6 consecutive months, in the case of a first such 
     determination with respect to the person;
       ``(2) 12 consecutive months, in the case of a second such 
     determination with respect to the person; and
       ``(3) 24 consecutive months, in the case of a third or 
     subsequent such determination with respect to the person.
       ``(d) Effect on Other Assistance.--A person subject to a 
     period of nonpayment of benefits under title II or 
     ineligibility for title XVI benefits by reason of this 
     section nevertheless shall be considered to be eligible for 
     and receiving such benefits, to the extent that the person 
     would be receiving or eligible for such benefits but for the 
     imposition of the penalty, for purposes of--
       ``(1) determination of the eligibility of the person for 
     benefits under titles XVIII and XIX; and
       ``(2) determination of the eligibility or amount of 
     benefits payable under title II or XVI to another person.
       ``(e) Definition.--In this section, the term `benefits 
     under title XVI' includes State supplementary payments made 
     by the Commissioner pursuant to an agreement under section 
     1616(a) of this Act or section 212(b) of Public Law 93-66.
       ``(f) Consultations.--The Commissioner of Social Security 
     shall consult with the Inspector General of the Social 
     Security Administration regarding initiating actions under 
     this section.''.
       (b) Conforming Amendment Precluding Delayed Retirement 
     Credit for any Month to Which a Nonpayment of Benefits 
     Penalty Applies.--Section 202(w)(2)(B) of such Act (42 U.S.C. 
     402(w)(2)(B)) is amended--
       (1) by striking ``and'' at the end of clause (i);
       (2) by striking the period at the end of clause (ii) and 
     inserting ``, and''; and
       (3) by adding at the end the following new clause:
       ``(iii) such individual was not subject to a penalty 
     imposed under section 1129A.''.
       (c) Elimination of Redundant Provision.--Section 1611(e) of 
     such Act (42 U.S.C. 1382(e)) is amended--
       (1) by striking paragraph (4);
       (2) in paragraph (6)(A)(i), by striking ``(5)'' and 
     inserting ``(4)''; and
       (3) by redesignating paragraphs (5) and (6) as paragraphs 
     (4) and (5), respectively.
       (d) Regulations.--Within 6 months after the date of the 
     enactment of this Act, the Commissioner of Social Security 
     shall develop regulations that prescribe the administrative 
     process for making determinations under section 1129A of the 
     Social Security Act (including when the applicable period in 
     subsection (c) of such section shall commence), and shall 
     provide guidance on the exercise of discretion as to whether 
     the penalty should be imposed in particular cases.
       (e) Effective Date.--The amendments made by this section 
     shall apply to statements and representations made on or 
     after the date of the enactment of this Act.

     SEC. 209. EXCLUSION OF REPRESENTATIVES AND HEALTH CARE 
                   PROVIDERS CONVICTED OF VIOLATIONS FROM 
                   PARTICIPATION IN SOCIAL SECURITY PROGRAMS.

       (a) In General.--Part A of title XI of the Social Security 
     Act (42 U.S.C. 1301-1320b-17) is amended by adding at the end 
     the following new section:


 ``exclusion of representatives and health care providers convicted of 
       violations from participation in social security programs

       ``Sec. 1148. (a) In General.--The Commissioner of Social 
     Security shall exclude from participation in the social 
     security programs any representative or health care 
     provider--
       ``(1) who is convicted of a violation of section 208 or 
     1632 of this Act,
       ``(2) who is convicted of any violation under title 18, 
     United States Code, relating to an initial application for or 
     continuing entitlement to, or amount of, benefits under title 
     II of this Act, or an initial application for or continuing 
     eligibility for, or amount of, benefits under title XVI of 
     this Act, or
       ``(3) who the Commissioner determines has committed an 
     offense described in section 1129(a)(1) of this Act.
       ``(b) Notice, Effective Date, and Period of Exclusion.--(1) 
     An exclusion under this section shall be effective at such 
     time, for such period, and upon such reasonable notice to the 
     public and to the individual excluded as may be specified in 
     regulations consistent with paragraph (2).
       ``(2) Such an exclusion shall be effective with respect to 
     services furnished to any individual on or after the 
     effective date of the exclusion. Nothing in this section may 
     be construed to preclude, in determining disability under 
     title II or title XVI, consideration of any medical evidence 
     derived from services provided by a health care provider 
     before the effective date of the exclusion of the health care 
     provider under this section.
       ``(3)(A) The Commissioner shall specify, in the notice of 
     exclusion under paragraph (1), the period of the exclusion.
       ``(B) Subject to subparagraph (C), in the case of an 
     exclusion under subsection (a), the minimum period of 
     exclusion shall be five years, except that the Commissioner 
     may waive the exclusion in the case of an individual who is 
     the sole source of essential services in a community. The 
     Commissioner's decision whether to waive the exclusion shall 
     not be reviewable.
       ``(C) In the case of an exclusion of an individual under 
     subsection (a) based on a conviction or a determination 
     described in subsection (a)(3) occurring on or after the date 
     of the enactment of this section, if the individual has 
     (before, on, or after such date of enactment) been convicted, 
     or if such a determination has been made with respect to the 
     individual--
       ``(i) on one previous occasion of one or more offenses for 
     which an exclusion may be effected under such subsection, the 
     period of the exclusion shall be not less than 10 years, or
       ``(ii) on 2 or more previous occasions of one or more 
     offenses for which an exclusion may be effected under such 
     subsection, the period of the exclusion shall be permanent.
       ``(c) Notice to State Agencies.--The Commissioner shall 
     promptly notify each appropriate State agency employed for 
     the purpose of making disability determinations under section 
     221 or 1633(a)--
       ``(1) of the fact and circumstances of each exclusion 
     effected against an individual under this section, and
       ``(2) of the period (described in subsection (b)(3)) for 
     which the State agency is directed to exclude the individual 
     from participation in the activities of the State agency in 
     the course of its employment.
       ``(d) Notice to State Licensing Agencies.--The Commissioner 
     shall--
       ``(1) promptly notify the appropriate State or local agency 
     or authority having responsibility for the licensing or 
     certification of an individual excluded from participation 
     under this section of the fact and circumstances of the 
     exclusion,
       ``(2) request that appropriate investigations be made and 
     sanctions invoked in accordance with applicable State law and 
     policy, and
       ``(3) request that the State or local agency or authority 
     keep the Commissioner and the Inspector General of the Social 
     Security Administration fully and currently informed with 
     respect to any actions taken in response to the request.
       ``(e) Notice, Hearing, and Judicial Review.--(1) Any 
     individual who is excluded (or directed to be excluded) from 
     participation under this section is entitled to reasonable 
     notice and opportunity for a hearing thereon by the 
     Commissioner to the same extent as is provided in section 
     205(b), and to judicial review of the Commissioner's final 
     decision after such hearing as is provided in section 205(g).
       ``(2) The provisions of section 205(h) shall apply with 
     respect to this section to the same extent as it is 
     applicable with respect to title II.
       ``(f) Application for Termination of Exclusion.--(1) An 
     individual excluded from participation under this section may 
     apply to the Commissioner, in the manner specified by the 
     Commissioner in regulations and at the end of the minimum 
     period of exclusion provided under subsection (b)(3) and at 
     such other times as the Commissioner may provide, for 
     termination of the exclusion effected under this section.
       ``(2) The Commissioner may terminate the exclusion if the 
     Commissioner determines, on the basis of the conduct of the 
     applicant which occurred after the date of the notice of 
     exclusion or which was unknown to the Commissioner at the 
     time of the exclusion, that--
       ``(A) there is no basis under subsection (a) for a 
     continuation of the exclusion, and
       ``(B) there are reasonable assurances that the types of 
     actions which formed the basis for the original exclusion 
     have not recurred and will not recur.
       ``(3) The Commissioner shall promptly notify each State 
     agency employed for the purpose of making disability 
     determinations under section 221 or 1633(a) of the fact and 
     circumstances of each termination of exclusion made under 
     this subsection.
       ``(g) Availability of Records of Excluded Representatives 
     and Health Care Providers.--Nothing in this section shall be 
     construed to have the effect of limiting access by any 
     applicant or beneficiary under title II or XVI, any State 
     agency acting

