[Congressional Record (Bound Edition), Volume 149 (2003), Part 4]
[House]
[Pages 5121-5148]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 SOCIAL SECURITY PROTECTION ACT OF 2003

  Mr. SHAW. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 743) to amend the Social Security Act and the Internal 
Revenue Code of 1986 to provide additional safeguards for Social 
Security and Supplemental Security Income beneficiaries with 
representative payees, to enhance the program protections, and for 
other purposes, as amended.
  The Clerk read as follows:

                                H.R. 743

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

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Social 
     Security Protection Act of 2003''.
       (b) Table of Contents.--The table of contents is as 
     follows:

Sec. 1. Short title and table of contents.

                  TITLE I--PROTECTION OF BENEFICIARIES

                   Subtitle A--Representative Payees

Sec. 101. Authority to reissue benefits misused by organizational 
              representative payees.
Sec. 102. Oversight of representative payees.
Sec. 103. Disqualification from service as representative payee of 
              persons convicted of offenses resulting in imprisonment 
              for more than 1 year or fleeing prosecution, custody, or 
              confinement.
Sec. 104. Fee forfeiture in case of benefit misuse by representative 
              payees.
Sec. 105. Liability of representative payees for misused benefits.
Sec. 106. Authority to redirect delivery of benefit payments when a 
              representative payee fails to provide required 
              accounting.

                        Subtitle B--Enforcement

Sec. 111. Civil monetary penalty authority with respect to wrongful 
              conversions by representative payees.

                     TITLE II--PROGRAM PROTECTIONS

Sec. 201. Civil monetary penalty authority with respect to knowing 
              withholding of material facts.
Sec. 202. Issuance by Commissioner of Social Security of receipts to 
              acknowledge submission of reports of changes in work or 
              earnings status of disabled beneficiaries.
Sec. 203. Denial of title II benefits to persons fleeing prosecution, 
              custody, or confinement, and to persons violating 
              probation or parole.
Sec. 204. Requirements relating to offers to provide for a fee a 
              product or service available without charge from the 
              Social Security Administration.
Sec. 205. Refusal to recognize certain individuals as claimant 
              representatives.
Sec. 206. Penalty for corrupt or forcible interference with 
              administration of Social Security Act.
Sec. 207. Use of symbols, emblems, or names in reference to social 
              security or medicare.
Sec. 208. Disqualification from payment during trial work period upon 
              conviction of fraudulent concealment of work activity.
Sec. 209. Authority for judicial orders of restitution.

          TITLE III--ATTORNEY FEE PAYMENT SYSTEM IMPROVEMENTS

Sec. 301. Cap on attorney assessments.
Sec. 302. Extension of attorney fee payment system to title XVI claims.

            TITLE IV--MISCELLANEOUS AND TECHNICAL AMENDMENTS

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

Sec. 401. Application of demonstration authority sunset date to new 
              projects.
Sec. 402. Expansion of waiver authority available in connection with 
              demonstration projects providing for reductions in 
              disability insurance benefits based on earnings.
Sec. 403. Funding of demonstration projects provided for reductions in 
              disability insurance benefits based on earnings.
Sec. 404. Availability of Federal and State work incentive services to 
              additional individuals.
Sec. 405. Technical amendment clarifying treatment for certain purposes 
              of individual work plans under the Ticket to Work and 
              Self-Sufficiency Program.

                  Subtitle B--Miscellaneous Amendments

Sec. 411. Elimination of transcript requirement in remand cases fully 
              favorable to the claimant.
Sec. 412. Nonpayment of benefits upon removal from the United States.
Sec. 413. Reinstatement of certain reporting requirements.
Sec. 414. Clarification of definitions regarding certain survivor 
              benefits.
Sec. 415. Clarification respecting the FICA and SECA tax exemptions for 
              an individual whose earnings are subject to the laws of a 
              totalization agreement partner.
Sec. 416. Coverage under divided retirement system for public employees 
              in Kentucky.
Sec. 417. Compensation for the Social Security Advisory Board.
Sec. 418. 60-month period of employment requirement for application of 
              government pension offset exemption.

                    Subtitle C--Technical Amendments

Sec. 421. Technical correction relating to responsible agency head.
Sec. 422. Technical correction relating to retirement benefits of 
              ministers.
Sec. 423. Technical corrections relating to domestic employment.
Sec. 424. Technical corrections of outdated references.
Sec. 425. Technical correction respecting self-employment income in 
              community property States.

                  TITLE I--PROTECTION OF BENEFICIARIES

                   Subtitle A--Representative Payees

     SEC. 101. AUTHORITY TO REISSUE BENEFITS MISUSED BY 
                   ORGANIZATIONAL REPRESENTATIVE PAYEES.

       (a) Title II Amendments.--
       (1) Reissuance of benefits.--Section 205(j)(5) of the 
     Social Security Act (42

[[Page 5122]]

     U.S.C. 405(j)(5)) is amended by inserting after the first 
     sentence the following new sentences: ``In any case in which 
     a representative payee that--
       ``(A) is not an individual (regardless of whether it is a 
     `qualified organization' within the meaning of paragraph 
     (4)(B)); or
       ``(B) is an individual who, for any month during a period 
     when misuse occurs, serves 15 or more individuals who are 
     beneficiaries under this title, title VIII, title XVI, or any 
     combination of such titles;

     misuses all or part of an individual's benefit paid to such 
     representative payee, the Commissioner of Social Security 
     shall certify for payment to the beneficiary or the 
     beneficiary's alternative representative payee an amount 
     equal to the amount of such benefit so misused. The 
     provisions of this paragraph are subject to the limitations 
     of paragraph (7)(B).''.
       (2) Misuse of benefits defined.--Section 205(j) of such Act 
     (42 U.S.C. 405(j)) is amended by adding at the end the 
     following new paragraph:
       ``(8) For purposes of this subsection, misuse of benefits 
     by a representative payee occurs in any case in which the 
     representative payee receives payment under this title for 
     the use and benefit of another person and converts such 
     payment, or any part thereof, to a use other than for the use 
     and benefit of such other person. The Commissioner of Social 
     Security may prescribe by regulation the meaning of the term 
     `use and benefit' for purposes of this paragraph.''.
       (b) Title VIII Amendments.--
       (1) Reissuance of benefits.--Section 807(i) of the Social 
     Security Act (42 U.S.C. 1007(i)) is amended by inserting 
     after the first sentence the following new sentences: ``In 
     any case in which a representative payee that--
       ``(1) is not an individual; or
       ``(2) is an individual who, for any month during a period 
     when misuse occurs, serves 15 or more individuals who are 
     beneficiaries under this title, title II, title XVI, or any 
     combination of such titles;

     misuses all or part of an individual's benefit paid to such 
     representative payee, the Commissioner of Social Security 
     shall pay to the beneficiary or the beneficiary's alternative 
     representative payee an amount equal to the amount of such 
     benefit so misused. The provisions of this paragraph are 
     subject to the limitations of subsection (l)(2).''.
       (2) Misuse of benefits defined.--Section 807 of such Act 
     (42 U.S.C. 1007) is amended by adding at the end the 
     following new subsection:
       ``(j) Misuse of Benefits.--For purposes of this title, 
     misuse of benefits by a representative payee occurs in any 
     case in which the representative payee receives payment under 
     this title for the use and benefit of another person under 
     this title and converts such payment, or any part thereof, to 
     a use other than for the use and benefit of such person. The 
     Commissioner of Social Security may prescribe by regulation 
     the meaning of the term `use and benefit' for purposes of 
     this subsection.''.
       (3) Technical amendment.--Section 807(a) of such Act (42 
     U.S.C. 1007(a)) is amended, in the first sentence, by 
     striking ``for his or her benefit'' and inserting ``for his 
     or her use and benefit''.
       (c) Title XVI Amendments.--
       (1) Reissuance of benefits.--Section 1631(a)(2)(E) of such 
     Act (42 U.S.C. 1383(a)(2)(E)) is amended by inserting after 
     the first sentence the following new sentences: ``In any case 
     in which a representative payee that--
       ``(i) is not an individual (regardless of whether it is a 
     `qualified organization' within the meaning of subparagraph 
     (D)(ii)); or
       ``(ii) is an individual who, for any month during a period 
     when misuse occurs, serves 15 or more individuals who are 
     beneficiaries under this title, title II, title VIII, or any 
     combination of such titles;

     misuses all or part of an individual's benefit paid to the 
     representative payee, the Commissioner of Social Security 
     shall pay to the beneficiary or the beneficiary's alternative 
     representative payee an amount equal to the amount of the 
     benefit so misused. The provisions of this subparagraph are 
     subject to the limitations of subparagraph (H)(ii).''.
       (2) Exclusion of reissued benefits from resources.--Section 
     1613(a) of such Act (42 U.S.C. 1382b(a)) is amended--
       (A) in paragraph (12), by striking ``and'' at the end;
       (B) in paragraph (13), by striking the period and inserting 
     ``; and''; and
       (C) by inserting after paragraph (13) the following new 
     paragraph:
       ``(14) for the 9-month period beginning after the month in 
     which received, any amount received by such individual (or 
     spouse) or any other person whose income is deemed to be 
     included in such individual's (or spouse's) income for 
     purposes of this title as restitution for benefits under this 
     title, title II, or title VIII that a representative payee of 
     such individual (or spouse) or such other person under 
     section 205(j), 807, or 1631(a)(2) has misused.''.
       (3) Misuse of benefits defined.--Section 1631(a)(2)(A) of 
     such Act (42 U.S.C. 1383(a)(2)(A)) is amended by adding at 
     the end the following new clause:
       ``(iv) For purposes of this paragraph, misuse of benefits 
     by a representative payee occurs in any case in which the 
     representative payee receives payment under this title for 
     the use and benefit of another person and converts such 
     payment, or any part thereof, to a use other than for the use 
     and benefit of such other person. The Commissioner of Social 
     Security may prescribe by regulation the meaning of the term 
     `use and benefit' for purposes of this clause.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to any case of benefit misuse by a representative 
     payee with respect to which the Commissioner makes the 
     determination of misuse on or after January 1, 1995.

     SEC. 102. OVERSIGHT OF REPRESENTATIVE PAYEES.

       (a) Certification of Bonding and Licensing Requirements for 
     Nongovernmental Organizational Representative Payees.--
       (1) Title ii amendments.--Section 205(j) of the Social 
     Security Act (42 U.S.C. 405(j)) is amended--
       (A) in paragraph (2)(C)(v), by striking ``a community-based 
     nonprofit social service agency licensed or bonded by the 
     State'' in subclause (I) and inserting ``a certified 
     community-based nonprofit social service agency (as defined 
     in paragraph (9))'';
       (B) in paragraph (3)(F), by striking ``community-based 
     nonprofit social service agencies'' and inserting ``certified 
     community-based nonprofit social service agencies (as defined 
     in paragraph (9))'';
       (C) in paragraph (4)(B), by striking ``any community-based 
     nonprofit social service agency which is bonded or licensed 
     in each State in which it serves as a representative payee'' 
     and inserting ``any certified community-based nonprofit 
     social service agency (as defined in paragraph (9))''; and
       (D) by adding after paragraph (8) (as added by section 
     101(a)(2) of this Act) the following new paragraph:
       ``(9) For purposes of this subsection, the term `certified 
     community-based nonprofit social service agency' means a 
     community-based nonprofit social service agency which is in 
     compliance with requirements, under regulations which shall 
     be prescribed by the Commissioner, for annual certification 
     to the Commissioner that it is bonded in accordance with 
     requirements specified by the Commissioner and that it is 
     licensed in each State in which it serves as a representative 
     payee (if licensing is available in such State) in accordance 
     with requirements specified by the Commissioner. Any such 
     annual certification shall include a copy of any independent 
     audit on such agency which may have been performed since the 
     previous certification.''.
       (2) Title xvi amendments.--Section 1631(a)(2) of such Act 
     (42 U.S.C. 1383(a)(2)) is amended--
       (A) in subparagraph (B)(vii), by striking ``a community-
     based nonprofit social service agency licensed or bonded by 
     the State'' in subclause (I) and inserting ``a certified 
     community-based nonprofit social service agency (as defined 
     in subparagraph (I))'';
       (B) in subparagraph (D)(ii)--
       (i) by striking ``or any community-based'' and all that 
     follows through ``in accordance'' in subclause (II) and 
     inserting ``or any certified community-based nonprofit social 
     service agency (as defined in subparagraph (I)), if the 
     agency, in accordance'';
       (ii) by redesignating items (aa) and (bb) as subclauses (I) 
     and (II), respectively (and adjusting the margination 
     accordingly); and
       (iii) by striking ``subclause (II)(bb)'' and inserting 
     ``subclause (II)''; and
       (C) by adding at the end the following new subparagraph:
       ``(I) For purposes of this paragraph, the term `certified 
     community-based nonprofit social service agency' means a 
     community-based nonprofit social service agency which is in 
     compliance with requirements, under regulations which shall 
     be prescribed by the Commissioner, for annual certification 
     to the Commissioner that it is bonded in accordance with 
     requirements specified by the Commissioner and that it is 
     licensed in each State in which it serves as a representative 
     payee (if licensing is available in the State) in accordance 
     with requirements specified by the Commissioner. Any such 
     annual certification shall include a copy of any independent 
     audit on the agency which may have been performed since the 
     previous certification.''.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on the first day of the thirteenth month 
     beginning after the date of the enactment of this Act.
       (b) Periodic Onsite Review.--
       (1) Title ii amendment.--Section 205(j)(6) of such Act (42 
     U.S.C. 405(j)(6)) is amended to read as follows:
       ``(6)(A) In addition to such other reviews of 
     representative payees as the Commissioner of Social Security 
     may otherwise conduct, the Commissioner shall provide for the 
     periodic onsite review of any person or agency located in the 
     United States that receives the benefits payable under this 
     title (alone or in combination with benefits payable under 
     title VIII or title XVI) to another individual pursuant to 
     the appointment of such person or agency as a representative 
     payee under this subsection, section 807, or section 
     1631(a)(2) in any case in which--

[[Page 5123]]

       ``(i) the representative payee is a person who serves in 
     that capacity with respect to 15 or more such individuals;
       ``(ii) the representative payee is a certified community-
     based nonprofit social service agency (as defined in 
     paragraph (9) of this subsection or section 1631(a)(2)(I)); 
     or
       ``(iii) the representative payee is an agency (other than 
     an agency described in clause (ii)) that serves in that 
     capacity with respect to 50 or more such individuals.
       ``(B) Within 120 days after the end of each fiscal year, 
     the Commissioner shall submit to the Committee on Ways and 
     Means of the House of Representatives and the Committee on 
     Finance of the Senate a report on the results of periodic 
     onsite reviews conducted during the fiscal year pursuant to 
     subparagraph (A) and of any other reviews of representative 
     payees conducted during such fiscal year in connection with 
     benefits under this title. Each such report shall describe in 
     detail all problems identified in such reviews and any 
     corrective action taken or planned to be taken to correct 
     such problems, and shall include--
       ``(i) the number of such reviews;
       ``(ii) the results of such reviews;
       ``(iii) the number of cases in which the representative 
     payee was changed and why;
       ``(iv) the number of cases involving the exercise of 
     expedited, targeted oversight of the representative payee by 
     the Commissioner conducted upon receipt of an allegation of 
     misuse of funds, failure to pay a vendor, or a similar 
     irregularity;
       ``(v) the number of cases discovered in which there was a 
     misuse of funds;
       ``(vi) how any such cases of misuse of funds were dealt 
     with by the Commissioner;
       ``(vii) the final disposition of such cases of misuse of 
     funds, including any criminal penalties imposed; and
       ``(viii) such other information as the Commissioner deems 
     appropriate.''.
       (2) Title viii amendment.--Section 807 of such Act (as 
     amended by section 101(b)(2) of this Act) is amended further 
     by adding at the end the following new subsection:
       ``(k) Periodic Onsite Review.--(1) In addition to such 
     other reviews of representative payees as the Commissioner of 
     Social Security may otherwise conduct, the Commissioner may 
     provide for the periodic onsite review of any person or 
     agency that receives the benefits payable under this title 
     (alone or in combination with benefits payable under title II 
     or title XVI) to another individual pursuant to the 
     appointment of such person or agency as a representative 
     payee under this section, section 205(j), or section 
     1631(a)(2) in any case in which--
       ``(A) the representative payee is a person who serves in 
     that capacity with respect to 15 or more such individuals; or
       ``(B) the representative payee is an agency that serves in 
     that capacity with respect to 50 or more such individuals.
       ``(2) Within 120 days after the end of each fiscal year, 
     the Commissioner shall submit to the Committee on Ways and 
     Means of the House of Representatives and the Committee on 
     Finance of the Senate a report on the results of periodic 
     onsite reviews conducted during the fiscal year pursuant to 
     paragraph (1) and of any other reviews of representative 
     payees conducted during such fiscal year in connection with 
     benefits under this title. Each such report shall describe in 
     detail all problems identified in such reviews and any 
     corrective action taken or planned to be taken to correct 
     such problems, and shall include--
       ``(A) the number of such reviews;
       ``(B) the results of such reviews;
       ``(C) the number of cases in which the representative payee 
     was changed and why;
       ``(D) the number of cases involving the exercise of 
     expedited, targeted oversight of the representative payee by 
     the Commissioner conducted upon receipt of an allegation of 
     misuse of funds, failure to pay a vendor, or a similar 
     irregularity;
       ``(E) the number of cases discovered in which there was a 
     misuse of funds;
       ``(F) how any such cases of misuse of funds were dealt with 
     by the Commissioner;
       ``(G) the final disposition of such cases of misuse of 
     funds, including any criminal penalties imposed; and
       ``(H) such other information as the Commissioner deems 
     appropriate.''.
       (3) Title xvi amendment.--Section 1631(a)(2)(G) of such Act 
     (42 U.S.C. 1383(a)(2)(G)) is amended to read as follows:
       ``(G)(i) In addition to such other reviews of 
     representative payees as the Commissioner of Social Security 
     may otherwise conduct, the Commissioner shall provide for the 
     periodic onsite review of any person or agency that receives 
     the benefits payable under this title (alone or in 
     combination with benefits payable under title II or title 
     VIII) to another individual pursuant to the appointment of 
     the person or agency as a representative payee under this 
     paragraph, section 205(j), or section 807 in any case in 
     which--
       ``(I) the representative payee is a person who serves in 
     that capacity with respect to 15 or more such individuals;
       ``(II) the representative payee is a certified community-
     based nonprofit social service agency (as defined in 
     subparagraph (I) of this paragraph or section 205(j)(9)); or
       ``(III) the representative payee is an agency (other than 
     an agency described in subclause (II)) that serves in that 
     capacity with respect to 50 or more such individuals.
       ``(ii) Within 120 days after the end of each fiscal year, 
     the Commissioner shall submit to the Committee on Ways and 
     Means of the House of Representatives and the Committee on 
     Finance of the Senate a report on the results of periodic 
     onsite reviews conducted during the fiscal year pursuant to 
     clause (i) and of any other reviews of representative payees 
     conducted during such fiscal year in connection with benefits 
     under this title. Each such report shall describe in detail 
     all problems identified in the reviews and any corrective 
     action taken or planned to be taken to correct the problems, 
     and shall include--
       ``(I) the number of the reviews;
       ``(II) the results of such reviews;
       ``(III) the number of cases in which the representative 
     payee was changed and why;
       ``(IV) the number of cases involving the exercise of 
     expedited, targeted oversight of the representative payee by 
     the Commissioner conducted upon receipt of an allegation of 
     misuse of funds, failure to pay a vendor, or a similar 
     irregularity;
       ``(V) the number of cases discovered in which there was a 
     misuse of funds;
       ``(VI) how any such cases of misuse of funds were dealt 
     with by the Commissioner;
       ``(VII) the final disposition of such cases of misuse of 
     funds, including any criminal penalties imposed; and
       ``(VIII) such other information as the Commissioner deems 
     appropriate.''.

