FRAUD CONTROL UNDER AFDC PROGRAM.

SEC. 9102. FRAUD CONTROL UNDER AFDC PROGRAM. (a) In General.— Part A of title IV of the Social Security Act is amended by adding at the end the following new section: “fraud control “Sec. 416. (a) Any State, in the administration of its State plan approved under section 402, may elect to establish and operate a fraud control program in accordance with this section. “(b) Under any such program, if an individual who is a member of a family applying for or receiving aid under the State plan approved under section 402 is found by a Federal or State court or pursuant to an administrative hearing meeting requirements determined in regulations of the Secretary, on the basis of a plea of guilty or nolo contendere or otherwise, to have intentionally— “(1) made a false or misleading statement or misrepresented, concealed, or withheld facts, or “(2) committed any act intended to mislead, misrepresent, conceal, or withhold facts or propound a falsity, for the purpose of establishing or maintaining the family’s eligibility for aid under such State plan or of increasing (or preventing a reduction in) the amount of such aid, then the needs of such individual shall not be taken into account in making the determination under section 402(3)(7) with respect to his or her family (A) for a period of 6 months upon the first occasion of any such offense, (B) for101 STAT. 1330–300 a period of 12 months upon the second occasion of any such offense, and (C) permanently upon the third or a subsequent occasion of any such offense. “(c) The State agency involved shall proceed against any individual alleged to have committed an offense described in subsection (b) either by way of administrative hearing or by referring the matter to the appropriate authorities for civil or criminal action in a court of law. The State agency shall coordinate its actions under this section with any corresponding actions being taken under the food stamp program in any case where the factual issues involved arise from the same or related circumstances. “(d) Any period for which sanctions are imposed under subsection (b) shall remain in effect, without possibility of administrative stay, unless and until the finding upon which the sanctions were imposed is subsequently reversed by a court of appropriate jurisdiction; but in no event shall the duration of the period for which such sanctions are imposed be subject to review. “(e) The sanctions provided under subsection (b) shall be in addition to, and not in substitution for, any other sanctions which may be provided for by law with respect to the offenses involved. “(f) Each State which has elected to establish and operate a fraud control program under this section must provide all applicants for aid to families with dependent children under its approved State plan, at the time of their application for such aid, with a written notice of the penalties for fraud which are provided for under this section.” (b) State Plan Requirement.— Section 402(a) of such Act is amended— (1) by striking “and” after the semicolon at the end of paragraph (38); (2) by striking the period at the end of paragraph (39) and inserting “; and”; and (3) by inserting immediately after paragraph (39) the following new paragraph: “(40) provide, if the State has elected to establish and operate a fraud control program under section 416, that the State will submit to the Secretary (with such revisions as may from time to time be necessary) a description of and budget for such program, and will operate such program in full compliance with that section.”. (c) Federal Matching.— Section 403(a)(3) of such Act is amended— (1) by striking “and” after the final comma in subparagraph (B); (2) by redesignating subparagraph (C) as subparagraph (D); (3) by inserting after subparagraph (B) the following new subparagraph: “(C) 75 percent of so much of such expenditures as are for the costs of carrying out a fraud control program under section 416, including costs related to the investigation, prosecution, and administrative hearing of fraudulent cases and the making of any resultant collections, and”; and (4) by striking “(C)” in the matter following subparagraph (D) (as redesignated by paragraph (2) of this subsection) and inserting “(D)”. 101 STAT. 1330–301 8888Copy read “Effective Date.—”. (d) Effective Date.— The amendments made by this section shall become effective April 1, 1988.