Representative Payee Fraud Prevention Act of 2019

IC 116TH CONGRESS 1ST SESSION S. 1430 IN THE HOUSE OF REPRESENTATIVES NOVEMBER 26, 2019 Referred to the Committee on Oversight and Reform AN ACT To amend title 5, United States Code, to prevent fraud by representative payees. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 21:38 Nov 26, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1430.RFH S1430 pamtmann on DSKBC07HB2PROD with BILLS 2 S 1430 RFH SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Representative Payee 2 Fraud Prevention Act of 2019’’. 3 SEC. 2. REPRESENTATIVE PAYEE FRAUD. 4 (a) DEFINITIONS.— 5 (1) CSRS.—Section 8331 of title 5, United 6 States Code, is amended— 7 (A) in paragraph (31), by striking ‘‘and’’ 8 at the end; 9 (B) in paragraph (32), by striking the pe- 10 riod at the end and inserting ‘‘; and’’; and 11 (C) by adding at the end the following: 12 ‘‘(33) ‘representative payee’ means a person 13 (including an organization) designated under section 14 8345(e)(1) to receive payments on behalf of a minor 15 or an individual mentally incompetent or under other 16 legal disability.’’. 17 (2) FERS.—Section 8401 of title 5, United 18 States Code, is amended— 19 (A) in paragraph (37), by striking ‘‘and’’ 20 at the end; 21 (B) in paragraph (38), by striking the pe- 22 riod at the end and inserting ‘‘; and’’; and 23 (C) by adding at the end the following: 24 ‘‘(39) ‘representative payee’ means a person 25 (including an organization) designated under section 26 VerDate Sep 11 2014 21:38 Nov 26, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1430.RFH S1430 pamtmann on DSKBC07HB2PROD with BILLS 3 S 1430 RFH 8466(c)(1) to receive payments on behalf of a minor 1 or an individual mentally incompetent or under other 2 legal disability.’’. 3 (b) EMBEZZLEMENT OR CONVERSION.— 4 (1) CSRS.—Subchapter III of chapter 83 of 5 title 5, United States Code, is amended by inserting 6 after section 8345 the following: 7 ‘‘§ 8345a. Embezzlement or conversion of payments 8 ‘‘(a) EMBEZZLING AND CONVERSION GENERALLY.— 9 ‘‘(1) IN GENERAL.—It shall be unlawful for a 10 representative payee to embezzle or in any manner 11 convert all or any part of the amounts received from 12 payments received as a representative payee to a use 13 other than for the use and benefit of the minor or 14 individual on whose behalf such payments were re- 15 ceived. 16 ‘‘(2) REVOCATION.—If the Office determines 17 that a representative payee has embezzled or con- 18 verted payments as described in paragraph (1), the 19 Office shall promptly— 20 ‘‘(A) revoke the certification for payment 21 of benefits to the representative payee; and 22 ‘‘(B) certify payment— 23 ‘‘(i) to another representative payee; 24 or 25 VerDate Sep 11 2014 21:38 Nov 26, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1430.RFH S1430 pamtmann on DSKBC07HB2PROD with BILLS 4 S 1430 RFH ‘‘(ii) if the interest of the individual 1 under this title would be served thereby, to 2 the individual. 3 ‘‘(b) PENALTY.—Any person who violates subsection 4 (a)(1) shall be fined under title 18, imprisoned for not 5 more than 5 years, or both.’’.’’ 6 (2) FERS.—Subchapter VI of chapter 84 of 7 title 5, United States Code, is amended by inserting 8 after section 8466 the following: 9 ‘‘§ 8466a. Embezzlement or conversion of payments 10 ‘‘(a) EMBEZZLING AND CONVERSION GENERALLY.— 11 ‘‘(1) IN GENERAL.—It shall be unlawful for a 12 representative payee to embezzle or in any manner 13 convert all or any part of the amounts received from 14 payments received as a representative payee to a use 15 other than for the use and benefit of the minor or 16 individual on whose behalf such payments were re- 17 ceived. 18 ‘‘(2) REVOCATION.—If the Office determines 19 that a representative payee has embezzled or con- 20 verted payments as described in paragraph (1), the 21 Office shall promptly— 22 ‘‘(A) revoke the certification for payment 23 of benefits to the representative payee; and 24 ‘‘(B) certify payment— 25 VerDate Sep 11 2014 21:38 Nov 26, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1430.RFH S1430 pamtmann on DSKBC07HB2PROD with BILLS 5 S 1430 RFH ‘‘(i) to another representative payee; 1 or 2 ‘‘(ii) if the interest of the individual 3 under this title would be served thereby, to 4 the individual. 5 ‘‘(b) PENALTY.—Any person who violates subsection 6 (a)(1) shall be fined under title 18, imprisoned for not 7 more than 5 years, or both.’’.’’ 8 (3) TECHNICAL AND CONFORMING AMEND- 9 MENTS.— 10 (A) The table of sections for chapter 83 of 11 title 5, United States Code, is amended by in- 12 serting after the item relating to section 8345 13 the following: 14 ‘‘8345a. Embezzlement or conversion of payments.’’