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

       (a) Title II Amendments.--Section 205(j)(2) of the Social 
     Security Act (42 U.S.C. 405(j)(2)) is amended--
       (1) in subparagraph (B)(i)--
       (A) by striking ``and'' at the end of subclause (III);
       (B) by redesignating subclause (IV) as subclause (VI); and
       (C) by inserting after subclause (III) the following new 
     subclauses:
       ``(IV) obtain information concerning whether such person 
     has been convicted of any other offense under Federal or 
     State law which resulted in imprisonment for more than 1 
     year,
       ``(V) obtain information concerning whether such person is 
     a person described in section 202(x)(1)(A)(iv), and'';
       (2) in subparagraph (B), by adding at the end the following 
     new clause:
       ``(iii) Notwithstanding the provisions of section 552a of 
     title 5, United States Code, or any other provision of 
     Federal or State law (other than section 6103 of the Internal 
     Revenue Code of 1986 and section 1106(c) of this Act), the 
     Commissioner shall furnish any Federal, State, or local law 
     enforcement officer, upon the written request of the officer, 
     with the current address, social security account number, and 
     photograph (if applicable) of any person investigated under 
     this paragraph, if the officer furnishes the Commissioner 
     with the name of such person and such other identifying 
     information as may reasonably be required by the Commissioner 
     to establish the unique identity of such person, and notifies 
     the Commissioner that--
       ``(I) such person is described in section 202(x)(1)(A)(iv),
       ``(II) such person has information that is necessary for 
     the officer to conduct the officer's official duties, and
       ``(III) the location or apprehension of such person is 
     within the officer's official duties.'';
       (3) in subparagraph (C)(i)(II), by striking ``subparagraph 
     (B)(i)(IV),,'' and inserting ``subparagraph (B)(i)(VI)'' and 
     striking ``section 1631(a)(2)(B)(ii)(IV)'' and inserting 
     ``section 1631(a)(2)(B)(ii)(VI)''; and
       (4) in subparagraph (C)(i)--
       (A) by striking ``or'' at the end of subclause (II);
       (B) by striking the period at the end of subclause (III) 
     and inserting a comma; and
       (C) by adding at the end the following new subclauses:
       ``(IV) such person has previously been convicted as 
     described in subparagraph (B)(i)(IV), unless the Commissioner 
     determines that such certification would be appropriate 
     notwithstanding such conviction, or
       ``(V) such person is person described in section 
     202(x)(1)(A)(iv).''.
       (b) Title VIII Amendments.--Section 807 of such Act (42 
     U.S.C. 1007) is amended--
       (1) in subsection (b)(2)--
       (A) by striking ``and'' at the end of subparagraph (C);
       (B) by redesignating subparagraph (D) as subparagraph (F); 
     and
       (C) by inserting after subparagraph (C) the following new 
     subparagraphs:
       ``(D) obtain information concerning whether such person has 
     been convicted of any other offense under Federal or State 
     law which resulted in imprisonment for more than 1 year;

[[Page 5124]]

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

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

       (a) Title II Amendments.--Section 205(j)(4)(A)(i) of the 
     Social Security Act (42 U.S.C. 405(j)(4)(A)(i)) is amended--
       (1) in the first sentence, by striking ``A'' and inserting 
     ``Except as provided in the next sentence, a''; and
       (2) in the second sentence, by striking ``The Secretary'' 
     and inserting the following:

     ``A qualified organization may not collect a fee from an 
     individual for any month with respect to which the 
     Commissioner of Social Security or a court of competent 
     jurisdiction has determined that the organization misused all 
     or part of the individual's benefit, and any amount so 
     collected by the qualified organization for such month shall 
     be treated as a misused part of the individual's benefit for 
     purposes of paragraphs (5) and (6). The Commissioner''.
       (b) Title XVI Amendments.--Section 1631(a)(2)(D)(i) of such 
     Act (42 U.S.C. 1383(a)(2)(D)(i)) is amended--
       (1) in the first sentence, by striking ``A'' and inserting 
     ``Except as provided in the next sentence, a''; and
       (2) in the second sentence, by striking ``The 
     Commissioner'' and inserting the following: ``A qualified 
     organization may not collect a fee from an individual for any 
     month with respect to which the Commissioner of Social 
     Security or a court of competent jurisdiction has determined 
     that the organization misused all or part of the individual's 
     benefit, and any amount so collected by the qualified 
     organization for such month shall be treated as a misused 
     part of the individual's benefit for purposes of 
     subparagraphs (E) and (F). The Commissioner''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to any month involving benefit misuse by a 
     representative payee in any case with respect to which the 
     Commissioner of Social Security or a court of competent 
     jurisdiction makes the determination of misuse after 180 days 
     after the date of the enactment of this Act.

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

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

[[Page 5125]]

     alternative representative payee under paragraph (1) and the 
     amount paid under subsection (i) may not exceed the total 
     benefit amount misused by the representative payee with 
     respect to such individual.''.
       (c) Title XVI Amendments.--Section 1631(a)(2) of such Act 
     (42 U.S.C. 1383(a)(2)) (as amended by section 102(b)(3)) is 
     amended further--
       (1) in subparagraph (G)(i)(II), by striking ``section 
     205(j)(9)'' and inserting ``section 205(j)(10)''; and
       (2) by striking subparagraph (H) and inserting the 
     following:
       ``(H)(i) If the Commissioner of Social Security or a court 
     of competent jurisdiction determines that a representative 
     payee that is not a Federal, State, or local government 
     agency has misused all or part of an individual's benefit 
     that was paid to the representative payee under this 
     paragraph, the representative payee shall be liable for the 
     amount misused, and the amount (to the extent not repaid by 
     the representative payee) shall be treated as an overpayment 
     of benefits under this title to the representative payee for 
     all purposes of this Act and related laws pertaining to the 
     recovery of the overpayments. Subject to clause (ii), upon 
     recovering all or any part of the amount, the Commissioner 
     shall make payment of an amount equal to the recovered amount 
     to such individual or such individual's alternative 
     representative payee.
       ``(ii) The total of the amount paid to such individual or 
     such individual's alternative representative payee under 
     clause (i) and the amount paid under subparagraph (E) may not 
     exceed the total benefit amount misused by the representative 
     payee with respect to such individual.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to benefit misuse by a representative payee in 
     any case with respect to which the Commissioner of Social 
     Security or a court of competent jurisdiction makes the 
     determination of misuse after 180 days after the date of the 
     enactment of this Act.

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

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

                        Subtitle B--Enforcement

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

       (a) In General.--Section 1129(a) of the Social Security Act 
     (42 U.S.C. 1320a-8) is amended by adding at the end the 
     following new paragraph:
       ``(3) Any person (including an organization, agency, or 
     other entity) who, having received, while acting in the 
     capacity of a representative payee pursuant to section 
     205(j), 807, or 1631(a)(2), a payment under title II, VIII, 
     or XVI for the use and benefit of another individual, 
     converts such payment, or any part thereof, to a use that 
     such person knows or should know is other than for the use 
     and benefit of such other individual shall be subject to, in 
     addition to any other penalties that may be prescribed by 
     law, a civil money penalty of not more than $5,000 for each 
     such conversion. Such person shall also be subject to an 
     assessment, in lieu of damages sustained by the United States 
     resulting from the conversion, of not more than twice the 
     amount of any payments so converted.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to violations committed after the 
     date of the enactment of this Act.

                     TITLE II--PROGRAM PROTECTIONS

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

       (a) Treatment of Withholding of Material Facts.--
       (1) Civil penalties.--Section 1129(a)(1) of the Social 
     Security Act (42 U.S.C. 1320a-8(a)(1)) is amended--
       (A) by striking ``who'' in the first sentence and inserting 
     ``who--'';
       (B) by striking ``makes'' in the first sentence and all 
     that follows through ``shall be subject to'' and inserting 
     the following:
       ``(A) makes, or causes to be made, a statement or 
     representation of a material fact, for use in determining any 
     initial or continuing right to or the amount of monthly 
     insurance benefits under title II or benefits or payments 
     under title VIII or XVI, that the person knows or should know 
     is false or misleading,
       ``(B) makes such a statement or representation for such use 
     with knowing disregard for the truth, or
       ``(C) omits from a statement or representation for such 
     use, or otherwise withholds disclosure of, a fact which the 
     person knows or should know is material to the determination 
     of any initial or continuing right to or the amount of 
     monthly insurance benefits under title II or benefits or 
     payments under title VIII or XVI, if the person knows, or 
     should know, that the statement or representation with such 
     omission is false or misleading or that the withholding of 
     such disclosure is misleading,

     shall be subject to'';
       (C) by inserting ``or each receipt of such benefits or 
     payments while withholding disclosure of such fact'' after 
     ``each such statement or representation'' in the first 
     sentence;
       (D) by inserting ``or because of such withholding of 
     disclosure of a material fact'' after ``because of such 
     statement or representation'' in the second sentence; and
       (E) by inserting ``or such a withholding of disclosure'' 
     after ``such a statement or representation'' in the second 
     sentence.
       (2) Administrative procedure for imposing penalties.--
     Section 1129A(a) of such Act (42 U.S.C. 1320a-8a(a)) is 
     amended--
       (A) by striking ``who'' the first place it appears and 
     inserting ``who--''; and
       (B) by striking ``makes'' and all that follows through 
     ``shall be subject to,'' and inserting the following:
       ``(1) makes, or causes to be made, a statement or 
     representation of a material fact, for use in determining any 
     initial or continuing right to or the amount of monthly 
     insurance benefits under title II or benefits or payments 
     under title XVI that the person knows or should know is false 
     or misleading,
       ``(2) makes such a statement or representation for such use 
     with knowing disregard for the truth, or
       ``(3) omits from a statement or representation for such 
     use, or otherwise withholds disclosure of, a fact which the 
     person knows or should know is material to the determination 
     of any initial or continuing right to or the amount of 
     monthly insurance benefits under title II or benefits or 
     payments under title XVI, if the person knows, or should 
     know, that the statement or representation with such omission 
     is false or misleading or that the withholding of such 
     disclosure is misleading,

     shall be subject to,''.
       (b) Clarification of Treatment of Recovered Amounts.--
     Section 1129(e)(2)(B) of such Act (42 U.S.C. 1320a-
     8(e)(2)(B)) is amended by striking ``In the case of amounts 
     recovered arising out of a determination relating to title 
     VIII or XVI,'' and inserting ``In the case of any other 
     amounts recovered under this section,''.
       (c) Conforming Amendments.--
       (1) Section 1129(b)(3)(A) of such Act (42 U.S.C. 1320a-
     8(b)(3)(A)) is amended by striking ``charging fraud or false 
     statements''.
       (2) Section 1129(c)(1) of such Act (42 U.S.C. 1320a-
     8(c)(1)) is amended by striking ``and representations'' and 
     inserting ``, representations, or actions''.
       (3) Section 1129(e)(1)(A) of such Act (42 U.S.C. 1320a-
     8(e)(1)(A)) is amended by striking ``statement or 
     representation referred to in subsection (a) was made'' and 
     inserting ``violation occurred''.
       (d) Effective Date.--The amendments made by this section 
     shall apply with respect

[[Page 5126]]

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

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

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

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

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

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

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

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

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

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

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


   ``attempts to interfere with administration of social security act

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

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

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

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

       (a) In General.--Section 222(c) of the Social Security Act 
     (42 U.S.C. 422(c)) is amended by adding at the end the 
     following new paragraph:
       ``(5) Upon conviction by a Federal court that an individual 
     has fraudulently concealed work activity during a period of 
     trial work from the Commissioner of Social Security by--

[[Page 5127]]

       ``(A) providing false information to the Commissioner of 
     Social Security as to whether the individual had earnings in 
     or for a particular period, or as to the amount thereof;
       ``(B) receiving disability insurance benefits under this 
     title while engaging in work activity under another identity, 
     including under another social security account number or a 
     number purporting to be a social security account number; or
       ``(C) taking other actions to conceal work activity with an 
     intent fraudulently to secure payment in a greater amount 
     than is due or when no payment is authorized,

     no benefit shall be payable to such individual under this 
     title with respect to a period of disability for any month 
     before such conviction during which the individual rendered 
     services during the period of trial work with respect to 
     which the fraudulently concealed work activity occurred, and 
     amounts otherwise due under this title as restitution, 
     penalties, assessments, fines, or other repayments shall in 
     all cases be in addition to any amounts for which such 
     individual is liable as overpayments by reason of such 
     concealment.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply with respect to work activity performed after the 
     date of the enactment of this Act.

     SEC. 209. AUTHORITY FOR JUDICIAL ORDERS OF RESTITUTION.

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

          TITLE III--ATTORNEY FEE PAYMENT SYSTEM IMPROVEMENTS

     SEC. 301. CAP ON ATTORNEY ASSESSMENTS.

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

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

       (a) In General.--Section 1631(d)(2) of the Social Security 
     Act (42 U.S.C. 1383(d)(2)) is amended--
       (1) in subparagraph (A), in the matter preceding clause 
     (i)--
       (A) by striking ``section 206(a)'' and inserting ``section 
     206'';
       (B) by striking ``(other than paragraph (4) thereof)'' and 
     inserting ``(other than subsections (a)(4) and (d) 
     thereof)''; and
       (C) by striking ``paragraph (2) thereof'' and inserting 
     ``such section'';
       (2) in subparagraph (A)(i), by striking ``in subparagraphs 
     (A)(ii)(I) and (C)(i),'' and inserting ``in subparagraphs 
     (A)(ii)(I) and (D)(i) of subsection (a)(2)'', and by striking 
     ``and'' at the end;
       (3) by striking subparagraph (A)(ii) and inserting the 
     following:
       ``(ii) by substituting, in subsections (a)(2)(B) and 
     (b)(1)(B)(i), the phrase `section 1631(a)(7)(A) or the 
     requirements of due process of law' for the phrase 
     `subsection (g) or (h) of section 223';
       ``(iii) by substituting, in subsection (a)(2)(C)(i), the 
     phrase `under title II' for the phrase `under title XVI';
       ``(iv) by substituting, in subsection (b)(1)(A), the phrase 
     `pay the amount of such fee' for the phrase `certify the 
     amount of such fee for payment' and by striking, in 
     subsection (b)(1)(A), the phrase `or certified for payment'; 
     and
       ``(v) by substituting, in subsection (b)(1)(B)(ii), the 
     phrase `deemed to be such amounts as determined before any 
     applicable reduction under section 1631(g), and reduced by 
     the amount of any reduction in benefits under this title or 
     title II made pursuant to section 1127(a)' for the phrase 
     `determined before any applicable reduction under section 
     1127(a))'.''; and
       (4) by striking subparagraph (B) and inserting the 
     following new subparagraphs:
       ``(B) Subject to subparagraph (C), if the claimant is 
     determined to be entitled to past-due benefits under this 
     title and the person representing the claimant is an 
     attorney, the Commissioner of Social Security shall pay out 
     of such past-due benefits to such attorney an amount equal to 
     the lesser of--
       ``(i) so much of the maximum fee as does not exceed 25 
     percent of such past-due benefits (as determined before any 
     applicable reduction under section 1631(g) and reduced by the 
     amount of any reduction in benefits under this title or title 
     II pursuant to section 1127(a)), or
       ``(ii) the amount of past-due benefits available after any 
     applicable reductions under sections 1631(g) and 1127(a).
       ``(C)(i) Whenever a fee for services is required to be paid 
     to an attorney from a

[[Page 5128]]

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

            TITLE IV--MISCELLANEOUS AND TECHNICAL AMENDMENTS

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

     SEC. 401. APPLICATION OF DEMONSTRATION AUTHORITY SUNSET DATE 
                   TO NEW PROJECTS.

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

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

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

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

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

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

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

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

       (a) In General.--Section 1148(g)(1) of the Social Security 
     Act (42 U.S.C. 1320b-19) is amended by adding at the end, 
     after and below subparagraph (E), the following new sentence:


[[Page 5129]]


     ``An individual work plan established pursuant to this 
     subsection shall be treated, for purposes of section 
     51(d)(6)(B)(i) of the Internal Revenue Code of 1986, as an 
     individualized written plan for employment under a State plan 
     for vocational rehabilitation services approved under the 
     Rehabilitation Act of 1973.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as if included in section 505 of the Ticket 
     to Work and Work Incentives Improvement Act of 1999 (Public 
     Law 106-170; 113 Stat. 1921).

                  Subtitle B--Miscellaneous Amendments

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

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

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

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

     SEC. 413. REINSTATEMENT OF CERTAIN REPORTING REQUIREMENTS.

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

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

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

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

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

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

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

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

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

                 ``Compensation, Expenses, and Per Diem

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

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

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

[[Page 5130]]

     210 of such Act, and all such service subsequently performed 
     by such individual has constituted such ``employment''.

                    Subtitle C--Technical Amendments

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

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

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

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

     SEC. 423. TECHNICAL CORRECTIONS RELATING TO DOMESTIC 
                   EMPLOYMENT.

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

     SEC. 424. TECHNICAL CORRECTIONS OF OUTDATED REFERENCES.

