SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Employer Work Incentive Act for 
Individuals with Severe Disabilities''.

SEC. 2. PURPOSE.

    The purpose of this Act is to promote employment opportunities for 
individuals with severe disabilities, by requiring Federal agencies to 
offer incentives to Government contractors and subcontractors that 
employ substantial numbers of individuals with severe disabilities.

SEC. 3. FINDINGS.

    Congress makes the following findings:
            (1) Of the 9,400,000 people with severe disabilities in the 
        United States who want to work, only 26.1 percent are employed.
            (2) The Social Security trustees project that, by 2029, the 
        Disability Trust Fund will be exhausted, 13 years before the 
        Old Age and Survivors Trust Fund.
            (3) A June 2005 Government Accountability Office (GAO) 
        report designated modernizing federal disability programs as a 
        high-risk area, one that requires urgent attention and 
        organizational transformation to ensure that programs function 
        in the most economical, efficient and effective manner 
        possible. Solutions to these problems are likely to require 
        fundamental changes, including regulatory and legislative 
        action.
            (4) If one percent of people with severe disabilities now 
        receiving Social Security Disability Insurance and Supplemental 
        Security Income payments were employed, the projected 10-year 
        cost savings for the Treasury would equal $45,000,000,000.
            (5) It is appropriate for the Federal Government to offer 
        incentives to government contractors who employ significant 
        numbers of individuals with severe disabilities.

SEC. 4. CONTRACTORS EMPLOYING INDIVIDUALS WITH SEVERE DISABILITIES.

    (a) Contractors Employing Individuals With Severe Disabilities.--
The Office of Federal Procurement Policy Act (41 U.S.C. 403 et seq.) is 
amended by adding at the end the following new section:

``SEC. 43. CONTRACTORS EMPLOYING INDIVIDUALS WITH SEVERE DISABILITIES.