[[Page S8119]]

     under section 221 or 1633(a), or the Commissioner to records 
     maintained by any representative or health care provider in 
     connection with services provided to the applicant or 
     beneficiary prior to the exclusion of such representative or 
     health care provider under this section.
       ``(h) Reporting Requirement.--Any representative or health 
     care provider participating in, or seeking to participate in, 
     a social security program shall inform the Commissioner, in 
     such form and manner as the Commissioner shall prescribe by 
     regulation, whether such representative or health care 
     provider has been convicted of a violation described in 
     subsection (a).
       ``(i) Delegation of Authority.--The Commissioner may 
     delegate authority granted by this section to the Inspector 
     General.
       ``(j) Definitions.--For purposes of this section:
       ``(1) Exclude.--The term `exclude' from participation 
     means--
       ``(A) in connection with a representative, to prohibit from 
     engaging in representation of an applicant for, or recipient 
     of, benefits, as a representative payee under section 205(j) 
     or 1631(a)(2)(A)(ii), or otherwise as a representative, in 
     any hearing or other proceeding relating to entitlement to 
     benefits, and
       ``(B) in connection with a health care provider, to 
     prohibit from providing items or services to an applicant 
     for, or recipient of, benefits for the purpose of assisting 
     such applicant or recipient in demonstrating disability.
       ``(2) Social security program.--The term `social security 
     programs' means the program providing for monthly insurance 
     benefits under title II, and the program providing for 
     monthly supplemental security income benefits to individuals 
     under title XVI (including State supplementary payments made 
     by the Commissioner pursuant to an agreement under section 
     1616(a) of this Act or section 212(b) of Public Law 93-66).
       ``(3) Convicted.--An individual is considered to have been 
     `convicted' of a violation--
       ``(A) when a judgment of conviction has been entered 
     against the individual by a Federal, State, or local court, 
     except if the judgment of conviction has been set aside or 
     expunged;
       ``(B) when there has been a finding of guilt against the 
     individual by a Federal, State, or local court;
       ``(C) when a plea of guilty or nolo contendere by the 
     individual has been accepted by a Federal, State, or local 
     court; or
       ``(D) when the individual has entered into participation in 
     a first offender, deferred adjudication, or other arrangement 
     or program where judgment of conviction has been withheld.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to convictions of violations 
     described in paragraphs (1) and (2) of section 1148(a) of the 
     Social Security Act and determinations described in paragraph 
     (3) of such section occurring on or after the date of the 
     enactment of this Act.

     SEC. 210. STATE DATA EXCHANGES.

       Whenever the Commissioner of Social Security requests 
     information from a State for the purpose of ascertaining an 
     individual's eligibility for benefits (or the correct amount 
     of such benefits) under title II or XVI of the Social 
     Security Act, the standards of the Commissioner promulgated 
     pursuant to section 1106 of such Act or any other Federal law 
     for the use, safeguarding, and disclosure of information are 
     deemed to meet any standards of the State that would 
     otherwise apply to the disclosure of information by the State 
     to the Commissioner.

     SEC. 211. STUDY ON POSSIBLE MEASURES TO IMPROVE FRAUD 
                   PREVENTION AND ADMINISTRATIVE PROCESSING.

       (a) Study.--As soon as practicable after the date of the 
     enactment of this Act, the Commissioner of Social Security, 
     in consultation with the Inspector General of the Social 
     Security Administration and the Attorney General, shall 
     conduct a study of possible measures to improve--
       (1) prevention of fraud on the part of individuals entitled 
     to disability benefits under section 223 of the Social 
     Security Act or benefits under section 202 of such Act based 
     on the beneficiary's disability, individuals eligible for 
     supplemental security income benefits under title XVI of such 
     Act, and applicants for any such benefits; and
       (2) timely processing of reported income changes by 
     individuals receiving such benefits.
       (b) Report.--Not later than 1 year after the date of the 
     enactment of this Act, 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 written report 
     that contains the results of the Commissioner's study under 
     subsection (a). The report shall contain such recommendations 
     for legislative and administrative changes as the 
     Commissioner considers appropriate.

     SEC. 212. ANNUAL REPORT ON AMOUNTS NECESSARY TO COMBAT FRAUD.

       (a) In General.--Section 704(b)(1) of the Social Security 
     Act (42 U.S.C. 904(b)(1)) is amended--
       (1) by inserting ``(A)'' after ``(b)(1)''; and
       (2) by adding at the end the following new subparagraph:
       ``(B) The Commissioner shall include in the annual budget 
     prepared pursuant to subparagraph (A) an itemization of the 
     amount of funds required by the Social Security 
     Administration for the fiscal year covered by the budget to 
     support efforts to combat fraud committed by applicants and 
     beneficiaries.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply with respect to annual budgets prepared for 
     fiscal years after fiscal year 1999.

     SEC. 213. COMPUTER MATCHES WITH MEDICARE AND MEDICAID 
                   INSTITUTIONALIZATION DATA.

       (a) In General.--Section 1611(e)(1) of the Social Security 
     Act (42 U.S.C. 1382(e)(1)), as amended by section 205(b)(2) 
     of this Act, is further amended by adding at the end the 
     following new subparagraph:
       ``(K) For the purpose of carrying out this paragraph, the 
     Commissioner of Social Security shall conduct periodic 
     computer matches with data maintained by the Secretary of 
     Health and Human Services under title XVIII or XIX. The 
     Secretary shall furnish to the Commissioner, in such form and 
     manner and under such terms as the Commissioner and the 
     Secretary shall mutually agree, such information as the 
     Commissioner may request for this purpose. Information 
     obtained pursuant to such a match may be substituted for the 
     physician's certification otherwise required under 
     subparagraph (G)(i).''.
       (b) Conforming Amendment.--Section 1611(e)(1)(G) of such 
     Act (42 U.S.C. 1382(e)(1)(G)) is amended by striking 
     ``subparagraph (H)'' and inserting ``subparagraph (H) or 
     (K)''.

     SEC. 214. ACCESS TO INFORMATION HELD BY FINANCIAL 
                   INSTITUTIONS.

       Section 1631(e)(1)(B) of the Social Security Act (42 U.S.C. 
     1383(e)(1)(B)) is amended--
       (1) by striking ``(B) The'' and inserting ``(B)(i) The''; 
     and
       (2) by adding at the end the following new clause:
       ``(ii)(I) The Commissioner of Social Security may require 
     each applicant for, or recipient of, benefits under this 
     title to provide authorization by the applicant or recipient 
     (or by any other person whose income or resources are 
     material to the determination of the eligibility of the 
     applicant or recipient for such benefits) for the 
     Commissioner to obtain (subject to the cost reimbursement 
     requirements of section 1115(a) of the Right to Financial 
     Privacy Act) from any financial institution (within the 
     meaning of section 1101(1) of such Act) any financial record 
     (within the meaning of section 1101(2) of such Act) held by 
     the institution with respect to the applicant or recipient 
     (or any such other person) whenever the Commissioner 
     determines the record is needed in connection with a 
     determination with respect to such eligibility or the amount 
     of such benefits.
       ``(II) Notwithstanding section 1104(a)(1) of the Right to 
     Financial Privacy Act, an authorization provided by an 
     applicant or recipient (or any other person whose income or 
     resources are material to the determination of the 
     eligibility of the applicant or recipient) pursuant to 
     subclause (I) of this clause shall remain effective until the 
     earliest of--
       ``(aa) the rendering of a final adverse decision on the 
     applicant's application for eligibility for benefits under 
     this title;
       ``(bb) the cessation of the recipient's eligibility for 
     benefits under this title; or
       ``(cc) the express revocation by the applicant or recipient 
     (or such other person referred to in subclause (I)) of the 
     authorization, in a written notification to the Commissioner.
       ``(III)(aa) An authorization obtained by the Commissioner 
     of Social Security pursuant to this clause shall be 
     considered to meet the requirements of the Right to Financial 
     Privacy Act for purposes of section 1103(a) of such Act, and 
     need not be furnished to the financial institution, 
     notwithstanding section 1104(a) of such Act.
       ``(bb) The certification requirements of section 1103(b) of 
     the Right to Financial Privacy Act shall not apply to 
     requests by the Commissioner of Social Security pursuant to 
     an authorization provided under this clause.
       ``(cc) A request by the Commissioner pursuant to an 
     authorization provided under this clause is deemed to meet 
     the requirements of section 1104(a)(3) of the Right to 
     Financial Privacy Act and the flush language of section 1102 
     of such Act.
       ``(IV) The Commissioner shall inform any person who 
     provides authorization pursuant to this clause of the 
     duration and scope of the authorization.
       ``(V) If an applicant for, or recipient of, benefits under 
     this title (or any such other person referred to in subclause 
     (I)) refuses to provide, or revokes, any authorization made 
     by the applicant or recipient for the Commissioner of Social 
     Security to obtain from any financial institution any 
     financial record, the Commissioner may, on that basis, 
     determine that the applicant or recipient is ineligible for 
     benefits under this title.''.