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

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

       (a) Social Security Act Amendment.--Section 211(a)(5)(A) of 
     the Social Security Act (42 U.S.C. 411(a)(5)(A)) is amended 
     by striking ``all of the gross income'' and all that follows 
     and inserting ``the gross income and deductions attributable 
     to such trade or business shall be treated as the gross 
     income and deductions of the spouse carrying on such trade or 
     business or, if such trade or business is jointly operated, 
     treated as the gross income and deductions of each spouse on 
     the basis of their respective distributive share of the gross 
     income and deductions;''.
       (b) Internal Revenue Code of 1986 Amendment.--Section 
     1402(a)(5)(A) of the Internal Revenue Code of 1986 is amended 
     by striking ``all of the gross income'' and all that follows 
     and inserting ``the gross income and deductions attributable 
     to such trade or business shall be treated as the gross 
     income and deductions of the spouse carrying on such trade or 
     business or, if such trade or business is jointly operated, 
     treated as the gross income and deductions of each spouse on 
     the basis of their respective distributive share of the gross 
     income and deductions; and''.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Florida (Mr. Shaw) and the gentleman from California (Mr. Matsui) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Florida (Mr. Shaw).
  Mr. SHAW. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, Social Security, as everyone in this Chamber knows, 
touches the lives of virtually every American and serves as a vital 
safety net for those who retire, become disabled or die. Nearly $500 
billion in Social Security and supplemental security income benefits 
were paid last year to about 50 million retired and disabled workers 
their families and SSI recipients. These costs represent close to one-
fourth of all Federal outlays last year. More importantly, as baby 
boomers approach retirement age, Social Security's and SSI's combined 
benefit outlays are expected to double by the time children born this 
year finish high school. Programs as important, as comprehensive as 
these require our constant vigilance. We must act today to address 
inadequate protections for beneficiaries and the programs in order to 
avoid potentially tragic consequences in the future.
  This is why I urge all Members to support the Social Security 
Protection Act of 2003. This is a bipartisan bill introduced earlier 
this month by myself and the gentleman from California (Mr. Matsui) 
along with other Members of Congress. The Protection Act will give the 
Social Security Administration the additional tools needed to fight 
activities that drain resources from Social Security and undermine the 
financial security of beneficiaries.
  First, this bill protects the one in eight Social Security and SSI 
beneficiaries who cannot, for physical or mental reasons, handle their 
own funds. For these persons, the Social Security Administration 
appoints an individual or organization called a representative payee to 
manage their benefits. While most representative payees are 
conscientious and they are honest, some violate the trust placed in 
them.
  The Social Security Inspector General reported that in the late 
1990's over 2,400 representative payees missed about $12 million in 
benefits. This bill raises the standard for persons and organizations 
serving as representative payees and imposes stricter regulation and 
monetary penalties on those who mismanage benefits.
  Second, this bill picks up where legislation enacted in 1996 let off 
in ending benefit payments to those who committed crimes. That 
legislation denied SSI benefits to fugitive felons. However, these 
criminals are still allowed to receive Social Security benefits. The 
Congressional Budget Office estimates that they will pay $526 million 
out of the Social Security trust fund to these law-breakers over the 
next 10 years. This is not right, and this legislation denies them 
these benefits.
  The Protection Act also provides tools to further safeguard Social 
Security programs. Our goals are to help shield Social Security 
employees from harm while conducting their duties, expanding the 
Inspector General's ability to stop perpetrators of fraud through new 
civil monetary penalties, and prevent people from misrepresenting 
themselves as they provide Social Security-related services.

                              {time}  1100

  On top of this, the bill helps individuals with disabilities by, one, 
making it easier for them to obtain legal representation while applying 
for benefits by improving the attorney fee withholding process; two, 
enhancing provisions of the Ticket to Work Program; and, three, 
encouraging more employers to hire individuals with disabilities by 
expanding eligibility for the Work Opportunity Tax Credit.
  Finally, the bill contains several provisions aimed at correcting 
inequities in the law regarding benefit coverage and receipt, as well 
as making technical corrections to the law.
  It is our and the agency's duty to protect Social Security programs 
and the beneficiaries. This bill is the accumulation of bipartisan 
efforts towards

[[Page 5131]]

that, and as well as the cooperation and support of the Social Security 
Administration and the Social Security Inspector General. That is why 
the 107th Congress's version of the bill, the Social Security 
Protection Act of 2002, passed this House by an overwhelming bipartisan 
support of 425 to 0 and passed the Senate as amended under unanimous 
consent.
  I urge the Members today to finish the good work begun in the 107th 
Congress and vote in favor of the Social Security Protection Act. We 
must enact these changes quickly to protect the most vulnerable 
beneficiaries and to stop Social Security from hemorrhaging precious 
dollars through fraud and benefit misuse.
  Mr. Speaker, I reserve the balance of my time.
  Mr. MATSUI. Mr. Speaker, I yield myself 2 minutes.
  Mr. Speaker, first of all, I wish to commend the Chair of the 
Subcommittee on Social Security, the gentleman from Florida (Mr. Shaw), 
for the bipartisanship in which we were able to put this legislation 
together. As many know, and as the gentleman from Florida (Mr. Shaw) 
mentioned, we passed this bill last year, in the last Congress, but 
unfortunately, it was dropped during the waning hours of the joint 
House-Senate conference committees in the month of October. So now we 
are bringing the bill back.
  It essentially has four parts to it. We added one provision which has 
become somewhat controversial. As the gentleman from Florida (Mr. Shaw) 
says, it has strengthening of the representative pay provisions of the 
law. Obviously, when someone is mentally disabled or one is a child, 
one needs a representative payee. This bill strengthens that law to 
protect the recipient, the beneficiary.
  Second, it provides anti-fraud provisions in the legislation, 
including denying benefits to fugitive felons and also those who have 
violated their parole.
  Thirdly, it provides for SSI recipients more of the advantages of 
having a lawyer or others represent that person as they are going 
through the administrative process, essentially by creating the same 
kind of withholding of benefits by the attorney or other representative 
of the claimant as we currently have in the Social Security System. So 
SSI beneficiaries will have the same kind of rights as the Social 
Security recipients. And, in addition, it caps attorneys' fees, the 
processing fees, to $75. So it will make it much easier for people to 
actually go through the administrative procedures.
  It has 18 technical provisions in the legislation, or in the bill 
last year. The one area in which we have added to it is it closes a 
loophole in which some have attempted to get around the GPO, the 
government pension offset provisions that are currently in the law. The 
gentleman from Florida (Mr. Shaw) has indicated to me and to others 
that he intends to have hearings on the whole issue of the government 
pension offset issue. And as a result of that, I am very satisfied with 
this legislation.
  As I indicated, Mr. Speaker, many of my colleagues have problems with 
it on my side of the aisle. They intend to speak on this issue today. I 
would urge a ``yes'' vote on it, but I certainly can understand some of 
those that might have some differences of opinion on that one 
provision.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SHAW. Mr. Speaker, I insert for the Record two documents. The 
first is bipartisan summary report language, including a detailed 
summary of current law and an explanation of each provision and the 
reasons for the change. The second is a list of organizations, 
including AARP, that provided letters of support for this bill, with 
those letters attached.

         ``The Social Security Protection Act of 2003'' Summary

                  TITLE I--PROTECTION OF BENEFICIARIES

                   Subtitle A--Representative Payees

     Section 101. Authority to Reissue Benefits Misused by 
         Organizational Representative Payees


                              Present Law

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


                        Explanation of Provision

       In addition to cases where the SSA negligently failed to 
     investigate and monitor the payee, the provision also 
     requires the Commissioner to re-issue benefits under Titles 
     II, VIII and XVI in any case in which a beneficiary's funds 
     are misused by a representative payee that is not an 
     individual (regardless of whether it is a qualified 
     organization such as a state/local agency or a community 
     nonprofit social service agency) or an individual payee 
     representing 15 or more beneficiaries.
       The new provision defines misuse as any case in which a 
     representative payee converts the benefits entrusted to his 
     or her care for purposes other than the ``use and benefit'' 
     of the beneficiary, and authorizes the Commissioner to define 
     ``use and benefit'' in regulation.
       In crafting a regulatory definition for ``use and 
     benefit,'' the Commissioner should take special care to 
     distinguish between the situation in which the representative 
     payee violates his or her responsibility by converting the 
     benefits to further the payee's own self interest, and the 
     situation in which the payee faithfully serves the 
     beneficiary by using the benefits in a way that principally 
     aids the beneficiary but which also incidentally aids the 
     payee or another individual. For instance, cases in which a 
     representative payee uses the benefits entrusted to his or 
     her care to help pay the rent on an apartment that he or she 
     and the beneficiary share should not be considered misuse.
       The effective date applies to any cases of benefit misuse 
     by a representative payee with respect to which the 
     Commissioner makes the determination of misuse on or after 
     January 1, 1995. This protects the interests of beneficiaries 
     affected by cases of egregious misuse that have been 
     identified in recent years.


                           Reason for Change

       There have been a number of highly publicized cases 
     involving organizational representative payees that have 
     misused large sums of monies paid to them on behalf of the 
     Social Security and Supplemental Security Income (SSI) 
     beneficiaries they represented. In most instances, these 
     organizations operated as criminal enterprises, bent not only 
     on stealing funds from beneficiaries, but also on carefully 
     concealing the evidence of their wrongdoing. These illegal 
     activities went undetected until large sums had been stolen. 
     If the Social Security Administration is not shown to be 
     negligent for failing to investigate and monitor the payee, 
     affected beneficiaries may never be repaid or may be repaid 
     only when the representative payee committing misuse makes 
     restitution to the SSA.
       Requiring the SSA to reissue benefit payments to the 
     victims of misuse in these cases protects beneficiaries who 
     are among the most vulnerable, because they may have no 
     family members or friends who are willing or able to manage 
     their benefits for them. These are cases in which misuse of 
     benefits may be the hardest to detect. Moreover, extending 
     the provision to cases involving individual payees serving 
     fewer beneficiaries may lead to fraudulent claims of misuse. 
     These claims, which often turn on information available only 
     from close family members, would be difficult to assess. 
     Similarly, extension of this provision to these cases could 
     potentially encourage misuse or poor money management by 
     these individual representative payees, if they believe the 
     SSA could eventually pay the beneficiary a second time.
     Section 102. Oversight of Representative Payees


                              Present Law

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


                        Explanation of Provision

       The new provision requires community-based nonprofit social 
     service agencies serving as representative payees to be both 
     bonded and licensed (provided that licensing is available in 
     the State). In addition, such representative payees must 
     submit yearly proof of bonding and licensing, as well as 
     copies of any independent audits that were performed on the 
     payee since the previous certification.
       The new provision also requires the Commissioner of Social 
     Security to conduct periodic onsite reviews of: (1) a person 
     who serves as a representative payee to 15 or more 
     beneficiaries; (2) community-based nonprofit social service 
     agencies serving as representative payees; and (3) any agency 
     that serves as the representative payee to 50 or more 
     beneficiaries. In addition, the Commissioner is required to 
     submit an annual report to the Committee on Ways and Means of 
     the House of Representatives and the Committee on Finance of 
     the Senate on the reviews conducted in the prior fiscal year.
       The bonding, licensing, and audit provisions are effective 
     on the first day of the 13th

[[Page 5132]]

     month following enactment of the legislation. The periodic 
     on-site review provision is effective upon enactment.


                           Reason for change

       Strenthening the bonding and licensing requirements for 
     community-based nonprofit social service agencies would add 
     further safeguards to protect beneficiaries' funds. State 
     licensing provides for some oversight by the State into the 
     organization's business practices, and bonding provides some 
     assurances that a surety company has investigated the 
     organization and approved it for the level of risk associated 
     with the bond. Requiring annual certification as to the 
     licensing and bonding of the payee, as well as submission of 
     audits performed, should help prevent a payee from dropping 
     their licensing or bonding subsequent to the SSA approving 
     them as payee.
       On-site periodic visits should be conducted regularly to 
     reduce misuse of funds. To the degree possible, appropriate 
     auditing and accounting standards should be utilized in 
     conducting such reviews.
     Section 103. Disqualification from Service as Representative 
         Payee of Persons Convicted of Offenses Resulting in 
         Imprisonment for More Than One Year, or Fleeing 
         Prosecution, Custody or Confinement.


                              present law

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


                        explanation of provision

       The new provision expands the scope of disqualification to 
     prohibit an individual from serving as a representative payee 
     if he or she has been convicted of an offense resulting in 
     imprisonment for more than one year, unless the Commissioner 
     determines that payee status would be appropriate despite the 
     conviction. It also disqualifies persons fleeing prosecution, 
     custody, or confinement for a felony from being 
     representative payees. Finally, the Commissioner shall assist 
     law enforcement officials in apprehending such persons by 
     providing them with the address, Social Security number, 
     photograph, or other identifying information.
       The new provision requires the Commissioner, in 
     consultation with the SSA Inspector General, to submit a 
     report to the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate 
     evaluating existing procedures and reviews conducted for 
     representative payees to determine whether they are 
     sufficient to protect benefits from being misused.
       This provision is effective on the first day of the 13th 
     month beginning after the date of enactment, except that the 
     report to Congress is due no later than 270 days after the 
     date of enactment.


                           reason for change

       Prohibiting persons convicted of offenses resulting in 
     imprisonment for more than one year and persons fleeing 
     prosecution, custody or confinement for a felony from serving 
     as representative payees decreases the likelihood of 
     mismanagement or abuse of beneficiaries' funds. Also, 
     allowing such persons to serve as representative payees could 
     raise serious questions about the SSA's stewardship of 
     taxpayer funds. The agency's report will assist Congress in 
     its oversight of the representative payee program.
     Section 104. Fee Forfeiture in Case of Benefit Misuse by 
         Representative Payees


                              present law

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


                        explanation of provision

       The new provision requires representative payees to forfeit 
     the fee for those months during which the representative 
     payee misused funds, as determined by the Commissioner of 
     Social Security or a court of competent jurisdiction. This 
     provision applies to any month involving benefit misuse by a 
     representative payee as determined by the Commissioner or a 
     court of competent jurisdiction after 180 days after the date 
     of enactment.


                           reason for change

       Payees who misuse their clients' funds are not properly 
     performing the service for which the fee was paid; therefore, 
     they should forfeit such fees. Permitting the payee to retain 
     the fees is tantamount to rewarding the payee for violating 
     his or her responsibility to use the benefits for the 
     individual's needs.
     Section 105. Liability of Representative Payees for Misused 
         Benefits


                              present law

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


                        explanation of provision

       The new provision treats benefits misused by any 
     representative payee (except a federal, state or local 
     government agency) as an overpayment to the representative 
     payee, thus subjecting the representative payee to current 
     overpayment recovery authorities. Any recovered benefits not 
     already reissued to the beneficiary pursuant to section 101 
     of this legislation would be reissued to either the 
     beneficiary or their alternate representative payee, up to 
     the total amount misused. This provision applies to benefit 
     misuse by a representative payee in any case where the 
     Commissioner of Social Security or a court of competent 
     jurisdiction makes a determination of misuse after 180 days 
     after the date of enactment.


                           reason for change

       Although the SSA has been provided with expanded authority 
     to recover overpayments, these tools cannot be used to recoup 
     benefits misused by a representative payee. Treating misused 
     benefits as overpayments to the representative payee would 
     provide the SSA with additional means for recovering misused 
     payments.
     Section 106. Authority to Redirect Delivery of Benefit 
         Payments When a Representative Payee Fails to Provide 
         Required Accounting


                              present law

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


                        explanation of provision

       The new provision authorizes the Commissioner of Social 
     Security to require a representative payee to receive any 
     benefits under Titles II, VIII, and XVI in person at a Social 
     Security field office if the representative payee fails to 
     provide a required accounting of benefits. The Commissioner 
     would be required to provide proper notice and the 
     opportunity for a hearing prior to redirecting benefits to 
     the field office. This provision is effective 180 days after 
     the date of enactment.


                           reason for change

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

                        Subtitle B--Enforcement

     Section 111. Civil Monetary Penalty Authority with Respect to 
         Wrongful Conversions by Representative Payees


                              present law

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


                        explanation of provision

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


                           reason for change

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

                     TITLE II--PROGRAM PROTECTIONS

     Section 201. Civil Monetary Penalty Authority with Respect to 
         Knowing Withholding of Material Facts


                              Present Law

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


                        Explanation of Provision

       By including the phrase ``or otherwise withholds disclosure 
     of'', in section 1129 and 1129A, civil monetary penalties and 
     assessments and sanctions could also be imposed

[[Page 5133]]

     for failure to come forward and notify the SSA of changed 
     circumstances that affect eligibility or benefit amount when 
     that person knows or should know that the failure to come 
     forward is misleading. This provision applies to violations 
     committed after the date on which the Commissioner implements 
     the centralized computer file described in section 202.


                           Reason for Change

       Currently the SSA cannot impose civil monetary penalties 
     and assessments on a person who should have come forward to 
     notify the SSA of changed circumstances that affect 
     eligibility or benefit amount, but did not. To be subject to 
     civil monetary penalties and assessments under the current 
     law, an individual must have made a statement that omitted a 
     material fact or was false or misleading. Examples of the 
     types of individuals intended to be covered under this 
     amendment to section 1129 and 1129A include (but are not 
     limited to): (1) an individual who has a joint bank account 
     with a beneficiary in which the SSA direct deposited the 
     beneficiary's Social Security checks; upon the death of the 
     beneficiary, this individual fails to advise the SSA of the 
     beneficiary's death, instead spending the proceeds from the 
     deceased beneficiary's Social Security checks; and (2) an 
     individual who is receiving benefits under one SSN while 
     working under another SSN.
       This amendment is intended to close this loophole in the 
     current law, but it is not intended to expand section 1129 
     and 1129A to include those individuals whose failure to come 
     forward to notify the SSA was not done for the purpose of 
     improperly obtaining or continuing to receive benefits. For 
     instance, it is not intended that the expanded authority be 
     used against individuals who do not have the capacity to 
     understand that their failure to come forward is misleading.
     Section 202. Issuance by Commissioner of Social Security of 
         Receipts to Acknowledge Submission of Reports of Changes 
         in Work or Earnings Status of Disabled Beneficiaries


                              Present Law

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


                        Explanation of Provision

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


                           reason for change

       Witnesses have testified before the Social Security 
     Subcommittee and the Human Resources Subcommittee of the 
     House Ways and Means Committee that the SSA does not 
     currently have an effective system in place for processing 
     and recording Title II and Title XVI disability 
     beneficiaries' reports of changes in work and earnings 
     status. Issuing receipts to disabled beneficiaries who make 
     such reports would provide them with proof that they had 
     properly fulfilled their obligation to report these changes.
     Section 203. Denial of Title II Benefits to Persons Fleeing 
         Prosecution, Custody, or Confinement, and to Persons 
         Violating Probation or Parole


                              present law

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


                        explanation of provision

       The new provision denies Social Security benefits under 
     Title II to persons fleeing prosecution, custody or 
     confinement for a felony, and to persons violating probation 
     or parole. However, the Commissioner may, for good cause, pay 
     withheld benefits. Finally, the Commissioner shall assist law 
     enforcement officials in apprehending such persons by 
     providing them with the address, Social Security number, 
     photograph, or other identifying information.
       This provision is effective the first day of the first 
     month that begins on or after the date that is nine months 
     after the date of enactment.


