RESTRICTIONS ON PAYMENT OF BENEFITS BASED ON DISABILITY TO SUBSTANCE ABUSERS.

SEC. 201. RESTRICTIONS ON PAYMENT OF BENEFITS BASED ON DISABILITY TO SUBSTANCE ABUSERS. (a) Amendments Relating to Benefits Based on Disability Under Title II of the Social Security Act.— (1) Required payment of benefits to representative payees.— (A) In general.— Section 205(j)(1) of the Social Security Act (42 U.S.C. 405(j)(D) is amended— (i) by inserting “(A)” after “(j)(1)”; (ii) in the last sentence, by inserting “, if the interest of the individual under this title would be served thereby,” after “alternative representative payee or”; and (iii) by adding at the end the following new subparagraph: “(B) In the case of an individual entitled to benefits based on disability, if alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is under a disability, certification of payment of such benefits to a representative payee shall be deemed to serve the interest of such individual under this title. In any case in which such certification is so deemed under this subparagraph to serve the interest of an individual, the Secretary shall include, in such individual’s notification of entitlement, a notice that alcoholism or drug addiction is a contributing factor material to the Secretary’s determination of such individual’s disability and that the Secretary is therefore required to make a certification of payment of such individual’s benefits to a representative payee.”. 108 STAT. 1491 (B) Conforming amendment.—Section 205(j)(2)(D)(ii)(II) of such Act (42 U.S.C. 402(j)(2)(D)(ii)(II)) is amended by striking “or under the age of 15” and inserting “, under the age of 15 years, or (if alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is under a disability) is eligible for benefits under this title by reason of disability.”. (C) 90-day delay in deferral or suspension of benefits for current beneficiaries.— In the case of an individual who, as of 180 days after the date of the enactment of this Act, has been determined to be under a disability, if alcoholism or drug addiction is a contributing factor material to the determination of the Secretary of Health and Human Services that the individual is under a disability, the Secretary may, notwithstanding clauses (i) and (ii) of section 205(j)(2)(D) of the Social Security Act, make direct payment of benefits to such individual during the 90-day period commencing with the date on which such individual is provided the notice described in subparagraph (D)(ii) of this paragraph, until such time during such period as the selection of a representative payee is made pursuant to section 205(j) of such Act. (D) Effective date.— (i) General rule.— Except as provided in clause (ii), the amendments made by this paragraph shall apply with respect to benefits paid in months beginning after 180 days after the date of the enactment of this Act. (ii) Treatment of current beneficiaries.— In any case in which— (I) an individual is entitled to benefits based on disability (as defined in section 205(j)(7) of the Social Security Act, as amended by this section), (II) the determination of disability was made by the Secretary of Health and Human Services during or before the 180-day period following the date of the enactment of this Act, and (III) alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is under a disability, the amendments made by this paragraph shall apply with respect to benefits paid in months after the month in which such individual is notified by the Secretary in writing that alcoholism or drug addiction is a contributing factor material to the Secretary’s determination and that the Secretary is therefore required to make a certification of payment of such individual’s benefits to a representative payee. (E) Study regarding feasibility, cost, and equity of requiring representative payees for all disability beneficiaries suffering from alcoholism or drug addiction.— (i) Study.— As soon as practicable after the date of the enactment of this Act, the Secretary of Health and Human Services shall conduct a study of the rep-108 STAT. 1492resentative payee program. In such study, the Secretary shall examine— (I) the feasibility, cost, and equity of requiring representative payees for all individuals entitled to benefits based on disability under title II or XVI of the Social Security Act who suffer from alcoholism or drug addiction, irrespective of whether the alcoholism or drug addiction was material in any case to the Secretary’s determination of disability, (II) the feasibility, cost, and equity of providing benefits through non-cash means, including (but not limited to) vouchers, debit cards, and electronic benefits transfer systems, (III) the extent to which child beneficiaries are afflicted by drug addition or alcoholism and ways of addressing such affliction, including the feasibility of requiring treatment, and (IV) the extent to which children’s representative payees are afflicted by drug addiction or alcoholism, and methods to identify children’s representative payees afflicted by drug addition or alcoholism and to ensure that benefits continue to be provided to beneficiaries appropriately. (ii) Report.— Not later than December 31, 1995, the Secretary shall transmit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report setting forth the findings of the Secretary based on such study. Such report shall include such recommendations for administrative or legislative changes as the Secretary considers appropriate. (2) Increased reliance on professional representative payees.