19–006

108TH CONGRESS REPORT " HOUSE OF REPRESENTATIVES ! 1st Session 108–35

BACK TO WORK INCENTIVE ACT OF 2003

MARCH 13, 2003.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. BOEHNER, from the Committee on Education and the 

Workforce, submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 444] 

[Including cost estimate of the Congressional Budget Office]

The Committee on Education and the Workforce, to whom was 

referred the bill (H.R. 444) to amend the Workforce Investment Act 

of 1998 to establish a Personal Reemployment Accounts grant program to assist Americans in returning to work, having considered 

the same, report favorably thereon with an amendment and recommend that the bill as amended do pass. 

The amendment is as follows: 

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE 

This Act may be cited as the ‘‘Back to Work Incentive Act of 2003’’. 

SEC. 2. GRANTS TO SUPPORT PERSONAL REEMPLOYMENT ACCOUNTS. 

Subtitle B of title I of the Workforce Investment Act of 1998 (29 U.S.C. 2811 et 

seq.) is amended by inserting after chapter 5 the following new chapter: 

‘‘CHAPTER 5A—PERSONAL REEMPLOYMENT ACCOUNTS 

‘‘SEC. 135A. PURPOSES. 

‘‘The purposes of this chapter are to provide for the establishment of personal reemployment accounts for certain individuals identified as likely to exhaust their unemployment compensation in order to—

‘‘(1) accelerate the reemployment of such individuals; 

‘‘(2) promote the retention in employment of such individuals; and 

‘‘(3) provide such individuals with enhanced flexibility, choice, and control in 

obtaining intensive reemployment, training, and supportive services. 

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‘‘SEC. 135B. DEFINITION. 

‘‘In this chapter, the term ‘State’ means each of the several States of the United 

States, the District of Columbia, the Commonwealth of Puerto Rico, and the United 

States Virgin Islands. 

‘‘SEC. 135C. GRANTS TO STATES. 

‘‘(a) GRANTS.—The Secretary shall—

‘‘(1) reserve 2⁄10 of 1 percent of the amount appropriated under section 137(d) 

for use under section 135I; and 

‘‘(2) use the remainder of the amount appropriated under section 137(d) to 

make allotments in accordance with subsection (b). 

‘‘(b) ALLOTMENT AMONG STATES.—

‘‘(1) IN GENERAL.—From the amount made available under subsection (a)(2), 

the Secretary shall allot to each State an amount that is proportionate to the 

relative number of unemployed individuals in the State as compared to the total 

number of unemployed individuals in all States in order to provide assistance 

for eligible individuals in accordance with this chapter. 

‘‘(2) SMALL STATE MINIMUM ALLOTMENT.—The Secretary shall ensure that—

‘‘(A) each State (other than the United States Virgin Islands) shall receive 

an allotment under paragraph (1) that is not less than 3⁄10 of 1 percent of 

the amount made available under subsection (a)(2) for the fiscal year; and 

‘‘(B) the United States Virgin Islands shall receive an allotment under 

paragraph (1) that is not less than 1⁄10 of 1 percent of the amount made 

available under subsection (a)(2) for the fiscal year. 

‘‘(c) AVAILABILITY.—Notwithstanding section 189(g)(1), amounts made available 

under subsection (a) to carry out this chapter shall be available for obligation and 

expenditure beginning on the date of the enactment of the Back to Work Incentive 

Act of 2003. 

‘‘SEC. 135D. WITHIN STATE ALLOCATION. 

‘‘(a) ALLOCATION.—Of the amount allotted to a State under section 135C—

‘‘(1) not more than 2 percent of the amount may be reserved by the Governor 

of the State to enhance the system of worker profiling described in section 303(j) 

of the Social Security Act and to establish and operate a data management system, as necessary, and carry out other appropriate activities to implement this 

chapter; 

‘‘(2) 5 percent of the amount shall be allocated by the State to local areas in 

accordance with the formula described in subsection (b) for start-up costs and 

other operating costs related to the provision of assistance under this chapter; 

and 

‘‘(3) the remainder of the amount shall be provided to local areas consistent 

with the methods and procedures described in section 135G(a)(4) for the establishment of personal reemployment accounts described in section 135E for eligible individuals in such local areas. 

‘‘(b) FORMULA.—A State shall allocate funds to local areas in the State under subsection (a)(2) in an amount that is proportionate to the relative number of unemployed individuals in the local area as compared to the total number of unemployed 

individuals in the State. 

‘‘(c) AVAILABILITY.—Notwithstanding section 189(g)(2), amounts allotted to a State 

under section 135C, and amounts subsequently provided to a local area under this 

section, shall be available for obligation and expenditure only for the 3-year period 

beginning on the date of the enactment of the Back to Work Incentive Act of 2003. 

‘‘SEC. 135E. PERSONAL REEMPLOYMENT ACCOUNTS. 

‘‘(a) ACCOUNTS.—

‘‘(1) IN GENERAL.—Funds provided to a local area under section 135D shall 

be used to provide eligible individuals with personal reemployment accounts to 

be used in accordance with section 135F. An eligible individual may receive only 

one personal reemployment account. 

‘‘(2) AMOUNT.—The State shall establish the amount of a personal reemployment account, which shall be uniform throughout the State, and shall not exceed $3,000. 

‘‘(b) ELIGIBLE INDIVIDUALS.—

‘‘(1) IN GENERAL.—Each State shall establish eligibility criteria for individuals 

for personal reemployment accounts in accordance with this subsection. 

‘‘(2) ELIGIBILITY CRITERIA REQUIREMENTS.—

‘‘(A) IN GENERAL.—Subject to subparagraph (B), an individual shall be eligible to receive assistance under this chapter if, beginning after the date 

of enactment of the Back to Work Incentive Act of 2003, the individual— 

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‘‘(i) is identified by the State pursuant to section 303(j)(1) of the Social Security Act as likely to exhaust regular unemployment compensation and in need of job search assistance to make a successful transition to new employment or an individual’s unemployment can be attributed in substantial part to unfair competition from Federal Prison Industries, Inc.; 

‘‘(ii) is receiving regular unemployment compensation under any 

State or Federal unemployment compensation program administered by 

the State; and 

‘‘(iii) is eligible for not less than 20 weeks of regular unemployment 

compensation described in clause (ii). 

‘‘(B) ADDITIONAL ELIGIBILITY AND PRIORITY CRITERIA.—A State may establish criteria that is in addition to the criteria described in subparagraph (A) 

for the eligibility of individuals to receive assistance under this chapter. A 

State may also establish criteria for priority in the provision of assistance 

to such eligible individuals under this chapter. 

‘‘(3) TRANSITION RULE.—

‘‘(A) PREVIOUSLY IDENTIFIED AS LIKELY TO EXHAUST UNEMPLOYMENT COMPENSATION.—

‘‘(i) IN GENERAL.—At the option of the State, and subject to clause (ii), 

an individual may be eligible to receive assistance under this chapter 

if the individual—

‘‘(I) during the 13-week period ending the week prior to the date 

of the enactment of the Back to Work Incentive Act of 2003, was 

identified by the State pursuant to section 303(j)(1) of the Social 

Security Act as likely to exhaust regular unemployment compensation and in need of job search assistance to make a successful transition to new employment; and 

‘‘(II) otherwise meets the requirements of clauses (ii) and (iii) of 

paragraph (2)(A). 

‘‘(ii) ADDITIONAL ELIGIBILITY AND PRIORITY CRITERIA.—A State may 

establish criteria that is in addition to the criteria described in clause 

(i) for the eligibility of individuals to receive assistance under this chapter. A State may also establish criteria for priority in the provision of 

assistance to such eligible individuals under this chapter. 

‘‘(B) PREVIOUSLY EXHAUSTED UNEMPLOYMENT COMPENSATION.—At the option of the State, an individual may be eligible to receive assistance under 

this chapter if the individual—

‘‘(i) during the 26-week period ending the week prior to the date of 

the enactment of the Back to Work Incentive Act of 2003, exhausted 

all rights to any unemployment compensation; and 

‘‘(ii)(I) is enrolled in training and needs additional support to complete such training, with a priority of service to be provided to such individuals who are training for shortage occupations or high-growth industries; or 

‘‘(II) is separated from employment in an industry or occupation that 

has experienced declining employment, or no longer provides any employment, in the local labor market during the two-year period ending 

on the date of the determination of eligibility of the individual under 

this subparagraph. 

‘‘(4) NO INDIVIDUAL ENTITLEMENT.—Nothing in this chapter shall be construed 

to entitle any individual to receive a personal reemployment account. 

‘‘(c) LOCAL ADMINISTRATION.—

‘‘(1) INFORMATION AND ATTESTATION.—Prior to the establishment of a personal 

reemployment account for an eligible individual under this chapter, the local 

board, through the one-stop delivery system, shall ensure that the individual—

‘‘(A) is informed of the requirements applicable to the personal reemployment account, including the allowable uses of funds from the account, the 

limitations on access to services described under section 135F(a)(3)(C) and 

a description of such services, and the conditions for receiving a reemployment bonus; 

‘‘(B) has the option to develop a personal reemployment plan which will 

identify the employment goals and appropriate combination of services selected by the individual to achieve the employment goals; and 

‘‘(C) signs an attestation that the individual has been given the option to 

develop a personal reemployment plan in accordance with subparagraph 

(B), will comply with the requirements relating to the personal reemployment accounts under this chapter, and will reimburse the account or, if the 

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account has been terminated, the program under this chapter, for any 

amounts expended from the account that are not allowable. 