                           reason for change

       There are concerns that Social Security benefits, not just 
     Supplemental Security Income and other welfare benefits, are 
     being used to aid flight from justice or other crime. The 
     Congressional Budget Office has estimated that persons 
     fleeing to avoid prosecution for a felony or to avoid custody 
     or confinement after conviction for a felony, or in violation 
     of a condition of probation or parole, will receive $526 
     million in Title II Social Security benefits over the next 10 
     years. The Social Security Inspector General (SSA IG) 
     recommended changing the law to prohibit fugitive felons and 
     other criminals from receiving benefits.
       The provision gives the Commissioner authority to pay 
     withheld Title II benefits if there is ``good cause.'' The 
     Commissioner would be required to develop regulations within 
     one year of the date of enactment. This ``good cause'' 
     discretion is authorized for the Commissioner in cases of 
     Title II benefits, where it was not authorized or intended 
     for programs affected under the similar provision in PRWORA, 
     because workers earn the right to receive benefits for 
     themselves and their families through their career-long Title 
     II payroll tax contributions.
       The good cause exception will provide the Commissioner with 
     the ability to pay benefits under circumstances in which the 
     Commissioner deems withholding of benefits to be 
     inappropriate--for example, but not limited to, situations 
     when Social Security beneficiaries are found to be in flight 
     from a warrant relating to a crime for which a court of 
     competent jurisdiction finds the person not guilty, or if the 
     charges are dismissed; if a warrant for arrest is vacated; or 
     if probation or parole is not revoked. In such circumstances, 
     it is expected that the Commissioner would pay benefits 
     withheld from the beneficiary for which he or she was 
     otherwise eligible but for the prohibition in this provision.
       In testimony received at a February 27, 2003 hearing, the 
     Subcommittee was made aware of instances with respect to the 
     SSI program where there may be mitigating circumstances 
     relating to persons with outstanding warrants for their 
     arrest. In addition, PRWORA implementing instructions have 
     been found to vary between agencies. For example, the 
     Department of Agriculture's Food and Nutrition Service has 
     issued instructions that in order to be considered 
     ``fleeing,'' the individual must have knowledge a warrant has 
     been issued for his or her arrest and that the State agency 
     should verify the individual has such knowledge. In addition, 
     once the person has knowledge of the warrant, either by 
     having received it personally or by being advised of its 
     existence by the State agency, he or she is technically 
     ``fleeing'' at that time. Finally, the instructions strongly 
     urge the State agency to give the individual an opportunity 
     to submit documentation that the warrant has been satisfied. 
     The Social Security Administration's procedures do not 
     include such instructions.
       The SSA IG is conducting an audit on implementation of the 
     fugitive felon provision for the Supplemental Security Income 
     program, which will shed light on the types of crimes 
     beneficiaries committed, law enforcement's pursuit of such 
     criminals, the length of time benefits were suspended, the 
     SSA's handling of these cases, and other issues. The 
     Subcommittee will continue to closely monitor these issues 
     and encourages the Commissioner to review the agency's 
     implementing instructions in light of these circumstances and 
     what constitutes flight under federal law.
     Section 204. Requirements Relating to Offers to Provide for a 
         Fee a Product or Service Available Without Charge From 
         the Social Security Administration


                              present law

       Section 1140 of the Social Security Act prohibits or 
     restricts various activities involving the use of Social 
     Security and Medicare symbols, emblems, or references that 
     give a

[[Page 5134]]

     false impression that an item is approved, endorsed, or 
     authorized by the Social Security Administration, the Health 
     Care Financing Administration (now the Centers for Medicare 
     and Medicaid Services), or the Department of Health and Human 
     Services. It also provides for the imposition of civil 
     monetary penalties with respect to violations of the section.


                        explanation of provision

       Several individuals and companies offer Social Security 
     services for a fee even though the same services are 
     available directly from the SSA free of charge. The new 
     provision requires persons or companies offering such 
     services to include in their offer a statement that the 
     services they provide for a fee are available directly from 
     the SSA free of charge. The statements would be required to 
     comply with standards promulgated through regulation by the 
     Commissioner of Social Security with respect to their 
     content, placement, visibility, and legibility. The amendment 
     applies to offers of assistance made after the 6th month 
     following the issuance of these standards. The new provision 
     requires that the Commissioner promulgate regulations within 
     1 year after the date of enactment.


                           Reason for Change

       Several individuals and companies offer Social Security 
     services for a fee even though the same services are 
     available directly from the SSA free of charge. For example, 
     the SSA's Inspector general has encountered business entities 
     that have offered assistance to individuals in changing their 
     names (upon marriage) or in obtaining a Social Security 
     number (upon the birth of a child) for a fee, even though 
     these services are directly available from the SSA for free. 
     The offer from the business entities either did not state at 
     all, or did not clearly state, that these services were 
     available from the SSA for free. These practices can mislead 
     and deceive senior citizens, newlyweds, new parents, and 
     other individuals seeking services or products, who may not 
     be aware that the SSA provides these services for free.
     Section 205. Refusal to Recognize Certain Individuals as 
         Claimant Representatives


                              Present Law

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


                        Explanation of Provision

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


                           Reason for Change

       This provision would provide additional protections for 
     beneficiaries who may rely on representatives during all 
     phases of their benefit application process. As part of their 
     ongoing oversight of claimant representatives, the Committee 
     on Ways and Means intends to review whether options to 
     establish protections for claimants represented by non-
     attorneys should be considered.
     Section 206. Penalty for Corrupt or Forcible Interference 
         with Administration of the Social Security Act


                              Present Law

       No provision.


                        Explanation of Provision

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


                           Reason for Change

       This provision extends to SSA employees the same 
     protections provided to employees of the Internal Revenue 
     Service under the Internal Revenue Code of 1954. These 
     protections will allow SSA employees to perform their work 
     with more confidence that they will be safe from harm.
       The Internal Revenue Manual defines the term ``corruptly'' 
     as follows: ```Corruptly' characterizes an attempt to 
     influence any official in his or her official capacity under 
     this title by any improper inducement. For example, an offer 
     of a bribe or a passing of a bribe to an Internal Revenue 
     employee for the purpose of influencing him or her in the 
     performance of his or her official duties is corrupt 
     interference with the administration of federal laws.'' 
     (Internal Revenue Manual, [9.5] 11.3.2.2, 4-09-1999).
     Section 207. Use of Symbols, Emblems or Names in Reference to 
         Social Security or Medicare


                              Present Law

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


                        Explanation of Provision

       The new provision expands the prohibition in present law to 
     several other references to Social Security and Medicare. 
     This includes, but is not limited to, ``Death Benefits 
     Update,'' ``Federal Benefits Information,'' and ``Final 
     Supplemental Plan.'' This provision applies to items sent 
     after 180 days after the date of enactment.


                           Reason for Change

       The SSA Inspector General has found these phrases appearing 
     in mailings, solicitations, or flyers, which, when used with 
     the SSA's words, symbols, emblems, and references may be 
     particularly misleading and more likely to convey the false 
     impression that such item is approved, endorsed, or 
     authorized by the SSA, the Health Care Financing 
     Administration (now the Centers for Medicare and Medicaid 
     Services), or the Department of Health and Human Services. 
     Expansion of this list helps to ensure that individuals 
     receiving any type of mail, solicitations or flyers bearing 
     symbols, emblems or names in reference to Social Security or 
     Medicare are not misled into believing that these agencies 
     approved or endorsed the services or products depicted.
     Section 208. Disqualification from Payment During Trial Work 
         Period Upon Conviction of Fraudulent Concealment of Work 
         Activity


                              Present Law

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


                        Explanation of Provision

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

[[Page 5135]]




                           Reason for Change

       Under current law, if an individual is convicted of 
     fraudulently concealing work activity, the dollar loss to the 
     government is calculated based on the benefits that the 
     individual would have received had he or she not concealed 
     the work activity. During the trial work period, disability 
     beneficiaries continue to receive their monthly benefit 
     amount regardless of their work activity. Therefore, the SSA 
     does not include benefits paid during a trial work period in 
     calculating the total dollar loss to the government, even if 
     the individual fraudulently concealed work activity during 
     that period. As a result, the dollars lost to the government 
     may fall below the thresholds set by the United States 
     Attorneys in cases involving fraudulent concealment of work 
     by Title II disability beneficiaries. In such situations, the 
     case would not be prosecuted, even if the evidence of fraud 
     were very clear.
       This provision rectifies the situation by establishing that 
     individuals convicted of fraudulently concealing work 
     activity during the trial work period are not entitled to 
     receive any disability benefits for trial work period months 
     prior to the conviction (but within the same period of 
     disability).
     Section 209. Authority for Judicial Orders of Restitution


                              Present Law

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


                        Explanation of Provision

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


                           reason for change

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

   TITLE III--ATTORNEY REPRESENTATIVE FEE PAYMENT SYSTEM IMPROVEMENTS

     Section 301. Cap on Attorney Representative Assessments


                              present law

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


                        explanation of provision

       The new provision imposes a cap of $75 on the 6.3% 
     assessment on approved attorney representative fees for Title 
     II claims. The cap is indexed annually for inflation. This 
     provision is effective after 180 days after the date of 
     enactment.


                           reason for change

       Testimony was given at a House oversight hearing in May 
     2001 on the SSA's processing of attorney representative's 
     fees that the amount of the fee assessment is unfair to these 
     attorneys, who provide an important service to claimants. The 
     attorneys who receive fee payments from the agency have their 
     gross revenue reduced by 6.3%. As a result of this revenue 
     loss and the time it takes for the SSA to issue the fee 
     payments to attorneys, a number of attorneys have decided to 
     take fewer or none of these cases. The cap on the amount of 
     the assessment would help ensure that enough attorneys remain 
     available to represent claimants before the Social Security 
     Administration.
       The Committee on Ways and Means continues to be concerned 
     about the agency's processing time for attorney 
     representatives fee payments and expects the SSA to further 
     automate the payment process as soon as possible.
     Section 302. Extension of Attorney Fee Payment System to 
         Title XVI Claims


                              present law

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


                        explanation of provision

       The provision would extend direct fee payment to attorneys 
     out of past-due benefits for Title XVI claims. It would also 
     authorize the SSA to charge a processing assessment of up to 
     6.3% of the approved attorney fees, subject to a cap of $75 
     that is indexed for inflation.
       In addition, in cases where the States would be reimbursed 
     for interim assistance they had provided to a beneficiary 
     awaiting a decision on a claim for SSI benefits, the State 
     would be paid first, and the attorney would be paid second 
     out of the past-due benefit amount.
       The provision also requires the General Accounting Office 
     to conduct a study of claimant representation in the Social 
     Security and Supplemental Security Income programs. The study 
     will include an evaluation of the potential results of 
     extending the fee withholding process to non-attorney 
     representatives.
       This provision applies with respect to fees for 
     representation that are first required to be certified or 
     paid on or after the first day of the first month that begins 
     after 270 days after the date of enactment. The provision 
     would sunset with respect to respect to agreements for 
     representation entered into after 5 years after the 
     implementation date. The GAO report is due to the Committee 
     on Ways and Means of the House of Representatives and the 
     Committee on Finance of the Senate not later than 1 year 
     after the date of enactment.


                           reason for change.

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

            TITLE IV--MISCELLANEOUS AND TECHNICAL AMENDMENTS

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

     Section 401. Application of Demonstration Authority Sunset 
         Date to New Projects


                              present law

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


                        explanation of provision

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


                           Reason for change

       The current five-year limitation on waiver authority 
     restricts the options that may be tested to improve work 
     incentives and return to work initiatives, as several 
     potential options the Commissioner may test would extend past 
     the current five-year limit. Developing a well-designed 
     demonstration project can require several years, and the 
     current five-year authority might not allow sufficient time 
     to both design the project and to conduct it long enough to 
     obtain reliable data.
     Section 402. Expansion of Waiver Authority Available in 
         Connection with Demonstration Projects Providing for 
         Reductions in Disability Insurance Benefits Based on 
         Earnings


                              present law

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

[[Page 5136]]

     waive compliance with the benefit provisions of Title II and 
     allows the Secretary of Health and Human Services to waive 
     compliance with the benefit requirements of Title XVIII.


                        explanation of provision

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


                           reason for change

       This additional waiver authority is needed to allow the 
     Commissioner to effectively test the $1-for-$2 benefit offset 
     in combination with return to work services under the Ticket 
     to Work Program. Under the $1-for-$2 benefit offset, earnings 
     of many beneficiaries may not be sufficient to completely 
     eliminate benefits. However, under section 1148 of the Social 
     Security Act, benefits must be completely eliminated before 
     employment networks participating in the Ticket to Work 
     Program are eligible to receive outcome payments. Therefore, 
     employment networks are likely to be reluctant to accept 
     tickets from beneficiaries participating in the $1-for-$2 
     benefit offset demonstration, making it impossible for the 
     SSA to effectively test the combination of the benefit offset 
     and these return to work services. Additionally, section 1148 
     waiver authority was provided for the broad Title II 
     disability demonstration authority under section 234 of the 
     Social Security Act, but not for this mandated project.
     Section 403. Funding of Demonstration Projects Providing for 
         Reductions in Disability Insurance Benefits Based on 
         Earnings


                              present law

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


                        explanation of provision

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


                           reason for change

       For demonstration projects conducted under the broader 
     Title II demonstration project authority under section 234 of 
     the Social Security Act, administrative costs are paid out of 
     otherwise available annually appropriated funds, and benefits 
     associated with the demonstration projects are paid from the 
     OASDI or HI/SMI trust funds. This provision would make 
     funding sources for the $1 for $2 demonstration project under 
     the Ticket to Work Act consistent with funding sources for 
     other Title II demonstration projects.
     Section 404. Availability of Federal and State Work Incentive 
         Services to Additional Individuals


                              present law

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


                        explanation of provision

       The new provision expands eligibility for the BPAO and 
     PABSS programs under sections 1149 and 1150 of the Act to 
     include not just individuals who are ``disabled 
     beneficiaries'' under section 1148(k) of the Act, but also 
     individuals who (1) are no longer eligible for SSI benefits 
     because of an increase in earnings, but remain eligible for 
     Medicaid under section 1619(b); (2) receive only a State 
     supplementation payment (a payment that some States provide 
     as a supplement to the federal SSI benefit); or (3) are in an 
     extended period of Medicare eligibility under Title XVIII 
     after a period of Title II disability has ended. The new 
     provision also expands the types of services a P&A system may 
     provide under section 1150 of the Act. Currently P&A systems 
     may provide ``advocacy or other services that a disabled 
     beneficiary may need to secure or regain employment,'' while 
     the new provision allows them to provide ``advocacy or other 
     services that a disabled beneficiary may need to secure, 
     maintain, or regain employment.''
       The amendment to section 1149, which affects the BPAO 
     program, is effective with respect to grants, cooperative 
     agreements or contracts entered into on or after the date of 
     enactment. The amendments to section 1150, which affect the 
     PABSS program, are effective for payments provided after the 
     date of the enactment.


                           reason for change

       The Committee on Ways and Means recognizes that Social 
     Security and SSI beneficiaries with disabilities face a 
     variety of barriers and disincentives to becoming employed 
     and staying in their jobs. The intent of this provision, as 
     with the Ticket to Work Act, is to encourage disabled 
     individuals to work.
       The definition of ``disabled beneficiary'' under section 
     1148(k) of the Act does not include several groups of 
     beneficiaries, including individuals who are no longer 
     eligible for SSI benefits because of an earnings increase but 
     remain eligible for Medicaid under section 1619(b); 
     individuals receiving only a State supplementation payment; 
     and individuals who are in an extended period of Medicare 
     eligibility. The Committee on Ways and Means believes that 
     BPAO and PABSS services should be available to all of these 
     disabled beneficiaries regardless of Title II or SSI payment 
     status. Beneficiaries may have progressed beyond eligibility 
     for federal cash benefits, but may still need information 
     about the effects of work on their benefits, or may need 
     advocacy or other services to help them maintain or regain 
     employment. Extending eligibility for the BPAO and PABSS 
     programs to beneficiaries who are receiving a State 
     supplementation payment or are still eligible for Medicare or 
     Medicaid, but who are no longer eligible for federal cash 
     benefits, will help to prevent these beneficiaries from 
     returning to the federal cash benefit rolls and help them to 
     reach their optimum level of employment.
       The Committee on Ways and Means also intends that PABSS 
     services be available to provide assistance to beneficiaries 
     who have successfully obtained employment but who continue to 
     encounter job-related difficulties. Therefore, the new 
     provision extends the current PABSS assistance (which is 
     available for securing and regaining employment) to 
     maintaining employment--thus providing a continuity of 
     services for disabled individuals throughout the process of 
     initially securing employment, the course of their being 
     employed and, if needed, their efforts to regain employment. 
     This provision would ensure that disabled individuals would 
     not face a situation in which they would have to wait until 
     they lost their employment in order to once again be eligible 
     to receive PABSS services. Payments for services to maintain 
     employment would be subject to Section 1150(c) of the Social 
     Security Act. The Committee on Ways and Means will continue 
     to monitor the implementation of PABSS programs to ensure 
     that assistance is directed to all areas in which 
     beneficiaries face obstacles in securing, maintaining, or 
     regaining work.
     Section 405. Technical Amendment Clarifying Treatment for 
         Certain Purposes of Individual Work Plans Under the 
         Ticket to Work and Self-Sufficiency Program


                              present law

       Under section 51 of the Internal Revenue Code (IRC), 
     employers may claim a Work Opportunity Tax Credit (WOTC) if 
     they hire, among other individuals, individuals with 
     disabilities who have been referred by a State vocational 
     rehabilitation (VR) agency. For an individual to qualify as a 
     vocational rehabilitation referral under section 51(d)(6)(B) 
     of the IRC, the individual must be receiving or have 
     completed vocational rehabilitation services pursuant to: (i) 
     ``an individualized written plan for employment under a State 
     plan for vocational rehabilitation services approved under 
     the Rehabilitation Act of 1973;'' or (ii) ``a program of 
     vocational rehabilitation carried out under chapter 31 of 
     title 38, United States Code.'' (IRC, section 51(d)(6)(B).
       The WOTC is equal to 40% of the first $6,000 of wages paid 
     to newly hired employees during their first year of 
     employment when the employee is retained for at least 400 
     work hours. As such, the maximum credit per employee is 
     $2,400, but the credit may be less depending on the 
     employer's tax bracket. A lesser credit rate of 25% is 
     provided to employers when the employee remains on the job 
     for 120-399 hours. The amount of the credit reduces the 
     company's deduction for the employee's wages.