       Subtitle B--Benefits for Certain Veterans of World War II

     SEC. 251. ESTABLISHMENT OF PROGRAM OF SPECIAL BENEFITS FOR 
                   CERTAIN WORLD WAR II VETERANS.

       (a) In General.--The Social Security Act is amended by 
     inserting after title VII the following:

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

                          ``Table of Contents

``Sec. 801. Basic entitlement to benefits.
``Sec. 802. Qualified individuals.
``Sec. 803. Residence outside the United States.

[[Page S8120]]

``Sec. 804. Disqualifications.
``Sec. 805. Benefit amount.
``Sec. 806. Applications and furnishing of information.
``Sec. 807. Representative payees.
``Sec. 808. Overpayments and underpayments.
``Sec. 809. Hearings and review.
``Sec. 810. Other administrative provisions.
``Sec. 811. Penalties for fraud.
``Sec. 812. Definitions.
``Sec. 813. Appropriations.

     ``SEC. 801. BASIC ENTITLEMENT TO BENEFITS.

       ``Every individual who is a qualified individual under 
     section 802 shall, in accordance with and subject to the 
     provisions of this title, be entitled to a monthly benefit 
     paid by the Commissioner of Social Security for each month 
     after September 2000 (or such earlier month, if the 
     Commissioner determines is administratively feasible) the 
     individual resides outside the United States.

     ``SEC. 802. QUALIFIED INDIVIDUALS.

       ``Except as otherwise provided in this title, an 
     individual--
       ``(1) who has attained the age of 65 on or before the date 
     of the enactment of this title;
       ``(2) who is a World War II veteran;
       ``(3) who is eligible for a supplemental security income 
     benefit under title XVI for--
       ``(A) the month in which this title is enacted; and
       ``(B) the month in which the individual files an 
     application for benefits under this title;
       ``(4) whose total benefit income is less than 75 percent of 
     the Federal benefit rate under title XVI;
       ``(5) who has filed an application for benefits under this 
     title; and
       ``(6) who is in compliance with all requirements imposed by 
     the Commissioner of Social Security under this title,

     shall be a qualified individual for purposes of this title.

     ``SEC. 803. RESIDENCE OUTSIDE THE UNITED STATES.

       For purposes of section 801, with respect to any month, an 
     individual shall be regarded as residing outside the United 
     States if, on the first day of the month, the individual so 
     resides outside the United States.

     ``SEC. 804. DISQUALIFICATIONS.

       ``Notwithstanding section 802, an individual may not be a 
     qualified individual for any month--
       ``(1) that begins after the month in which the Commissioner 
     of Social Security is notified by the Attorney General that 
     the individual has been removed from the United States 
     pursuant to section 237(a) of the Immigration and Nationality 
     Act and before the month in which the Commissioner of Social 
     Security is notified by the Attorney General that the 
     individual is lawfully admitted to the United States for 
     permanent residence;
       ``(2) during any part of which the individual is outside 
     the United States due to flight to avoid prosecution, or 
     custody or confinement after conviction, under the laws of 
     the United States or the jurisdiction within the United 
     States from which the person has fled, for a crime, or an 
     attempt to commit a crime, that is a felony under the laws of 
     the place from which the individual has fled, or which, in 
     the case of the State of New Jersey, is a high misdemeanor 
     under the laws of such State;
       ``(3) during any part of which the individual violates a 
     condition of probation or parole imposed under Federal or 
     State law; or
       ``(4) during any part of which the individual is confined 
     in a jail, prison, or other penal institution or correctional 
     facility pursuant to a conviction of an offense.

     ``SEC. 805. BENEFIT AMOUNT.

       ``The benefit under this title payable to a qualified 
     individual for any month shall be in an amount equal to 75 
     percent of the Federal benefit rate under title XVI for the 
     month, reduced by the amount of the qualified individual's 
     benefit income for the month.

     ``SEC. 806. APPLICATIONS AND FURNISHING OF INFORMATION.

       ``(a) In General.--The Commissioner of Social Security 
     shall, subject to subsection (b), prescribe such requirements 
     with respect to the filing of applications, the furnishing of 
     information and other material, and the reporting of events 
     and changes in circumstances, as may be necessary for the 
     effective and efficient administration of this title.
       ``(b) Verification Requirement.--The requirements 
     prescribed by the Commissioner of Social Security under 
     subsection (a) shall preclude any determination of 
     entitlement to benefits under this title solely on the basis 
     of declarations by the individual concerning qualifications 
     or other material facts, and shall provide for verification 
     of material information from independent or collateral 
     sources, and the procurement of additional information as 
     necessary in order to ensure that the benefits are provided 
     only to qualified individuals (or their representative 
     payees) in correct amounts.

     ``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, 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) Any determination under subsection (a) to pay the 
     benefits of a qualified individual to a representative payee 
     shall be made on the basis of--
       ``(A) an investigation by the Commissioner of Social 
     Security of the person to serve as representative payee, 
     which shall be conducted in advance of the determination and 
     shall, to the extent practicable, include a face-to-face 
     interview with the person (or, in the case of an 
     organization, a representative of the organization); and
       ``(B) adequate evidence that the arrangement is in the 
     interest of the qualified individual.
       ``(2) As part of the investigation referred to in paragraph 
     (1), the Commissioner of Social Security shall--
       ``(A) require the person being investigated to submit 
     documented proof of the identity of the person;
       ``(B) in the case of a person who has a social security 
     account number issued for purposes of the program under title 
     II or an employer identification number issued for purposes 
     of the Internal Revenue Code of 1986, verify the number;
       ``(C) determine whether the person has been convicted of a 
     violation of section 208, 811, or 1632; and
       ``(D) 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 title XVI, 
     respectively.
       ``(c) Requirement for Centralized File.--The Commissioner 
     of Social Security shall establish and maintain a centralized 
     file, which shall be updated periodically and which shall be 
     in a form that renders it readily retrievable by each 
     servicing office of the Social Security Administration. The 
     file shall consist of--
       ``(1) a list of the names and social security account 
     numbers or employer identification numbers (if issued) of all 
     persons with respect to whom, in the capacity of 
     representative payee, the payment of benefits has been 
     revoked or terminated under 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 title XVI, 
     respectively; and
       ``(2) a list of the names and social security account 
     numbers or employer identification numbers (if issued) of all 
     persons who have been convicted of a violation of section 
     208, 811, or 1632.
       ``(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) the person has been convicted of a violation of 
     section 208, 811, or 1632;
       ``(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.
       ``(2) Exemptions.--
       ``(A) The Commissioner of Social Security may prescribe 
     circumstances under which the Commissioner of Social Security 
     may grant an exemption from paragraph (1) to any person on a 
     case-by-case basis if the exemption is in the best interest 
     of the qualified individual whose benefits would be paid to 
     the person pursuant to this section.
       ``(B) Paragraph (1)(C) shall not apply with respect to any 
     person who is a creditor referred to in such paragraph if the 
     creditor is--
       ``(i) a relative of the qualified individual and the 
     relative resides in the same household as the qualified 
     individual;
       ``(ii) a legal guardian or legal representative of the 
     individual;
       ``(iii) a facility that is licensed or certified as a care 
     facility under the law of the political jurisdiction in which 
     the qualified individual resides;
       ``(iv) a person who is an administrator, owner, or employee 
     of a facility referred to in clause (iii), if the qualified 
     individual resides in the facility, and the payment to the 
     facility or the person is made only after the Commissioner of 
     Social Security has made a good faith effort to locate an 
     alternative representative payee to whom payment would serve 
     the best interests of the qualified individual; or

[[Page S8121]]

