Overissuances caused by systemic State errors

(A) In general If the Secretary determines that a State agency overissued benefits to a substantial number of households in a fiscal year as a result of a major systemic error by the State agency, as defined by the Secretary, the Secretary may prohibit the State agency from collecting these overissuances from some or all households.

(B) Procedures (i) Information reporting by States Every State agency shall provide to the Secretary all information requested by the Secretary concerning the issuance of benefits to households by the State agency in the applicable fiscal year. (ii) Final determination After reviewing relevant information provided by a State agency, the Secretary shall make a final determination— (I) whether the State agency overissued benefits to a substantial number of households as a result of a systemic error in the applicable fiscal year; and (II) as to the amount of the overissuance in the applicable fiscal year for which the State agency is liable. (iii) Establishing a claim Upon determining under clause (ii) that a State agency has overissued benefits to households due to a major systemic error determined under subparagraph (A), the Secretary shall establish a claim against the State agency equal to the value of the overissuance caused by the systemic error. (iv) Administrative and judicial review Administrative and judicial review, as provided in section 2023 of this title , shall apply to the final determinations by the Secretary under clause (ii). (v) Remission to the Secretary (I) Determination not appealed If the determination of the Secretary under clause (ii) is not appealed, the State agency shall, as soon as practicable, remit to the Secretary the dollar amount specified in the claim under clause (iii). (II) Determination appealed If the determination of the Secretary under clause (ii) is appealed, upon completion of administrative and judicial review under clause (iv), and a finding of liability on the part of the State, the appealing State agency shall, as soon as practicable, remit to the Secretary a dollar amount subject to the finding made in the administrative and judicial review. (vi) Alternative method of collection (I) In general If a State agency fails to make a payment under clause (v) within a reasonable period of time, as determined by the Secretary, the Secretary may reduce any amount due to the State agency under any other provision of this chapter by the amount due. (II) Accrual of interest During the period of time determined by the Secretary to be reasonable under subclause (I), interest in the amount owed shall not accrue. (vii) Limitation Any liability amount established under section 2025(c)(1)(C) of this title shall be reduced by the amount of the claim established under this subparagraph.