[[Page 5137]]

       The Ticket to Work Act established the Ticket to Work and 
     Self-Sufficiency Program (Ticket to Work Program) under 
     section 1148 of the Social Security Act. Under this program, 
     the SSA provides a ``ticket'' to eligible Social Security 
     Disability Insurance beneficiaries and Supplemental Security 
     Income beneficiaries with disabilities that allows them to 
     obtain employment and other support services from an approved 
     ``employment network'' of their choice. Employment networks 
     may include State, local, or private entities that can 
     provide directly, or arrange for other organizations or 
     entities to provide, employment services, VR services, or 
     other support services. State VR agencies have the option of 
     participating in the Ticket to Work Program as employment 
     networks. Employment networks must work with each beneficiary 
     they serve to develop an individual work plan (IWP) for that 
     beneficiary that outlines his or her vocational goals and the 
     services needed to achieve those goals. For VR agencies that 
     participate in the Ticket to Work Program, the individualized 
     written plan for employment (as specified under (i) in 
     paragraph one above) serves in lieu of the IWP.
       Under current law, an employer hiring a disabled individual 
     referred by an employment network does not qualify for the 
     WOTC unless the employment network is a State VR agency.


                        explanation of provision

       The new provision allows employers who hire disabled 
     workers through referrals by employment networks under 
     section 1148 of the Social Security Act to qualify for the 
     WOTC. Specifically, it provides that, for purposes of section 
     51(d)(6)(B)(i) of the IRC of 1986, an IWP under section 1148 
     of the Social Security Act shall be treated as an 
     individualized written plan for employment under a State plan 
     for vocational rehabilitation services approved under the 
     Rehabilitation Act of 1973.
       This provision is effective as if it were included in 
     section 505 of the Ticket to Work Act.


                           reason for change

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

                  Subtitle B--Miscellaneous Amendments

     Section 411. Elimination of Transcript Requirement in Remand 
         Cases Fully Favorable to the Claimant


                              present law

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


                        explanation of provision

       The new provision clarifies that the SSA is not required to 
     file a transcript with the court when the SSA, on remand, 
     issues a decision fully favorable to the claimant. This 
     provision is effective with respect to final determinations 
     issued (upon remand) on or after the date of enactment.


                           reason for change

       A claimant whose benefits have been denied is provided a 
     transcript of a hearing to be used when the claimant appeals 
     his case in Federal District court. If the Administrative Law 
     Judge issued a fully favorable decision, then transcribing 
     the hearing is unnecessary since the claimant would not 
     appeal this decision.
     Section 412. Nonpayment of Benefits Upon Removal From the 
         United States


                              present law

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


                        explanation of provision

       The new provision requires the SSA to suspend benefits of 
     beneficiaries who are removed from the United States for 
     smuggling aliens. This provision applies with respect to 
     removals occurring after the date of enactment.


                           reason for change

       Individuals who are removed from the United States for 
     smuggling aliens have committed an act that should prohibit 
     them from receiving Social Security benefits.
     Section 413. Reinstatement of Certain Reporting Requirements


                              present law

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


                        explanation of provision

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


                           Reason for change

       The reports to be reinstated provide Congress with 
     important information needed to evaluate and oversee the 
     Social Security and Medicare programs.
     Section 414. Clarification of Definitions Regarding Certain 
         Survivor Benefits


                              Present Law

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


                        Explanation of Provision

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


                           Reason for Change

       This provision allows the Commissioner to issue benefits in 
     certain unusual cases in which the duration of marriage 
     requirement could not be met due to a legal impediment over 
     which the individual had no control and the individual would 
     have met the legal requirements were it not for the legal 
     impediment.
     Section 415. Clarification Respecting the FICA and SECA Tax 
         Exemptions for an Individual Whose Earnings are Subject 
         to the Laws of a Totalization Agreement Partner


                              Present Law

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


                        Explanation of Provision

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


                           Reason for Change

       In U.S. totalization agreements, a person's work is 
     generally subject to the Social Security laws of the country 
     in which the work is performed. In most cases, the worker 
     (whether subject to the laws of the United States or the 
     other country) is compulsorily covered and required to pay 
     contributions in accordance with the laws of that country. In 
     some instances, however, work that would be compulsorily 
     covered in the U.S. is excluded from compulsory coverage in 
     the other country (such as Germany). In such cases, the IRS 
     has questioned the exemption from U.S. Social Security tax 
     for workers who elect not to make contributions to the 
     foreign country's retirement system. This provision would 
     remove any question regarding the exemption and would be 
     consistent with the general philosophy behind the coverage 
     rules of totalization agreements.
     Section 416. Coverage Under Divided Retirement System for 
         Public Employees in Kentucky


                              Present Law

       Under Section 218 of the Social Security Act, a State may 
     choose whether or not its State and local government 
     employees who are covered by a public pension may also 
     participate in the Social Security Old-Age, Survivors, and 
     Disability Insurance program. (In this context, the term 
     ``public pension plan'' refers to a pension, annuity, 
     retirement, or similar fund or system established by a State 
     or a political subdivision of a State such as a town. Under 
     current law, State or local government employees not covered 
     by a public pension plan are, with a few exceptions, required 
     to pay Social Security payroll taxes.)
       Social Security coverage for employees covered under a 
     State or local government public pension plan is established 
     through an agreement between the State and the federal 
     government. All States have the option of electing Social 
     Security coverage for employees by a majority vote in a 
     referendum. If the majority vote is in favor of Social 
     Security coverage, then the entire group, including those 
     voting against such coverage, will be covered by Social 
     Security. If the majority vote is against Social Security 
     coverage, then the entire group, including those

[[Page 5138]]

     voting in favor of such coverage and employees hired after 
     the referendum, will not be covered by Social Security.
       In certain States, however, there is an alternative method 
     for electing Social Security coverage. Under this method, 
     rather than the majority of votes determining Social Security 
     coverage for the whole group, employees voting in the 
     referendum may individually determine whether they want 
     Social Security coverage, provided that all newly hired 
     employees of the system are required to participate in Social 
     Security. After the referendum, the retirement system is 
     divided into two groups, one composed of members who elected 
     Social Security coverage plus those hired after the 
     referendum, and the other composed of those who did not elect 
     Social Security coverage. Under Section 218(d)(6)(c) of the 
     Social Security Act, 21 states currently have authority to 
     operate such a divided retirement system.


                        Explanation of Provision

       The new provision permits the state of Kentucky to join the 
     21 other states in being able to offer a divided retirement 
     system. This system would permit current state and local 
     government workers in a public pension plan to elect Social 
     Security coverage on an individual basis. Those who do not 
     wish to be covered by Social Security would continue to 
     participate exclusively in the public pension plan. This 
     provision is effective retroactively to January 1, 2003.


                           reason for change

       The governments of the City of Louisville and Jefferson 
     County merged in January 2003, and formed a new political 
     subdivision. Under the provision, once the new political 
     subdivision holds a referendum on Social Security coverage 
     among its employees, each employee would choose whether or 
     not to participate in the Social Security system in addition 
     to their public pension plan. All employees newly hired to 
     the system after the divided system is in place would be 
     covered automatically under Social Security.
       Currently, some employees of the new government are covered 
     under Social Security, while others are not. In order to 
     provide fair and equitable coverage to all employees, a 
     divided retirement system, such as that currently authorized 
     in 21 other states, was seen as the best solution. It would 
     allow those who want to keep Social Security coverage or 
     obtain Social Security coverage to do so, without requiring 
     other current employees to participate in Social Security as 
     well.
       Without this provision, upon holding a referendum on Social 
     Security coverage, a majority of votes would determine 
     whether or not the group would participate in Social 
     Security. Since the number of non-covered employees exceeds 
     the number of Social Security-covered employees in the new 
     government, those employees currently covered by Social 
     Security could lose that coverage. The Kentucky General 
     Assembly has adopted a bill that will allow the new divided 
     retirement system to go forward following enactment of this 
     provision.
     Section 417. Compensation for the Social Security Advisory 
         Board


                              present law

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


                        explanation of provision

       The new provision establishes that compensation for Social 
     Security Advisory Board members will be provided, at the 
     daily rate of basic pay for level IV of the Executive 
     Schedule, for each day (including travel time) during which 
     the member is engaged in performing a function of the Board. 
     This provision is effective on January 1, 2003.


                           reasons for change

       Other government advisory boards--such as the Employee 
     Retirement Income Security Act Advisory Council, the Pension 
     Benefit Guaranty Corporation Advisory Committee and the 
     Thrift Savings Plan Board--provide compensation for their 
     members. This provision allows for similar treatment of 
     Social Security Advisory Board members with respect to 
     compensation.
     Seciton 418. 60-Month Period of Employment Requirement for 
         Application of Government Pension Offset Exemption


                              present law

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


                        explanation of provision

       The new provision requires that State and local government 
     workers be covered by Social Security during their last 5 
     years of employment in order to be exempt from the GPO. The 
     provision is effective for applications filed on or after the 
     first day of the first month after the date of enactment. 
     However, the provision would not apply to individuals whose 
     last day of employment for the State or local governmental 
     entity occurred before the end of the 90-day period following 
     the date of enactment. It would also not apply to person 
     whose last day of employment occurred after the end of the 
     90-day period following the date of enactment, if during the 
     90-day period following the date of enactment the person's 
     job was covered by Social Security and remained so until 
     their last day of employment.


                           reason for change

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

                    Subtitle C--Technical Amendments

     Section 421. Technical Correction Relating to Responsible 
         Agency Head


                              present law

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


                        explanation of provision

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


                           reason for change

       The ``Social Security Independence and Program Improvements 
     Act of 1994'' (P.L. 103-296) made the Social Security 
     Administration an independent agency separate from the 
     Department of Health and Human Services. This provision 
     updates Section 1143 to reflect that change.
     Section 422. Technical Correction Relating to Retirement 
         Benefits of Ministers


                              present law

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


                        explanation of provision

       The new provision makes a conforming change to exclude 
     these benefits received by retired clergy from Social 
     Security-covered earnings for the purpose of acquiring 
     insured status and calculating Social Security benefit 
     amounts. This provision is effective for years beginning 
     before, on, or after December 31, 1994. This effective date 
     is the same as

[[Page 5139]]

     the effective date of Section 1456 of P.L. 104-188.


                           reason for change

       P.L. 104-188 provided that certain retirement benefits 
     received by ministers and members of religious orders are not 
     subject to payroll taxes. However, a conforming change was 
     not made to the Social Security Act to exclude these benefits 
     from being counted as wages for the purpose of acquiring 
     insured status and calculating Social Security benefit 
     amounts. This income is therefore not treated in a uniform 
     manner. This provision would conform the Social Security Act 
     to the Internal Revenue Code with respect to such income.
     Section 423. Technical Correction Relating to Domestic 
         Employment


                              present law

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


                        explanation of provision

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


                           reason for change

       Prior to 1994, domestic service on a farm was treated as 
     agricultural labor and was subject to the coverage threshold 
     for agricultural labor. According to the SSA, in 1994, when 
     Congress amended the law with respect to domestic employment, 
     the intent was that domestic employment on a farm would be 
     subject to the coverage threshold for domestic employees 
     instead of the threshold for agricultural labor. However, the 
     current language is unclear, making it appear as if farm 
     domestics are subject to both thresholds.
     Section 424. Technical Correction of Outdated References


                              present law

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


                        explanation of provision

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


                           reason for change

       Over the years, provisions in the Social Security Act, the 
     Internal Revenue Code and other related laws have been 
     deleted, re-designated or amended. However, necessary 
     conforming changes have not always been made. Consequently, 
     Social Security law contains some outdated references.
     Section 425. Technical Correction Respecting Self-Employment 
         Income in Community Property States


                              present law

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


                        explanation of provision

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


                           reason for change

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


 Letters of Support Received for H.R. 743, Social Security Protection 
                              Act of 2003


                          Disability Advocates

       National Alliance for the Mentally Ill.
       Consortium for Citizens with Disabilities.


                         Attorney Organizations

       National Organization of Social Security Claimants' 
     Representatives.


                       Administrative Law Judges

       Association of Administrative Law Judges.


                            Law Enforcement

       Grand Lodge Fraternal Order of Police.
       Fraternal Order of Police, Louisville Lodge 6.
       Long Beach, CA Police--Chief of Police.
       Wayne County, MI (includes Detroit)--Sheriff.
       Chartiers Township Police--Houston, PA--Chief of Police.
       Borough of Churchill Police--Pittsburgh, PA--Chief of 
     Police.
       Brecknock Township Police--Mohnton, PA--Chief of Police.
       Milton, PA Police--Chief of Police.

                                                         AARP,

                                    Washington, DC, March 5, 2003.
     Hon. Robert Matsui,
     House of Representatives,
     Washington, DC.
       Dear Representative Matsui: On behalf of AARP and its 35 
     million members, I wish to commend you and Representative 
     Shaw for introducing H.R. 743, the ``Social Security Program 
     Protection Act of 2003.'' This comprehensive legislation is 
     important to claimants, beneficiaries and the overall Social 
     Security program.
       We are pleased that the legislation would protect 
     beneficiaries against abuses by representative payees. For 
     many years, AARP recruited volunteers as representative 
     payees so that Social Security beneficiaries who needed a 
     representative payee but could not find one would not lose 
     any benefits. These programs were quite successful but were 
     limited in scope.
       AARP has had a longstanding interest in curbing deceptive 
     mailings targeted at older Americans. This legislation builds 
     upon prior legislation and could discourage other mailers 
     from scaring older people about their Social Security and 
     Medicare benefits.
       The legislation would strengthen the Ticket to Work Act and 
     conduct pilot projects to improve work incentives for those 
     with a disability. These changes would send a strong signal 
     that our society values the contributions of all its 
     citizens.
       Thank you again for your leadership in moving H.R. 743 in 
     the House.
           Sincerely,
                                                    David Certner,
     Director, Federal Affairs.
                                  ____



                                                         NAMI,

                                     Arlington, VA, March 3, 2003.
     Hon. E. Clay Shaw,
     Chairman, Subcommittee on Social Security, Committee on Ways 
         & Means, House of Representatives, Washington, DC.
       Dear Chairman Shaw: On behalf of the 220,000 members and 
     1,200 affiliates of the National Alliance for the Mentally 
     Ill (NAMI) I am writing to offer our support and urge swift 
     House consideration of HR 743, the Social Security Protection 
     Act of 2003. As the nation's largest organization 
     representing individuals with severe mental illnesses and 
     their families, NAMI urges the House to pass this bipartisan 
     legislation to protect the interests of vulnerable 
     beneficiaries of Social Security's disability income and 
     support programs.
       HR 743 is the product of near universal bipartisan support. 
     This legislation contains many long overdue protections for 
     the most disabled and vulnerable Americans and their 
     families. As you know, individuals with severe mental 
     illnesses represent a large and growing percentage of Social 
     Security's cash assistance benefit programs (SSI and SSDI). 
     The beneficiary protections and program integrity provisions 
     in HR 743 will help ensure that the performance of the SSI 
     and SSDI programs improve. Of particular to NAMI are the 
     sections in HR 743 that will provide badly needed protections 
     for recipients whose benefits are mishandled or fraudulently 
     diverted by institutional representative payees. NAMI is 
     especially supportive of these protections given the high 
     percentage of SSI beneficiaries with severe persistent mental 
     illnesses who receive benefits through a representative 
     payee.
       NAMI is also pleased with provisions in HR 743 that will 
     require Social Security to issue receipts to SSDI 
     beneficiaries when they forward earnings reports to agency. 
     This new protection will be of tremendous help to SSDI 
     beneficiaries seeking to use the Trial Work Period program to 
     re-enter the workforce. Finally, NAMI is pleased that HR 743 
     contains needed technical corrections to improve with the 
     implementation of the 1999 Ticket to Work and Work incentives 
     Improvement Act (TWWIIA).
       HR 743 is the product of years of bipartisan work. Similar 
     legislation passed the House 425-0 and cleared the Senate 
     without dissent in the 107th Congress. In NAMI's view, the 
     House should act swiftly in 2003 to pass this important 
     legislation that everyone agrees is needed to protect people 
     with severe disabilities that rely on SSI and SSDI benefits 
     for their most basic needs.
           Sincerely,
                                         Richard C. Birkel, Ph.D.,
                                               Executive Director.

[[Page 5140]]

     
                                  ____
                                                    Consortium for


                                   Citizens with Disabilities,

                                    Washington, DC, March 4, 2003.
     Hon. E. Clay Shaw,
     Hon. Robert Matsui,
     House of Representatives, Washington, DC.
       Dear Representatives Shaw and Matsui: On behalf of the 
     Consortium for Citizens with Disabilities Task Forces on 
     Social Security and Work Incentives Implementation, we are 
     writing to express our support for the speedy passage of H.R. 
     743, the Social Security Protection Act of 2003.
       We appreciate the hard work and the perseverance of the 
     Subcommittee on Social Security in addressing this important 
     legislation over the course of two Congresses and again in 
     this 108th Congress. Your leadership and commitment last year 
     resulted in the passage of the Social Security Program 
     Protection Act of 2002, H.R. 4070, in the House by a vote of 
     425 to 0. Clearly, the issues addressed in the bipartisan 
     Social Security Protection Act are important to people with 
     disabilities who must depend on the Title II and Title XVI 
     disability programs. We urge House passage of H.R. 743.
       H.R. 743 is a very important bill for people with 
     disabilities. We believe that it should be enacted as soon as 
     possible. People with disabilities need the protections of 
     the representative payee provisions. People with disabilities 
     who are attempting to work need the statutory changes to the 
     Ticket to Work program in order to better utilize the 
     intended work incentive provisions enacted in 1999. In 
     addition, beneficiaries with disabilities need the provision 
     requiring the Social Security Administration to issue written 
     receipts, and to implement a centralized computer file 
     record, whenever beneficiaries report earnings or a change in 
     work status. These important provisions have not been 
     controversial--in fact, they have enjoyed significant 
     bipartisan support--and have simply fallen prey to the 
     legislative process over the last two Congresses. We 
     appreciate your interest in moving H.R. 743 quickly so that 
     these important protections can become available to 
     beneficiaries as soon as possible.
       One of the most important sections of H.R. 743 for people 
     with disabilities is the section dealing with improved 
     protections for beneficiaries who need representative payees. 
     Approximately 6 million Social Security and Supplemental 
     Security Income beneficiaries have representative payees, 
     often family members or friends, who receive the benefits on 
     their behalf and have a responsibility to manage the benefits 
     on behalf of the beneficiaries.
       H.R. 743 includes important provisions strengthening SSA's 
     ability to address abuses by representative payees. The 
     provisions would:
       Require non-governmental fee-for-services organizational 
     representative payees to be bonded and licensed under state 
     or local law;
       Provide that when an organization has been found to have 
     misused an individual's benefits, the organization would not 
     qualify for the fee;
       Allow SSA to re-issue benefits to beneficiaries whose funds 
     had been misused;
       Allow SSA to treat misused benefits as ``overpayments'' to 
     the representative payee, thereby triggering SSA's authority 
     to recover the money through tax refund offsets, referral to 
     collection agencies, notifying credit bureaus, and offset of 
     any future federal benefits/payments; and
       Require monitoring of representative payees, including 
     monitoring of organizations over a certain size and 
     government agencies serving as representative payees.
       In addition, H.R. 743 would extend the direct payment of 
     attorneys fees in SSI cases on a voluntary basis. Advocates 
     believe that such a program will make legal representation 
     more accessible for people with disabilities who need 
     assistance in handling their cases as they move through the 
     extremely complex disability determination and appeals 
     systems.
       CCD is a working coalition of national consumer, advocacy, 
     provider, and professional organizations working together 
     with and on behalf of the 54 million children and adults with 
     disabilities and their families living in the United States. 
     The CCD Social Security and Work Incentives Implementation 
     Task Forces focus on disability policy issues in the Title 
     XVI Supplemental Security Income program and the Title II 
     disability programs. We look forward to the House passage and 
     final enactment of H.R. 743.
           Sincerely,