— (A) Preference required for organizational representative payees.— Section 205(j)(2)(C) of such Act (42 U.S.C. 405(j)(2)(C)) is amended by adding at the end the following new clause: “(v) In the case of an individual entitled to benefits based on disability, if alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is under a disability, when selecting such individual’s representative payee, preference shall be given to— “(I) a community-based nonprofit social service agency licensed or bonded by the State, “(II) a Federal, State, or local government agency whose mission is to carry out income maintenance, social service, or health care-related activities, “(III) a State or local government agency with fiduciary responsibilities, or “(IV) a designee of an agency (other than of a Federal agency) referred to in the preceding subclauses of this clause, if the Secretary deems it appropriate, unless the Secretary determines that selection of a family member would be appropriate.”. 108 STAT. 1493 (B) Availability of public agencies and other qualified organizations to serve as representative payees.— (i) Allowable fees.— Section 205(j)(4)(A) of such Act (42 U.S.C. 405(j)(4)) is amended— (I) by redesignating clauses (i) and (ii) as subclauses (I) and (II), respectively; (II) by inserting “(i)” after “(4)(A)”; (III) by striking subclause (II) (as redesignated by subclause (I) of this clause) and inserting the following: “(II) $25.00 per month ($50.00 per month in any case in which the individual is entitled to benefits based on disability and alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is under a disability).”; (IV) by inserting, after and below subclause (II) (as amended), the following new sentence: “The Secretary shall adjust annually (after 1995) each dollar amount set forth in subclause (II) under procedures providing for adjustments in the same manner and to the same extent as adjustments are provided for under the procedures used to adjust benefit amounts under section 215(i)(2)(A), except that any amount so adjusted that is not a multiple of $1.00 shall be rounded to the nearest multiple of $1.00.”; and (V) by adding at the end the following new clause: “(ii) In the case of an individual who is no longer currently entitled to monthly insurance benefits under this title but to whom all past-due benefits have not been paid, for purposes of clause (i), any amount of such past-due benefits payable in any month shall be treated as a monthly benefit referred to in clause (i)(I).”. (ii) Inclusion of state and local agencies as qualified organizations.— Section 205(j)(4)(B) of such Act (42 U.S.C. 405(j)(4)(B)) is amended— (I) by inserting “State or local government agency whose mission is to carry out income maintenance, social service, or health care-related activities, any State or local government agency with fiduciary responsibilities, or any” after “means any”; (II) by striking “representative payee and which,” and inserting “representative payee, if such agency,”; (III) by striking “, and” at the end of clause (ii) and inserting a period; and (IV) by striking clause (iii). (iii) Retroactive repeal of sunset.— Effective July 1, 1994, section 205(j)(4) of such Act (42 U.S.C. 405(j)(4)) is amended by striking subparagraph (D). (C) Definition.— Section 205(j) of such Act (42 U.S.C. 405(j)) is amended by adding at the end the following new paragraph: “(7) For purposes of this subsection, the term ‘benefit based on disability’ of an individual means a disability insurance benefit of such individual under section 223 or a child’s, widow’s, or widow-108 STAT. 1494er’s insurance benefit of such individual under section 202 based on such individual’s disability.”. (D) Effective date.— Except as provided in subparagraph (B)(iii), the amendments made by this paragraph shall apply with respect to months beginning after 90 days after the date of the enactment of this Act. (3) Nonpayment or termination of benefits.— (A) In general.— Section 225 of such Act (42 U.S.C. 425) is amended— (i) by striking the heading and inserting the following: “additional rules relating to benefits based on disability “Suspension of Benefits”; (ii) by inserting before subsection (b) the following new heading: “Continued Payments During Rehabilitation Program”; and (iii) by adding at the end the following new subsection: “Nonpayment or Termination of Benefits Where Entitlement Involves Alcoholism or Drug Addiction “(c) (1) (A) In the case of any individual entitled to benefits based on disability, if alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that such individual is under a disability, such individual shall comply with the provisions of this subsection. In any case in which an individual is required to comply with the provisions of this subsection, the Secretary shall include, in such individual’s notification of entitlement, a notice informing such individual of such requirement. “(B) Notwithstanding any other provision of this title, if an individual who is required under subparagraph (A) to comply with the provisions of this subsection is determined by the Secretary not to be in compliance with the provisions of this subsection, such individual’s benefits based on disability shall be suspended for a period— “(i) commencing with the first month following the month in which such individual is notified by the Secretary of the determination of noncompliance and that the individual’s benefits will be suspended, and “(ii) ending with the month preceding the first month, after the determination of noncompliance, in which such individual demonstrates