‘‘(2) PERIODIC INTERVIEWS.—If a recipient exhausts his or her rights to any 

unemployment compensation, and the recipient has a remaining balance in his 

or her personal reemployment account, the one-stop delivery system shall conduct periodic interviews with the recipient to assist the recipient in meeting his 

or her individual employment goals. 

‘‘SEC. 135F. USE OF FUNDS. 

‘‘(a) ALLOWABLE ACTIVITIES.—

‘‘(1) IN GENERAL.—Subject to the requirements contained in paragraphs (2) 

and (3), a recipient may use amounts in a personal reemployment account to 

purchase one or more of the following: 

‘‘(A) Intensive services, including those types of services specified in section 134(d)(3)(C). 

‘‘(B) Training services, including those types of services specified in section 134(d)(4)(D). 

‘‘(C) Supportive services, except for needs-related payments. 

‘‘(D) Assistance to purchase or lease an automobile, if such assistance is 

necessary to allow the recipient to accept a bona fide offer of employment 

for which there is a reasonable expectation of long-term duration. 

‘‘(2) DELIVERY OF SERVICES.—The following requirements relating to delivery 

of services shall apply to the program under this chapter: 

‘‘(A) Recipients may use funds from the personal reemployment account 

to purchase the services described in paragraph (1) through the one-stop delivery system on a fee-for-service basis, or through other providers, consistent with safeguards described in the State and local plans under section 

135G. 

‘‘(B) The local board, through the one-stop delivery system, may pay costs 

for such services directly on behalf of the recipient, through a voucher system, or by reimbursement to the recipient upon receipt of appropriate cost 

documentation, consistent with safeguards described in the State plan 

under section 135G. 

‘‘(C) Each local board, through the one-stop delivery system, shall make 

available to recipients information on training providers specified in section 

134(d)(4)(F)(ii), information available to the one-stop delivery system on 

providers of the intensive and supportive services described in paragraph 

(1), and information relating to occupations in demand in the local area. 

‘‘(3) LIMITATIONS.—The following limitations shall apply with respect to personal reemployment accounts under this chapter: 

‘‘(A)(i) Amounts in a personal reemployment account may be used for up 

to one year from the date of the establishment of the account. 

‘‘(ii) No personal reemployment account may be established beginning 2 

years after the date of the enactment of the Back to Work Incentive Act 

of 2003. 

‘‘(B) Each recipient shall submit cost documentation as required by the 

one-stop delivery system. 

‘‘(C) For the 1-year period following the establishment of the account, recipients may not receive intensive, supportive, or training services funded 

under this title except on a fee-for-services basis as specified in paragraph 

(2)(A). 

‘‘(D) Amounts in a personal reemployment account shall be nontransferable. 

‘‘(b) INCOME SUPPORT.—A State may authorize recipients determined eligible 

under section 135E(b)(3)(B) to withdraw amounts from the personal reemployment 

account on a weekly basis for purposes of income support in amounts up to the average weekly amount of unemployment compensation that the individual received 

prior to his or her exhaustion of rights to unemployment compensation if the individual is engaged in job search, intensive services, or training that is expected to 

lead to employment. 

‘‘(c) REEMPLOYMENT BONUS.—

‘‘(1) IN GENERAL.—Subject to paragraph (2)—

‘‘(A) if a recipient determined eligible under section 135E(b)(2) obtains 

full-time employment before the end of the 13th week of unemployment for 

which unemployment compensation is paid, the balance of his or her personal reemployment account shall be provided directly to the recipient in 

cash; and 

‘‘(B) if a recipient determined eligible under section 135E(b)(3) obtains 

full-time employment before the end of the 13th week after the date on 

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which the account is established, the balance of his or her personal reemployment account shall be provided directly to the recipient in cash. 

‘‘(2) LIMITATIONS.—The following limitations shall apply with respect to a recipient described in paragraph (1): 

‘‘(A) 60 percent of the remaining personal reemployment account balance 

shall be paid to the recipient at the time of reemployment. 

‘‘(B) 40 percent of the remaining personal reemployment account balance 

shall be paid to the recipient after 26 weeks of employment retention. 

‘‘(3) EXCEPTION REGARDING SUBSEQUENT UNEMPLOYMENT.—If a recipient described in paragraph (1) subsequently becomes unemployed due to a lack of 

work after receiving the portion of the reemployment bonus specified under 

paragraph (2)(A), the individual may use the amount remaining in the personal 

reemployment account for the purposes described in subsection (a) but may not 

be eligible for additional cash payments under this subsection. 

‘‘SEC. 135G. STATE AND LOCAL PLANS. 

‘‘(a) STATE PLAN.—In order for a State to receive an allotment under section 135C, 

the Governor of the State shall submit to the Secretary a plan for approval that includes a description of how the State intends to carry out the personal reemployment accounts authorized under this chapter, including—

‘‘(1) the criteria and methods to be used for determining eligibility for the personal reemployment accounts, including whether the State intends to include 

the optional categories described in section 135E(b)(3), and the additional criteria and priority for service that the State intends to apply, if any, pursuant 

to section 135E(b)(2)(B); 

‘‘(2) the methods or procedures, developed in consultation with local boards 

and chief elected officials, to be used to provide eligible individuals information 

relating to services and providers, and safeguards, developed in consultation 

with such boards and officials, to ensure that funds from the personal reemployment accounts are used for purposes authorized under this chapter and to ensure the quality and integrity of services and providers, consistent with the purpose of providing such individuals with enhanced flexibility, choice, and control 

in obtaining intensive reemployment, training, and supportive services. 

‘‘(3) how the State will coordinate the activities carried out under this chapter 

with the employment and training activities carried out under section 134 and 

other activities carried out by each local board through the one-stop delivery 

system in the State; and 

‘‘(4) the methods and procedures for providing funds to local areas under section 135D(a)(3). 

‘‘(b) LOCAL PLAN.—In order for a local area to receive an allocation under section 

135D, the local board, in partnership with the chief elected official for the local area 

involved, shall submit to the Governor a plan for approval that includes a description of how the local board intends to carry out the personal reemployment accounts, consistent with the requirements of this chapter and with the State plan established under subsection (a), including—

‘‘(1) a description of how the local board will coordinate the activities carried 

out under this chapter with the employment and training activities carried out 

in the local area under section 134; and 

‘‘(2) a description of the methods or procedures to be used to provide eligible 

individuals information relating to the jobs that are available in the local area 

in high demand occupations and information on services and providers, and the 

safeguards the local area will initiate to ensure that funds from the personal 

reemployment accounts are used for purposes authorized under this chapter 

and to ensure the quality and integrity of services and providers, consistent 

with the purpose of providing such individuals with enhanced flexibility, choice, 

and control in obtaining intensive reemployment, training, and supportive services, and consistent with the State plan. 

‘‘(c) STATE PLAN SUBMISSION AND APPROVAL.—A State plan submitted to the Secretary under subsection (a) by a Governor shall be considered to be approved by the 

Secretary at the end of the 30-day period beginning on the date the Secretary receives the plan, unless the Secretary makes a written determination during such period that the plan is incomplete or otherwise inconsistent with the provisions of this 

chapter. 

‘‘SEC. 135H. PROGRAM INFORMATION. 

‘‘The Secretary may require from States the collection and reporting on such financial, performance, and other program-related information as the Secretary determines is appropriate to carry out this chapter, including the evaluation described 

in section 135I. 

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‘‘SEC. 135I. EVALUATION. 

‘‘(a) EVALUATION.—From the amount made available under section 135C(a)(1), the 

Secretary, pursuant to the authority provided under section 172, shall, directly or 

through grants, contracts, or cooperative agreements with appropriate entities, conduct an evaluation of the activities carried out under this chapter. 

‘‘(b) CONDUCT OF EVALUATION.—The evaluation shall examine the effectiveness of 

such activities in achieving the purposes described in section 135A and such other 

purposes as the Secretary determines are appropriate. 

‘‘(c) REPORT.—The report to Congress under section 172(e) relating to the results 

of the evaluations required under section 172 shall include the recommendation of 

the Secretary with respect to the use of personal reemployment accounts as a mechanism to assist individuals in obtaining and retaining employment.’’. 

SEC. 3. ADMINISTRATION. 

Section 117(d) of the Workforce Investment Act of 1998 (29 U.S.C. 2832(d)) is 

amended—

(1) in paragraph (3)(B)(i)(I), by striking ‘‘sections 128 and 133’’ and inserting 

‘‘sections 128, 133, and 135D’’; and 

(2) in paragraph (4), by inserting ‘‘, activities authorized under section 135F’’

after ‘‘section 134’’. 

SEC. 4. DELIVERY OF SERVICES. 

Section 134(c)(1) of the Workforce Investment Act of 1998 (29 U.S.C. 2864(c)(1)) 

is amended—

(1) in subparagraph (D), by striking ‘‘and’’ at the end; 

(2) in subparagraph (E), by striking the period at the end and inserting ‘‘; 

and’’; and 

(3) by adding at the end the following: 

‘‘(F) shall provide access to personal reemployment accounts in accordance to section 135E.’’. 

SEC. 5. AUTHORIZATION OF APPROPRIATION. 

Section 137 of the Workforce Investment Act of 1998 (29 U.S.C. 2872) is amended 

by adding at the end the following: 

‘‘(d) PERSONAL REEMPLOYMENT ACCOUNTS.—

‘‘(1) IN GENERAL.—There is authorized to be appropriated $3,600,000,000 for 

fiscal year 2003 to carry out chapter 5A. 

‘‘(2) AVAILABILITY.—Amounts appropriated pursuant to the authorization of 

appropriations under paragraph (1) to carry out section 135I are authorized to 

remain available until expended.’’. 