  Co-chairs, Social Security and Work Incentives Implementation Task 
                                 Forces

     Marty Ford
         The Arc and UCP Public Policy Collaboration.
     Ethel Zelenske
         National Organization of Social Security Claimants' 
           Representatives.
     Cheryl Bates-Harris
         National Association of Protection and Advocacy Systems.
     Susan Prokop
         Paralyzed Veterans of America.
     Melanie Brunson
         American Council of the Blind.
     Paul Seifert
         International Association of Psychosocial Rehabilitation 
           Services.
                                  ____

         National Organization of Social Security Claimants' 
           Representatives,
                              Midland Park, NJ, February 26, 2003.
     Hon. E. Clay Shaw, Jr.,
     Subcommittee on Social Security, Committee on Ways and Means, 
         House of Representatives, Washington, DC.
       Dear Mr. Chairman: On behalf of the National Organization 
     of Social Security Claimants' Representatives (``NOSSCR''), 
     we offer our support for the important goals of H.R. 743, the 
     Social Security Protection Act of 2003.
       Specifically, we support the protections in Title I for 
     beneficiaries who have representative payees and support 
     provisions which, for the first time, require the Social 
     Security Administration to issue receipts to beneficiaries 
     when they report earnings or a change in work status. 
     Additionally, Title III of this measure contains two 
     important provisions NOSSCR strongly supports. These 
     provisions are designed to ensure access to legal 
     representation for those Social Security and Supplemental 
     Security Income (``SSI'') claimants who seek to be 
     represented as they pursue their claims and appeals. First, 
     the bill limits the assessment of the user fee to $75.00 or 
     6.3 percent, whichever is lower. Second, the bill extends the 
     current Title II fee withholding and direct payment procedure 
     to the Title XVI program, giving SSI claimants the same 
     access to representation as is currently available to Social 
     Security disability claimants. Together, these provisions 
     make changes that will help claimants obtain representation 
     as they navigate what can often be confusing and difficult 
     process.
       We are dismayed, however, by the addition of a sunset 
     provision for the extension of withholding to the Title XVI 
     program. Enactment of an attorneys' fee payment system with 
     an ``end date'' will undercut its very purpose: to enable 
     more SSI claimants seeking a lawyer to hire one. The sunset 
     provision shortchanges SSI claimants who desire legal 
     representation. We are not aware of any policy justification 
     for this provision, and we urge its deletion from the bill.
       NOSSCR appreciates your continued interest in improving the 
     Social Security and SSI programs and ensuring the best 
     possible service delivery. We look forward to your 
     Subcommittee's consideration of this legislation.
           Very truly yours,
                                                    Nancy G. Shor,
     Executive Director.
                                  ____

                                                    Association of


                                    Administrative Law Judges,

                                 Milwaukee, WI, February 28, 2003.
     Re: The Social Security Protection Act of 2003 (HR 743).

     Hon. Clay Shaw, Jr.,
     Chairperson, Subcommittee on Social Security, Washington, DC.
       Dear Chairperson Shaw: I write on behalf of the Association 
     of Administrative Law Judges. We represent about 1000 
     administrative law judges in the Social Security 
     Administration and in the Department of Health and Human 
     Services which comprise about 80% of the administrative law 
     judges in the Federal government. I am writing in regard to 
     H.R. 743, a bill to provide additional safeguards for Social 
     Security and Supplement Security Income beneficiaries with 
     representative payees, to enhance program protections, and 
     for other purposes.
       We support the goals of H.R. 743. In particular, we support 
     the attorney fee payment system improvements provided for in 
     the bill, but we believe that the legislation should not 
     include any ``sunset'' provisions. We further support the 
     provisions in the legislation for the elimination of 
     transcript requirements in remand cases fully favorable to 
     the claimant.
       We also favor the provision in the legislation that directs 
     the Social Security Administration to issue receipts to 
     acknowledge submissions of earnings by beneficiaries.
       Thank you for your work on this important legislation.
           Sincerely,
                                               Ronald G. Bernoski,
     President.
                                  ____

                                                      Grand Lodge,


                                    Fraternal Order of Police,

                                 Washington, DC, January 10, 2003.
     Hon. Ron Lewis,
     House of Representatives,
     Washington, DC.
       Dear Representative Lewis: I am writing on behalf of the 
     membership of the Fraternal Order of Police to advise you of 
     our strong support for H.R. 134, which would add Kentucky to 
     the list of those States permitted to operate a separate 
     retirement system for certain public employees.
       As you know, in November of 2000, the citizens of Jefferson 
     County and the City of Louisville, Kentucky voted to merge 
     their communities and respective governments into a single 
     entity, known as Greater Louisville. This merger went into 
     effect on 6 January 2003. Jefferson County and the City of 
     Louisville operated two very different retirement programs 
     for their police officers and, now that the merger has 
     occurred, Federal law requires the new government to offer a 
     single retirement plan. We share your concern that this 
     requirement may dramatically increase the cost of retirement 
     for the public

[[Page 5141]]

     safety officers who now serve Greater Louisville, and thus 
     jeopardize the retirement security of many of the community's 
     police, fire, and emergency personnel.
       The Kentucky State Lodge of the Fraternal Order of Police 
     has been successful in its effort in the State's General 
     Assembly and now need the Federal government to act by adding 
     Kentucky to the list of twenty-one (21) States permitted to 
     operate what is known as a ``divided retirement system.'' 
     This will allow the police officers of Greater Louisville to 
     decide for themselves whether or not they want to participate 
     in Social Security or remain in their traditional retirement 
     plan. While future employees will be automatically enrolled 
     in Social Security, no current officers would be forced into 
     a new retirement system as a result of the merger.
       It is critical that the Congress act quickly on this 
     matter. The F.O.P. is ready to assist you in getting this 
     bill through the House expeditiously.
       On behalf of the more than 300,000 members of the Fraternal 
     Order of Police, I want to thank you for your hard work on 
     this effort. Please let us know how we can be of further 
     assistance by contacting me or Executive Director Jim Pasco 
     through my Washington office.
           Sincerely,
                                                 Chuck Canterbury,
     National President.
                                  ____

                                        Fraternal Order of Police,


                                           Louisville Lodge 6,

                                Louisville, KY, February 19, 2003.
     Hon. Ron Lewis,
     House of Representatives,
     Washington, DC.
       Dear Representative Lewis: I am writing on behalf of the 
     members of Fraternal Order of Police, Louisville Lodge #6. We 
     want to advise you of our support for HR 134. We believe that 
     this bill would add Kentucky to the list of those States 
     permitted to operate a separate retirement system for certain 
     public employees.
       As I am sure you are aware that last November our community 
     voted to unite Jefferson County and the City of Louisville, 
     Kentucky. We have a newly formed entity known as Greater 
     Louisville. This merger was effective January 6th 2003. 
     Jefferson County and the City of Louisville are now operating 
     on two very different retirement systems in respect to their 
     police officers. Now that the merger has taken effect, 
     Federal law requires the new government to offer one single 
     retirement plan for everyone.
       The Kentucky State F.O.P. Lodge has been successful in its 
     effort in the State's General Assembly and now need the 
     Federal Government to act by adding Kentucky to the list of 
     twenty-one (21) States permitted to operate what is known as 
     a ``divided retirement system.'' This will give every police 
     officer the choice whether to participate in Social Security 
     or remain in their current/traditional retirement plan.
       We believe that it is critical and important that Congress 
     act on this matter as quickly as possible. On behalf of our 
     membership, we wish to thank you for your efforts with this 
     matter. Please let us know if we can be of any assistance in 
     the future.
           Sincerely,
                                                      David James,
     President.
                                  ____

                                                City of Long Beach


                                            Police Department,

                                Long Beach, CA, February 27, 2003.
     Congressman E. Clay Shaw, Jr.,
     Rayburn House Office Building, Washington, DC.
       Dear Congressman Shaw: It has come to my attention that you 
     will soon be holding hearings on House of Representatives 
     Bill 743. I am writing to let you know that I fully support 
     this Bill, especially as it relates to expanding the denial 
     of Social Security benefits to all of those who are fugitives 
     from justice.
       My department has worked successfully with the Social 
     Security Administration's Office of the Inspector General 
     (SSA OIG) in apprehending fugitives who collect Supplemental 
     Security Income payments. By working with the SSA OIG to 
     remove a source of income for the fugitive, law enforcement 
     departments like mine are finding it easier to locate and 
     apprehend fugitives.
       I urge you to fully support the provisions of H.R. 743 that 
     make all fugitives ineligible for any type of Social Security 
     benefit from the United States Government.
           Sincerely,
                                                 Anthony W. Batts,
     Chief of Police.
                                  ____

                                            Office of the Sheriff,


                                                 Wayne County,

                                   Detroit, MI, February 25, 2003.
     Subject: House Bill HR 473.

     Hon. E. Clay Shaw, Jr.,
     Rayburn House Office Building, Washington, DC.
       Dear Congressman Shaw: I would like to take this 
     opportunity to officially endorse and support House Bill HR 
     473 that provides for the expansion of the Fugitive Felons 
     Project to include the Title II program. My department works 
     closely with the Social Security Inspector General's office 
     in identifying Title 16 SSI welfare recipients who are 
     fugitive felons and are residents of Wayne County.
       Over the past two years several hundred fugitive felons 
     have been arrested because of the close working relationship 
     between the Sheriff's Department and the Social Security 
     Inspector General's office. By expanding the fugitive felon 
     provision to include the Title II program, I believe the 
     number of arrests will increase significantly.
       If I may be of assistance to you in this matter, please 
     contact me at (313) 224-2233.
           Sincerely yours,
                                                  Warren C. Evans,
     Sheriff.
                                  ____

                                                Chartiers Township


                                            Police Department,

                                   Houston, PA, February 26, 2003.
     Congressman E. Clay Shaw Jr.,
     Rayburn House Office Building, Washington, DC.
       Dear Congressman E. Clay Shaw Jr.: I am writing you today, 
     to strongly endorse House Bill #473. I would especially 
     endorse Section 203 that covers the Title II Fugitive Felons 
     expansion. I believe Law Enforcement efforts would be greatly 
     enhanced by its passage.
           Sincerely,
                                                 James M. Horvath,
     Chief.
                                  ____

                                          The Borough of Churchill


                                            Police Department,

                                Pittsburgh, PA, February 28, 2003.
     To: Congressman E. Clay Shaw Jr.
     Subject: Endorsement for H.R. 743.
       I am writing to show my support for the above bill. I 
     believe that it would be in the best interest of the American 
     public to give this tool to Law Enforcement officials. I 
     believe that it will help up in the investigation of 
     Terrorists.
                                                 Richard H. James,
     Chief of Police.
                                  ____

                                                Brecknock Township


                                            Police Department,

                                   Mohnton, PA, February 27, 2003.
     Congressman E. Clay Shaw, Jr.,
     Rayburn House Office Building, Washington, DC.
       Dear Congressman Shaw: I would like to take this 
     opportunity to endorse the expansion of the Fugitive Felons 
     Project to include the Title II program in Section 203 of HR 
     473. It will be another valuable tool in the fight against 
     crime.
       Thank you for your consideration.

                                                    John V. Mintz,
     Chief of Police.
                                  ____



                                     Milton Police Department,

                                    Milton, PA, February 25, 2003.
     Congressman E. Clay Shaw, Jr.,
     Rayburn House Office Building, Washington, DC.
       Dear Congressman Shaw Jr.: This letter is in support of 
     your efforts under House Bill H.R. 743, amending the Social 
     Security Act and the Internal Revenue Code of 1986. This 
     should provide law enforcement at all levels a powerful tool 
     in the location of fugitives from justice. On many occasions 
     in my law enforcement experience I have found persons 
     receiving benefits of the Social Security System while 
     outstanding warrants or other paper was pending on them.
       Thank you for your introduction of this needed legislation.
           Sincerely yours.
                                                        Paul Yost,
                                                            Chief.

  Mr. SHAW. Mr. Speaker, I yield 2 minutes to the gentleman from 
California (Mr. Herger), a valued member of the subcommittee.
  Mr. HERGER. Mr. Speaker, I rise in support of the Social Security 
Program Protection act. I would like to thank Chairman Shaw and the 
other members of the Committee on Ways and Means who have worked 
tirelessly to improve Social Security programs that provide a crucial 
safety net for many of our Nation's neediest disabled and elderly 
individuals. These changes have been designed to ensure that the right 
benefits go to the right people, a principle which should guide our 
efforts on behalf of the taxpayers we serve.
  I am especially pleased that the bill before us includes a provision 
designed to keep convicted fugitive felons from getting Social Security 
checks. These efforts built upon the criminal welfare prevention 
provisions which I introduced and which were enacted into law more than 
3 years ago. By all accounts, these laws have been effective in 
stopping illegal, fraudulent Social Security payments to prisoners.
  We have also stopped hard-earned taxpayer dollars from being used to 
subsidize addicts with disability checks. Overall, we have saved the 
taxpayers and beneficiaries literally billions of dollars.
  Other provisions in the legislation before us, such as granting the 
Social

[[Page 5142]]

Security Administration the tools it needs to weed out waste and fraud, 
will further protect vulnerable beneficiaries.
  Mr. Speaker, this bill passed with overwhelming bipartisan support in 
the last Congress. I urge all my colleagues to join me today in 
supporting it once again.
  Mr. MATSUI. Mr. Speaker, I yield 1 minute to the gentleman from Texas 
(Mr. Sandlin), a member of the Committee on Ways and Means.
  Mr. SANDLIN. Mr. Speaker, I thank the gentleman for yielding me this 
time, and I rise today to express my strong opposition to section 418 
of the Social Security Protection Act.
  Under section 418, an individual would be required to work in a 
Social Security-covered job for his or her last 5 years of employment 
to be exempt from the GPO. Both the increase in time and the offset 
itself are absolutely ridiculous.
  Under a provision of current law, known as the ``last day rule,'' an 
individual is exempt from GPO if he or she worked in a job that was 
covered by Social Security on the last day of employment. According to 
the GAO, extending the employment requirement to 5 years will save only 
$18 million per year, greatly to the detriment of public workers, 
especially our school teachers.
  Section 418 was not included in the version of this legislation that 
the House passed, with my support, during the 107th Congress. This is 
not the same bill as last year. I support the other provisions of this 
legislation, but cannot support H.R. 743 as introduced. Technical 
corrections are necessary. This is a correction that will strike at the 
very heart of public school teachers in Texas and public employees in 
other parts of the country.
  Mr. Speaker, I hope this legislation will finally focus Congress' 
attention on the need to repeal the government pension offset. I urge 
the Committee on Ways and Means to examine the GPO and its harmful 
impact on seniors in my district and all across the country.
  Mr. SHAW. Mr. Speaker, I yield 2 minutes to the gentleman from 
Arizona (Mr. Hayworth), another valued member of the Subcommittee on 
Social Security of the Committee on Ways and Means.
  Mr. HAYWORTH. Mr. Speaker, I thank the chairman of the subcommittee 
for yielding me this time, and I rise in strong support of the Social 
Security Protection Act of 2003.
  Now, the gentleman who preceded me in the well, the gentleman from 
California, spoke of the initiatives this committee and this House 
adopted to crack down on fraud and abuse, specifically the abuse of 
Social Security payments going to convicted felons. We have a chance 
now to expand that, to deny fugitive felons and payroll violators from 
receiving Social Security benefits and help individuals with 
disabilities.
  This is the key thing for me, my colleagues, because so many folks in 
the Fifth Congressional District of Arizona have come to me to extol 
the virtues of something this Congress did back in 1999, as we put 
people back to work with our Ticket to Work incentives that year. And 
while we have granted tickets to work across the country to emphasize 
the ability in disability and put people back to work, an important 
piece of clarifying language is in this provision. It clarifies that 
the Work Opportunity Tax Credit would be available to employers who 
hire a disabled beneficiary who is referred from any employment 
network, not just the State rehabilitation agency.
  So we actually expand the pool of people who can go to work and add 
further incentives in our Ticket to Work. So, on one hand, if we are 
talking about Social Security protection, we move to bar those who 
would take advantage of fraud and abuse. We crack down there. And yet 
for the most deserving among us, people who genuinely want to get back 
in the workforce, who have been met with limitations heretofore, we 
expand their opportunities to find work. We expand the opportunities 
for those who are willing to put them to work.
  It creates the type of balance necessary. It is the ideal type of 
perfecting and expanding legislation that is meant when we say we step 
up to protect this vital program. It shows reasoned balance and 
perfection in what is all too often an imperfect world as we strive to 
further strengthen and protect and perfect our process of Social 
Security.
  If nothing else were there but this expansion of the Work Opportunity 
Tax Credit and the Ticket to Work Program, I would stand in favor of 
this bill. But it does so much more. I would invite all of my friends 
in the House to join us in supporting this legislation.
  Mr. MATSUI. Mr. Speaker, I yield 1 minute to the gentlewoman from the 
State of Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I thank the distinguished 
gentleman from California for yielding me this time and for all of his 
good work.
  I am particularly saddened today, Mr. Speaker, that I have to come to 
the floor and vigorously oppose this legislation because just last 
year, 2002, I enthusiastically supported the Social Security Act of 
2002 for the very reason that we do need to fix some of the abuses and 
we need to respond to the needs of shoring up Social Security.
  But the Texas branch of our teachers association has characterized 
this hidden provision in 418 as a poison pill for Texas school 
employees--hardworking teachers and others who are working in our 
school districts lose their benefits. Many school districts offer 
teachers nonSocial Security government pensions. So, until now, many 
teachers have been forced to take advantage of the last day option. 
Just before they retire, they get a job in a business with a Social 
Security pension for a day, in order to receive their deserved 
benefits.
  This is a ridiculous system and the appropriate way to fix it would 
have been to repeal the GPO. In fact, I have cosponsored H.R. 594, with 
my colleague, the gentleman from California (Mr. McKeon), and 132 
others, just to do that. This bill closes the option to protect those 
hardworking teachers.
  For example, I received a call from one woman in my district who was 
a teacher earlier in her life. She wanted to come back today and help 
the teachers to teach the children to the system. But as a widow she 
cannot do so because of this terrible structure in our Social Security 
legislation.
  Mr. Speaker, this is a bad bill that has this hidden provision. It 
will hurt teachers, firefighters, and police persons and I ask my 
colleagues to vote against it.
  Mr. Speaker, I am saddened to come to the floor today to speak out 
against H.R. 743, The Social Security Protection Act of 2003. Social 
Security represents a covenant between the U.S. Federal Government and 
the American people. It is a promise that if a person works hard, and 
contributes into this investment program, that when it comes time for 
them to retire--their government will ensure that a fair benefit is 
there for them. It seems that too often, criminals take advantage of 
the trust between the Social Security Administration and the seniors 
and disabled Americans it serves. They misuse Social Security benefits. 
Such activity is worse than just stealing, because it threatens the 
confidence that the American people have in their government. That 
confidence is the foundation of our democracy.
  So last Congress, I joined with every voting Member of this House in 
support of The Social Security Act of 2002. It was an excellent piece 
of bipartisan legislation, which would have made great strides towards 
cutting down on the abuse of the Social Security system. Most of the 
major provisions of that bill are reflected in the bill before us 
today, and I still support them. The bills would both protect Social 
Security recipients by mandating reissue of funds when their payments 
are misused. Representative payees who misuse a person's benefits would 
be forced to reimburse those funds, plus would be subject to fines of 
up to $5000 if they knowingly provided false or misleading information.
  For further protection, representative payees for over 15 individuals 
would be required to be licensed and bonded, and would be subject to 
periodic reviews. The bills would allow the Commissioner to withhold 
benefits from fugitive felons, and persons fleeing prosecution. The 
bills also provide for numerous improvements to the present system, 
which would reduce fraud and abuse of the program.
  The bill passed unanimously in the House last Congress, and similar 
legislation cleared

