House File 2535
HOUSE FILE
BY COMMITTEE ON HUMAN
RESOURCES
(SUCCESSOR TO HSB 153)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to public assistance benefits received by persons
2 who were not entitled or eligible to receive the benefits,
3 providing criminal and civil penalties, and appropriating
4 certain penalties received.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
6 TLSB 6880HV 80
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PAG LIN
1 1 Section 1. NEW SECTION. 10A.404 CIVIL PENALTIES AND
1 2 PAYMENT OF INVESTIGATION COSTS == PRESUMPTION OF LIABILITY ==
1 3 LIMITATION OF ACTIONS.
1 4 1. For the purposes of this section, unless the context
1 5 otherwise requires, "benefit" means a service, payment,
1 6 merchandise, or other assistance. In addition to any other
1 7 penalty or payment amount under law, a person is liable for
1 8 the civil penalty and payment of the investigation costs
1 9 listed in subsection 2 if the person receives a benefit to
1 10 which the person was not entitled or for which the person was
1 11 not eligible under any of the following chapters administered
1 12 by the state:
1 13 a. Chapter 234, relating to child and family services.
1 14 b. Chapter 237A, relating to child care.
1 15 c. Chapter 239B, relating to the family investment
1 16 program.
1 17 d. Chapter 249, relating to the state supplementary
1 18 assistance program.
1 19 e. Chapter 249A, relating to the medical assistance
1 20 program.
1 21 2. a. If the person liable under subsection 1 was the
1 22 program benefit recipient of the benefit to which the person
1 23 was not entitled or eligible under any of the chapters listed
1 24 in subsection 1 and the total dollar amount of such benefit
1 25 received was proven to be more than one thousand dollars, the
1 26 person is liable for both of the following amounts:
1 27 (1) A civil penalty of not more than three times the total
1 28 dollar amount of the benefit to which the person was not
1 29 entitled or eligible to receive.
1 30 (2) Not more than five hundred dollars of the costs
1 31 incurred by the department in investigating the matter.
1 32 b. If the person liable under subsection 1 was a provider
1 33 of service, merchandise, or other assistance under any of the
1 34 chapters listed in subsection 1, the person is liable for both
1 35 of the following amounts:
2 1 (1) A civil penalty. If a provider received benefits to
2 2 which the provider was not entitled with a proven dollar
2 3 amount, the civil penalty shall be at least twenty=five
2 4 percent of the amount of benefits to which the provider was
2 5 not entitled. The court ordering payment of this civil
2 6 penalty may order payment of a maximum penalty not to exceed
2 7 three times the proven total dollar amount of benefits to
2 8 which the provider was not entitled.
2 9 (2) Not more than five thousand dollars of the costs
2 10 incurred by the department in investigating the matter.
2 11 3. Liability for the civil penalty and payment of costs of
2 12 investigation under subsections 1 and 2 is separate from and
2 13 cumulative with any other administrative, civil, or criminal
2 14 penalty or payments ordered under federal or state law or
2 15 regulation. Institution of a criminal proceeding is not a
2 16 prerequisite or condition for an action to enforce subsections
2 17 1 and 2.
2 18 4. Liability for the civil penalty and payment of costs of
2 19 investigation under subsections 1 and 2 may be established by
2 20 any of the following means:
2 21 a. Upon a criminal conviction, entry of a guilty plea, or
2 22 entry of a finding of guilt in a state or federal prosecution
2 23 that is directly related to a benefit administered by the
2 24 state under a chapter listed in subsection 1, the sentencing
2 25 court may order payment in accordance with subsections 1 and
2 26 2. However, if the sentencing court fails to order the
2 27 payment, a civil proceeding to enforce payment may be
2 28 instituted in accordance with subsection 5.
2 29 b. Upon entry of a civil judgment or confession of
2 30 judgment in a state or federal court proceeding that is
2 31 directly related to a benefit administered by the state under
2 32 a chapter listed in subsection 1, the court entering judgment
2 33 may order payment in accordance with subsections 1 and 2.
2 34 However, if the court ordering judgment fails to order the
2 35 payment, a civil proceeding to enforce payment may be
3 1 instituted in accordance with subsection 5.
3 2 c. Upon an administrative finding in a state or federal
3 3 proceeding that is directly related to a benefit administered
3 4 by the state under a chapter listed in subsection 1, a civil
3 5 proceeding to enforce payment may be instituted in accordance
3 6 with subsection 5.