       ``(v) a person who is determined by the Commissioner of 
     Social Security, on the basis of written findings and 
     pursuant to procedures prescribed by the Commissioner of 
     Social Security, to be acceptable to serve as a 
     representative payee.
       ``(C) The procedures referred to in subparagraph (B)(v) 
     shall require the person who will serve as representative 
     payee to establish, to the satisfaction of the Commissioner 
     of Social Security, that--
       ``(i) the person poses no risk to the qualified individual;
       ``(ii) the financial relationship of the person to the 
     qualified individual poses no substantial conflict of 
     interest; and
       ``(iii) no other more suitable representative payee can be 
     found.
       ``(e) Deferral of Payment Pending Appointment of 
     Representative Payee.--
       ``(1) In general.--Subject to paragraph (2), if the 
     Commissioner of Social Security makes a determination 
     described in the first sentence of subsection (a) with 
     respect to any qualified individual's benefit and determines 
     that direct payment of the benefit to the qualified 
     individual would cause substantial harm to the qualified 
     individual, the Commissioner of Social Security may defer (in 
     the case of initial entitlement) or suspend (in the case of 
     existing entitlement) direct payment of the benefit to the 
     qualified individual, until such time as the selection of a 
     representative payee is made pursuant to this section.
       ``(2) Time limitation.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     any deferral or suspension of direct payment of a benefit 
     pursuant to paragraph (1) shall be for a period of not more 
     than 1 month.
       ``(B) Exception in the case of incompetency.--Subparagraph 
     (A) shall not apply in any case in which the qualified 
     individual is, as of the date of the Commissioner of Social 
     Security's determination, legally incompetent under the laws 
     of the jurisdiction in which the individual resides.
       ``(3) Payment of retroactive benefits.--Payment of any 
     benefits which are deferred or suspended pending the 
     selection of a representative payee shall be made to the 
     qualified individual or the representative payee as a single 
     sum or over such period of time as the Commissioner of Social 
     Security determines is in the best interest of the qualified 
     individual.
       ``(f) Hearing.--Any qualified individual who is 
     dissatisfied with a determination by the Commissioner of 
     Social Security to make payment of the qualified individual's 
     benefit to a representative payee under subsection (a) of 
     this section or with the designation of a particular person 
     to serve as representative payee shall be entitled to a 
     hearing by the Commissioner of Social Security to the same 
     extent as is provided in section 809(a), and to judicial 
     review of the Commissioner of Social Security's final 
     decision as is provided in section 809(b).
       ``(g) Notice Requirements.--
       ``(1) In general.--In advance of the payment of a qualified 
     individual's benefit to a representative payee under 
     subsection (a), the Commissioner of Social Security shall 
     provide written notice of the Commissioner's initial 
     determination to so make the payment. The notice shall be 
     provided to the qualified individual, except that, if the 
     qualified individual is legally incompetent, then the notice 
     shall be provided solely to the legal guardian or legal 
     representative of the qualified individual.
       ``(2) Specific requirements.--Any notice required by 
     paragraph (1) shall be clearly written in language that is 
     easily understandable to the reader, shall identify the 
     person to be designated as the qualified individual's 
     representative payee, and shall explain to the reader the 
     right under subsection (f) of the qualified individual or of 
     the qualified individual's legal guardian or legal 
     representative--
       ``(A) to appeal a determination that a representative payee 
     is necessary for the qualified individual;
       ``(B) to appeal the designation of a particular person to 
     serve as the representative payee of qualified individual; 
     and
       ``(C) to review the evidence upon which the designation is 
     based and to submit additional evidence.
       ``(h) Accountability Monitoring.--
       ``(1) In any case where payment under this title is made to 
     a person other than the qualified individual entitled to the 
     payment, the Commissioner of Social Security shall establish 
     a system of accountability monitoring under which the person 
     shall report not less often than annually with respect to the 
     use of the payments. The Commissioner of Social Security 
     shall establish and implement statistically valid procedures 
     for reviewing the reports in order to identify instances in 
     which persons are not properly using the payments.
       ``(2) Special reports.--Notwithstanding paragraph (1), the 
     Commissioner of Social Security may require a report at any 
     time from any person receiving payments on behalf of a 
     qualified individual, if the Commissioner of Social Security 
     has reason to believe that the person receiving the payments 
     is misusing the payments.
       ``(3) Centralized file.--The Commissioner of Social 
     Security shall maintain a centralized file, which shall be 
     updated periodically and which shall be in a form that is 
     readily retrievable, of--
       ``(A) the name, address, and (if issued) the social 
     security account number or employer identification number of 
     each representative payee who is receiving benefit payments 
     pursuant to this section, section 205(j), or section 
     1631(a)(2); and
       ``(B) the name, address, and social security account number 
     of each individual for whom each representative payee is 
     reported to be providing services as representative payee 
     pursuant to this section, section 205(j), or section 
     1631(a)(2).
       ``(4) The Commissioner of Social Security shall maintain a 
     list, 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 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. The Commissioner of 
     Social Security shall make a good faith effort to obtain 
     restitution from the terminated representative payee.

     ``SEC. 808. OVERPAYMENTS AND UNDERPAYMENTS.

       ``(a) In General.--Whenever the Commissioner of Social 
     Security finds that more or less than the correct amount of 
     payment has been made to any person under this title, proper 
     adjustment or recovery shall be made, as follows:
       ``(1) With respect to payment to a person of more than the 
     correct amount, the Commissioner of Social Security shall 
     decrease any payment under this title to which the overpaid 
     person (if a qualified individual) is entitled, or shall 
     require the overpaid person or his or her estate to refund 
     the amount in excess of the correct amount, or, if recovery 
     is not obtained under these two methods, shall seek or pursue 
     recovery by means of reduction in tax refunds based on notice 
     to the Secretary of the Treasury, as authorized under section 
     3720A of title 31, United States Code.
       ``(2) With respect to payment of less than the correct 
     amount to a qualified individual who, at the time the 
     Commissioner of Social Security is prepared to take action 
     with respect to the underpayment--
       ``(A) is living, the Commissioner of Social Security shall 
     make payment to the qualified individual (or the qualified 
     individual's representative payee designated under section 
     807) of the balance of the amount due the underpaid qualified 
     individual; or
       ``(B) is deceased, the balance of the amount due shall 
     revert to the general fund of the Treasury.
       ``(b) Waiver of Recovery of Overpayment.--In any case in 
     which more than the correct amount of payment has been made, 
     there shall be no adjustment of payments to, or recovery by 
     the United States from, any person who is without fault if 
     the Commissioner of Social Security determines that the 
     adjustment or recovery would defeat the purpose of this title 
     or would be against equity and good conscience.
       ``(c) Limited Immunity for Disbursing Officers.--A 
     disbursing officer may not be held liable for any amount paid 
     by the officer if the adjustment or recovery of the amount is 
     waived under subsection (b), or adjustment under subsection 
     (a) is not completed before the death of the qualified 
     individual against whose benefits deductions are authorized.
       ``(d) Authorized Collection Practices.--
       ``(1) In general.--With respect to any delinquent amount, 
     the Commissioner of Social Security may use the collection 
     practices described in sections 3711(e), 3716, and 3718 of 
     title 31, United States Code, as in effect on October 1, 
     1994.
       ``(2) Definition.--For purposes of paragraph (1), the term 
     `delinquent amount' means an amount--
       ``(A) in excess of the correct amount of the payment under 
     this title; and
       ``(B) determined by the Commissioner of Social Security to 
     be otherwise unrecoverable under this section from a person 
     who is not a qualified individual under this title.

     ``SEC. 809. HEARINGS AND REVIEW.