[[Page 5143]]

the Senate. But unfortunately this important legislation got hung up at 
the end of last year. With such support and progress, this should have 
been an easy piece of work to get through this year, and a score for 
the American taxpayers. Instead, a wrench has been thrown into the 
works, through the addition of a small section that has provoked a 
deluge of phone calls into my office from, it seems like, every 
schoolteacher in my district.
  The Texas branch of the American Federation of Teachers describes 
Section 418 as ``poison for Texas school employees.'' That section 
relates to the Government Pension Offset. At present, if an individual 
receives a government pension based on work that was not covered by 
Social Security, his or her Social Security spousal or survivor benefit 
is reduced by an amount equal to two-thirds the government pension. 
This provision of current law is called the Government Pension Offset 
(GPO). However, under the ``last day rule,'' an individual is exempt 
from the GPO if he or she works in a job covered by Social Security on 
the last day of employment.
  Many school districts offer teachers non-Social Security government 
pensions, so until now many teachers have been forced to take advantage 
of the ``last day'' option. Just before they retire, they get a job in 
a business with a Social Security pension for a day, in order to 
receive their deserved benefits. This is a ridiculous system, and the 
appropriate way to fix it would have been to repeal the GPO. In fact, I 
have co-sponsored H.R. 594 with my colleague from California, Buck 
McKeon, and 132 others to do just that.
  Instead, the bill before us today closes the option. I am usually all 
for saving money, but now is no time to be ``sticking-it'' to 
teachers--just as we are trying to leave no child behind, just as we 
have a shortage of qualified teachers in many areas. This could drive 
many people away from careers in teaching.
  For example, today I received a call from one woman in my District 
who was a teacher earlier in her life. Her husband recently passed away 
and she has been contemplating going back into teaching. But she has 
been warned that she could actually jeopardize her financial future by 
going to work. As a widow, she will be entitled to her husband's social 
security benefits. However, if she starts to teach in a school district 
with a government non-Social Security pension, she could lose $360 per 
month in retirement benefits--over $4000 per year.
  Why should she risk it? If H.R. 743 passes today, it won't be only 
she that loses. It will be our Nation's children who lose--an 
experienced, intelligent teacher.
  The GPO issue needs to be addressed, but not today. Right now, we are 
giving money to criminals who are beating our system and undermining 
confidence in the future of Social Security and the government as a 
whole. We need to protect Social Security, and we need to do it soon. 
But I will wait until we can do it without attacking our teachers, and 
penalizing our children.
  I will vote ``no'' on H.R. 743, and urge my colleagues to do the 
same.
  Mr. SHAW. Mr. Speaker, I yield myself such time as I may consume to 
say to the gentlewoman from Texas that this levels the playing field 
and treats the people, or the teachers in Texas as other teachers 
throughout the entire country.
  Mr. Speaker, I yield 3 minutes to the gentleman from Missouri (Mr. 
Hulshof), another valued member of the Committee on Ways and Means.
  Mr. HULSHOF. Mr. Speaker, I thank the chairman for yielding me this 
time, and I rise in support of H.R. 743, the Social Security Protection 
Act.
  There are a lot of issues that are addressed that are important to 
Americans with disabilities that depend upon Title II and Title XVI. 
Individuals facing the challenges of life with a disability need these 
protections that are proposed on the representative payee provisions.
  There are about 6 million Americans that receive Social Security and 
supplemental security income. These beneficiaries often have family 
members or loved ones who act on their behalf, and yet there are some 
of those receiving these benefits that go to services, a fee for this 
service of being a representative payee. If someone receives a fee for 
this service, now they must be bonded and licensed. And if this 
representative payee chooses to pray on the disability or the elderly, 
society's most vulnerable, then tough civil monetary penalties will 
result. These changes are important and necessary.
  Another provision deserving mention, Mr. Speaker, is contained within 
section 401 through 405. In 1999, this body enacted some breakthrough 
changes for individuals with disabilities, specifically the Ticket to 
Work and Work Incentive Improvement Act. The Ticket to Work rolled over 
barriers that prevented countless employable individuals with 
disabilities from rejoining the workforce.

                              {time}  1115

  Yet now we need to make some technical corrections. For instance, one 
of the things in the original Ticket to Work bill was a demonstration 
project which allowed the commissioners of Social Security to look at 
other ways to employ those that want to rejoin the workforce. One of 
the technical corrections is that we extend the 5-year limit on 
designing and implementing these worthy demonstration projects.
  I am especially interested personally in abolishing this so-called 
``income cliff.'' That is, if an individual is employable and works and 
achieves earnings up to a certain amount, if that individual makes $1 
more than that, they fall off the cliff and lose all of their Social 
Security disability benefits. I encourage this sliding scale, for every 
$2 earned, maybe losing $1 of disability benefits. Yet we need to make 
those technical corrections to the bill so employer networks will 
accept these beneficiaries that are participating in this $1 for $2 
offset demonstration project. So these are worthy changes.
  Let me quickly address the issue of my colleagues from Texas. There 
was a recent study that the General Accounting Office came back to our 
committee in August of last year with, at the request of the chairman, 
and found this last-day exemption, this loophole, found that nearly 
5,000 individuals in two States were taking advantage of this loophole 
in order to get around the requirements of law.
  What we do is simply implement the changes of the GAO. What the 
General Accounting Office found was that we were allowing, current law 
was allowing a select group of individuals with really a small 
investment of work time and only minimal Social Security contributions 
to really gain access to potentially many years of full Social Security 
benefits. I recognize this is a tough situation for those Members from 
those particular States; but as the chairman alluded after the last 
speaker, this is something that brings those States in line with the 
other 48 States. Again a difficult but necessary, important change. 
These changes are overdue. I urge adoption of H.R. 743.
  Mr. MATSUI. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Lampson).
  Mr. LAMPSON. Mr. Speaker, there are over 40,000 teachers across the 
State of Texas who could be adversely affected by this legislation. 
This bill includes provisions which I consider to be catastrophic for 
Texas teachers and many other government employees. Provisions in the 
legislation would, in effect, reduce the amount of combined benefits 
that the Texas teachers could depend upon after retirement, even for 
many teachers who have paid into both Social Security and the Texas 
teacher retirement system.
  I realize that many in this body characterize section 418, the 
section that would extend the last-day exemption to 6 years, as an 
issue of fundamental fairness. With that, I cannot entirely disagree. 
Those who are able to take advantage of a loophole in the law represent 
a small minority of Americans who pay into Social Security and a 
government pension; and there are other ways in which we can fix that, 
and we do have legislation that is pending.
  I do not object to this legislation on the grounds that it seeks to 
create an equitable system of payment for all citizens. I object to a 
process whereby Members of the Texas delegation and other delegations 
are not able to offer amendments or debate this bill on the floor of 
the House. This legislation will have broad implementations for 
teachers in Texas and will most likely force a mass exodus of 
experienced teachers from our public schools. Under this legislation, 
teachers will still be able to

[[Page 5144]]

retire this year and use the last day exemption provision to draw their 
retirement.
  What impetus does an experienced teacher have to stay in the 
classroom and continue teaching if the government is, in effect, going 
to significantly reduce his or her retirement payment after this year? 
If we are to attract and retain qualified, caring teachers, then hidden 
procedures such as that in section 418 must be debated and considered 
in an open forum where amendments and debate are not stifled. Now is 
not the time to force experienced, caring teachers into retirement and 
demonstrate to the younger generation of educators our indifference to 
the livelihood of our Nation's educators.
  Mr. Speaker, I ask that we pull section 418, make the bill like it 
was last year, or defeat H.R. 743.
  Mr. MATSUI. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Turner).
  Mr. TURNER of Texas. Mr. Speaker, a few years ago a lady came to my 
office in my district whose husband had died before he had ever 
collected a single penny of Social Security. He had worked his entire 
life paying into the Social Security system thinking when he died, his 
wife would receive a survivor's benefit from his Social Security 
payments that would help keep her secure during her retirement.
  She sat in my office near tears explaining to me that because she had 
spent her career in teaching and because she receives a monthly Texas 
State teacher's retirement benefit, she would never see one penny from 
Social Security. To learn that she would have received a survivor's 
benefit if she had been drawing a retirement benefit from a private, 
rather than a public, retirement fund only added insult to her injury.
  Mr. Speaker, this is unfair and the government pension offset must be 
repealed. For the 6 years that I have been in Congress, I have 
cosponsored the legislation to end this unfair result caused by this 
provision we call the GPO. Last year 186 Members on both sides of the 
aisle cosponsored legislation to repeal this government pension offset. 
In spite of that support, the bill never has passed, never has received 
a full hearing in the committee. And in spite of the support in this 
Congress, section 418 of the bill before us moves in exactly the 
opposite direction.
  Mr. Speaker, I urge my colleagues to protect our teachers, to reject 
this bill today, to send it back to the Committee on Ways and Means 
with the understanding that the GPO should be repealed.
  Mr. MATSUI. Mr. Speaker, I yield 6 minutes to the gentleman from 
Texas (Mr. Green).
  Mr. GREEN of Texas. Mr. Speaker, I thank the gentleman for yielding 
me this time.
  This is an issue so important to some of us who represent districts 
in Texas and Georgia, and it is important nationwide because there has 
been legislation in the last 4 years that had a majority of the U.S. 
House of Representatives as cosponsors to repeal the offset for public 
employees, for teachers, firefighters and police officers. The 
gentleman from Arizona (Mr. Hayworth) was a cosponsor of the bill 2 
years ago, and now we are gathering signatures again. It is a system 
that is wrong, and it needs to be changed; but in my 5 years, we have 
not had a chance to address it on the floor of the House of 
Representatives.
  I know my colleagues talk about the 1 day as a loophole. Well, it may 
be a loophole, but it is also complying with the law. It is 
interesting, we are going to close a loophole and allow firefighters, 
police officers and teachers to go to work 1 day in a system that has 
Social Security and their retirement system and be eligible for Social 
Security. Yet we are willing to open up millions of loopholes for 
corporations to be able to walk through.
  I regret to say Enron is from the area I am from in Houston, and they 
have not paid Federal taxes in 6 years. We do not mind opening 
loopholes big enough for corporations to drive trucks through, but for 
a school teacher who wants to get her husband's Social Security 
benefits because she has taught for 30 years teaching our children, we 
are closing up that loophole. They get penalized on their widow's 
benefits. We are talking about widows' benefits and not somebody that 
is double dipping, and I know previously that is what the committee 
wanted to do.
  Mr. Speaker, I am opposed to H.R. 743, and I hope that Members will 
look at it to change it. Some public employees are not covered by 
Social Security, and in Texas it is particularly our police officers, 
firefighters and teachers. Our school districts can be part of Social 
Security or not. The individual employee, whether they are a cafeteria 
worker or custodian or a teacher, they do not have a choice. All they 
want to do is serve our children, and yet they are getting penalized.
  My example is the best one I can think of. My wife and I have been 
married 33 years. She has been a teacher in Texas for 26 years. If I 
died tomorrow, she would be penalized on all the benefits that I have 
put into Social Security. I have paid the maximum for I-do-not-know-
how-many years. She would be penalized because she is a public 
schoolteacher in Texas.
  H.R. 743 has a great many good things in it, but this is so bad we 
ought to have enough votes on the floor to be able to defeat it and 
bring it back without this provision in it, or at least bring it back 
and debate it fully on the floor with an opportunity to amend it.
  Full spousal benefit ought to be if I paid into Social Security, my 
wife as a widow when I pass away ought to get the same benefit no 
matter whether she is a stay-at-home housewife or actually worked as a 
schoolteacher. We should not punish teachers and firefighters and 
police officers by stripping away this right unless we address the 
underlying problem of the government pension offset.
  Closing a loophole, that is what the current law is. And in Texas I 
have a good example. I have a teacher in my wife's school district who 
was 73 years old. Her husband died in her early sixties. She was 
receiving his Social Security widow's benefit. She could not retire 
because of the cut she would take in her Social Security benefit from 
her husband. They were married many years so she was entitled to it. 
What she did, she went and worked in a school district that had Social 
Security and teacher retirement for that 1 day at 73 years old. How 
long do we want people to have to work?
  It is just outrageous what the law has made people have to do. 
Teachers across our country are chronically underpaid. We give lots of 
lip service on the floor. Yesterday we passed a resolution about 
Lutheran educators. I am talking about public school teachers who teach 
our children every day. Is it perfect? Of course not. But this is the 
only thing we can do on the Federal level because teachers' salaries 
are set by the school districts and by the States. But this is 
something we can do to say we are not going to slap them in the face. 
We are going to make sure that if someone is a teacher and has taught 
all those years, and their husband has been under Social Security and 
they pass away, and I say husband because most of the teachers are 
women. They are the ones in their retirement years who have less than 
we do as men, and yet we are taking that away from them. Again, that is 
just outrageous.
  We find it harder and harder to attract teachers. Let us make sure if 
teachers are married to someone who pays into Social Security, they can 
get their widow's benefit without being punished for it. This issue is 
close to the heart for a lot of us in Texas.
  Mr. SHAW. Mr. Speaker, I yield myself 1 minute.
  Mr. Speaker, I remind Members who are going to vote on this issue who 
are zeroing in on this one small part of this bill, where we have a 
two-worker family both paying into Social Security, one dies, the 
survivor either gets their earned benefit or the survivor benefit, 
whichever is greater.
  But in Texas where you have one spouse who has paid nothing into 
Social Security but paid all into their pension plan, they would 
receive, if they worked 1 day under the Social Security system, they 
would receive their full pension and survivor benefits. All we are 
trying to do is to say if someone

[[Page 5145]]

works 5 years under Social Security, they can get both. But if they 
work 1 day, they cannot get both.
  This is trying to level the playing field for the millions of 
teachers, firefighters and others across this country who have paid 
into Social Security, to level the playing field so the people who 
never paid into Social Security are not getting a better deal. It is as 
simple as that.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1130

  Mr. MATSUI. Mr. Speaker, I yield 1 minute to the distinguished 
gentlewoman from Ohio (Mrs. Jones), a member of the Committee on Ways 
and Means.
  Mrs. JONES of Ohio. I thank the gentleman for yielding me this time.
  Mr. Speaker, I rise to speak in support of the legislation, but not 
with regard to the government offset. It is very, very important that 
we make sure that we take care of the persons on Social Security that 
have representatives speaking on their behalf. This legislation will 
provide stricter requirements with regard to those who represent people 
in the Social Security Administration on behalf of recipients.
  This is my first opportunity as a member of the Committee on Ways and 
Means, the Subcommittee on Social Security, to be on the floor to speak 
on behalf of an issue. I am pleased to stand in support of this 
legislation with regard to all the provisions with regard to Social 
Security. I thank the chairman and the ranking member for all the work 
they have done in this particular regard.
  Mr. SHAW. Mr. Speaker, I yield 4 minutes to the gentleman from Texas 
(Mr. Brady), a valued member of the Ways and Means subcommittee.
  Mr. BRADY of Texas. Mr. Speaker, we are right to be concerned about 
our teachers. They are overworked. They are underpaid. We are concerned 
about them. I think had it not been for study over the last year or so, 
I would be giving the exact same speech today as my Democratic 
colleagues from Texas because we are all concerned. It turns out this 
is not exactly the case I thought it was.
  Recently we held a hearing on this legislation. We wanted to hear 
from our Texas teachers, so we requested the chairman invite our Texas 
State Teachers Association, our Texas Federation of Teachers and the 
Association of Texas Professional Educators to testify. Unfortunately, 
they were not able to because of various reasons, the snow being one of 
them, but we submitted their testimony on their behalf and urged 
members of the subcommittee to study it.
  During the hearing, it was shown that teachers in government pensions 
are not being singled out. They are not. The government pension offset 
affects more than just teachers. It affects more than 5 million people 
in all sorts of State, local and Federal Government pensions who do not 
pay into Social Security. This is important to know because a lot of my 
teachers feel like they are being targeted, being singled out.
  My main concern during the hearing that I expressed that my teachers 
are so upset about, that a widower who has worked a lifetime to earn 
their government pension, like a Texas teacher, will keep less of their 
deceased spouse's Social Security than a widower who has worked and 
paid into Social Security. The Social Security Administration 
conclusively proved this is not the case. It turns out it is just the 
opposite.
  Teachers in TRS are able to keep the same, or more, of their spouse's 
Social Security benefits than other widowers who have worked, like 
nurses or waitresses. That is because the government pension offset law 
reduces their husband's or their deceased spouse's Social Security by 
two-thirds of their pension. But for other widowers, for waitresses, 
nurses and others who paid into Social Security, their husband's 
benefits are reduced even more, 100 percent of their own benefit.
  What I think confuses teachers and many is that if someone has not 
worked, they have worked inside the home all their life, have not 
earned Social Security, they keep all of their husband's or their 
deceased spouses's benefits because they depend upon it more. Social 
Security is extremely complicated. There is a great deal of 
misinformation going around the Internet and by well-meaning 
individuals and organizations these days.
  What frustrates me most is that teachers were not told about this 
situation years ago. They feel they have paid into Social Security for 
years and they do not get the help when they need it the most. It would 
have been so much better if this would have been reformed years ago, 
where you put aside your own contribution to Social Security into a 
traditional retirement account, where that money grew for you over the 
years, you could take it with you, it was yours to own and you would 
not be surprised by some government formula done 20 years ago. That is 
where we need to head.
  How we can help teachers today and others I think is to focus on the 
windfall elimination provision. It sounds complicated, but the 
principle is, for me, if you have worked hard and paid into Social 
Security and you have worked hard and paid into a government pension, 
you should receive more of both. I am thinking here of teachers who 
have contributed their hard-earned pay into Social Security through a 
second job, teachers who have contributed to Social Security in another 
State before moving to Texas or Georgia, thinking of future teachers 
who already have a career, we would like to get them into the classroom 
to help but they are afraid of losing their retirement benefits. I 
believe the best and the most timely solution to help these people, 
these teachers, and others who have earned two pensions, is to 
modernize the windfall elimination provision to make it more fair.
  I have asked our subcommittee chairman, the gentleman from Florida 
(Mr. Shaw), to hold hearings on the windfall elimination provision. 
This is where I think we can take a formula that is outdated, I think a 
bit arbitrary, and focus on the principles if you have paid into Social 
Security and you have paid into your government pension, that you keep 
more of the Social Security that you have paid into.
  Mr. MATSUI. Mr. Speaker, I yield the balance of my time to the 
distinguished gentleman from Texas (Mr. Doggett), a member of the 
Committee on Ways and Means.
  The SPEAKER pro tempore (Mr. Gilchrest). The gentleman from Texas is 
recognized for 5\1/2\ minutes.
  Mr. DOGGETT. Mr. Speaker, I must begin by saying that I find the 
comments of the last speaker, the gentleman from Texas (Mr. Brady), to 
be very troubling. Each of the three organizations that he identified, 
the Association of Professional Texas Educators, the Texas State 
Teachers Association, and the American Federation of Teachers, oppose 
this bill. They have submitted written testimony when at least one of 
those organization's representatives was stranded in Austin because of 
an ice storm.
  It is fine to talk about teachers; this Republican leadership though 
has a chance to act. Today they talk about leveling the playing field. 
It is just that they want to level the playing field down instead of 
leveling the playing field up. The Texas teachers who have tried to 
protect themselves from this terrible government pension offset have 
confronted a Republican leadership that has been in control here for 
the last eight years. What have they done about the windfall 
elimination provision or the government pension offset during that 
time? They filed a bill that a lot of us have cosponsored. They could 
have had a hearing in the subcommittee last week on that bill. But what 
did they choose to do? They took a bill that passed unanimously, that I 
voted for, that the gentleman from California (Mr. Matsui) voted for, 
that every Member of this Chamber voted for last year, and they added a 
provision to it, on page 70 of the bill, section 418, a provision that 
is not even clearly identified in the summary of the bill. This bill 
has the effect of taking away a right that Texas teachers and teachers 
in other parts of this country have utilized and which they enjoy a 
perfect right to utilize.