that he or she has reestablished and maintained compliance with such provisions for the applicable period specified in paragraph (3). “(2) (A) An individual described in paragraph (1) is in compliance with the requirements of this subsection for a month if in such month— “(i) such individual undergoes substance abuse treatment which is appropriate for such individual’s condition diagnosed as alcoholism or drug addiction and for the stage of such individual’s rehabilitation and which is conducted at an institu-108 STAT. 1495tion or facility approved for purposes of this subsection by the Secretary, and “(ii) such individual complies in such month with the terms, conditions, and requirements of such treatment and with requirements imposed by the Secretary under paragraph (5). “(B) An individual described in paragraph (1) may be determined as failing to comply with the requirements of this subsection for a month only if treatment meeting the requirements of subparagraph (A)(i) is available for that month, as determined pursuant to regulations of the Secretary. “(3) The applicable period specified in this paragraph is— “(A) 2 consecutive months, in the case of a first determination that an individual is not in compliance with the requirements of this subsection, “(B) 3 consecutive months, in the case of the second such determination with respect to the individual, or “(C) 6 consecutive months, in the case of the third or subsequent such determination with respect to the individual. “(4) In any case in which an individual’s benefit is suspended for a period of 12 consecutive months for failure to comply with treatment described in paragraph (2) of this subsection, the month following such period shall be deemed, for purposes of section 223(a)(1) or subsection (d)(l)(G)(i), (e)(1), or (f)(1) of section 202 (as applicable), the termination month with respect to such entitlement. “(5) (A) The Secretary shall provide for the monitoring and testing of individuals who are receiving benefits under this title and who as a condition of payment of such benefits are required to be undergoing treatment under paragraph (1) and complying with the terms, conditions, and requirements thereof as described in paragraph (2)(A), in order to assure such compliance. “(B) The Secretary, in consultation with drug and alcohol treatment professionals, shall issue regulations— “(i) defining appropriate treatment for alcoholics and drug addicts who are subject to appropriate substance abuse treatment required under this subsection, and “(ii) establishing guidelines to be used to review and evaluate their compliance, including measures of the progress expected to be achieved by participants in such programs. “(C) (i) For purposes of carrying out the requirements of subparagraphs (A) and (B), the Secretary shall provide for the establishment of one or more referral and monitoring agencies for each State. “(ii) Each referral and monitoring agency for a State shall— “(I) identify appropriate placements, for individuals residing in such State who are entitled to benefits based on disability and with respect to whom alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that they are under a disability, where they may obtain treatment described in paragraph (2)(A), “(II) refer such individuals to such placements for such treatment, and “(III) monitor compliance with the requirements of paragraph (2)(A) by individuals who are referred by the agency to such placements and promptly report failures to comply to the Secretary. 108 STAT. 1496 “(D) There are authorized to be transferred from the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund such sums as are necessary to carry out the requirements of this paragraph for referral, monitoring, and testing. “(6) (A) In the case of any individual who is entitled to a benefit based on disability for any month, if alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is under a disability, pa5nnent of any past-due monthly insurance benefits under this title to which such individual is entitled shall be made in any month only to the extent that the sum of— “(i) the amount of such past-due benefit paid in such month, and “(ii) the amount of any benefit for the preceding month under such current entitlement which is payable in such month, does not exceed, subject to subparagraph (B), twice the amount of such individual’s benefit for the preceding month (determined without applying any reductions or deductions under this title). “(B) (i) In the case of an individual who is no longer currently entitled to monthly insurance benefits under this title but to whom any amount of past-due benefits has not been paid, for purposes of subparagraph (A), such individual’s monthly insurance benefit for such individual’s last month of entitlement shall be treated as such individual’s benefit for the preceding month. “(ii) For the first month in which an individual’s past-due benefits referred to in subparagraph (A) are paid, the amount of the limitation provided in subparagraph (A) shall be increased by the amount of any debts of such individual related to housing which are outstanding as of the end of the preceding month and which are resulting in a high risk of homelessness for such individual. “(C) Upon the death of an individual to whom pa3rment of past-due benefits has been limited under subparagraph (A), any amount of such past-due benefits remaining unpaid shall be treated as an underpayment for purposes of section 204. “(D) In the case of an individual who would be entitled to benefits based on disability but for