       ``(a) Hearings.--
       ``(1) In general.--The Commissioner of Social Security 
     shall make findings of fact and decisions as to the rights of 
     any individual applying for payment under this title. The 
     Commissioner of Social Security shall provide reasonable 
     notice and opportunity for a hearing to any individual who is 
     or claims to be a qualified individual and is in disagreement 
     with any determination under this title with respect to 
     entitlement to, or the amount of, benefits under this title, 
     if the individual requests a hearing on the matter in 
     disagreement within 60 days after notice of the determination 
     is received, and, if a hearing is held, shall, on the basis 
     of evidence adduced at the hearing affirm, modify, or reverse 
     the Commissioner of Social Security's findings of fact and 
     the decision. The Commissioner of Social Security may, on the 
     Commissioner of Social Security's own motion, hold such 
     hearings and to conduct such investigations and other 
     proceedings as the Commissioner of Social Security deems 
     necessary or proper for the administration of this title. In 
     the course of any hearing, investigation, or other 
     proceeding, the Commissioner may administer oaths and 
     affirmations, examine witnesses, and receive evidence. 
     Evidence may be received at any

[[Page S8122]]

     hearing before the Commissioner of Social Security even 
     though inadmissible under the rules of evidence applicable to 
     court procedure. The Commissioner of Social Security shall 
     specifically take into account any physical, mental, 
     educational, or linguistic limitation of the individual 
     (including any lack of facility with the English language) in 
     determining, with respect to the entitlement of the 
     individual for benefits under this title, whether the 
     individual acted in good faith or was at fault, and in 
     determining fraud, deception, or intent.
       ``(2) Effect of failure to timely request review.--A 
     failure to timely request review of an initial adverse 
     determination with respect to an application for any payment 
     under this title or an adverse determination on 
     reconsideration of such an initial determination shall not 
     serve as a basis for denial of a subsequent application for 
     any payment under this title if the applicant demonstrates 
     that the applicant failed to so request such a review acting 
     in good faith reliance upon incorrect, incomplete, or 
     misleading information, relating to the consequences of 
     reapplying for payments in lieu of seeking review of an 
     adverse determination, provided by any officer or employee of 
     the Social Security Administration.
       ``(3) Notice requirements.--In any notice of an adverse 
     determination with respect to which a review may be requested 
     under paragraph (1), the Commissioner of Social Security 
     shall describe in clear and specific language the effect on 
     possible entitlement to benefits under this title of choosing 
     to reapply in lieu of requesting review of the determination.
       ``(b) Judicial Review.--The final determination of the 
     Commissioner of Social Security after a hearing under 
     subsection (a)(1) shall be subject to judicial review as 
     provided in section 205(g) to the same extent as the 
     Commissioner of Social Security's final determinations under 
     section 205.

     ``SEC. 810. OTHER ADMINISTRATIVE PROVISIONS.

       ``(a) Regulations and Administrative Arrangements.--The 
     Commissioner of Social Security may prescribe such 
     regulations, and make such administrative and other 
     arrangements, as may be necessary or appropriate to carry out 
     this title.
       ``(b) Payment of Benefits.--Benefits under this title shall 
     be paid at such time or times and in such installments as the 
     Commissioner of Social Security determines are in the 
     interests of economy and efficiency.
       ``(c) Entitlement Redeterminations.--An individual's 
     entitlement to benefits under this title, and the amount of 
     the benefits, may be redetermined at such time or times as 
     the Commissioner of Social Security determines to be 
     appropriate.
       ``(d) Suspension of Benefits.--Regulations prescribed by 
     the Commissioner of Social Security under subsection (a) may 
     provide for the temporary suspension of entitlement to 
     benefits under this title as the Commissioner determines is 
     appropriate.

     ``SEC. 811. PENALTIES FOR FRAUD.

       ``(a) In General.--Whoever--
       ``(1) knowingly and willfully makes or causes to be made 
     any false statement or representation of a material fact in 
     an application for benefits under this title;
       ``(2) at any time knowingly and willfully makes or causes 
     to be made any false statement or representation of a 
     material fact for use in determining any right to the 
     benefits;
       ``(3) having knowledge of the occurrence of any event 
     affecting--
       ``(A) his or her initial or continued right to the 
     benefits; or
       ``(B) the initial or continued right to the benefits of any 
     other individual in whose behalf he or she has applied for or 
     is receiving the benefit,

     conceals or fails to disclose the event with an intent 
     fraudulently to secure the benefit either in a greater amount 
     or quantity than is due or when no such benefit is 
     authorized; or
       ``(4) having made application to receive any such benefit 
     for the use and benefit of another and having received it, 
     knowingly and willfully converts the benefit or any part 
     thereof to a use other than for the use and benefit of the 
     other individual,

     shall be fined under title 18, United States Code, imprisoned 
     not more than 5 years, or both.
       ``(b) Restitution by Representative Payee.--If a person or 
     organization violates subsection (a) in the person's or 
     organization's role as, or in applying to become, a 
     representative payee under section 807 on behalf of a 
     qualified individual, and the violation includes a willful 
     misuse of funds by the person or entity, the court may also 
     require that full or partial restitution of funds be made to 
     the qualified individual.

     ``SEC. 812. DEFINITIONS.

       ``In this title:
       ``(1) World war ii veteran.--The term `World War II 
     veteran' means a person who served during World War II--
       ``(A) in the active military, naval, or air service of the 
     United States during World War II, and who was discharged or 
     released therefrom under conditions other than dishonorable 
     after service of 90 days or more; or
       ``(B) in the organized military forces of the Government of 
     the Commonwealth of the Philippines, while the forces were in 
     the service of the Armed Forces of the United States pursuant 
     to the military order of the President dated July 26, 1941, 
     including among the military forces organized guerrilla 
     forces under commanders appointed, designated, or 
     subsequently recognized by the Commander in Chief, Southwest 
     Pacific Area, or other competent authority in the Army of the 
     United States, in any case in which the service was rendered 
     before December 31, 1946.
       ``(2) World war ii.--The term `World War II' means the 
     period beginning on September 16, 1940, and ending on July 
     24, 1947.
       ``(3) Supplemental security income benefit under title 
     xvi.--The term `supplemental security income benefit under 
     title XVI', except as otherwise provided, includes State 
     supplementary payments which are paid by the Commissioner of 
     Social Security pursuant to an agreement under section 
     1616(a) of this Act or section 212(b) of Public Law 93-66.
       ``(4) Federal benefit rate under title xvi.--The term 
     `Federal benefit rate under title XVI' means, with respect to 
     any month, the amount of the supplemental security income 
     cash benefit (not including any State supplementary payment 
     which is paid by the Commissioner of Social Security pursuant 
     to an agreement under section 1616(a) of this Act or section 
     212(b) of Public Law 93-66) payable under title XVI for the 
     month to an eligible individual with no income.
       ``(5) United states.--The term `United States' means, 
     notwithstanding section 1101(a)(1), only the 50 States, the 
     District of Columbia, and the Commonwealth of the Northern 
     Mariana Islands.
       ``(6) Benefit income.--The term `benefit income' means any 
     recurring payment received by a qualified individual as an 
     annuity, pension, retirement, or disability benefit 
     (including any veterans' compensation or pension, workmen's 
     compensation payment, old-age, survivors, or disability 
     insurance benefit, railroad retirement annuity or pension, 
     and unemployment insurance benefit), but only if a similar 
     payment was received by the individual from the same (or a 
     related) source during the 12-month period preceding the 
     month in which the individual files an application for 
     benefits under this title.

     ``SEC. 813. APPROPRIATIONS.