SEC. 6. CONFORMING AMENDMENT. 

The table of contents for the Workforce Investment Act of 1998 is amended by 

inserting after the items relating to chapter 5 of subtitle B of title I the following 

new items:

‘‘CHAPTER 5A—PERSONAL REEMPLOYMENT ACCOUNTS

‘‘Sec. 135A. Purposes. 

‘‘Sec. 135B. Definition. 

‘‘Sec. 135C. Grants to States. 

‘‘Sec. 135D. Within State allocation. 

‘‘Sec. 135E. Personal reemployment accounts. 

‘‘Sec. 135F. Use of funds. 

‘‘Sec. 135G. State and local plans. 

‘‘Sec. 135H. Program information. 

‘‘Sec. 135I. Evaluation.’’.

PURPOSE

H.R. 444, the Back to Work Incentive Act of 2003, authorizes 

new grants within the Workforce Investment Act (WIA) to create 

personal reemployment accounts, or ‘‘Back to Work accounts,’’ to 

assist unemployed individuals in returning to work. The bill offers 

an innovative new approach for assisting workers. The program 

aims to accelerate reemployment and increase job retention of individuals likely to exhaust their unemployment compensation benefits, while providing such individuals with enhanced flexibility, 

choice, and control in obtaining reemployment services and training. An eligible individual will have the option to accept a Back to 

7

Work account or access services through the current WIA one stop 

delivery system. 

COMMITTEE ACTION

FULL COMMITTEE HEARINGS

On Wednesday, February 12, 2003, the Committee on Education 

and the Workforce held a hearing in Washington, D.C., on ‘‘Back 

to Work: the Administration’s Plan for Economic Recovery and the 

Workforce Investment Act.’’ The purpose of the hearing was to 

learn about the administration’s proposal to speed the country’s 

economic recovery, a component of which includes Back to Work accounts, that provides assistance to help unemployed Americans 

who are struggling to return to work. The Honorable Elaine Chao, 

Secretary of Labor, U.S. Department of Labor, Washington, D.C., 

testified before the Committee on the first panel about the benefits 

of the Back to Work accounts. Mr. Kenneth Mayfield, President, 

National Association of Counties, Washington, D.C. and Dr. Lawrence Mishel, President, Economic Policy Institute, Washington, 

D.C. testified before the Committee on the second panel. 

On Tuesday, February 18, 2003, the Committee on Education 

and the Workforce held a field hearing in Las Vegas, Nevada on 

‘‘H.R. 444, the Back to Work Incentive Act.’’ The purpose of the 

hearing was to examine and discuss the Back to Work Incentive 

Act, which reflects the administration’s plan to create Back to 

Work accounts to help unemployed individuals return to work 

quickly. Ms. Myla Florence, Director, Nevada Department of Employment, Training, and Rehabilitation, Carson City, Nevada; Mr. 

Ardell Galbreth, Deputy Board Manager, Southern Nevada Workforce Investment Board, Las Vegas, Nevada; Mr. Robert Brewer, 

Chair, Southern Nevada Workforce Investment Board, Las Vegas, 

Nevada; and, Ms. Debi Lindemenn, Employment Specialist Supervisor, Department of Employment, Training, and Rehabilitation, 

North Las Vegas, Nevada testified before the Committee at the 

field hearing. 

LEGISLATIVE ACTION

On January 29, 2003, Representatives Jon Porter (R–NV) and 

Buck McKeon (R–CA) introduced H.R. 444, the Back to Work Incentive Act, a bill to amend the Workforce Investment Act of 1998 

to establish a Personal Reemployment Accounts grant program to 

assist Americans in returning to work. 

On February 26, 2003, the Subcommittee on 21st Century Competitiveness considered H.R. 444 in legislative session and reported 

it favorably, as amended, to the Committee on Education and the 

Workforce by a vote of 15–12. The Subcommittee considered two 

amendments: 

• The Subcommittee adopted, by voice vote, a substitute amendment offered by Representative Buck McKeon (R–CA). Specifically, 

the substitute amendment adopted by the Subcommittee: (1) makes 

clear that the Back to Work accounts would be administered 

through the local one-stop delivery system under the direction of 

the local workforce investment boards; (2) requires local boards to 

submit a plan to the State, consistent with the State plan, in order 

to receive an allocation to administer the accounts; (3) requires 

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States and local areas, through their respective plans, to specify 

safeguards to ensure the quality and integrity of services and providers, consistent with the purpose of providing flexibility and 

choice to individuals; (4) requires the individual accepting a Back 

to Work account to attest that he or she was given the option to 

develop a personal reemployment plan; and (5) allows States to 

make eligible individuals who have exhausted their unemployment 

compensation benefits within the previous 180 days, instead of the 

90 day limit in the original bill. 

• The Subcommittee rejected, by a vote of 11–13, a substitute 

amendment offered by Representatives Dale Kildee (D–MI) and 

David Wu (D–OR). The amendment would have struck all language 

after the enacting clause and inserted language that allocates 

funds to each State to provide emergency employment accounts to 

eligible individuals. The funds in these accounts would be used in 

the same manner as that of unemployment compensation benefits. 

On March 5, 2003, the Committee on Education and the Workforce considered H.R. 444 in legislative session and reported it favorably, as amended, to the House of Representatives by a vote of 

23–22, with one member voting present. The Committee considered 

8 amendments and adopted the following two amendments: 

• The Committee adopted, by voice vote, a substitute amendment offered by Representative Buck McKeon (R–CA). Specifically, 

the substitute amendment adopted by the Committee: (1) changes 

the calculation of the ‘‘look-back’’ period for eligibility determinations from days to weeks to be consistent with the terminology 

used in the unemployment compensation program; (2) clarifies that 

the 40 percent retention bonus is provided after 26 weeks of employment retention; and (3) makes other technical improvements.

• The Committee also adopted, by voice vote, an amendment offered by Representative Pete Hoekstra (R–MI), which makes those 

individuals whose unemployment can be attributed in substantial 

part to unfair competition from Federal Prison Industries, Inc., eligible to receive Back to Work accounts, subject to state criteria and 

prioritization. 

The Committee also considered an amendment offered by Representative Denise Majette (D–GA). The Committee discussion was 

positive and the amendment was withdrawn. This amendment 

would have specified that intensive services must be provided 

through the one-stop delivery system, and that a provider of training services must meet the requirements of section 122(a)(2) of the 

Workforce Investment Act. 

SUMMARY

H.R. 444, the Back to Work Incentive Act of 2003, amends the 

Workforce Investment Act of 1998 (WIA) to create Chapter 5A, 

which authorizes a Personal Reemployment Accounts grant program to assist unemployed Americans in returning to work. The 

legislation represents a key component of President Bush’s economic stimulus package that provides $3.6 billion to create Back to 

Work accounts to help unemployed individuals struggling to return 

to the workforce and retain satisfactory, long-term employment. 

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ELIGIBILITY

H.R. 444 provides eligible individuals with the option to accept 

a Back to Work account or access services currently available 

through the one-stop delivery system provided under the current 

WIA system. States determine the amount of the accounts up to 

$3,000. States are required to establish eligibility criteria; however, 

at a minimum, an individual must be receiving unemployment 

compensation, be identified by the State as likely to exhaust his or 

her unemployment benefits, and be eligible for at least 20 weeks 

of unemployment compensation. States may further make eligible 

individuals who have exhausted unemployment compensation within 26 weeks prior to enactment so long as the individual is enrolled 

in training or is separated from employment in an industry or occupation that is declining or no longer functioning in the local labor 

market. States may establish additional eligibility criteria or priorities in the provision of assistance. 

Back to Work accounts may be established for up to two years 

from the date of enactment, and funds may be expended for up to 

three years. An individual is eligible to receive an account only 

once during the duration of the program, and individuals are prohibited from receiving intensive, supportive, or training services, 

unless purchased using account funds, for one year subsequent to 

the establishment of the account. The bill provides that there is no 

individual entitlement to a Back to Work account. The one-stop delivery system must inform the eligible individual, prior to the receipt of an account, of the requirements and limitations for the use 

of the account. 

USES OF FUNDS

H.R. 444 provides that eligible individuals will have the option 

to develop a personal reemployment plan for the purpose of developing employment goals and identifying appropriate services selected by individuals to achieve their employment goals. Back to 

Work accounts may be used to purchase various intensive, training, 

or supportive services including, but not limited to, career counseling, case management, occupational skill assessments, childcare, 

and transportation. The reemployment account funds may be used 

to purchase services either through a one-stop delivery system or 

on a fee-for-service basis through other providers. The cost of services may be paid by a one-stop delivery system directly on behalf 

of recipients, through a voucher system, or by reimbursement directly to the individual provided appropriate expense documentation is submitted. Furthermore, any individual receiving funds 

through a Back to Work account must sign an attestation that he 

or she will comply with the Back to Work account requirements. 

In addition, States may allow individuals who had exhausted unemployment compensation benefits to withdraw funds for income 

support if engaged in a legitimate job search, training, or intensive 

services expected to lead to employment. 

REEMPLOYMENT BONUS

The bill provides for individuals to be paid in cash the balance 

of the Back to Work account if employed by the 13th week for 

which unemployment compensation is paid. Sixty percent of the reVerDate Jan 31 2003 04:13 Mar 15, 2003 Jkt 019006 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\HR\OC\HR035.XXX HR035
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maining balance of the account will be paid at the time of employment, and forty percent of the account will be paid after six months 

of job retention. If an individual becomes unemployed before six 

months at no fault of his or her own, the individual may utilize the 

balance of the account for permissible services within the same 

year that the account remains in effect. 