termination of such benefits under paragraph (4) or (7), such individual shall be entitled to payment of past-due benefits under this paragraph as if such individual continued to be entitled to such terminated benefits. “(7) (A) Subject to subparagraph (B), in the case of any individual entitled to benefits based on disability, if— “(i) alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that such individual is under a disability, and “(ii) as of the end of the 36-month period beginning with such individual’s first month of entitlement, such individual would not otherwise be disabled but for alcoholism or drug addiction, the month following such 36-month period shall be deemed, for purposes of section 223(a)(1) or subsection (d)(l)(G)(i), (e)(1), or (f)(1) of section 202 (as applicable), the termination month with respect to such entitlement. Such individual whose entitlement is terminated under this paragraph may not be entitled to benefits based on disability for any month following such 36-month period if, in such following month, alcoholism or drug addiction is a contrib-108 STAT. 1497uting factor material to the Secretary’s determination that such individual is under a disability. “(B) In determining whether the 36-month period referred to in subparagraph (A) has elapsed— “(i) a month shall not be taken into account unless the Secretary determines, under regulations of the Secretary, that treatment required under this subsection is available to the individual for the month, and “(ii) any month for which a suspension is in effect for the individual under paragraph (1)(B) shall not be taken into account. “(8) Monthly insurance benefits under this title which would be payable to any individual (other than the disabled individual to whom benefits are not payable by reason of this subsection) on the basis of the wages and self-employment income of such disabled individual but for the provisions of paragraph (1), (4), or (7) shall be payable as though such paragraph did not apply. “(9) For purposes of this subsection, the term ‘benefit based on disability’ of an individual means a disability insurance benefit of such individual under section 223 or a child’s, widow’s, or widower’s insurance benefit of such individual under section 202 based on the disability of such individual.”. (B) Report.— Not later than December 31, 1996, the Secretary shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a full and complete report on the Secretary’s activities under paragraph (5) of section 225(c) of the Social Security Act (as amended l3y subparagraph (A)). Such report shall include the number and percentage of individuals referred to in such paragraph who have not received regular drug testing since the effective date of such paragraph. (C) SUNSET OF 36-MONTH RULE.—Section 225(c)(7) of the Social Security Act (added by subparagraph (A)) shall cease to be effective with respect to benefits for months after September 2004. (D) Preservation of medicare benefits.— (i) Section 226 of such Act (42 U.S.C. 426) is amended by adding at the end the following: “(i) For purposes of this section, each person whose monthly insurance benefit for any month is terminated or is otherwise not payable solely by reason of paragraph (1) or (7) of section 225(c) shall be treated as entitled to such benefit for such month.”. (ii) Section 226A of such Act (42 U.S.C. 426A) is amended by adding at the end the following: “(c) For purposes of this section, each person whose monthly insurance benefit for any month is terminated or is otherwise not payable solely by reason of paragraph (1) or (7) of section 225(c) shall be treated as entitled to such benefit for such month.”. (E) Effective date.— (i) In general.— Except as otherwise provided in this paragraph, the amendments made by this paragraph shall apply with respect to benefits based on disability (as defined in section 225(c)(9) of the Social Security Act, added by this section) which are otherwise payable in months beginning after 180 days after the date of the enactment of this Act. The Secretary108 STAT. 1498 of Health and Human Services shall issue regulations necessary to carry out the amendments made by this paragraph not later than 180 days after the date of the enactment of this Act. (ii) Referral and monitoring agencies.— Section 225(c)(5) of the Social Security Act (added by this subsection) shall take effect 180 days after the date of the enactment of this Act. (iii) Termination after 36 months.— Section 225(c)(7) of the Social Security Act (added by this subsection) shall apply with respect to benefits based on disability (as so defined) for months beginning after 180 days after the date of the enactment of this Act. (F) Transition rules for current beneficiaries.— In any case in which an individual is entitled to benefits based on disability, the determination of disability was made by the Secretary of Health and Human Services during or before the 180-day period following the date of the enactment of this Act, and alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is under a disability— (i) Treatment requirement.— Paragraphs (1) through (4) of section 225(c) of the Social Security Act (added by this subsection) shall apply only with respect to benefits paid in months after the month in which such individual is notified by the Secretary in writing that alcoholism or drug addiction is a contributing factor material to the Secretary’s determination and that such individual is therefore required to comply with the provisions of section 225(c) of such Act. (ii) Termination after 36 months.