       ``There are hereby appropriated for fiscal year 2001 and 
     subsequent fiscal years such sums as may be necessary to 
     carry out this title.''.
       (b) Conforming Amendments.--
       (1) Social security trust funds lae account.--Section 
     201(g) of such Act (42 U.S.C. 401(g)) is amended--
       (A) in the fourth sentence of paragraph (1)(A), by 
     inserting after ``this title,'' the following: ``title 
     VIII,'';
       (B) in paragraph (1)(B)(i)(I), by inserting after ``this 
     title,'' the following: ``title VIII,''; and
       (C) in paragraph (1)(C)(i), by inserting after ``this 
     title,'' the following: ``title VIII,''.
       (2) Representative payee provisions of title ii.--Section 
     205(j) of such Act (42 U.S.C. 405(j)) is amended--
       (A) in paragraph (1)(A), by inserting ``807 or'' before 
     ``1631(a)(2)'';
       (B) in paragraph (2)(B)(i)(I), by inserting ``, title 
     VIII,'' before ``or title XVI'';
       (C) in paragraph (2)(B)(i)(III), by inserting ``, 811,'' 
     before ``or 1632'';
       (D) in paragraph (2)(B)(i)(IV)--
       (i) by inserting ``, the designation of such person as a 
     representative payee has been revoked pursuant to section 
     807(a),'' before ``or payment of benefits''; and
       (ii) by inserting ``, title VIII,'' before ``or title 
     XVI'';
       (E) in paragraph (2)(B)(ii)(I)--
       (i) by inserting ``whose designation as a representative 
     payee has been revoked pursuant to section 807(a),'' before 
     ``or with respect to whom''; and
       (ii) by inserting ``, title VIII,'' before ``or title 
     XVI'';
       (F) in paragraph (2)(B)(i)(II), by inserting ``, 811,'' 
     before ``or 1632'';
       (G) in paragraph (2)(C)(i)(II) by inserting ``, the 
     designation of such person as a representative payee has been 
     revoked pursuant to section 807(a),'' before ``or payment of 
     benefits'';
       (H) in each of clauses (i) and (ii) of paragraph (3)(E), by 
     inserting ``, section 807,'' before ``or section 
     1631(a)(2)'';
       (I) in paragraph (3)(F), by inserting ``807 or'' before 
     ``1631(a)(2)''; and
       (J) in paragraph (4)(B)(i), by inserting ``807 or'' before 
     ``1631(a)(2)''.
       (3) Withholding for child support and alimony 
     obligations.--Section 459(h)(1)(A) of such Act (42 U.S.C. 
     659(h)(1)(A)) is amended--
       (A) at the end of clause (iii), by striking ``and'';
       (B) at the end of clause (iv), by striking ``but'' and 
     inserting ``and''; and
       (C) by adding at the end a new clause as follows:
       ``(v) special benefits for certain World War II veterans 
     payable under title VIII; but''.
       (4) Social security advisory board.--Section 703(b) of such 
     Act (42 U.S.C. 903(b)) is amended by striking ``title II'' 
     and inserting ``title II, the program of special benefits for 
     certain World War II veterans under title VIII,''.
       (5) Delivery of checks.--Section 708 of such Act (42 U.S.C. 
     908) is amended--
       (A) in subsection (a), by striking ``title II'' and 
     inserting ``title II, title VIII,''; and
       (B) in subsection (b), by striking ``title II'' and 
     inserting ``title II, title VIII,''.
       (6) Civil monetary penalties.--Section 1129 of such Act (42 
     U.S.C. 1320a-8) is amended--
       (A) in the title, by striking ``II'' and inserting ``II, 
     VIII'';

[[Page S8123]]

       (B) in subsection (a)(1)--
       (i) by striking ``or'' at the end of subparagraph (A);
       (ii) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (iii) by inserting after subparagraph (A) the following:
       ``(B) benefits or payments under title VIII, or'';
       (C) in subsection (a)(2), by inserting ``or title VIII,'' 
     after ``title II'';
       (D) in subsection (e)(1)(C)--
       (i) by striking ``or'' at the end of clause (i);
       (ii) by redesignating clause (ii) as clause (iii); and
       (iii) by inserting after clause (i) the following:
       ``(ii) by decrease of any payment under title VIII to which 
     the person is entitled, or'';
       (E) in subsection (e)(2)(B), by striking ``title XVI'' and 
     inserting ``title VIII or XVI''; and
       (F) in subsection (l), by striking ``title XVI'' and 
     inserting ``title VIII or XVI''.
       (7) Recovery of ssi overpayments.--Section 1147 of such Act 
     (42 U.S.C. 1320b-17) is amended--
       (A) in subsection (a)(1)--
       (i) by inserting ``or VIII'' after ``title II'' the first 
     place it appears; and
       (ii) by striking ``title II'' the second place it appears 
     and inserting ``such title''; and
       (B) in the title, by striking ``social security'' and 
     inserting ``other''.
       (8) Representative payee provisions of title xvi.--Section 
     1631(a)(2) of such Act (42 U.S.C. 1383(a)(2)) is amended--
       (A) in subparagraph (A)(iii), by inserting ``or 807'' after 
     ``205(j)(1)'';
       (B) in subparagraph (B)(ii)(I), by inserting ``, title 
     VIII,'' before ``or this title'';
       (C) in subparagraph (B)(ii)(III), by inserting ``, 811,'' 
     before ``or 1632'';
       (D) in subparagraph (B)(ii)(IV)--
       (i) by inserting ``whether the designation of such person 
     as a representative payee has been revoked pursuant to 
     section 807(a),'' before ``and whether certification''; and
       (ii) by inserting ``, title VIII,'' before ``or this 
     title'';
       (E) in subparagraph (B)(iii)(II), by inserting ``the 
     designation of such person as a representative payee has been 
     revoked pursuant to section 807(a),'' before ``or 
     certification''; and
       (F) in subparagraph (D)(ii)(II)(aa), by inserting ``or 
     807'' after ``205(j)(4)''.
       (9) Administrative offset.--Section 3716(c)(3)(C) of title 
     31, United States Code, is amended--
       (A) by striking ``sections 205(b)(1)'' and inserting 
     ``sections 205(b)(1), 809(a)(1),''; and
       (B) by striking ``either title II'' and inserting ``title 
     II, VIII,''.

                        TITLE III--CHILD SUPPORT

     SEC. 301. ELIMINATION OF ENHANCED MATCHING FOR LABORATORY 
                   COSTS FOR PATERNITY ESTABLISHMENT.

       (a) In General.--Section 455(a)(1) of the Social Security 
     Act (42 U.S.C. 655(a)(1)) is amended by striking subparagraph 
     (C) and redesignating subparagraph (D) as subparagraph (C).
       (b) Effective Date.--The amendment made by this section 
     shall be effective with respect to calendar quarters 
     beginning on or after October 1, 1999.

     SEC. 302. ELIMINATION OF HOLD HARMLESS PROVISION FOR STATE 
                   SHARE OF DISTRIBUTION OF COLLECTED CHILD 
                   SUPPORT.

       (a) In General.--Section 457 of the Social Security Act (42 
     U.S.C. 657) is amended--
       (1) in subsection (a), by striking ``subsections (e) and 
     (f)'' and inserting ``subsections (d) and (e)'';
       (2) by striking subsection (d);
       (3) in subsection (e), by striking the 2nd sentence; and
       (4) by redesignating subsections (e) and (f) as subsections 
     (d) and (e), respectively.
       (b) Effective Date.--The amendments made by this section 
     shall be effective with respect to calendar quarters 
     beginning on or after October 1, 1999.

                    TITLE IV--TECHNICAL CORRECTIONS

     SEC. 401. TECHNICAL CORRECTIONS RELATING TO AMENDMENTS MADE 
                   BY THE PERSONAL RESPONSIBILITY AND WORK 
                   OPPORTUNITY RECONCILIATION ACT OF 1996.

       (a) Section 402(a)(1)(B)(iv) of the Social Security Act (42 
     U.S.C. 602(a)(1)(B)(iv)) is amended by striking ``Act'' and 
     inserting ``section''.
       (b) Section 409(a)(7)(B)(i)(II) of the Social Security Act 
     (42 U.S.C. 609(a)(7)(B)(i)(II)) is amended by striking 
     ``part'' and inserting ``section''.
       (c) Section 413(g)(1) of the Social Security Act (42 U.S.C. 
     613(g)(1)) is amended by striking ``Act'' and inserting 
     ``section''.
       (d) Section 413(i)(1) of the Social Security Act (42 U.S.C. 
     613(i)(1)) is amended by striking ``part'' and inserting 
     ``section''.
       (e) Section 416 of the Social Security Act (42 U.S.C. 616) 
     is amended by striking ``Opportunity Act'' and inserting 
     ``Opportunity Reconciliation Act'' each place such term 
     appears.
       (f) Section 431(a)(6) of the Social Security Act (42 U.S.C. 
     629a(a)(6))) is amended--
       (1) by inserting ``, as in effect before August 22, 1986'' 
     after ``482(i)(5)''; and
       (2) by inserting ``, as so in effect'' after 
     ``482(i)(7)(A)''.
       (g) Sections 452(a)(7) and 466(c)(2)(A)(i) of the Social 
     Security Act (42 U.S.C. 652(a)(7) and 666(c)(2)(A)(i)) are 
     each amended by striking ``Social Security'' and inserting 
     ``social security''.
       (h) Section 454 of the Social Security Act (42 U.S.C. 654) 
     is amended--
       (1) by striking ``, or'' at the end of each of paragraphs 
     (6)(E)(i) and (19)(B)(i) and inserting ``; or'';
       (2) in paragraph (9), by striking the comma at the end of 
     each of subparagraphs (A), (B), (C) and inserting a 
     semicolon; and
       (3) by striking ``, and'' at the end of each of paragraphs 
     (19)(A) and (24)(A) and inserting ``; and''.
       (i) Section 454(24)(B) of the Social Security Act (42 
     U.S.C. 654(24)(B)) is amended by striking ``Opportunity Act'' 
     and inserting ``Opportunity Reconciliation Act''.
       (j) Section 344(b)(1)(A) of the Personal Responsibility and 
     Work Opportunity Reconciliation Act of 1996 (110 Stat. 2236) 
     is amended to read as follows:
       ``(A) in paragraph (1), by striking subparagraph (B) and 
     inserting the following new subparagraph:
       `(B) equal to the percent specified in paragraph (3) of the 
     sums expended during such quarter that are attributable to 
     the planning, design, development, installation or 
     enhancement of an automatic data processing and information 
     retrieval system (including in such sums the full cost of the 
     hardware components of such system); and'; and''.
       (k) Section 457(a)(2)(B)(i)(I) of the Social Security Act 
     (42 U.S.C. 657(a)(2)(B)(i)(I)) is amended by striking ``Act 
     Reconciliation'' and inserting ``Reconciliation Act''.
       (l) Section 457 of the Social Security Act (42 U.S.C. 657) 
     is amended by striking ``Opportunity Act'' each place it 
     appears and inserting ``Opportunity Reconciliation Act''.
       (m) Section 466(a)(7) of the Social Security Act (42 U.S.C. 
     666(a)(7)) is amended by striking ``1681a(f))'' and inserting 
     ``1681a(f)))''.
       (n) Section 466(b)(6)(A) of the Social Security Act (42 
     U.S.C. 666(b)(6)(A)) is amended by striking ``state'' and 
     inserting ``State''.
       (o) Section 471(a)(8) of the Social Security Act (42 U.S.C. 
     671(a)(8)) is amended by striking ``(including activities 
     under part F)''.
       (p) Section 1137(a)(3) of the Social Security Act (42 
     U.S.C. 1320b-7(a)(3)) is amended by striking 
     ``453A(a)(2)(B)(iii))'' and inserting 
     ``453A(a)(2)(B)(ii)))''.
       (q) The amendments made by this section shall take effect 
     as if included in the enactment of the Personal 
     Responsibility and Work Opportunity Reconciliation Act of 
     1996.
                                  ____