PROGRAM REPORTING AND EVALUATION

H.R. 444 provides that the Secretary of Labor may require States 

to report financial, performance, and other germane program information. The Secretary shall report to Congress concerning such 

findings reported by States. 

STATE PLAN

The bill requires States to submit program plans to the Secretary 

of Labor in order to receive funds under the program. Such information shall include the criteria and methods used for determining 

eligibility for Back to Work accounts; methods or procedures used 

to provide eligible individuals with service information; and, safeguards to ensure that funds are used in an appropriate, authorized 

manner, consistent with the program and activity coordination provided through the one stop delivery system. A state plan submitted 

to the Secretary shall be approved at the end of the 30-day period 

beginning on the day the Secretary receives the plan, unless the 

Secretary makes a written determination that the plan is incomplete or inconsistent with the requirements of the Act.

LOCAL ADMINISTRATION

Local areas must submit a plan, similar to the State plan, to the 

Governor for approval in order to receive a grant to administer the 

Back to Work accounts. The plan must contain a description of how 

the local area will coordinate assistance under this program with 

other assistance provided through WIA, methods or procedures to 

be used to provide eligible individuals with information relating to 

jobs that are available in the local area in high demand occupations and information on services and providers, and the safeguards the local area will initiate to ensure that funds are used for 

authorized purposes and to ensure the quality of services and providers. The local plan must be consistent with the State plan. 

FUNDING

Consistent with the President’s economic stimulus package, the bill authorizes $3.6 billion for the creation of Back to Work accounts. Funds will be distributed on a percentage basis according 

to the number of unemployed persons in each state. States may reserve up to 2 percent of funds to be used for administrative purposes. Local areas will receive 5 percent of a state’s funds to be 

used for start-up purposes. Funds have been reserved for the Secretary of Labor to perform requisite evaluations of State performance, financial, and other related information. 

EFFECTIVE DATE

The Back to Work Incentive Act of 2003 shall be effective immediately upon appropriation. 

11

COMMITTEE VIEWS

To aid the country’s economic recovery, on January 7, 2003, 

President George W. Bush proposed a growth and jobs plan to 

strengthen the American economy. The President’s economic agenda has three main goals: to encourage consumer spending that will 

continue to boost the economic recovery, to promote investment by 

individuals and businesses that will lead to economic growth and 

job creation, and to deliver critical help to unemployed citizens. 

Taxpayers, businesses, and unemployed workers all would benefit upon enactment of the President’s plan. For example, under 

the President’s proposal to speed up tax relief, 92 million taxpayers 

would receive, on average, a tax cut of $1,083 in 2003. According 

to a projection by the Council of Economic Advisors, the President’s 

plan will help the economy to create 2.1 million jobs over the next 

three years. 

However, while the economy is improving, unemployment rates 

remain unacceptably high. The national unemployment rate at the 

end of December 2002 was six percent. Consequently, President 

Bush also has proposed innovative new assistance to help unemployed Americans find work. As we work to encourage long-term 

growth in the economy, we must not forget the men and women 

struggling today. To provide new opportunities for unemployed 

workers, the President proposed creating new personal reemployment accounts, or ‘‘Back to Work’’ accounts, to help such individuals find new jobs and, if necessary, acquire the skills needed to 

obtain and keep those jobs. 

H.R. 444, the Back to Work Incentive Act of 2003, implements 

the President’s plan to assist up to 1.2 million unemployed workers 

as they seek to return to the workplace, while providing new flexibility and individual choice in accessing services. 

During the Committee’s hearing in Las Vegas, Nevada, the Committee heard from state and local leaders about the practical benefits of the measure in helping the unemployed. As Robert Brewer, 

Chairman of the Southern Nevada Workforce Investment Board, 

stated, ‘‘This proposed initiative has great potential for providing 

our most vulnerable dislocated workers with additional resources 

that will help them secure new, gainful employment. It is an appropriate effort to assist the over 2 million workers who have lost 

their jobs over the last two years.’’

Business leaders also support H.R. 444, as they look for entry 

level and skilled workers to fill open positions. R. Bruce Josten, Executive Vice President for Government Affairs for the U.S. Chamber of Commerce, wrote Chairman John Boehner on March 4, 2003 

to ‘‘express our support for H.R. 444 . . . Personal reemployment 

accounts promise to be an efficient and effective new tool for local 

One Stop Career centers and the individuals they serve.’’

H.R. 444 creates a new Chapter 5A within Title I of the Workforce Investment Act of 1998 (WIA) to provide for the establishment of personal reemployment accounts for individuals identified 

as likely to exhaust their unemployment compensation. 

GRANTS TO STATES

From funds appropriated to administer this chapter, the Secretary shall reserve 2⁄10 of one percent to conduct an evaluation of 

12

the program. The remainder of the funds shall be provided to 

states for the administration of Back to Work accounts. Each state 

shall receive an allotment that is proportionate to the relative 

number of unemployed individuals in the state as compared to the 

total number of unemployed individuals in all states. At a minimum, a state shall receive an allotment of at least 3⁄10 of one percent of the funds available to states. The Committee notes that this 

small state minimum is consistent with the minimum provided 

under other funding streams of WIA. In addition, the United States 

Virgin Islands shall receive not less than 1⁄10 of one percent of the 

funds allotted to states. The Virgin Islands is the only outlying 

area to receive an allotment under H.R. 444, since no other outlying areas operate an unemployment insurance program. 

From the funds allotted to a state, a Governor may reserve up 

to two percent of the funds to establish and operate a data management system necessary to provide assistance to individuals eligible 

for Back to Work accounts and to enhance the worker profiling system required under unemployment insurance law. The Committee 

encourages the Secretary to work with states to ensure that these 

funds may be combined with other state administrative funds 

available under WIA to pay for start-up or operational costs necessary under this new chapter.

The state shall allocate five percent of its funding available 

under this chapter to local workforce investment areas for start-up 

and operating costs related to the provision of assistance of Back 

to Work accounts. The within-state allocation to local areas shall 

be proportionate to the relative number of unemployed individuals 

in the local area as compared to the total number of unemployed 

individuals in the state. The remainder of the funds shall be provided to local areas for the establishment of Back to Work accounts. The Committee intends for states to create mechanisms for 

local areas to draw-down funds from the state to provide an account to each individual determined to be eligible for such an account. 

Although other funding streams provided through WIA are available to states on a program year basis of July 1–June 30, amounts 

available to state and local areas under this chapter shall be available for the creation of accounts for two years after the date of enactment of H.R. 444. The Committee notes that the funds must become available immediately for the creation of Back to Work accounts so as to provide assistance to unemployed workers as soon 

as possible. Funds to create new accounts are available only for two 

years because Back to Work accounts are intended to respond to 

the extraordinary circumstances created by current levels of high 

unemployment, and not to be a permanent new program. H.R. 444 

requires the Secretary to conduct a rigorous evaluation of the new 

assistance provided to workers under this chapter and report the 

findings to Congress. Lessons learned through this temporary assistance may be incorporated in the future into the broader assistance provided through WIA. 

BACK TO WORK ACCOUNTS

H.R. 444 requires states to establish the amount of a Back to 

Work account, but the amount must be uniform statewide and cannot exceed $3,000. The Committee anticipates that the funds proVerDate Jan 31 2003 04:13 Mar 15, 2003 Jkt 019006 PO 00000 Frm 00012 Fmt 6659 Sfmt 6602 E:\HR\OC\HR035.XXX HR035
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vided through this act will allow states to serve at least 1.2 million 

unemployed workers. U.S. Labor Secretary Elaine Chao (the Secretary) testified before the Committee on February 12, 2003 that 

$3,000 is the average amount that local areas spend on an individual to help obtain employment. The $3,000 maximum is a reasonable level that allows choice of a wide array of reemployment 

services while maximizing the number of individuals who can be 

served with the available funding for the new program. 

States establish eligibility criteria for the accounts and may establish criteria for the priority in the provision of assistance to 

such eligible individuals. However, at a minimum, to be eligible an 

individual must be receiving regular unemployment compensation 

and be eligible for at least 20 week of such compensation. Under 

current law, when individuals apply for unemployment compensation benefits, states profile such individuals to determine whether 

they are likely to exhaust their benefits. To do this, the state identifies permanently separated workers who are not expecting recall 

to their previous employers and then determines whether such 

workers are likely to be long-term benefit recipients. Criteria often 

used when making this determination include education, job tenure, changes in employment in the previous industry or occupation, 

and the local unemployment rate. Variables for age, gender, and 

race are prohibited by civil rights laws. States will use this 

profiling system to determine those most likely to benefit from this 

new assistance. To be eligible for a Back to Work account, an unemployed person also must be identified as likely to exhaust regular unemployment compensation and in need of job search assistance to make a successful transition to new employment or be an 

individual whose unemployment can be attributed in substantial 

part to unfair competition from Federal Prison Industries, Inc. 

Currently such profiled individuals are referred to the one-stop 

career center system created under WIA for reemployment assistance. Therefore, the Back to Work accounts will be administered efficiently through the easily accessible one-stop delivery system 

where the unemployed already seek assistance in obtaining employment. 

This assistance is in addition to unemployment benefits payments if the eligible individual has not exhausted such benefits. 

However, instead of only providing temporary income support, as 

the unemployment compensation system does, H.R. 444 provides 

services designed exclusively to help someone to return to work. 