[[Page 5146]]

  It is legal and proper for teachers to do this, and the reason they 
must act for themselves is that this Congress, under Republican 
leadership, has failed to act for them. This self-help should be of 
little surprise when all they hear is talk up here and when the 
Republican leadership will not even set this for a hearing.
  Yes, they had a hearing on a bill that passed unanimously last year. 
They just tucked in a little provision they did not tell us about that 
hurts the teachers of Texas and many other States. Then what did they 
do after they held a hearing when our teachers were stuck in an ice 
storm but they were so eager to move forward that they would not wait 
for them to get to Washington? Did they bring it up for a vote in the 
subcommittee? No, they did not. Did they bring it up for a vote in the 
full committee on Ways and Means? No, they did not. Instead they 
brought it directly to the floor today in a surprise move announced 
only a couple of legislative days after this was taken up in committee. 
Now they propose to bring it up under a procedure where debate is 
limited and we cannot even offer an amendment to take out this 
offending provision.
  Yes, I think we should do something about felons getting Social 
Security checks. I am ready to vote for that. But why do we have to 
treat our teachers like felons and deny them the benefits that they 
have rightly earned?
  The loss of a spouse is difficult enough to bear. But when a widow or 
a widower has devoted their lifetime to public service as a teacher 
often at low wages, they get another cruel surprise. When these former 
educators lose their husband or wife, the Social Security 
Administration does not send them a letter to console them in their 
mourning, it reduces the spousal Social Security benefit by two-thirds 
of the teacher's pension. That is what these teachers are concerned 
about.
  To the average retired teacher in Texas, or anywhere else, this means 
a loss of about $360 a month. For an elderly retiree, you can call it 
an ``offset,'' but for them it is mighty upsetting. Confronted with 
this unfair offset and the technique that teachers have had to rely on 
as self-help to fix this injustice, the Republican leadership has not 
been willing to correct the problem. Instead, they want to target the 
cure. What a contrast, too, with the rest of their legislative package.
  The Republicans could have fixed this injustice in a separate bill or 
they could have fixed this injustice in the bill that they are going to 
be taking up tomorrow, that began as a very appropriate, unanimously 
supported bill much like this one. It is called the ``Armed Forces Tax 
Fairness Act,'' and it is designed to treat our Armed Forces fairly as 
they serve in harm's way throughout the world.
  But what began as a bill to help our Armed Forces has been debased 
with measures that would allow foreigners to bet on horse races tax-
free, certainly good news to the Turks and the French; it would exempt 
fishing tackle boxes from an excise tax; and exempt bows and arrows 
from a similar tax.
  I support tax fairness for our military because they secure our 
country. But I also support retirement security for our teachers 
because they build the foundation upon which our democracy rests. The 
Republican leadership is today tackling the issue of tackle boxes, but 
it tells our teachers to ``Go fish.'' They will cut bow and arrow taxes 
but put a bulls-eye on teachers. Surely we can also fix the injustice 
that this offset inflicts on America's educators.
  We ask for a ``no'' vote on this bill and we have a message to this 
entire Congress that has not been heard, apparently by even some of our 
own representatives, but certainly not by the sneaky tactics that got 
this provision in the bill. That message, is, ``Don't mess with 
Texas.'' [Doggett holds bumper sticker] Don't mess with Texas teachers. 
Vote ``no'' on this bad bill.
  Mr. SHAW. Mr. Speaker, I would remind the other speaker that what we 
did was picked up the language that the Democrat-controlled Senate 
passed by unanimous consent in the last Congress and put it in this 
bill and now have brought it to the floor.
  Mr. Speaker, I yield 30 seconds to the gentleman from Texas (Mr. 
Brady).
  Mr. BRADY of Texas. Mr. Speaker, clearing up a couple of 
misconceptions there, I would love to be able to tell my Texas 
teachers, whom I love, what they want to hear. But I respect them too 
much to do that. I want to tell them the truth. The fact of the matter 
is, this was not snuck in. This was passed in the Senate last session. 
And this Republican House, with Texas lawmakers from both sides said, 
let us discuss this in open debate and make sure it is the right way, 
which is exactly what we are doing. Both parties have had a chance to 
work on this issue since 1983. We have not come up with a solution yet. 
We are working to do that.
  Finally, I want our Texas teachers to be treated fairly. I want our 
Texas waitresses and nurses and other moms to be treated fairly, too.
  Mr. SHAW. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, I would like to remind the House, even though we have 
been talking about the Texas situation over most of the time that has 
been allocated to this bill, exactly what this bill does and exactly 
why it is and does receive such high bipartisan support. This holds 
representative payees accountable for mismanaging benefits and 
increases representative payee oversight. We support that and you 
support that. It denies Social Security benefits to fugitive felons. 
That is right. I support that. You support that. It deters fraud by 
creating new civil penalties for Social Security fraud. All of us agree 
to that. It helps individuals with disabilities gain access to 
representation. These are the people that need it most. We agree with 
that. You agree with that. It helps disabled beneficiaries return to 
work. This is something that I think that this Congress has done with a 
ticket to work, and I think have done it in the best tradition of this 
House, in a very bipartisan way.
  Now we come to a little bump in the road. It does involve Texas. I 
think the gentleman was quite right to put the sign up, ``Don't Mess 
with Texas,'' because that is a Texas problem. But Texas has discovered 
a loophole which folds into their pension plan which is unfair to the 
rest of the country. The General Accounting Office has told us that 
this is going to amount to about a half a billion dollars in savings 
once this goes into place, just simply by treating Texas like the rest 
of the country.

                              {time}  1145

  This is not anti-Texas, and it is not intended to punish anybody. As 
a matter of fact, those that are already receiving those double 
benefits and the disability benefits as well as their earned pension 
plans will continue to do so. They plan for their retirement. So we do 
not take that away; but we do put fairness into the law, and we say 
that people who do not pay into Social Security should not get a better 
deal than those who did pay into Social Security.
  With that, Mr. Speaker, I ask for a ``yes'' vote.
  Mr. UDALL of Colorado. Mr. Speaker, I support this bill because it 
includes many necessary provisions to protect Social Security 
beneficiaries.
  However, I do have concerns about one provision, and would have 
preferred for the bill to be considered under a procedure allowing for 
amendments.
  The troublesome provision is the one related to the ``government 
pension offset'' part of the Social Security Act.
  I understand the rationale for that provision, which would make 
application of the offset provision more uniform. However, I think it 
would be better for this provision to be considered separately, as part 
of a measure to make other revisions to the government pension offset.
  I think the offset should be revised, because as it stands it works a 
hardship on many people. That is why I am cosponsoring a bill (H.R. 
887) which would assure that the offset will not reduce Social Security 
benefits below $2,000 per month. I hope the House will soon take up 
that much-needed legislation.
  Mr. ORTIZ. Mr. Speaker, the original intent of this bill was a worthy 
one: to reimburse Social Security benefits if they are misused by 
people representing the recipient.
  That's not controversial . . . but the provision reducing the spousal 
Social Security benefits for countless teachers, school support

[[Page 5147]]

personnel, police officers, firefighters, and other public servants is 
most certainly controversal--and I intend to oppose the entire bill 
since it contains this provision that will adversely affect teachers 
and others across Texas. These are people we should be protecting.
  We need to understand that targeting pensions of teachers and other 
school employees will discourage qualified individuals from entering 
the classroom at exactly the time when the nation is experiencing a 
shortage of teachers. We say we are committed to education . . . yet in 
this bill we are profoundly uncommitted to educators.
  The teachers across the state of Texas are largely women and are not 
wealthy people. They depend on the benefits of both them and their 
spouses; nearly all are part of two-income families. We are being 
monumentally unfair to them by changing the rules late in the game.
  Since we are ramrodding this bill through the House with non-
controversial bills today, be on notice that our opposition efforts 
will not end here.
  I am a co-sponsor of HR 594, a bill introduced in the 108th Congress 
that will eliminate the Government Pension Offset and the Windfall 
Elimination Provisions that target our teachers and other public 
servants by denying them the opportunity to retain their full spousal 
Social Security benefits.
  Mr. Speaker, I am deeply disappointed that this provision was 
included in an otherwise good bill.
  Mrs. JONES of Ohio. Mr. Speaker, I rise in support of H.R. 743. 
First, I would like to acknowledge Mr. Matsui for working diligently on 
the Social Security Act of 2003.
  As we all know, H.R. 743 will extend the direct fee withholding 
program payment to attorneys who represent supplemental security income 
claimants, thus encouraging more attorneys to represent them.
  It is vital that we pass legislation that addresses the major 
concerns of our seniors, the blind, and the disabled.
  This legislation imposes greater standards on individuals and 
organizations that serve as representative payees for Social Security 
and supplemental security income recipients; this legislation will make 
non-governmental representative payees liable for ``misused'' funds and 
subject them to civil monetary penalties; H.R. 743 will reduce the fee 
assessments from the Social Security Administration that charges 
attorneys for fee withholding.
  Overall, the Social Security Act of 2003 will be beneficial to 
recipients and those who serve as representatives for recipients.
  Furthermore, H.R. 743 will make a number of technical changes 
designed to reduce Social Security fraud and abuse.
  Mr. Speaker, I will close my statement for the record with supporting 
H.R. 743.
  Mr. REYES. Mr. Speaker, I rise today in recognition of the hard work 
of our nation's teachers, particularly in El Paso, Texas, which I 
proudly represent. My community, like many other communities across the 
country, are suffering from a teacher shortage. Our schools lack 
teachers in many important areas of study, such as math, science, and 
special education. Meanwhile, teacher salaries are still insufficient 
and it is difficult to recruit qualified personnel when salaries are 
not atttractive.
  I know full well the effort and hard work that teachers dedicate to 
their students. My wife was a teacher for many years and my daughter, 
who just completed her doctorate degree in education, is currently an 
administrator at a local school district. I believe the teaching 
profession is one of the most honorable professions. I credit our 
teachers with laying the foundation for the future of our country and 
the world. In addition to teaching children the basic skills they need, 
teachers are an important guiding force for our children. After 
parents, they are one of the greatest influences on children. We 
therefore need to make sure we have well-qualified and well-paid 
teachers educating students.
  As you know Mr. Speaker, passage of this bill before us would reduce 
the spousal Social Security benefits for countless teachers. H.R. 743 
also affects school support personnel, police officers, firefighters, 
and other public servants. At a time when multi-billion dollar tax 
breaks are being given to our country's top income earners, our 
teachers and other public servants would be penalized through this 
bill. These are people we should be protecting. We should not make them 
pay for the tax cuts we give those who are more fortunate. This bill 
negatively affects teachers and other public servants in my state of 
Texas. For that reason I will be voting against this bill.
  Mr. Speaker, I have co-sponsored H.R. 594, a bill introduced by my 
colleague Mr. McKeon that will eliminate the Government Pension Offset 
and the Windfall Elimination Provisions that target our teachers and 
other public servants by denying them the opportunity to retain their 
full spousal Social Security benefits.
  I strongly urge my colleagues to oppose H.R. 743 and continue to 
support our teachers.
  Mr. ROYCE. Mr. Speaker, I am firmly committed to protecting Social 
Security for current recipients and for those who will be retiring in 
the near future. So, I want to thank the Chairman of the Subcommittee 
on Social Security, Mr. Shaw for his efforts to strengthen the 
financial security of our Nation's retirement system. I support the 
Social Security Protection Act, and I was pleased to support this bill 
when it passed the House unanimously last year. It is unfortunate that 
the House and Senate couldn't work out a final version before the end 
of the 107th Congress.
  This bill stops fugitive felons from receiving benefits. The CBO 
estimates we will pay over $500 million to fugitive felons over the 
next 10 years from the Social Security trust funds.
  The Social Security Administration appoints representative payees for 
many beneficiaries to help manage their financial affairs when they are 
not able. This bill protects these beneficiaries from representative 
payees who may misuse their benefits.
  Mr. Speaker, this bill helps put the Security back in Social Security 
and I look forward to its passage.
  Mr. HINOJOSA. Mr. Speaker, I rise in strong opposition to H.R. 743. I 
do so, not because I oppose ending Social Security fraud and abuse, but 
because of a section that is damaging to state and municipal employees. 
Section 418 is bad for teachers, police officers, fire fighters and 
other state and local workers in Texas who receive government pensions 
that are currently being reduced because of the Government Pension 
Offset provision of the Social Security Act. Section 418 would require 
experienced public servants to quit their jobs prematurely and work for 
the private sector for the 5 years before they retire in order to avoid 
the offset. We all know that our Nation has a critical shortage of 
teachers and public safety personnel. This provision will only 
exacerbate the problem.
  The teachers of Texas have been writing and calling my office to 
protest this long-standing offset provision that is taking away Social 
Security benefits that they and their spouses have earned. At a time 
when federal and state budgets for education are being slashed, this is 
just one more slap in the face to those who are working hard to educate 
our children. We need to let them know that education is a national 
priority and that we value their dedication.
  Instead of this bill that will provide no relief for these 
hardworking public servants, I urge the majority to bring H.R. 594, 
introduced by Congressman McKeon and which I proudly co-sponsor, to the 
House floor for a vote. This legislation would repeal both the 
Government Pension Offset and the ``Windfall Elimination Provision'', 
another portion of the Social Security Act that is penalizing state and 
local government employees.
  I encourage my colleagues to move quickly to bring real relief to 
teachers and other public employees by considering H.R. 594 or failing 
that, by bringing H.R. 743 to the floor under regular order so that 
this damaging Section 418 provision can be removed. Our public servants 
deserves no less.
  Mr. LEWIS of Kentucky. Mr. Speaker, I rise today to register my 
strong support for the Social Security Protection Act of 2003 (H.R. 
743).
  While I recognize there are differences between Republicans and 
Democrats on how to address the long-term solvency problems facing 
Social Security, I am pleased to see that we can work together to 
address other important issues facing the program.
  H.R. 743 is a common-sense bill that provides the Social Security 
Administration with the necessary resources and tools to fight fraud 
and abuse. Along with other provisions in the bill, this will save 
taxpayers $656 million over ten years. In addition, the legislation 
improves the landmark Ticket to Work law to help people with 
disabilities find work.
  H.R. 743 also adds Kentucky to the list of states that offer divided 
retirement systems. In January, the former governments of the City of 
Louisville and Jefferson County merged. Since the merger was approved 
by the people of Jefferson County in November 2000, local and state 
officials have been working together to ensure that the transition was 
without problems. All indications are that it has been a success.
  One important issue, however, that needs to be addressed is how to 
provide Social Security and Medicare coverage to hazardous duty 
employees working for the county and the city. Since January 6, 2003, 
all officers are considered a single group for Social Security coverage 
purposes. Prior to the merger some police officers and firefighters 
contributed to

[[Page 5148]]

Medicare, but not Social Security. Some contributed to both; others 
neither.
  As we can see, ensuring fair and equal coverage presents a serious 
challenge to the new government. After working with all interested 
parties, it was agreed that a divided retirement system is the 
solution. Currently 21 states use this system.
  Under a divided retirement system, each employee will decide whether 
or not to pay into Social Security. All new employees hired after the 
system is in place would automatically be enrolled in Social Security.
  The Kentucky Division of Social Security has started the education 
process with representatives from the Social Security Administration 
and the groups that represent the hazardous duty employees. Last year, 
the Kentucky General Assembly adopted a bill that allows this system to 
go forward as soon as Congress approves this legislation and President 
Bush signs it into law.
  In closing, I would like to thank Chairman Shaw and Ranking Member 
Matsui for including this important provision in H.R. 743 and urge my 
colleagues to support the bill.
  Mr. SHAW. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Gilchrest). The question is on the 
motion offered by the gentleman from Florida (Mr. Shaw) that the House 
suspend the rules and pass the bill, H.R. 743, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of 
those present have voted in the affirmative.
  Mr. DOGGETT. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Pursuant to clause 8, rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.
  The point of no quorum is considered withdrawn.

                          ____________________