— (I) In general.— For purposes of section 225(c)(7) of the Social Security Act (added by this subsection), the first month of entitlement beginning after 180 days after the date of the enactment of this Act shall be treated as the individual’s first month of entitlement to such benefits. (II) Concurrent beneficiaries currently under treatment.— In any case in which the individual is also entitled to benefits under title XVI and, as of 180 days after the date of the enactment of this Act, such individual is undergoing treatment required under section 1611(e)(3) of the Social Security Act (as in effect immediately before the date of the enactment of this Act), the Secretary of Health and Human Services shall notify such individual of the provisions of section 225(c)(7) of the Social Security Act (added by this subsection) not later than 180 days after the date of the enactment of this Act. (III) Concurrent beneficiaries not currently under treatment.— In any case in which the individual is also entitled to benefits under title XVI but, as of 180 days sifter the date of the enactment of this Act, such individual is not undergoing treatment described in subclause (II),108 STAT. 1499 section 225(c)(7) (added by this subsection) shall apply only with respect to benefits for months after the month in which treatment required under section 1611(e)(3) of the Social Security Act (as amended by subsection (b)) is available, as determined under regulations of the Secretary of Health and Human Services, and the Secretary notifies such individual of the availability of such treatment and describes in such notification the provisions of section 225(c)(7) of the Social Security Act (added by this subsection). (4) Irrelevance of legality of services performed in determining substantial gainful activity.— (A) In general.— Section 223(d)(4) of such Act (42 U.S.C. 423(d)(4)) is amended— (i) by inserting “(A)” after “(4)”; and (ii) by adding at the end the following new subparagraph: “(B) In determining under subparagraph (A) when services performed or earnings derived from services demonstrate an individual’s ability to engage in substantial gainful activity, the Secretary shall apply the criteria described in subparagraph (A) with respect to services performed by any individual without regard to the legality of such services.”. (B) Conforming amendment relating to trial work.— Section 222(c)(2) of such Act (42 U.S.C. 422(c)(2)) is amended by inserting “(whether legal or illegal)” after “activity”. (C) Effective date.— The amendments made by this paragraph shall take effect on the date of the enactment of this Act. (b) Amendments Relating to Supplemental Security Income Benefits Under Title XVI of the Social Security Act.— (1) Required payment of benefits to representative payees.— (A) In general.— Section 1631(a)(2)(A) of the Social Security Act (42 U.S.C. 1383(a)(2)(A)) is amended— (i) in clause (ii)— (I) by inserting “(I)” after “(ii)”; (II) by striking “or in the case of any individual or eligible spouse referred to in section 1611(e)(3)(A),”; and (III) by adding after and below the end the following: “(II) In the case of an individual eligible for benefits under this title by reason of disability, if alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is disabled, the payment of such benefits to a representative payee shall be deemed to serve the interest of the individual under this title. In any case in which such payment is so deemed under this subclause to serve the interest of an individual, the Secretary shall include, in the individual’s notification of such eligibility, a notice that alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is disabled and that the Secretary is therefore108 STAT. 1500 required to pay the individual’s benefits to a representative payee.”; and (ii) in clause (iii), by striking “to the individual or eligible spouse or to an alternative representative payee of the individual or eligible spouse” and inserting “to an alternative representative payee of the individual or eligible spouse or, if the interest of the individual under this title would be served thereby, to the individual or eligible spouse”. (B) Conforming amendment.— Section 1631(a)(2)(B)(viii)(II) of such Act (42 U.S.C. 1383(a)(2)(B)(viii)(II)) is amended by striking “15 years” and all that follows and inserting “of 15 years, or (if alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is disabled) is eligible for benefits under this title by reason of disability.”. (C) Effective date.— The amendments made by this paragraph shall apply with respect to months beginning after 180 days after the date of the enactment of this Act. (2) Increased reliance on professional representative payees.— (A) Preference required for organizational representative payees.— Section 1631(a)(2)(B) of such Act (42 U.S.C. 1383(a)(2)(B)), as amended by paragraph (1)(B) of this subsection, is amended— (i) by redesignating clauses (vii) through (xii) as clauses (viii) through (xiii), respectively; (ii) by inserting sifter clause (vi) the following: “(vii) In the case of an individual eligible for benefits under this title by reason of disability, if alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is disabled, when selecting such individual’s representative payee, preference shall be given to— “(I) a community-based nonprofit social service agency licensed or bonded by the State; “(II) a Federal, State, or local government agency whose mission is to carry out income maintenance, social service, or health care-related activities; “(III) a State or local government agency with fiduciary responsibilities; or “(IV) a designee of an agency (other than of a Federal agency) referred to in the preceding subclauses of this clause, if the Secretary deems it appropriate, unless the Secretary determines that selection of a family member would be appropriate.”; (iii) in clause (viii) (as so redesignated), by striking “clause (viii)” and inserting “clause (ix)”; (iv) in clause (ix) (as so redesignated), by striking “(vii)” and inserting “(viii)”; (v) in clause (xiii) (as so redesignated)— (I) by striking “(xi)” and inserting “(xii)”; and (II) by striking “(x)” and inserting “(xi)”. (B) Availability of public agencies and other qualified organizations to serve as representative payees.