During Committee consideration, the Committee clarified the 

role of the local workforce investment boards to ensure that local 

leadership will direct the implementation of this assistance. The 

Committee believes that connections to and integration with the 

local workforce investment systems already in place will ensure assistance reaches those in need as quickly as possible. A letter from 

the United States Conference of Mayors, the National Association 

of Workforce Boards, and the National Association of Counties sent 

on February 24, 2003 to Subcommittee Chairman McKeon confirms 

this, as they collectively asserted, ‘‘We believe the prospects for 

quick implementation to be strong if the initiative is linked closely 

to the current infrastructure established under WIA.’’

States may also make individuals who were similarly profiled 

within the 13 week period ending the week prior to the week of enVerDate Jan 31 2003 04:13 Mar 15, 2003 Jkt 019006 PO 00000 Frm 00013 Fmt 6659 Sfmt 6602 E:\HR\OC\HR035.XXX HR035
14

actment eligible for assistance, as long as such individuals also are 

eligible for at least 20 weeks of regular unemployment compensation. In addition, to address the needs of individuals who already 

may have exhausted all unemployment compensation benefits, 

states may make individuals who have exhausted such benefits 

within 26 weeks prior to the date of enactment eligible for a Back 

to Work account if such individuals are enrolled in training and 

need additional support to complete the training or if the individuals are separated from employment in an industry or occupation 

that has experienced declining enrollment in the local labor market. 

H.R. 444 specifies that there is no individual entitlement to a 

Back to Work account. 

USE OF FUNDS

An account holder may use the Back to Work account to purchase intensive services, supportive services, training, or an automobile if a car is necessary to allow the recipient to accept a bona 

fide offer of employment for which there is a reasonable expectation 

of long-term duration. Examples of intensive services include oneon-one career counseling and short-term prevocational classes. Supportive services include child care, transportation assistance, housing assistance, and relocation assistance.

Recipients have full flexibility to use their Back to Work accounts 

to tailor a package of reemployment services that best meets their 

needs and helps them to get a job of their choice. As such, recipients may use the account funds to purchase such services through 

the one-stop delivery system on a fee-for-service basis or through 

other providers, consistent with safeguards described in state and 

local plans. 

Under WIA currently, individuals only may access training 

through providers included on an eligible training provider list developed by the state. The list of available providers is based on past 

performance. However, the current eligible training provider list is 

not comprehensive. Many high-quality training providers, particularly community colleges, currently do not participate in the WIA 

system because of burdensome reporting requirements. As a result, 

the needs of all individuals may not be addressed through the current system. The Committee will address the issues associated with 

accessing training under WIA during reauthorization of that law. 

Until that time it is important to allow recipients of Back to Work 

accounts maximum flexibility in choosing appropriate service providers, especially since these individuals are those struggling to return to work. 

The local board, through the one-stop delivery system, may pay 

for the costs for such services directly on behalf of the recipient, 

through a voucher system, or by reimbursement to the recipient 

upon receipt of appropriate cost documentation. 

Certain limitations on the use of the accounts apply. Recipients 

may use the Back to Work accounts for up to one year from the 

date of the establishment of the account, and for the one-year period following the establishment of the account recipients may only 

receive intensive, supportive or training services provided through 

the one-stop delivery system on a fee-for-service basis using the acVerDate Jan 31 2003 04:13 Mar 15, 2003 Jkt 019006 PO 00000 Frm 00014 Fmt 6659 Sfmt 6602 E:\HR\OC\HR035.XXX HR035
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count funds. Also, amounts in the Back to Work account are nontransferable. 

The Committee wants to ensure eligible individuals have the opportunity to make an informed choice when selecting to accept a 

Back to Work account. Consequently, before becoming a recipient 

of an account, the local workforce investment board, through the 

one-stop delivery system, shall ensure that the individual is informed of the requirements applicable to the Back to Work account, 

the limitations on access to services, a description of the allowable 

services, and the conditions for receiving a reemployment bonus. 

An eligible individual must sign an attestation that he or she will 

comply with the requirements relating to the Back to Work accounts and will reimburse the account or one-stop delivery system 

for any amounts expended that are not allowable. 

In addition, the Committee intends for eligible individuals to 

have access to the expertise of the professional career counselors 

available through the one-stop delivery system. H.R. 444 requires 

the local workforce investment boards, through the one-stop delivery system, to provide an eligible individual the option to create a 

reemployment plan that will identify the employment goals and appropriate combination of services selected by the individual to 

achieve the employment goals. In addition, in order to receive an 

account, an individual must attest in writing that he or she was 

given the option to create such a plan before accepting the account. 

The Committee believes that it is important for individuals to be 

aware of the options they have as they pursue employment, including the jobs that are in demand in the local areas. As a result, H.R. 

444 requires each local board, through the one-stop delivery system, to make available to recipients information on training providers that are on the eligible training provider list, information 

available to the one-stop delivery system on providers of intensive 

and supportive services, and information relating to occupations in 

demand in the local area. In addition, H.R. 444 requires each local 

area to specify in its plan how such information will be provided 

to recipients. 

No individual will be required to accept a Back to Work account. 

If an individual needs training that costs more than $3,000, the individual will have the choice to refuse the Back to Work account 

and access training through the current WIA system. 

However, a wide variety of training services can be purchased for 

under $3,000. Examples of training services that can be purchase 

for $3,000 or less include Information Technology certifications (including Microsoft Systems), courses to become a licensed realtor, 

courses to become a certified financial planner, preparation classes 

for other certifications or exams, training to become a licensed insurance planner, plus numerous courses of training available 

through community colleges. The Committee notes that a two-year 

associates’ degree from a public community college costs $2594 

(based on the national average in 1998, the latest available information). 

The added flexibility available through the use of the account 

will allow some recipients to customize a package of services that 

may not be readily available in all local areas. For example, while 

all local areas are to provide information on supportive services in 

the area, paying for such services is optional now. Therefore, if an 

16

individual previously received child care through an employer and 

now needs child care assistance in order to look for new employment, he or she could use the account to pay for child care. In addition, if he or she did not meet the current prioritization for training 

in the local area, the recipient still could choose immediately to use 

the funds for training. 

Even if a recipient expends the funds in the account, he or she 

will have access at all times to core services available at the onestop career centers. These services include job search and placement assistance, information on available providers of services, initial career counseling, and access to a variety of labor market information. 

H.R. 444 rewards individuals who find jobs quickly. Recipients 

will be able to keep the balance of the account as a cash reemployment bonus if they become reemployed in full-time employment 

within 13 weeks. To encourage workers to stay on the job longer, 

the remaining balance will be paid in two installments—60 percent 

at the time of employment, and the remaining 40 percent after six 

months job retention. The sooner one gets a job, the larger the employment bonus will be. 

If an individual becomes unemployed again before the second 

portion of the bonus is provided, he or she may use the amount remaining in the Back to Work account for reemployment services 

but may not receive any additional cash payments.

Past experiments with cash reemployment bonuses have proven 

to be effective in reducing individuals’ weeks of unemployment 

compensation benefits while not compromising the quality of jobs 

and have been cost effective to the government. 

Between 1984 and 1989, four reemployment bonus experiments 

were conducted on unemployment insurance recipients in Illinois, 

New Jersey, Washington, and Pennsylvania. When Secretary Chao 

appeared before the Committee in February, she testified that the 

Department of Labor’s evaluations of the reemployment bonuses in 

these states showed that such a bonus motivated the recipients to 

become reemployed, reduced the duration of unemployment compensation benefits by approximately one week, and resulted in new 

jobs comparable in earnings to those obtained by workers who were 

not eligible for the bonus. An additional evaluation in Illinois 

showed that bonuses did not lead to lower earnings at the worker’s 

next job. 

The final report on the Pennsylvania Reemployment Bonus Demonstration, prepared for the Department of Labor by Mathematica 

Policy Research, Inc. and published in September 1991, expands on 

these assertions. According to the report, ‘‘There is no evidence that 

the bonus offers prompted claimants to take less desirable jobs in 

an effort to qualify for the bonus . . . , the first post-unemployment 

jobs held by bonus-eligible claimants were similar to their pre-unemployment jobs in many respects, including their weekly wage 

rate.’’

In addition, the Committee believes that labor market attachment helps individuals advance in the workplace, and taking a job 

may lead to promotions and new career opportunities. Being reemployed quickly is important to maintaining skills and work habits, 

and builds self-esteem. 

17

Staff of the W.E. Upjohn Institute for Employment Research recently reviewed available research on the impact of reemployment 

bonuses. The staff working paper, published in January 2003, suggests that targeting those most likely to exhaust their unemployment compensation benefits could be the most cost effective mechanism for providing reemployment bonuses. H.R. 444 targets those 

that have been so profiled. 

Another likely benefit of the reemployment bonuses is a reduction in the duration of unemployment compensation benefits for 

those eligible for a bonus. According to Walter A. Corson and Robert G. Spiegelman of the Upjohn Institute, who published a book 

titled ‘‘Reemployment Bonuses in the Unemployment Insurance 

System’’ in 2001, studies have found that, ‘‘the availability of unemployment benefits led to voluntary and unproductive reduction 

in work effort, thereby leading to unnecessarily high costs to the 

UI system.’’ (page 1) R. Glenn Hubbard, Chairman of the Council 

of Economic Advisors, corroborated this statement when he testified before the Joint Economic Committee of Congress on February, 

26, 2003 when he stated, ‘‘One advantage of these (personal reemployment) accounts compared to traditional unemployment insurance is that traditional insurance encourages workers to wait until 

their insurance runs out before finding a new job.’’ Mr. Hubbard 

presented evidence that reemployment spikes when benefits expire, 

whether regular or extended benefits. 

The savings to the unemployment insurance system due to rapid 

reemployment could be significant. Myla Florence, director of the 

Nevada Department of Employment, Training and Rehabilitation 

testified at the Committee’s hearing in Las Vegas that, ‘‘Currently, 

Nevada’s average benefit amount is $232.29 per week and the average duration for an individual to receive benefits is 15.5 weeks. 