3 7 5. A civil proceeding to enforce payment under this
3 8 section shall be instituted in the district court of the
3 9 county in which the person received under a chapter listed in
3 10 subsection 1 a benefit to which the person was not entitled or
3 11 for which the person under rule was not eligible. The office
3 12 of the attorney general or the county attorney may institute
3 13 the civil proceeding, which may commence after or at the same
3 14 time as any related state or federal criminal, civil, or
3 15 administrative proceeding directly related to a benefit under
3 16 a chapter listed in subsection 1 to which the person was not
3 17 entitled or eligible to receive.
3 18 6. A rebuttable presumption arises that a person is liable
3 19 for the civil penalty and payment of costs of investigation
3 20 under subsections 1 and 2. The presumption may only be
3 21 rebutted by clear and convincing evidence that the person was
3 22 properly entitled to or eligible to receive such benefit under
3 23 a chapter listed in subsection 1. The rebuttable presumption
3 24 arises after any of the following occurs in a state or federal
3 25 criminal, civil, or administrative proceeding that is directly
3 26 related to payment or collection of payments received by a
3 27 person for a service or benefit administered by the state
3 28 under a chapter listed in subsection 1:
3 29 a. Entry of a criminal conviction, plea of guilty, or
3 30 finding of guilt.
3 31 b. Entry of a judgment or confession of judgment in a
3 32 civil proceeding.
3 33 c. Entry of an administrative finding adverse to the
3 34 person or establishing the person's liability.
3 35 7. The departments of human services and inspections and
4 1 appeals shall cooperate in adopting rules pursuant to chapter
4 2 17A as necessary for administration, collection, and
4 3 allocation of civil penalties described in subsection 2. The
4 4 department of inspections and appeals shall adopt rules
4 5 pursuant to chapter 17A as necessary for the administration,
4 6 collection, and allocation of costs of investigation described
4 7 in subsection 2.
4 8 8. An action under this section shall not be instituted
4 9 more than five years after the date the state discovered that
4 10 a person received a benefit under a chapter listed in
4 11 subsection 1 to which the person was not entitled or for which
4 12 the person under rule was not eligible.
4 13 9. a. This section shall be applicable in circumstances
4 14 when a person receiving the benefit or a portion thereof to
4 15 which the person was not entitled or eligible for knowingly
4 16 did any of the following:
4 17 (1) Presented, caused to be presented, or acquiesced in
4 18 the presentation of false claims or false information.
4 19 (2) Made or caused to be made, or used false records or
4 20 statements.
4 21 (3) Committed fraud or conspired to commit fraud.
4 22 (4) Failed to provide information or failed to disclose
4 23 material facts, including but not limited to property
4 24 interests and resources.
4 25 b. This section shall not be applicable in circumstances
4 26 when a person, through no fault of their own, receives a
4 27 benefit or a portion thereof to which the person or provider
4 28 was not entitled or eligible for, and when the benefit or a
4 29 portion thereof was the result of error, improper application,
4 30 interpretation, or implementation of the program rules or
4 31 policies specific to the chapter under which the benefits were
4 32 received.
4 33 10. The collection of penalties or investigation costs
4 34 under this section shall not occur until the person assessed
4 35 the penalties or investigation costs has exhausted all appeal
5 1 rights.
5 2 Sec. 2. NEW SECTION. 234.13A CIVIL PENALTIES == PAYMENT
5 3 OF INVESTIGATION COSTS.
5 4 If a person receives under this chapter a service, payment,
5 5 merchandise, or other assistance to which the person was not
5 6 entitled or for which the person was not eligible, the
5 7 person's liability for civil penalties and investigation costs
5 8 shall be determined in accordance with section 10A.404.
5 9 Sec. 3. NEW SECTION. 237A.14 FRAUDULENT PRACTICES ==
5 10 RECOVERY OF OVERPAYMENTS.
5 11 1. An individual who receives, or attempts to receive, or
5 12 aids or abets an individual in receiving, by means of a
5 13 willfully false statement or representation, by knowingly
5 14 failing to disclose a material fact, or by impersonation, or
5 15 through any fraudulent device, any assistance, payment, or
5 16 other benefit under this chapter to which the individual is
5 17 not entitled, commits a fraudulent practice.
5 18 2. An individual who commits a fraudulent practice under
5 19 this section is personally liable for the amount of
5 20 assistance, payment, or other benefit fraudulently received.
5 21 The amount of the assistance, payment, or other benefit may be
5 22 recovered from the offender or the offender's estate in an
5 23 action brought or by claim filed in the name of the state and
5 24 the recovered funds are appropriated to the department to be
5 25 used for state child care assistance under section 237A.13.
5 26 The action or claim filed in the name of the state shall not
5 27 be considered an election of remedies to the exclusion of
5 28 other remedies.