— 108 STAT. 1501 (i) Allowable fees.— Section 1631(a)(2)(D) of such Act (42 U.S.C. 1383(a)(2)(D)) is amended— (I) in clause (i)— (aa) by striking subclause (II) and inserting the following: “(II) $25.00 per month ($50.00 per month in any case in which an individual is eligible for benefits under this title by reason of disability and alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is disabled).”; and (bb) by inserting after the 1st sentence the following: “The Secretary shall adjust annually (after 1995) each dollar amount set forth in subclause (II) of this clause under procedures providing for adjustments in the same manner and to the same extent as adjustments are provided for under the procedures used to adjust benefit amounts under section 215(i)(2)(A), except that any amount so adjusted that is not a multiple of $1.00 shall be rounded to the nearest multiple of $1.00.”; and (II) by adding at the end the following: “(v) In the case of an individual who is no longer eligible for benefits under this title but to whom any amount of past-due benefits under this title has not been paid, for purposes of clause (i), any amount of such past-due benefits payable in any month shall be treated as a monthly benefit referred to in clause (i)(I).”. (ii) Inclusion of state and local agencies as qualified organizations.— Section 1631(a)(2)(D)(ii) of such Act (42 U.S.C. 1383(a)(2)(D)(ii)) is amended— (I) by inserting “State or local government agency whose mission is to carry out income maintenance, social service, or health care-related activities, any State or local government agency with fiduciary responsibilities, or any” after “means any”; (II) by inserting a comma after “service agency”; (III) by adding “and” at the end of subclause (I); and (IV) in subclause (II)— (aa) by adding “and” at the end of item (aa); (bb) by striking “; and” at the end of item (bb) and inserting a period; and (cc) by striking item (cc). (iii) Retroactive repeal of sunset.— (I) Repeal.— Effective July 1, 1994, section 1631(a)(2)(D) of such Act (42 U.S.C. 1383(a)(2)(D)) is amended by striking clause (iv). (II) Conforming amendment.— Section 1631(a)(2)(D) of such Act (42 U.S.C. 1383(a)(2)(D)) is amended by redesignating clause (v) (as added by clause (i)(II) of this subparagraph) as clause (iv). (C) Effective date.— Except as provided in subparagraph (B)(iii)(I), the amendments made by this paragraph108 STAT. 1502 shall apply with respect to months beginning after 90 days after the date of the enactment of this Act. (3) Nonpayment or termination of benefits.— (A) In general.— Section 1611(e)(3)(A) of such Act (42 U.S.C. 1382(e)(3)(A)) is amended to read as follows: “(A) (i) (I) In the case of any individual eligible for benefits under this title solely by reason of disability, if alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is disabled, the individual shall comply with the provisions of this subparagraph. In any case in which an individual is required to comply with the provisions of this subparagraph, the Secretary shall include in the individual’s notification of such eligibility a notice informing the individual of such requirement. “(II) Notwithstanding any other provision of this title, if an individual who is required under subclause (I) to comply with the requirements of this subparagraph is determined by the Secretary not to be in compliance with the provisions of this subparagraph, the individual’s benefits under this title by reason of disability shall be suspended for a period— “(aa) commencing with the first month following the month in which the individual is notified by the Secretary of the determination of noncompliance and that the individual’s benefits will be suspended; and “(bb) ending with the month preceding the first month, after the determination of noncompliance, in which the individual demonstrates that he or she has reestablished and maintained compliance with such provisions for the applicable period specified in clause (iii). “(ii) (I) An individual described in clause (i) is in compliance with the requirements of this subparagraph for a month if in such month— “(aa) the individual undergoes substance abuse treatment, which is appropriate for the individual’s condition diagnosed as alcoholism or drug addiction and for the stage of the individual’s rehabilitation and which is conducted at an institution or facility approved for purposes of this subparagraph by the Secretary; and “(bb) the individual complies in such month with the terms, conditions, and requirements of the treatment and with requirements imposed by the Secretary under this paragraph. “(II) An individual described in clause (i) may be determined as failing to comply with the requirements of this subparagraph for a month only if treatment meeting the requirements of subclause (I)(aa) is available for the