Through the support and incentives provided in H.R. 444, if we 

shorten the duration by even one week, Nevada’s trust fund could 

save approximately $8.4 million.’’ The Committee estimates that, if one million individuals likely to 

exhaust their regular unemployment compensation benefits were to 

become employed within thirteen weeks in order to obtain a reemployment bonus, the savings to the unemployment insurance system would be approximately $3.4 billion. (The national average unemployment compensation benefit is $260 per week. The savings 

estimate is based on reducing such benefits from 26 weeks to just 

less than 13 weeks.) 

In addition to the reduced cost to the unemployment insurance 

system, the Committee believes another benefit to society overall is 

the increased contribution that wage earners make as taxpayers. 

STATE AND LOCAL PLANS

In order for a state to receive funding under this chapter, the 

Governor of a state must submit to the Secretary a plan for approval that includes (1) the criteria and methods to be used for determining eligibility for Back to Work accounts; (2) the methods 

and procedures, developed in consultation with local boards and 

chief elected officials, to be used to provide eligible individuals information relating to services and providers; (3) safeguards, also 

developed in consultation with local areas, to ensure that funds 

from the Back to Work accounts will be used for purposes authorVerDate Jan 31 2003 04:13 Mar 15, 2003 Jkt 019006 PO 00000 Frm 00017 Fmt 6659 Sfmt 6602 E:\HR\OC\HR035.XXX HR035
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ized and to ensure the quality and integrity of services and providers, consistent with the purpose of providing such individuals 

with enhanced flexibility, choice, and control in obtaining services; 

and, (4) how the state will coordinate the activities provided under 

this chapter with the other employment and training activities provided through WIA. The plan shall be considered approved within 

30 days of receipt by the Secretary, unless the Secretary makes a 

written determination that the plan is incomplete or inconsistent 

with the requirements of the Act. 

Local boards, in partnership with the chief elected official for the 

local area, shall submit to the Governor a plan for approval that 

includes a description of the how the local board intends to carry 

out the Back to Work accounts, consistent with the state plan. The 

local plan must contain (1) a description on how the local area will 

coordinate assistance under this chapter with other assistance provided through WIA; (2) a description of the methods or procedures 

to be used to provide eligible individuals information relating to 

jobs that are available in the local area in high demand occupations and information on services and providers; (3) the safeguards 

the local area will initiate to ensure that funds from the Back to 

Work accounts will be used for purposes authorized and to ensure 

the quality and integrity of services and providers, consistent with 

the purpose of providing such individuals with enhanced flexibility, 

choice, and control in obtaining such services. 

The Committee intends that safeguards specified through the 

state and local plans will provide accountability for the use of federal funds spent through Back to Work accounts and enable recipients to select appropriate service providers. Through these safeguards, the state and local areas will be able to guard against the 

use of funds for ‘‘fly-by-night’’ providers that otherwise may try to 

entice recipients into using their services. The provisions are intended to maintain individual flexibility and choice while ensuring 

program integrity. 

Requiring both state and local plans further reinforces that both 

states and local workforce investment areas have significant roles 

to play in the delivery of workforce development services. Local 

plans will ensure that services are integrated at the local level with 

the one-stop delivery system. 

PROGRAM INFORMATION

The Secretary may require from states the collection and reporting on such financial, performance, and other program-related information as the Secretary determines appropriate to carry out this 

chapter. The Committee anticipates that the Secretary will work 

with states to establish appropriate tracking mechanisms so that 

information will be readily available regarding use of funds and results achieved. Such information will be essential for conducting an 

evaluation of the assistance. The Committee expects the Secretary 

to work with states to minimize any administrative burden. 

EVALUATION

H.R. 444 requires the Secretary to conduct an evaluation of the 

Back to Work accounts. The evaluation will examine the cost effectiveness of the accounts in achieving the purposes of the new chapter and other purposes as determined by the Secretary. The SecVerDate Jan 31 2003 04:13 Mar 15, 2003 Jkt 019006 PO 00000 Frm 00018 Fmt 6659 Sfmt 6602 E:\HR\OC\HR035.XXX HR035
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retary shall report the results to Congress, including the recommendation of the Secretary with respect to the use of Back to 

Work accounts as a mechanism to assist individuals in obtaining 

and retaining employment. The Committee anticipates using the 

results of the evaluation to determine whether to continue such assistance in the future. 

ADMINISTRATION AND DELIVERY OF SERVICES

H.R. 444 makes the local chief elected official the local grant recipient for Back to Work account funds, consistent with other WIA 

funding streams. In addition, the bill specifies that the local onestop delivery system shall provide access to Back to Work accounts. 

These provisions are consistent with the Committee’s goal of ensuring that the locally directed one-stop delivery remains the center 

of the nation’s workforce development system. 

FUNDING

H.R. 444 authorizes $3.6 billion for fiscal year 2003 to create 

Back to Work accounts and carry out this new chapter. 

The Committee intends that these funds will be used to serve at 

least 1.2 million unemployed individuals. This number is consistent 

with the number of unemployment insurance recipients who were 

profiled and referred to one-stop career centers for services last 

year. In fiscal year 2002, the average monthly total of unemployed 

individuals was 8 million. However, this number includes people 

who were unemployed in two broad categories, job losers and job 

leavers. The economy is dynamic and employment continues to 

churn. Many people choose to leave employment. Back to Work accounts are directed toward the category of individuals who have 

lost their jobs through no fault of their own. In fiscal year 2002, 

8.7 million unemployment insurance claimants were profiled. However, 1.2 million of these individuals were profiled as likely to exhaust benefits and referred to one-stop career centers for services 

as a condition for continuing receipt of unemployment compensation benefits. H.R. 444 will assist these individuals as they are referred to the one-stop centers. 

The Committee expects that as the economy improves fewer individuals will be profiled and referred for services. This will make 

funds available for individuals who already have exhausted their 

unemployment insurance benefits. 

During her testimony in Las Vegas, Myla Florence expressed another benefit of the new funds available for Back to Work accounts, 

which is the ability of the one-stops to serve more clients who may 

not be eligible for these new accounts. She stated, ‘‘While the personal reemployment accounts would not be available to all claimants, we believe the heightened interest in such a program would 

connect more of the unemployed to the Nevada JobConnect system 

and the resources it can provide.’’ The Committee notes that in the last program year WIA resources served 1.27 million adults and dislocated workers. This is 

in addition to the individuals referred through the profiling system. 

By helping 1.2 million workers with Back to Work accounts, WIA 

funds will be able to serve a significant number of additional individuals. Between the two options, millions of job seekers who desire 

new or better employment will be served. 

20

SECTION-BY-SECTION ANALYSIS

Section 1. Establishes the short title of the act to be the ‘‘Back 

to Work Incentive Act of 2003.’’

Section 2. Amends Subtitle B of title I of the Workforce Investment Act of 1998 (WIA) by inserting an additional chapter immediately following chapter 5. This new chapter will be titled ‘‘Chapter 5A—Personal Reemployment Accounts.’’ The new chapter includes the following new sections: 

Section 135A. Establishes that the purpose of this chapter is 

to form personal reemployment accounts.

Section 135B. Defines ‘‘State’’ as any state in the Union, and 

includes the District of Columbia, Puerto Rico, and the U.S. 

Virgin Islands. 

Section 135C. Authorizes grants to states proportionate to 

the number of unemployed individuals in a state relative to the 

total number of unemployed individuals in all states in order 

to provide assistance under this chapter. 

Section 135D. Specifies within state allocations of funds for 

operational costs and the establishment of Back to Work accounts. 

Section 135E. Creates Back to Work accounts for eligible individuals. Stipulates that accounts shall not exceed $3,000 per 

person, specifies eligibility criteria, and requires information be 

provided to eligible individuals and an attestation from such 

individuals before receiving an account. 

Section 135F. Specifies uses of funds, including allowable activities to be purchased with Back to Work accounts and the 

mechanisms for the delivery of services. Authorizes reemployment bonuses. 

Section 135G. Requires state and local plans in order for a 

state and local area to receive funds provided for Back to Work 

accounts. 

Section 135H. Permits the Secretary to require states to provide financial, performance, and other program related data. 

Section 135I. Requires the Secretary to evaluate the effectiveness of Back to Work accounts and report the findings to 

Congress. 

Section 3. Amends section 117(d) of WIA to make the local chief 

elected official the local grant recipient for Back to Work account 

funds, consistent with other WIA funding streams. 

Section 4. Amends section 134(c)(1) of WIA to specify that the 

local one-stop delivery system shall provide access to Back to Work 

accounts. 

Section 5. Amends Section 137 of WIA to authorize $3.6 billion 

to be appropriated for fiscal year 2003 to carry out chapter 5A. 

Section 6. Amends WIA by making changes in the table of contents to reflect the changes made by the ‘‘Back To Work Incentive 

Act of 2003’’. 

EXPLANATION OF AMENDMENTS

The Amendment in the Nature of a Substitute is explained in the 

body of this report. 

21

APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

Section 102(b)(3) of Public Law 104–1 requires a description of 

the application of this bill to the legislative branch. The purpose of 

H.R. 444 is to authorize new grants within the Workforce Investment Act (WIA) to create personal reemployment accounts, or 

‘‘Back to Work accounts,’’ to assist unemployed individuals in returning to work. The bill does not prevent legislative branch employees from receiving the benefits of this legislation. 