5 29 3. The department shall adopt rules pursuant to chapter
5 30 17A as necessary to recover overpayments of assistance,
5 31 payments, and benefits provided under this chapter. The
5 32 recovery methods shall include but are not limited to reducing
5 33 the amount of assistance, payments, or benefits provided.
5 34 Sec. 4. NEW SECTION. 237A.15 CIVIL PENALTIES == PAYMENT
5 35 OF INVESTIGATION COSTS.
6 1 If a person receives under this chapter assistance,
6 2 payment, or other benefit to which the person was not entitled
6 3 or for which the person was not eligible, the person's
6 4 liability for civil penalties and investigation costs shall be
6 5 determined in accordance with section 10A.404.
6 6 Sec. 5. NEW SECTION. 239B.14A CIVIL PENALTIES == PAYMENT
6 7 OF INVESTIGATION COSTS.
6 8 If a person receives under this chapter assistance or
6 9 another benefit to which the person was not entitled or for
6 10 which the person was not eligible, the person's liability for
6 11 civil penalties and investigation costs shall be determined in
6 12 accordance with section 10A.404.
6 13 Sec. 6. NEW SECTION. 249.11A CIVIL PENALTIES == PAYMENT
6 14 OF INVESTIGATION COSTS.
6 15 If a person receives under this chapter payment to which
6 16 the person was not entitled or for which the person was not
6 17 eligible, the person's liability for civil penalties and
6 18 investigation costs shall be determined in accordance with
6 19 section 10A.404.
6 20 Sec. 7. NEW SECTION. 249A.8A CIVIL PENALTIES == PAYMENT
6 21 OF INVESTIGATION COSTS.
6 22 If a person receives under this chapter assistance or
6 23 payment for medical assistance or payment for services or
6 24 merchandise under this chapter to which the person was not
6 25 entitled or for which the person was not eligible, the
6 26 person's liability for civil penalties and investigation costs
6 27 shall be determined in accordance with section 10A.404.
6 28 EXPLANATION
6 29 This bill relates to public assistance benefits received by
6 30 persons who were not entitled or eligible to receive the
6 31 benefits. The bill includes requirements for establishing
6 32 liability for civil penalties and recovery of investigation
6 33 costs from such persons under the following Code chapters:
6 34 chapter 234, relating to child and family services, including
6 35 child welfare services and food programs; chapter 237A,
7 1 relating to child care services; chapter 239B, relating to the
7 2 family investment program; chapter 249, relating to state
7 3 supplementary assistance; and chapter 249A, relating to the
7 4 medical assistance program.
7 5 In new Code section 10A.404, the bill provides authority as
7 6 applicable under each of these chapters to establish liability
7 7 for a person who receives a benefit, defined as a service,
7 8 payment, merchandise, or other assistance to which the person
7 9 was not entitled or for which the person by rule was not
7 10 eligible, in addition to any other penalty or payment under
7 11 law. The liability has two components: a civil penalty and
7 12 the costs of the investigation concerning the matter incurred
7 13 by the department of inspections and appeals.
7 14 The threshold for applying this liability to a recipient is
7 15 whether the recipient received more than $1,000 of benefits to
7 16 which the recipient was not entitled or eligible. The civil
7 17 liability limit for a recipient is three times the value of
7 18 such benefit and the liability for investigation costs is
7 19 limited to $500. If a provider received benefits to which the
7 20 provider was not entitled with a proven dollar amount, the
7 21 civil penalty shall be at least 25 percent of the amount of
7 22 benefits to which the provider was not entitled.
7 23 The liability may be established by a state or federal
7 24 court in a criminal or civil proceeding or pursuant to an
7 25 administrative finding. Otherwise the office of the attorney
7 26 general or county attorney is authorized to initiate the
7 27 proceedings in the county in which the person received the
7 28 benefit.
7 29 If a judgment or finding is issued in a criminal, civil, or
7 30 administrative proceeding that involves benefit programs
7 31 administered by the state, a rebuttable presumption arises
7 32 that the person is liable for the civil penalties and costs of
7 33 investigation. The presumption may be rebutted by showing
7 34 clear and convincing evidence that the person was eligible for
7 35 what was received.
8 1 The departments of human services and inspections and
8 2 appeals are authorized to adopt rules to implement the bill's
8 3 provisions.
8 4 In addition, new Code section 237A.14 establishes a
8 5 fraudulent practice crime involving persons obtaining child
8 6 care assistance, payments, or benefits. The state is
8 7 authorized to recover moneys to compensate for the
8 8 fraudulently obtained assistance, payment, or benefit, and
8 9 recovered moneys are appropriated to the department of human
8 10 services for the state child care assistance program.
8 11 LSB 6880HV 80
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