month, as determined pursuant to regulations of the Secretary. “(iii) The applicable period specified in this clause is— “(I) 2 consecutive months, in the case of a 1st determination that an individual is not in compliance with the requirements of this subparagraph; “(II) 3 consecutive months, in the case of the 2nd such determination with respect to the individual; or “(III) 6 consecutive months, in the case of the 3rd or subsequent such determination with respect to the individual. “(iv) An individual who is not in compliance with this paragraph for 12 consecutive months shall not be eligible for supplemental security income benefits under this title. The preceding sentence108 STAT. 1503 shall not be construed to prevent the individual from reapplying and becoming eligible for such benefits. “(v) (I) In the case of any individual eligible for benefits under this title by reason of disability, if— “(aa) alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is disabled; and “(bb) as of the end of the 36-month period beginning with the 1st month for which such benefits by reason of disability are payable to the individual, the individual would not otherwise be disabled but for alcoholism or drug addiction, the individual shall not be eligible for such benefits by reason of disability for any month following such 36-month period if, in such following month, alcoholism or drug addiction would be a contributing factor material to the Secretary’s determination that the individual is disabled, notwithstanding section 1619(a). “(II) An individual whose entitlement to benefits under title II based on disability has been terminated by reason of section 225(c)(7) shall not be eligible for benefits under this title by reason of disability, if alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is disabled, for any month after the individual’s termination month (within the meaning of section 223(a)(1) or subsection (d)(l)(G)(i), (e)(1), or (f)(1) of section 202, as applicable) with respect to such benefits. “(III) Any month for which a suspension is in effect for the individual under clause (i)(II) shall not be taken into account in determining whether any 36-month period referred to in this clause has elapsed. “(vi) (I) In the case of any individual who is eligible for benefits under this title for any month solely by reason of disability, if alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is disabled, payment of any benefits under this title the payment of which is past due shall be made in any month only to the extent that the sum of— “(aa) the amount of the past-due benefit paid in the month; and “(bb) the amount of any benefit under this title which is payable to the individual for the month, does not exceed twice the maximum benefit payable under this title to an eligible individual for the preceding month. “(II) For the first month in which an individual’s past-due benefits referred to in subclause (I) are paid, the amount of the limitation provided in subclause (I) shall be increased by the amount of any debts of the individual related to housing which are outstanding as of the end of the preceding month and which are resulting in a high risk of homelessness for the individual. “(III) Upon the death of an individual to whom payment of past-due benefits has been limited under subclause (I), any amount of such past-due benefits remaining unpaid shall be treated as an underpayment for purposes of section 1631(b)(1)(A). “(IV) As used in this clause, the term ‘benefits under this title’ includes supplementary payments pursuant to an agreement for Federal administration under section 1616(a), and payments pursuant to an agreement entered into under section 212(b) of Public Law 93–66. 108 STAT. 1504 “(V) In the case of an individual who would be eligible for benefits under this title by reason of disability but for termination of such benefits under clause (iv) or (v), the individual shall be eligible for payment of past-due benefits under this clause as if the individual continued to be eligible for such terminated benefits. “(VI) Subclause (I) shall not apply to payments under section 1631(g).“. (B) Referral, monitoring, and treatment.— (i) In general.— Section 1611(e)(3)(B) of such Act (42 U.S.C. 1382(e)(3)(B)) is amended— (I) by inserting “(i)” after “(B)”; (II) by striking the 2nd sentence; and (III) by adding after and below the end the following: “(ii) The Secretary, in consultation with drug and alcohol treatment professionals, shall issue regulations— “(I) defining appropriate treatment for alcoholics and drug addicts who are subject to required appropriate substance abuse treatment under this subparagraph; and “(II) establishing guidelines to be used to review and evaluate their compliance, including measures of the progress expected to be achieved by participants in such programs. “(iii) (I) For purposes of carrying out the requirements of clauses (i) and (ii), the Secretary shall provide for the establishment of 1 or more referral and monitoring agencies for each State. “(II) Each referral and monitoring agency for a State shall— “(aa) identify appropriate placements, for individuals residing in the State who are eligible for benefits under this title by reason of disability and with respect to whom alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that they are disabled, where they may obtain treatment described in subparagraph (A)(ii)(I); “(bb) refer such individuals to such placements for such treatment; and “(cc) monitor compliance with the requirements of subparagraph (A) by individuals who are referred by the agency to such placements, and promptly report to the Secretary any failure to comply with such requirements.”