    ``(a) Targets for the Participation of Businesses Employing 
Individuals With Severe Disabilities.--
            ``(1) Government-wide target.--The Administrator shall 
        annually establish a Government-wide target for procurement 
        contracts awarded to businesses that employ individuals with 
        severe disabilities. The Government-wide target shall be 
        established at not less than 2.5 percent of the total value of 
        all prime contract and subcontract procurements for each fiscal 
        year.
            ``(2) Executive agency targets.--Each executive agency 
        shall have an annual procurement target that presents, for that 
        agency, the maximum practicable opportunity for businesses that 
        employ individuals with severe disabilities to participate in 
        the performance of contracts, and the performance of 
        subcontracts to prime contracts, entered into by such agency.
            ``(3) Cumulative target.--The Administrator shall ensure 
        that the cumulative procurement targets for executive agencies 
        established pursuant to paragraph (2) meet or exceed the annual 
        Government-wide procurement target established pursuant to 
        paragraph (1).
            ``(4) Database.--The Administrator shall work with the 
        Administrator of General Services to establish and maintain a 
        database of eligible nonprofit and for profit business entities 
        that qualify as businesses that employ individuals with severe 
        disabilities.
    ``(b) Incentives for the Employment of Individuals With Severe 
Disabilities.--
            ``(1) Regulations.--
                    ``(A) In general.--The Administrator shall 
                promulgate regulations in the Federal Acquisition 
                Regulation providing that the participation of 
                businesses that employ individuals with severe 
                disabilities or the participation of prime contractors 
                that subcontract to such businesses shall be an 
                evaluation factor in all contracts awarded by executive 
                agencies. The Administrator shall ensure that this 
                evaluation factor is given sufficient weight to allow 
                all agencies to be in compliance with the 2.5 percent 
                contracting targets under subsection (a).
                    ``(B) Documentation requirement.--The regulations 
                promulgated under subparagraph (A) shall provide that 
                an executive agency awarding a contract may not 
                evaluate a business as a business that employs 
                individuals with severe disabilities unless the 
                business provides to such agency--
                            ``(i) documentation that the business 
                        currently qualifies as a business that employs 
                        individuals with severe disabilities;
                            ``(ii) documentation that the business has 
                        a history of hiring individuals with severe 
                        disabilities, a letter of commitment stating 
                        that the business will meet the employment 
                        criteria provided under subsection (e)(1)(B) 
                        within 1 year after the starting date of the 
                        contract, and a plan for meeting such criteria; 
                        or
                            ``(iii) documentation that the employer 
                        currently employs at least one individual with 
                        severe disabilities, a letter of commitment 
                        stating that the business will meet the 
                        employment criteria provided under subsection 
                        (e)(1)(B) within 1 year after the starting date 
                        of the contract, and a plan for meeting such 
                        criteria.
                    ``(C) Consequences of failure to qualify for 
                advantage.--The failure of a business that is awarded a 
                contract (either as a prime contractor or a 
                subcontractor) as a result of a preference given 
                pursuant to subparagraph (A) to meet the employment 
                criteria provided under subsection (e)(1)(B) within 1 
                year after the starting date of such contract shall 
                result in the termination of such contract, unless a 
                one-time waiver is submitted and approved, for good 
                cause, before the end of such time period.
    ``(c) Coordination Between Agencies and Interested Groups.--The 
Assistant Secretary of Labor for Employment and Training shall be 
responsible for seeking and obtaining input from the executive agencies 
responsible for Federal procurement and from individuals, groups, 
associations, and disability organizations regarding the effectiveness, 
outreach, utilization, and advancement of the goals and purposes of the 
employment and contracting program under this section.
    ``(d) Regional Assistance Centers.--The Secretary of Labor shall 
utilize existing Regional Assistance Centers to provide assistance to 
businesses in qualifying for the incentives established pursuant to 
subsection (b). The Regional Assistance Centers shall be headquartered 
in the Department of Labor's regional workforce offices operated under 
the authority of the Secretary.
    ``(e) Definitions.--In this section:
            ``(1) The term `business that employs individuals with 
        severe disabilities' means an eligible nonprofit or for-profit 
        business entity that--
                    ``(A) demonstrates that it has established an 
                integrated employment setting, meaning that the 
                employment setting for severely disabled employees is 
                similar to the employment setting for non-disabled 
                employees performing similar tasks and that severely 
                disabled employees are not unnecessarily physically 
                separated from non-disabled or other disabled employees 
                in their employment settings;
                    ``(B) beginning not later than 1 year after the 
                starting date of the contract for which the Federal 
                procurement advantage was utilized, employs individuals 
                with severe disabilities--
                            ``(i) in not less than 25 percent of the 
                        full-time equivalent positions of the business, 
                        if the business has 50 or fewer full-time 
                        equivalent employees;
                            ``(ii) in not less than 18 percent of the 
                        full-time equivalent positions, if the business 
                        has between 51 and 250 full-time equivalent 
                        employees; or
                            ``(iii) in not less than 15 percent of the 
                        full-time equivalent positions, if the business 
                        has more than 250 full-time positions; and
                    ``(C)(i) pays wages to each of the individuals with 
                severe disabilities at not less than the applicable 
                rate described in section 6(a)(1) of the Fair Labor 
                Standards Act of 1938 (29 U.S.C. 206(a)(1)), regardless 
                of whether the individuals are engaged in supported 
                employment, or training, under a contract with an 
                executive agency or a program that receives Federal 
                funds; and
                    ``(ii) does not employ any individual with a severe 
                disability pursuant to a special certificate issued 
                under section 14(c) of the Fair Labor Standards Act of 
                1938 (29 U.S.C. 214(c)); and
                    ``(D) makes contributions for at least 50 percent 
                of the total cost of the annual premiums for health 
                insurance coverage for its employees.
            ``(2)(A) The term `individual with a severe disability' 
        means an individual who is a disabled beneficiary (as defined 
        in section 1148(k)(2) of the Social Security Act (42 U.S.C. 
        1320b-19(k)(2)) or an individual who would be considered to be 
        such a disabled beneficiary but for having income or assets in 
        excess of the income or asset eligibility limits established 
        under title II or XVI of the Social Security Act, respectively 
        (42 U.S.C. 401 et seq., 1381 et seq.).
            ``(B) The term `individuals with severe disabilities' means 
        more than 1 individual with a severe disability.''.
    (b) Clerical Amendment.--The table of contents in section 1(b) of 
such Act is amended by adding at the end the following new item:

``Sec. 43. Contractors employing individuals with severe 
                            disabilities.''.

SEC. 5. REPORTING.

    Not later than August 31 of each year, the Assistant Secretary of 
Labor for Employment and Training shall submit to Congress an annual 
report on progress made in achieving the targets established under 
section 43 of the Office of Federal Procurement Policy Act, as added by 
section 4.
Employer Work Incentive Act for Individuals with Severe Disabilities - Amends the Office of Federal Procurement Policy Act to require the Administrator for Federal Procurement Policy to establish, annually, a government-wide target for procurement contracts awarded to businesses that employ individuals with severe disabilities. Requires such target to be established at not less than 2.5% of the total value of all prime contract procurements for each fiscal year.

Directs: (1) each executive agency to have an annual procurement target that presents the maximum practicable opportunity for businesses that employ individuals with severe disabilities to participate in the performance of agency contracts; (2) the Administrator to ensure that the cumulative agency targets meet or exceed the annual targets; (3) the Administrator to work with the Administrator of General Services to establish and maintain a database of eligible entities that qualify as businesses that employ such individuals; and (4) the Administrator to promulgate regulations providing that the participation of such businesses shall be an evaluation factor in all contracts awarded by executive agencies.

Provides that the failure of a business that is awarded a contract to meet the employment criteria within one year shall result in contract termination, unless a one-time waiver is approved for good cause.

Makes the Assistant Secretary of Labor for Employment and Training responsible for obtaining input from agencies, individuals, and organizations regarding the effectiveness, outreach, utilization, and advancement of the goals and purposes of the employment and contracting program.

Requires the Secretary of Labor to utilize existing Regional Assistance Centers to provide assistance to businesses in qualifying for the evaluation factor.
A bill to promote employment of individuals with severe disabilities through Federal Government contracting and procurement processes, and for other purposes.