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The Secretary shall use funds appropriated under section 2027 of this title to require States to replace benefits that are determined by the State agency to have been stolen through card skimming, card cloning, or similar fraudulent methods, subject to the conditions that—
(1)
the State agency shall submit to the Secretary not later than 60 days after December 29, 2022 , for prior approval a plan for the replacement of stolen benefits that—
(A) includes appropriate procedures, as determined by the Secretary, for the timely submission of claims to, timely validation of claims by, and replacement issuance by the State agency that includes— (i) a signed statement by the affected household on the benefit theft, consistent with the signature requirements and options provided by section 2020(e)(2)(C) of this title ; (ii) criteria to determine if a submitted claim is valid; (iii) procedures for the documentation of replacement issuances, including the submitted claims and findings from the validation; (iv) the submission of data reports on benefit theft and replacement activity to the Secretary; (v) procedures to inform households of their right to a fair hearing, consistent with those already established by section 2020(e) of this title and corresponding regulations concerning replacement issuances; and (vi) the State agency’s use and planned use of benefit theft prevention measures, including any additional guidance that may be issued under subsection (a)(1);
(B) includes appropriate procedures, as determined by the Secretary, for reporting the scope and frequency of card skimming affecting households within the State to the Secretary;
(C) upon approval shall be incorporated into the State plan of operation required under section 2020(e) of this title ; and
(D) the Secretary may approve after the date on which guidance is issued under subsection (a)(1);
the replacement of stolen benefits for a household—
(A) shall not exceed the lesser of— (i) the amount of benefits stolen from the household; or (ii) the amount equal to 2 months of the monthly allotment of the household immediately prior to the date on which the benefits were stolen;
(B) shall not occur more than 2 times per Federal fiscal year per household by a single State agency; and
(C) shall only apply to benefits stolen during the period beginning on October 1, 2022 , and ending on December 20, 2024 ;
plans approved under paragraph (1) will remain in effect until the effective date of the rule promulgated pursuant to subsection (a)(3); and
replacements of benefits under this section shall not be regarded as losses for the purpose of section 2016(e) of this title to the extent such replacements are made in accordance with an approved plan that complies with this subsection.