. (ii) Report.— Not later than December 31, 1996, the Secretary shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a full and complete report on the Secretary’s activities under section 1611(e)(3)(B) of the Social Security Act. The report shall include the number and percentage of individuals referred to in such paragraph who have not received regular drug testing since the effective date of the amendments made by clause (i) of this subparagraph. (C) Sunset of 36-month rule.— Section 1611(e)(3)(A)(v) of the Social Security Act (added by subparagraph (A) of this paragraph) shall cease to be effective with respect to benefits for months after September 2004. (D) Preservation of medicard benefits.— Section 1634 of such Act (42 U.S.C. 13283c) is amended by adding at the end the following: 108 STAT. 1505 “(e) Each person to whom benefits under this title by reason of disability are not payable for any month solely by reason of clause (i) or (v) of section 1611(e)(3)(A) shall be treated, for purposes of title XIX, as receiving benefits under this title for the month.”. (E) Effective date.— (i) In general.— Except as otherwise provided in this paragraph, the amendments made by this paragraph shall apply with respect to supplemental security income benefits under title XVI of the Social Security Act by reason of disability which are otherwise payable in months beginning after 180 days after the date of the enactment of this Act. The Secretary of Health and Human Services shall issue regulations necessary to carry out the amendments made by this paragraph not later than 180 days after such date of enactment. (ii) Referral and monitoring agencies.— The amendments made by subparagraph (B) shall take effect 180 days after the date of the enactment of this Act. (iii) Termination after 36 months.— Clause (v) of section 1611(e)(3)(A) of the Social Security Act (added by the amendment made by subparagraph (A) of this paragraph) shall apply with respect to supplemental security income benefits under title XVI of the Social Security Act by reason of disability for months beginning after 180 days after the date of the enactment of this Act. (F) Transition rules for current beneficiaries.— In any case in which an individual is eligible for supplemental security income benefits under title XVI of the Social Security Act by reason of disability, the determination of disability was made by the Secretary of Health and Human Services during or before the 180-day period following the date of the enactment of this Act, and alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that the individual is disabled, for purposes of section 161 l(e)(3)(A)(v) of the Social Security Act (added by the amendment made by subparagraph (A) of this paragraph)— (i) the first month of such eligibility beginning after 180 days after the date of the enactment of this Act shall be treated as the individual’s first month of such eligibility; and (ii) the Secretary shall notify the individual of the requirements of the amendments made by this paragraph no later than 180 days after the date of the enactment of this Act. (4) Irrelevance of legality of substantial gainful activity.— (A) In general.— Section 1614(a)(3)(D) of such Act (42 U.S.C. 1382c(a)(3)(D)) is amended by adding at the end the following: “The Secretary shall make determinations under this title with respect to substantial gainful activity, without regard to the legality of the activity.”. (B) Effective date.— The amendment made by subparagraph (A) shall take effect on the date of the enactment of this Act. 108 STAT. 1506 (c) Demonstration Projects.— (1) In general.— The Secretary of Health and Human Services shall develop and carry out demonstration projects designed to explore innovative referral, monitoring, and treatment approaches with respect to— (A) individuals who are entitled to disability insurance benefits or child’s, widow’s, or widower’s insurance benefits based on disability under title II of the Social Security Act, and (B) individuals who are eligible for supplemental security income benefits under title XVI of such Act based solely on disability, in cases in which alcoholism or drug addiction is a contributing factor material to the Secretary’s determination that individuals are under a disability. The Secretary may include in such demonstration projects individuals who are not described in either subparagraph (A) or subparagraph (B) if the inclusion of such individuals is necessary to determine the efficacy of various monitoring, referral, and treatment approaches for individuals described in subparagraph (A) or (B). (2) Scope.— The demonstration projects developed under paragraph (1) shall be of sufficient scope and shall be carried out on a wide enough scale to permit a thorough evaluation of the alternative approaches under consideration while giving assurance that the results derived from the projects will obtain generally in the operation of the programs involved without committing such programs to the adoption of any particular system either locally or nationally. (3) Final report.— The Secretary shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate no later than December 31, 1997, a final report on the demonstration projects carried out under this subsection, together with any related data and materials which the Secretary may consider appropriate. The authority under this section shall terminate upon the transmittal of such final report.