UNFUNDED MANDATE STATEMENT

Section 423 of the Congressional Budget and Impoundment Control Act (as amended by Section 101(a)(2) of the Unfunded Mandates Reform Act, P.L. 104–4) requires a statement of whether the 

provisions of the reported bill include unfunded mandates. H.R. 

444 amends the Workforce Investment Act. As such, the bill does 

not contain any unfunded mandates.

22


Insert offset folio 23 here HR35.001
23


Insert offset folio 24 here HR35.002
24


Insert offset folio 25 here HR35.003
25


Insert offset folio 26 here HR35.004
26

STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF

THE COMMITTEE

In compliance with clause 3(c)(1) of rule XIII and clause (2)(b)(1) 

of rule X of the Rules of the House of Representatives, the Committee’s oversight findings and recommendations are reflected in the 

body of this report. 

NEW BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE

COST ESTIMATE

With respect to the requirements of clause 3(c)(2) of rule XIII of 

the House of Representatives and section 308(a) of the Congressional Budget Act of 1974 and with respect to requirements of 

3(c)(3) of rule XIII of the House of Representatives and section 402 

of the Congressional Budget Act of 1974, the Committee has received the following cost estimate for H.R. 444 from the Director 

of the Congressional Budget Office:

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, March 11, 2003. 

Hon. JOHN A. BOEHNER, 

Chairman, Committee on Education and the Workforce, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 444, the Back to Work 

Incentive Act of 2003. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Christina Hawley 

Sadoti (for federal costs), Greg Waring (for the state and local impact), and Ralph Smith (for the private-sector impact). 

Sincerely, 

DOUGLAS HOLTZ-EAKIN, 

Director. 

Enclosure.

H.R. 444—Back to Work Incentive Act of 2003

Summary: H.R. 444 would amend the Workforce Investment Act 

of 1998 (WIA) to create a grant program to help states create ‘‘personal reemployment accounts’’ for individuals who are likely to exhaust their unemployment compensation. This bill would authorize 

the appropriation of $3.6 billion for fiscal year 2003. Assuming appropriation of the authorized amount, CBO estimates that enactment of this bill would increase spending by $3.6 billion over the 

2004–2005 period. 

H.R. 444 contains no intergovernmental or private-sector mandates, as defined in the Unfunded Mandates Reform Act (UMRA) 

and would impose no costs on state, local, or tribal governments. 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 444 is shown in the following table. The cost 

of this legislation falls within budget function 500 (education, 

training, employment, and social services). For the purposes of this 

estimate, CBO assumes H.R. 444 will be enacted by the beginning 

of July 2003.

27

By fiscal year, in millions of dollars—

2003 2004 2005 2006 2007 2008

CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Reemployment Accounts: 

Authorization Level .............................................................. 3,600 0 0 0 0 0

Estimated Outlays ............................................................... 0 2,700 900 0 0 0

Basis of the estimate: H.R. 444 would authorize the appropriation of $3.6 billion in fiscal year 2003 for states to establish personal reemployment accounts for certain individuals who are likely 

to exhaust their unemployment benefits. These individuals could 

receive up to $3,000 that could be used to assist with job training 

expenses or other employment-related needs, such as child care or 

transportation expenses. If the individual becomes employed within 

a certain period of time, he or she may be eligible to keep the 

unspent amount as a bonus. At state option, these funds may be 

used as cash assistance for individuals who have exhausted their 

right to unemployment compensation. For this estimate, CBO assumes that the authorized amount will be appropriate sometime 

this summer. The first grants to states would likely occur in fiscal 

year 2004. 

Intergovernmental and private-sector impact: H.R. 444 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA and would impose no costs on state, local, or tribal governments. States that submit plans for the personal reemployment accounts program would receive grants from the Department of Labor 

for enhancing worker profiling systems and funding and operating 

the individual accounts. Any cost to states from participating in the 

program would be incurred voluntarily. 

Estimated prepared by: Federal Costs: Christina Hawley Sadoti; 

Impact on State, Local, and Tribal Governments: Greg Waring; and 

Impact on the Private Sector: Ralph Smith. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

In accordance with Clause (3)(c) of House rule XIII, the goal of 

H.R. 444 is to provide grants within the Workforce Investment Act 

(WIA) to create personal reemployment accounts, or ‘‘Back to Work 

accounts,’’ to assist unemployed individuals in returning to work. 

The Committee expects the Department of Labor to comply with 

H.R. 444 and implement the changes to the law in accordance with 

the changes. 

CONSTITUTIONAL AUTHORITY STATEMENT

Under clause 3(d)(1) of rule XIII of the Rules of the House of 

Representatives, the Committee must include a statement citing 

the specific powers granted to Congress in the Constitution to 

enact the law proposed by H.R. 444. The Committee believes that 

the amendments made by this bill, which authorize appropriations 

for the Workforce Investment Act, are within Congress’ authority 

under Article I, section 8, clause 1 of the Constitution. 

28

COMMITTEE ESTIMATE

Clauses 3(d)(2) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison by the Committee of the costs that would be incurred in carrying out H.R. 444. 

However, clause 3(d)(3)(B) of that rule provides that this requirement does not apply when the Committee has included in its report 

a timely submitted cost estimate of the bill prepared by the Director of the Congressional Budget Office under section 402 of the 

Congressional Budget Act. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

WORKFORCE INVESTMENT ACT OF 1998

* * * * * * *

Sec. 1. Short title; table of contents. 

TITLE I—WORKFORCE INVESTMENT SYSTEMS 

* * * * * * *

Subtitle B—Statewide and Local Workforce Investment Systems 

Sec. 106. Purpose. 

CHAPTER 1—STATE PROVISIONS

Sec. 111. State workforce investment boards. 

* * * * * * *

CHAPTER 5A—PERSONAL REEMPLOYMENT ACCOUNTS

Sec. 135A. Purposes. 

Sec. 135B. Definition. 

Sec. 135C. Grants to States. 

Sec. 135D. Within State allocation. 

Sec. 135E. Personal reemployment accounts. 

Sec. 135F. Use of funds. 

Sec. 135G. State and local plans. 

Sec. 135H. Program information. 

Sec. 135I. Evaluation. 

* * * * * * *

TITLE I—WORKFORCE INVESTMENT 

SYSTEMS 

* * * * * * *

Subtitle B—Statewide and Local Workforce 

Investment Systems 

* * * * * * *

29

CHAPTER 2—LOCAL PROVISIONS 

* * * * * * *

SEC. 117. LOCAL WORKFORCE INVESTMENT BOARDS. 

(a) * * *

* * * * * * *

(d) FUNCTIONS OF LOCAL BOARD.—The functions of the local 

board shall include the following: 

(1) * * *

* * * * * * *

(3) BUDGET AND ADMINISTRATION.— (A) * * *

(B) ADMINISTRATION.— (i) GRANT RECIPIENT.— (I) IN GENERAL.—The chief elected official in a 

local area shall serve as the local grant recipient 

for, and shall be liable for any misuse of, the 

grant funds allocated to the local area under øsections 128 and 133¿ sections 128, 133, and 135D, 

unless the chief elected official reaches an agreement with the Governor for the Governor to act as 

the local grant recipient and bear such liability. 

* * * * * * *

(4) PROGRAM OVERSIGHT.—The local board, in partnership 

with the chief elected official, shall conduct oversight with respect to local programs of youth activities authorized under 

section 129, local employment and training activities authorized under section 134, activities authorized under section 

135F, and the one-stop delivery system in the local area. 

* * * * * * *

CHAPTER 5—ADULT AND DISLOCATED WORKER 

EMPLOYMENT AND TRAINING ACTIVITIES 

* * * * * * *

SEC. 134. USE OF FUNDS FOR EMPLOYMENT AND TRAINING ACTIVITIES. 

(a) * * *

* * * * * * *

(c) ESTABLISHMENT OF ONE-STOP DELIVERY SYSTEM.— (1) IN GENERAL.—There shall be established in a State that 

receives an allotment under section 132(b) a one-stop delivery 

system, which— (A) * * *

* * * * * * *

(D) shall provide access to programs and activities carried out by one-stop partners and described in section 

121(b); øand¿

(E) shall provide access to the information described in 

section 15 of the Wagner-Peyser Act and all job search, 

placement, recruitment, and other labor exchange services 

30

authorized under the Wagner-Peyser Act (29 U.S.C. 49 et 

seq.)ø.¿; and

(F) shall provide access to personal reemployment accounts in accordance to section 135E.

* * * * * * *

CHAPTER 5A—PERSONAL REEMPLOYMENT ACCOUNTS 

SEC. 135A. PURPOSES. 

The purposes of this chapter are to provide for the establishment 

of personal reemployment accounts for certain individuals identified 

as likely to exhaust their unemployment compensation in order to—

(1) accelerate the reemployment of such individuals; 

(2) promote the retention in employment of such individuals; 

and 

(3) provide such individuals with enhanced flexibility, choice, 

and control in obtaining intensive reemployment, training, and 

supportive services. 

SEC. 135B. DEFINITION. 

In this chapter, the term ‘‘State’’ means each of the several States 

of the United States, the District of Columbia, the Commonwealth 

of Puerto Rico, and the United States Virgin Islands. 

SEC. 135C. GRANTS TO STATES. 

(a) GRANTS.—The Secretary shall—

(1) reserve 2⁄10 of 1 percent of the amount appropriated under 

section 137(d) for use under section 135I; and 

(2) use the remainder of the amount appropriated under section 137(d) to make allotments in accordance with subsection 

(b). 

(b) ALLOTMENT AMONG STATES.—

(1) IN GENERAL.—From the amount made available under 

subsection (a)(2), the Secretary shall allot to each State an 

amount that is proportionate to the relative number of unemployed individuals in the State as compared to the total number 

of unemployed individuals in all States in order to provide assistance for eligible individuals in accordance with this chapter. 

