II

106TH CONGRESS

1ST SESSION S. 1355

To establish demonstration projects to provide family income to respond

to significant transitions, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 13 (legislative day, JULY 12), 1999

Mr. DODD (for himself, Mr. KENNEDY, Mr. LEAHY, and Mrs. MURRAY) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

A BILL

To establish demonstration projects to provide family income

to respond to significant transitions, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Family Income to Re5 spond to Significant Transitions Insurance Act’’.

6 SEC. 2. FINDINGS.

7 Congress finds that—

8 (1) nearly every industrialized nation other than

9 the United States, and most developing nations, pro10 vide parents with paid leave for infant care;
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1 (2)(A) parents’ interactions with their infants

2 have a major influence on the physical, cognitive,

3 and social development of the infants; and

4 (B) optimal development of an infant depends

5 on a strong attachment between an infant and the

6 infant’s parents;

(3) nearly 2 7 ⁄3 of employees, who need to take

8 family or medical leave, but do not take the leave,

9 report that they cannot afford to take the leave;

10 (4) although some employees in the United

11 States receive wage replacement during periods of

12 family or medical leave, the benefit of wage replace13 ment is not shared equally in the workforce, as dem14 onstrated by the fact that—

15 (A) employees with less education and

16 lower income are less likely to receive wage re17 placement than employees with more education

18 and higher salaries; and

19 (B) female employees, employees from ra20 cial minority groups, and younger employees

21 are slightly less likely to receive wage replace22 ment than male employees, white employees,

23 and older employees, respectively;
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1 (5) in order to cope financially with taking fam2 ily or medical leave, of persons taking that leave

3 without full wage replacement—

4 (A) 40 percent cut their leave short;

5 (B) 39 percent put off paying bills;

6 (C) 25 percent borrowed money; and

7 (D) 9 percent obtained public assistance;

8 (6) taking family or medical leave often drives

9 employees earning low wages into poverty, and 21

10 percent of such low-wage employees who take family

11 or medical leave without full wage replacement re12 sort to public assistance;

13 (7) studies document shortages in the supply of

14 infant care, and that the shortages are expected to

15 worsen as welfare reform measures are implemented;

16 and

17 (8) compared to 30 years ago, families have ex18 perienced an average decrease of 22 hours per week

19 in time that parents spend with their children.

20 SEC. 3. PURPOSES.

21 The purposes of this Act are—

22 (1) to establish a demonstration program that

23 supports the efforts of States and political subdivi24 sions to provide partial or full wage replacement,

25 often referred to as FIRST insurance, to new par-
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1 ents so that the new parents are able to spend time

2 with a new infant or newly adopted child, and to

3 other employees; and

4 (2) to learn about the most effective mecha5 nisms for providing the wage replacement assistance.

6 SEC. 4. DEFINITIONS.

7 In this Act:

8 (1) SECRETARY.—The term ‘‘Secretary’’ means

9 the Secretary of Labor, acting after consultation

10 with the Secretary of Health and Human Services.

11 (2) SON OR DAUGHTER; STATE.—The terms

12 ‘‘son or daughter’’ and ‘‘State’’ have the meanings

13 given the terms in section 101 of the Family and

14 Medical Leave Act of 1993 (29 U.S.C. 2611).

15 SEC. 5. DEMONSTRATION PROJECTS.

16 (a) GRANTS.—The Secretary shall make grants to eli17 gible entities to pay for the Federal share of the cost of

18 carrying out projects that assist families by providing,

19 through various mechanisms, wage replacement for eligi20 ble individuals that are responding to caregiving needs re21 sulting from the birth or adoption of a son or daughter

22 or other family caregiving needs. The Secretary shall make

23 the grants for periods of 5 years.
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1 (b) ELIGIBLE ENTITIES.—To be eligible to receive a

2 grant under this section, an entity shall be a State or polit3 ical subdivision of a State.

4 (c) USE OF FUNDS.—

5 (1) IN GENERAL.—An entity that receives a

6 grant under this section may use the funds made

7 available through the grant to provide partial or full

8 wage replacement as described in subsection (a) to

9 eligible individuals—

10 (A) directly;

11 (B) through an insurance program, such

12 as a State temporary disability insurance pro13 gram or the State unemployment compensation

14 benefit program;

15 (C) through a private disability or other

16 insurance plan, or another mechanism provided

17 by a private employer; or

18 (D) through another mechanism.

19 (2) ADMINISTRATIVE COSTS.—No entity may

20 use more than 10 percent of the total funds made

21 available through the grant during the 5-year period

22 of the grant to pay for the administrative costs re23 lating to a project described in subsection (a).
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1 (d) ELIGIBLE INDIVIDUALS.—To be eligible to re2 ceive wage replacement under subsection (a), an individual

3 shall—

4 (1) meet such eligibility criteria as the eligible

5 entity providing the wage replacement may specify

6 in an application described in subsection (e); and

7 (2) be—

8 (A) an individual who is taking leave,

9 under the Family and Medical Leave Act of

10 1993 (29 U.S.C. 2601 et seq.), other Federal,

11 State, or local law, or a private plan, for a rea12 son described in subparagraph (A) or (B) of

13 section 102(a)(1) of the Family and Medical

14 Leave Act of 1993 (29 U.S.C. 2612(a)(1));

15 (B) at the option of the eligible entity, an

16 individual who—

17 (i) is taking leave, under that Act,

18 other Federal, State, or local law, or a pri19 vate plan, for a reason described in sub20 paragraph (C) or (D) of section 102(a)(1)

21 of the Family and Medical Leave Act of

22 1993 (29 U.S.C. 2612(a)(1)); or

23 (ii) leaves employment because the in24 dividual has elected to care for a son or

25 daughter under age 1; or
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1 (C) at the option of the eligible entity, an

2 individual with other characteristics specified by

3 the eligible entity in an application described in

4 subsection (e).