            Foster Care Independence Act of 1999--Fact Sheet

       Federal Independent Living Programs (ILP) are designed to 
     assist some of our Nation's most vulnerable children as they 
     make the transition from foster children to independent 
     adults. Under current law, teens are ``out of the system'' 
     and completely on their own immediately when they turn 18. 
     Many teens need help to make a successful transition to self-
     sufficiency, especially teens who have spent years in foster 
     care. Programs must be designed to be consistent with the 
     Adoption and Safe Families Act of 1997, namely that safety 
     and health of the child are paramount. Studies of adolescents 
     who leave foster care have found that these children have a 
     significantly higher than normal rate of school drop out, 
     out-of-wedlock childbearing, homelessness, health and mental 
     health problems, and poverty.
       The Foster Care Independence Act of 1999 is designed to 
     help teens aging out of foster care make a more successful 
     transition to adulthood. It addresses safety by allowing for 
     ILP funds to be used to ensure that the basic needs of 
     housing and food can be provided to these youth. It addresses 
     health by ensuring that teens who are aging out of or adopted 
     out of foster care to continue to receive crucial health, and 
     mental health, care benefits to the age of 21. Key provisions 
     of the Act include:
       Strong Medicaid coverage: Requires states that receiving 
     new ILP monies continue to provide health care, including 
     coverage for mental health needs to foster, or adopted (whose 
     adoptive placements began on or after their 16th birthdays), 
     children up to their 21st birthday.
       Funding for Independent Living services: Doubles the 
     funding--up to $140 million--for Independent Living services 
     to enable states to cover teens from 18 to 21, with support 
     services and housing assistance, with language to promote 
     continuing education and/or job training. The bill also 
     insures that ILP are supervised and includes a broad array of 
     services based on young people's developmental and self-
     sufficiency needs.
       Avoids disincentives for adoption of teens: Consistent with 
     the priorities established in the Adoption and Safe Families 
     Act, this bill promotes permanence by allowing teens adopted 
     after 16 to retain eligibility for Independent Living 
     programs, including vital access to health coverage from ages 
     18-21. This clarifies that Independent Living programs are 
     not a substitute for permanency for foster care teens, rather 
     support services to ease the transition for teens who have 
     faced challenges. This provision allows Independent Living 
     Program services to be concurrent with continued reasonable 
     efforts to locate and achieve placement in adoptive families 
     or other planned permanent settings as required under ASFA.
       Quality data, evaluation and outcome measures: Insures that 
     quality data is collected and evaluated, to enhance programs 
     are effective, and seeks to coordinate with the data 
     collection efforts required under the Adoption and Safe 
     Families Act.
       Updated funding formula: Funding formula provides that 
     every state can quality for new

[[Page S8124]]

     Independent Living incentives to serve teens aging out of 
     foster care from 18 to 21.

  Mr. ROCKEFELLER. Mr. President, I rise today to join Senator Chafee 
and a bipartisan group in the introduction of the Foster Care 
Independence Act of 1999. I would like to thank Senator Chafee for his 
leadership on behalf of vulnerable young people, including our 
bipartisan work on this legislation. I also wish to thank the other co-
sponsors of this legislation--Senators Reed, Bond, Landrieu, Moynihan, 
Breaux, Kerrey, Mikulski, and Jeffords. Work on this legislation is 
based on the foundation created by the bipartisan 1997 Adoption and 
Safe Families Act.
  Our First Lady, Mrs. Clinton, has also been a special leader on 
behalf of vulnerable children. In 1997, she helped focus the national 
spotlight on the need to promote adoption. This year, she has helped to 
focus much needed attention on the challenges facing teenagers who age 
out of foster care, and has challenged us to improve the system for 
such teens by expanding the Independent Living program.
  In 1997, a unique bipartisan Senate coalition formed to promote 
adoption and find ways to help our most vulnerable children, those 
subjected to abuse and neglected. After months of hard work, we forged 
consensus on the Adoption and Safe Families Act of 1997 (ASFA). This 
law, for the first time ever, establishes that a child's health and 
safety are paramount when any decisions are made regarding children in 
the abuse and neglect system. The law also stressed the importance of 
permanency to a child, and it imposed new time frames as goals for 
permanency. While this law was the most sweeping and comprehensive 
piece of child welfare legislation passed in over a decade, more work 
and resources will be crucial to truly achieve the goals of safety, 
stability and permanence for all abused and neglected children.
  We have been pleased to learn that one of the desired outcomes of the 
Adoption Act, moving children more swiftly from foster care into 
permanent homes, has begun to become a reality. Adoptions throughout 
the country are up dramatically, far exceeding expectations. Yet, at 
the same time, we find that there continue to be approximately 20,000 
young people each year who turn 18 and ``age out'' of the foster care 
system with no home, no family, no medical coverage and no system of 
support in place. In my own state of West Virginia, over 1000 of our 
foster children are over the age of 16. 185 of these children, in the 
last year, received services through the state's Independent Living 
program.
  How do such teens in West Virginia and throughout the country fare? A 
Wisconsin study shows us that 18 months after leaving foster care, over 
one-third had not graduated from high school, half were unemployed, 
nearly half had no access to or coverage for health care, and many were 
homeless or victims or perpetrators of crimes. These are not just 
numbers, each of these statistics represents a real person, like Wendy 
or James:
  Wendy had been in foster care since the age of 6. She had been moved 
again and again, and at the age of 14 was placed in a Wilderness 
Program for teens with challenging behaviors. At 16 she was moved to a 
locked residential facility. Her 18th birthday, in December, was a cold 
day in more ways than one. Early in the morning, a knock came on her 
door and she was told to get dressed and gather her things, as she was 
moving. This was not unusual for her, so she did as she was told. She 
went, with her meager possessions, to the front desk and asked, ``Where 
am I going?'' The staff person jingled the large key ring, opened the 
front door, looked out into the snowy day and said, ``Anywhere you 
want--you are 18 and you are on your own.'' One year later, Wendy was 
addicted to drugs, homeless and pregnant. She had no access to health 
care until she became pregnant--Her baby was now her ticket to care.
  James had been in foster care since the age of 10. He had been moved 
``only'' five or six times and when he turned 18, all services stopped. 
The foster family he had been living with could not afford to care for 
him any longer, but they agreed to allow him to sleep in their garage. 
He had to drop out of school in order to work full time at a pizza 
restaurant and attempt to support himself. When he turned 19, he had an 
opportunity to be adopted with some of his younger siblings. He 
immediately said, ``Yes!'' and when asked by the judge why he would 
want to be adopted at his age, he replied, ``I will always need a 
family, and someday, I hope my children will be able to have 
grandparents.'' James was able to re-enroll in school, graduate with a 
trade and is now a self-supporting married man. Oh, and his 3 children 
do have grandparents.
  This legislation will provide resources and incentives to states so 
that more of our young people will have stories that end like James, 
and fewer that end like Wendy's.
  One of the most significant provisions of ASFA was the assurance of 
ongoing health care coverage for all children with special needs who 
move from foster care to adoption. The Foster Care Independence Act is 
an essential next step in this ongoing process. This important 
legislation will ensure that health care coverage for our foster care 
youths does not end when they turn 18. All states who wish to receive 
the new Independent Living Program money must provide assurance that 
they will provide health care coverage to these young people through to 
the age of 21. Young people who have survived the many traumas that led 
to their placement in foster care, and their journey through the foster 
care system often have special health care needs, especially in the 
area of mental health. Providing transitional health coverage at this 
crucial juncture in their lives can make the difference between 
successfully moving on to accomplish their goals, or becoming stuck in 
an unsatisfying and unhealthy way of life.
  Another key focus of ASFA is on moving children from foster care to 
permanent homes, and when possible adoption. Older teens in foster care 
have a great need for a permanent family. Although we propose to 
improve the Independent Living program and increase eligibility for 
services to the age of 21, it does end at that time. And yet a youth's 
need for a family does not end at any particular age. Each of us can 
clearly recall times when we have had to turn to our own families for 
advice, comfort or support long after our 18th or 21st birthdays. Many 
of us are still in the role of providing such support to our own 
children who are in their late teens or 20s. Therefore, an important 
provision in this Senate version of the Foster Care Independence Act 
states that Independent Living (IL) programs are not alternatives to 
permanency planning--young people of all ages need and deserve every 
possible effort made towards permanence, including adoption. It would 
be counterproductive to create any disincentive for adoption of 
teenagers. Therefore, our legislation would allow any enhanced 
independent living services, particularly health care, to continue 
until age 21 for those teens who are lucky enough to become adopted 
after 16 years old.
  Independent Living programs were designed to provide young people 
with training, skill-development and support as they make the 
transition from foster care to self-sufficiency. In some states, with 
creativity and innovation, these programs have seen remarkable success 
in that effort. In other localities, the programs have provided minimal 
support, and young people have faced an array of challenging life 
decisions and choices without the skills or supports to make them 
successfully. This bill requires that states improve their Independent 
Living programs, by requiring youth involvement at every level, 
requiring youths to participate in on-going education and career 
development activities, and requiring that those youths for whom room 
and board services are provided also have adult supervision and 
support.
  In short, this bill assists a very vulnerable group of young 
Americans by ensuring that they have access to: Health Care up to the 
age of 21; continued efforts to locate a permanent family; a quality 
Independent Living program providing a broad array of skills, resources 
and services; and a program that focuses on critical outcomes, 
especially in the areas of education, career development, and positive 
lifestyle choices.
  These will be valuable steps in our efforts to be more able to 
effectively address the needs of our Nation's most vulnerable young 
people, on the brink of adulthood. I urge my colleagues to