. (B) The table of sections for chapter 84 of 15 title 5, United States Code, is amended by in- 16 serting after the item relating to section 8466 17 the following: 18 ‘‘8466a. Embezzlement or conversion of payments.’’. (c) DEFERRAL OF PAYMENT PENDING APPOINT- 19 MENT OF REPRESENTATIVE PAYEE.— 20 (1) CSRS.—Section 8345(e) of title 5, United 21 States Code, is amended— 22 (A) by inserting ‘‘(1)’’ after ‘‘(e)’’; 23 VerDate Sep 11 2014 21:38 Nov 26, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1430.RFH S1430 pamtmann on DSKBC07HB2PROD with BILLS 6 S 1430 RFH (B) in the first sentence, by inserting ‘‘(in- 1 cluding an organization)’’ after ‘‘person’’; 2 (C) in the second sentence— 3 (i) by inserting ‘‘(including an organi- 4 zation)’’ after ‘‘any person’’; and 5 (ii) by inserting ‘‘and may appro- 6 priately receive such payments on behalf of 7 the claimant’’ after ‘‘claimant’’the second 8 place it appears; and 9 (D) by adding at the end the following: 10 ‘‘(2) If the Office determines that direct payment of 11 a benefit to an individual mentally incompetent or under 12 other legal disability would cause substantial harm to the 13 individual, the Office may defer or suspend direct payment 14 of the benefit until such time as the appointment of a rep- 15 resentative payee is made. The Office shall resume pay- 16 ment as soon as practicable, including all amounts due.’’. 17 (2) FERS.—Section 8466(c) of title 5, United 18 States Code, is amended— 19 (A) by inserting ‘‘(1)’’ after ‘‘(c)’’; 20 (B) in the first sentence, by inserting ‘‘(in- 21 cluding an organization)’’ after ‘‘person’’; 22 (C) in the second sentence— 23 (i) by inserting ‘‘(including an organi- 24 zation)’’ after ‘‘any person’’; and 25 VerDate Sep 11 2014 21:38 Nov 26, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1430.RFH S1430 pamtmann on DSKBC07HB2PROD with BILLS 7 S 1430 RFH (ii) by inserting ‘‘and may appro- 1 priately receive such payments on behalf of 2 the claimant’’ after ‘‘claimant’’the second 3 place it appears; and 4 (D) by adding at the end the following: 5 ‘‘(2) If the Office determines that direct payment of 6 a benefit to an individual mentally incompetent or under 7 other legal disability would cause substantial harm to the 8 individual, the Office may defer or suspend direct payment 9 of the benefit until such time as the appointment of a rep- 10 resentative payee is made. The Office shall resume pay- 11 ment as soon as practicable, including all amounts due.’’. 12 (d) LIMITATIONS ON APPOINTMENTS OF REP- 13 RESENTATIVE PAYEES.— 14 (1) CSRS.—Section 8345 of title 5, United 15 States Code, is amended by inserting after sub- 16 section (e) the following: 17 ‘‘(f) The Office may not authorize a person to receive 18 payments on behalf of a minor or individual of legal dis- 19 ability under subsection (e) if that person has been con- 20 victed of a violation of— 21 ‘‘(1) section 8345a or 8466a; 22 ‘‘(2) section 208 or 1632 of the Social Security 23 Act (42 U.S.C. 408, 1383a); or 24 ‘‘(3) section 6101 of title 38.’’. 25 VerDate Sep 11 2014 21:38 Nov 26, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1430.RFH S1430 pamtmann on DSKBC07HB2PROD with BILLS 8 S 1430 RFH (2) FERS.—Section 8466 of title 5, United 1 States Code, is amended by adding at the end the 2 following: 3 ‘‘(d) The Office may not authorize a person to receive 4 payments on behalf of a minor or individual of legal dis- 5 ability under subsection (c) if that person has been con- 6 victed of a violation of— 7 ‘‘(1) section 8345a or 8466a; 8 ‘‘(2) section 208 or 1632 of the Social Security 9 Act (42 U.S.C. 408, 1383a); or 10 ‘‘(3) section 6101 of title 38.’’. 11 SEC. 3. IMPLEMENTATION. 12 (a) AUTHORIZATION OF PAYMENTS.—Section 13 8348(a)(1)(B) of title 5, United States Code, is amended 14 by inserting ‘‘in administering fraud prevention under sec- 15 tions 8345, 8345a, 8466, and 8466a of this title,’’ after 16 ‘‘8465(b) of this title,’’. 17 (b) REGULATIONS.—Not later than 1 year after the 18 date of enactment of this Act, the Office of Personnel 19 Management— 20 (1) shall promulgate regulations to carry out 21 the amendments made by section 2; and 22 (2) may promulgate additional regulations re- 23 lating to the administration of the representative 24 payee program. 25 VerDate Sep 11 2014 21:38 Nov 26, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1430.RFH S1430 pamtmann on DSKBC07HB2PROD with BILLS 9 S 1430 RFH SEC. 4. EFFECTIVE DATE. 1 The amendments made by section 2— 2 (1) shall take effect on the date of the enact- 3 ment of this Act; and 4 (2) apply on and after the effective date of the 5 regulations promulgated under section 3(b)(1). 6 Passed the Senate November 21, 2019. Attest: JULIE E. ADAMS, Secretary. VerDate Sep 11 2014 21:38 Nov 26, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1430.RFH S1430 pamtmann on DSKBC07HB2PROD with BILLS