5 (e) APPLICATION.—To be eligible to receive a grant

6 under this section, an entity shall submit an application

7 to the Secretary, at such time, in such manner, and con8 taining such information as the Secretary may require, in9 cluding, at a minimum—

10 (1) a plan for the project to be carried out with

11 the grant;

12 (2) information demonstrating that the appli13 cant consulted representatives of employers and em14 ployees, including labor organizations, in developing

15 the plan;

16 (3) estimates of the costs and benefits of the

17 project;

18 (4)(A) information on the number and type of

19 families to be covered by the project, and the extent

20 of such coverage in the area served under the grant;

21 and

22 (B) information on any criteria or characteris23 tics that the entity will use to determine whether an

24 individual is eligible for wage replacement under
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1 subsection (a), as described in paragraphs (1) and

2 (2)(C) of subsection (d);

3 (5) if the project will expand on State and pri4 vate systems of wage replacement for eligible indi5 viduals, information on the manner in which the

6 project will expand on the systems;

7 (6) information demonstrating the manner in

8 which the wage replacement assistance provided

9 through the project will assist families in which an

10 individual takes leave as described in subsection

11 (d)(1); and

12 (7) an assurance that the applicant will partici13 pate in efforts to evaluate the effectiveness of the

14 project.

15 (f) SELECTION CRITERIA.—In selecting entities to re16 ceive grants for projects under this section, the Secretary

17 shall—

18 (1) take into consideration—

19 (A) the scope of the proposed projects;

20 (B) the cost-effectiveness, feasibility, and

21 financial soundness of the proposed projects;

22 (C) the extent to which the proposed

23 projects would expand access to wage replace24 ment in response to family caregiving needs,
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1 particularly for low-wage employees, in the area

2 served by the grant; and

3 (D) the benefits that would be offered to

4 families and children through the proposed

5 projects; and

6 (2) to the extent feasible, select entities pro7 posing projects that utilize diverse mechanisms, in8 cluding expansion of State unemployment compensa9 tion benefit programs, and establishment or expan10 sion of State temporary disability insurance pro11 grams, to provide the wage replacement.

12 (g) FEDERAL SHARE.—

13 (1) IN GENERAL.—The Federal share of the

14 cost described in subsection (a) shall be—

15 (A) 50 percent for the first year of the

16 grant period;

17 (B) 40 percent for the second year of that

18 period;

19 (C) 30 percent for the third year of that

20 period; and

21 (D) 20 percent for each subsequent year.

22 (2) NON-FEDERAL SHARE.—The non-Federal

23 share of the cost may be in cash or in kind, fairly

24 evaluated, including plant, equipment, and services
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1 and may be provided from State, local, or private

2 sources, or Federal sources other than this Act.

3 (h) SUPPLEMENT NOT SUPPLANT.—Funds appro4 priated pursuant to the authority of this Act shall be used

5 to supplement and not supplant other Federal, State, and

6 local public funds and private funds expended to provide

7 wage replacement.

8 (i) EFFECT ON EXISTING RIGHTS.—Nothing in this

9 Act shall be construed to supersede, preempt, or otherwise

10 infringe on the provisions of any collective bargaining

11 agreement or any employment benefit program or plan

12 that provides greater rights to employees than the rights

13 established under this Act.

14 SEC. 6. EVALUATIONS AND REPORTS.

15 (a) AVAILABLE FUNDS.—The Secretary shall use not

16 more than 2 percent of the funds made available under

17 section 5 to carry out this section.

18 (b) EVALUATIONS.—The Secretary shall, directly or

19 by contract, evaluate the effectiveness of projects carried

20 out with grants made under section 5, including

21 conducting—

22 (1) research relating to the projects, including

23 research comparing—

24 (A) the scope of the projects, including the

25 type of insurance or other wage replacement
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1 mechanism used, the method of financing used,

2 the eligibility requirements, the level of the

3 wage replacement benefit provided (such as the

4 percentage of salary replaced), and the length

5 of the benefit provided, for the projects;

6 (B) the utilization of the projects, includ7 ing the characteristics of individuals who ben8 efit from the projects, particularly low-wage

9 workers, and factors that determine the ability

10 of eligible individuals to obtain wage replace11 ment through the projects; and

12 (C) the costs of and savings achieved by

13 the projects, including the cost-effectiveness of

14 the projects and their benefits for children and

15 families;

16 (2) analysis of the overall need for wage re17 placement; and

18 (3) analysis of the impact of the projects on the

19 overall availability of wage replacement.

20 (c) REPORTS.—

21 (1) INITIAL REPORT.—Not later than 3 years

22 after the beginning of the grant period for the first

23 grant made under section 5, the Secretary shall pre24 pare and submit to Congress a report that contains
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1 information resulting from the evaluations conducted

2 under subsection (b).

3 (2) SUBSEQUENT REPORTS.—Not later than 4

4 years after the beginning of that grant period, and

5 annually thereafter, the Secretary shall prepare and

6 submit to Congress a report that contains—

7 (A) information resulting from the evalua8 tions conducted under subsection (b); and

9 (B) usage data for the demonstration

10 projects, for the most recent year for which

11 data are available.

12 SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

13 There are authorized to be appropriated to carry out

14 this Act $400,000,000 for fiscal year 2000 and such sums

15 as may be necessary for each subsequent fiscal year.

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