[[Page S8125]]

join us in co-sponsoring and passing this bill.
  Mr. BOND. Mr. President, I rise today with my colleagues Senators 
Chafee, Rockefeller, Reed, Moynihan, Breaux, Conrad, Jeffords, 
Mikulski, and Landrieu to introduce the Foster Care Independence Living 
Act of 1999. This important piece of legislation will provide 
transitional assistance for the estimated 20,000 youths in the United 
States who ``age out'' of the foster care system at the age of 18 
without a permanent family.
  This legislation builds on the Promotion of Adoption, Safety, and 
Support for Abused and Neglected Children (PASS) Act that I co-
sponsored in 1997. The Foster Care Independence Living Act of 1999 
increases the funding for the independent living program in order to 
provide basic living needs, such as housing and food. Additionally, the 
increased funding provides states the option to grant Medicaid for 
health care, including mental health needs, to former foster children 
up to their 21st birthdays as a condition of receiving the increased 
funding.
  This legislation also guarantees that state programs are well 
supervised and provides a wide range of support which focuses on 
health, safety, and permanency goals. In addition, the bill allows 
children who receive aid under the independent living program to have 
assets or resources totaling $10,000, in contrast to the old 
requirement of $1,000, which deterred foster children from saving money 
for a sound future.
  Mr. President, at age 18 foster care children are suddenly expected 
to be adults, able to take care of themselves. That is not a reasonable 
expectation, especially for kids deprived of a nurturing parent or 
other caring adult. As these youths age out of foster care without a 
permanent family or a structure of continued support, many lack a high 
school education, have difficulty maintaining employment, and often 
experience high levels of depression and discouragement. Research has 
proven that a significant number of homeless shelters users had 
recently been discharged from foster care. Other studies found that 
former foster care youth 2\1/2\ to 4 years after they ``aged out'' of 
foster care found that 46% of the youths had not completed high school, 
approximately 40% were dependent on public assistance or Medicaid and 
42% had given birth or fathered a child.
  Mr. President, I know first hand how this legislation can impact our 
nation's foster care children. In my home state of Missouri, Epworth 
Children and Family Services, in St. Louis, provides resources needed 
to help people who fall through the cracks of a system that is not 
strong enough to help build a future for foster care children ``aging 
out'' of foster care. Robin, an 18-year-old foster care youth, was all 
alone in the world when she entered Epworth's Independent Living 
Program. Her father was never a part of her life and her mother was 
serving time in jail. Motivated by the desire to regain custody of her 
two-year-old baby boy, Robin started the program with high hopes. 
However Robin struggled as she worked with the caring staff at Epworth. 
Despite attempts by the professional at Epworth to stretch limited 
resources to address Robin's ongoing needs, their system failed Robin. 
She was removed from Epworth by the Missouri Division of Family 
Services. Robin needed more support, more staff interaction and more 
resources than the Epworth program could provide.
  Mr. President, the Foster Care Independence Living Act of 1999 
provides significant assistance to assure that these foster care youth 
who ``age out'' of the system are provided with the assistance needed 
to transition out of foster care into independence. The provisions in 
this bill will assist these youth to begin a supervised and nurtured 
life outside of the foster care system. They will be given the time and 
resources they need to enter adulthood prepared. This independent 
living initiative would give many ``Robins'' the change to be self-
sufficient and to contribute to her community. This means a better life 
for all of our children.
  Mr. MOYNIHAN. Mr. President, today, I am proud to co-sponsor the 
Foster Care Independence Act of 1999, introduced by my good friend and 
colleague Senator Chafee. We are joined by a group of our colleagues, 
including Senator Rockefeller, Bond, Reed.
  This legislation will help a group of our children in dire 
circumstances--foster children who reach age 18 still in the custody of 
the state. They were victims of abuse and neglect and their families 
proved to be beyond repair. About 20,000 children a year ``age out'' of 
the foster care system. They reach 18 and we, in large part, abandon 
them to the world. Many make their way successfully. But far too many, 
alas, do not, and these children are more likely to become homeless or 
end up on public assistance.
  More than a decade ago, we recognized that these children needed 
additional help in preparing for life on their own. I am proud to have 
helped create the Independent Living program, which provided Federal 
support for efforts that prepare teenager for the transition from 
foster care to independence.
  Today we are working on a bipartisan basis to build on this program. 
The bill we are introducing will double funding for the Independent 
Living program and increase the use of the funds to assist former 
foster care children until they reach 21, including, for the first 
time, help with room and board. As any parent knows, many 19 and 20-
year olds remain in need of family support from time to time. For 
children who have ``aged out'' of foster care by turning 18, the 
government is, in effect, their parent and we should do more to help 
them become independent and self-sufficient, just as other parents do. 
The legislation also contains important provisions encouraging states 
to continue Medicaid coverage for these children so that health care 
remains available to them.
  Mr. President, this legislation has widespread support, including 
from the Administration and key members of both parties. I would like 
to particularly thank the First Lady for her leadership in working on 
behalf of these children. I thank Senator Chafee for offering it and 
look forward to working with him and many others to see that it becomes 
law.
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