(2) SMALL STATE MINIMUM ALLOTMENT.—The Secretary shall 

ensure that—

(A) each State (other than the United States Virgin Islands) shall receive an allotment under paragraph (1) that 

is not less than 3⁄10 of 1 percent of the amount made available under subsection (a)(2) for the fiscal year; and 

(B) the United States Virgin Islands shall receive an allotment under paragraph (1) that is not less than 1⁄10 of 1 

percent of the amount made available under subsection 

(a)(2) for the fiscal year. 

(c) AVAILABILITY.—Notwithstanding section 189(g)(1), amounts 

made available under subsection (a) to carry out this chapter shall 

be available for obligation and expenditure beginning on the date 

of the enactment of the Back to Work Incentive Act of 2003. 

SEC. 135D. WITHIN STATE ALLOCATION. 

(a) ALLOCATION.—Of the amount allotted to a State under section 

135C—

31

(1) not more than 2 percent of the amount may be reserved 

by the Governor of the State to enhance the system of worker 

profiling described in section 303(j) of the Social Security Act 

and to establish and operate a data management system, as 

necessary, and carry out other appropriate activities to implement this chapter; 

(2) 5 percent of the amount shall be allocated by the State to 

local areas in accordance with the formula described in subsection (b) for start-up costs and other operating costs related 

to the provision of assistance under this chapter; and 

(3) the remainder of the amount shall be provided to local 

areas consistent with the methods and procedures described in 

section 135G(a)(4) for the establishment of personal reemployment accounts described in section 135E for eligible individuals 

in such local areas. 

(b) FORMULA.—A State shall allocate funds to local areas in the 

State under subsection (a)(2) in an amount that is proportionate to 

the relative number of unemployed individuals in the local area as 

compared to the total number of unemployed individuals in the 

State. 

(c) AVAILABILITY.—Notwithstanding section 189(g)(2), amounts allotted to a State under section 135C, and amounts subsequently provided to a local area under this section, shall be available for obligation and expenditure only for the 3-year period beginning on the 

date of the enactment of the Back to Work Incentive Act of 2003. 

SEC. 135E. PERSONAL REEMPLOYMENT ACCOUNTS. 

(a) ACCOUNTS.—

(1) IN GENERAL.—Funds provided to a local area under section 135D shall be used to provide eligible individuals with personal reemployment accounts to be used in accordance with section 135F. An eligible individual may receive only one personal 

reemployment account. 

(2) AMOUNT.—The State shall establish the amount of a personal reemployment account, which shall be uniform throughout the State, and shall not exceed $3,000. 

(b) ELIGIBLE INDIVIDUALS.—

(1) IN GENERAL.—Each State shall establish eligibility criteria for individuals for personal reemployment accounts in accordance with this subsection. 

(2) ELIGIBILITY CRITERIA REQUIREMENTS.—

(A) IN GENERAL.—Subject to subparagraph (B), an individual shall be eligible to receive assistance under this 

chapter if, beginning after the date of enactment of the 

Back to Work Incentive Act of 2003, the individual—

(i) is identified by the State pursuant to section 

303(j)(1) of the Social Security Act as likely to exhaust 

regular unemployment compensation and in need of job 

search assistance to make a successful transition to 

new employment or an individual’s unemployment can 

be attributed in substantial part to unfair competition 

from Federal Prison Industries, Inc.; 

(ii) is receiving regular unemployment compensation 

under any State or Federal unemployment compensation program administered by the State; and 

32

(iii) is eligible for not less than 20 weeks of regular 

unemployment compensation described in clause (ii). 

(B) ADDITIONAL ELIGIBILITY AND PRIORITY CRITERIA.—A 

State may establish criteria that is in addition to the criteria described in subparagraph (A) for the eligibility of individuals to receive assistance under this chapter. A State 

may also establish criteria for priority in the provision of 

assistance to such eligible individuals under this chapter. 

(3) TRANSITION RULE.—

(A) PREVIOUSLY IDENTIFIED AS LIKELY TO EXHAUST UNEMPLOYMENT COMPENSATION.—

(i) IN GENERAL.—At the option of the State, and subject to clause (ii), an individual may be eligible to receive assistance under this chapter if the individual—

(I) during the 13-week period ending the week 

prior to the date of the enactment of the Back to 

Work Incentive Act of 2003, was identified by the 

State pursuant to section 303(j)(1) of the Social Security Act as likely to exhaust regular unemployment compensation and in need of job search assistance to make a successful transition to new employment; and 

(II) otherwise meets the requirements of clauses 

(ii) and (iii) of paragraph (2)(A). 

(ii) ADDITIONAL ELIGIBILITY AND PRIORITY CRITERIA.—A State may establish criteria that is in addition to the criteria described in clause (i) for the eligibility of individuals to receive assistance under this 

chapter. A State may also establish criteria for priority 

in the provision of assistance to such eligible individuals under this chapter. 

(B) PREVIOUSLY EXHAUSTED UNEMPLOYMENT COMPENSATION.—At the option of the State, an individual may be eligible to receive assistance under this chapter if the individual—

(i) during the 26-week period ending the week prior 

to the date of the enactment of the Back to Work Incentive Act of 2003, exhausted all rights to any unemployment compensation; and 

(ii)(I) is enrolled in training and needs additional 

support to complete such training, with a priority of 

service to be provided to such individuals who are 

training for shortage occupations or high-growth industries; or 

(II) is separated from employment in an industry or 

occupation that has experienced declining employment, 

or no longer provides any employment, in the local 

labor market during the two-year period ending on the 

date of the determination of eligibility of the individual 

under this subparagraph. 

(4) NO INDIVIDUAL ENTITLEMENT.—Nothing in this chapter 

shall be construed to entitle any individual to receive a personal 

reemployment account. 

(c) LOCAL ADMINISTRATION.—

33

(1) INFORMATION AND ATTESTATION.—Prior to the establishment of a personal reemployment account for an eligible individual under this chapter, the local board, through the one-stop 

delivery system, shall ensure that the individual— (A) is informed of the requirements applicable to the personal reemployment account, including the allowable uses 

of funds from the account, the limitations on access to services described under section 135F(a)(3)(C) and a description 

of such services, and the conditions for receiving a reemployment bonus; 

(B) has the option to develop a personal reemployment 

plan which will identify the employment goals and appropriate combination of services selected by the individual to 

achieve the employment goals; and 

(C) signs an attestation that the individual has been 

given the option to develop a personal reemployment plan 

in accordance with subparagraph (B), will comply with the 

requirements relating to the personal reemployment accounts under this chapter, and will reimburse the account 

or, if the account has been terminated, the program under 

this chapter, for any amounts expended from the account 

that are not allowable. 

(2) PERIODIC INTERVIEWS.—If a recipient exhausts his or her 

rights to any unemployment compensation, and the recipient 

has a remaining balance in his or her personal reemployment 

account, the one-stop delivery system shall conduct periodic 

interviews with the recipient to assist the recipient in meeting 

his or her individual employment goals. 

SEC. 135F. USE OF FUNDS. 

(a) ALLOWABLE ACTIVITIES.— (1) IN GENERAL.—Subject to the requirements contained in 

paragraphs (2) and (3), a recipient may use amounts in a personal reemployment account to purchase one or more of the following: 

(A) Intensive services, including those types of services 

specified in section 134(d)(3)(C). 

(B) Training services, including those types of services 

specified in section 134(d)(4)(D). 

(C) Supportive services, except for needs-related payments. 

(D) Assistance to purchase or lease an automobile, if such 

assistance is necessary to allow the recipient to accept a 

bona fide offer of employment for which there is a reasonable expectation of long-term duration. 

(2) DELIVERY OF SERVICES.—The following requirements relating to delivery of services shall apply to the program under 

this chapter: 

(A) Recipients may use funds from the personal reemployment account to purchase the services described in paragraph (1) through the one-stop delivery system on a fee-forservice basis, or through other providers, consistent with 

safeguards described in the State and local plans under 

section 135G. 

(B) The local board, through the one-stop delivery system, 

may pay costs for such services directly on behalf of the reVerDate Jan 31 2003 04:13 Mar 15, 2003 Jkt 019006 PO 00000 Frm 00033 Fmt 6659 Sfmt 6603 E:\HR\OC\HR035.XXX HR035
34

cipient, through a voucher system, or by reimbursement to 

the recipient upon receipt of appropriate cost documentation, consistent with safeguards described in the State plan 

under section 135G. 

(C) Each local board, through the one-stop delivery system, shall make available to recipients information on 

training providers specified in section 134(d)(4)(F)(ii), information available to the one-stop delivery system on providers of the intensive and supportive services described in 

paragraph (1), and information relating to occupations in 

demand in the local area. 

(3) LIMITATIONS.—The following limitations shall apply with 

respect to personal reemployment accounts under this chapter: 

(A)(i) Amounts in a personal reemployment account may 

be used for up to one year from the date of the establishment of the account. 

(ii) No personal reemployment account may be established beginning 2 years after the date of the enactment of 

the Back to Work Incentive Act of 2003. 

(B) Each recipient shall submit cost documentation as required by the one-stop delivery system. 

(C) For the 1-year period following the establishment of 

the account, recipients may not receive intensive, supportive, or training services funded under this title except 

on a fee-for-services basis as specified in paragraph (2)(A). 

(D) Amounts in a personal reemployment account shall 

be nontransferable. 

(b) INCOME SUPPORT.—A State may authorize recipients determined eligible under section 135E(b)(3)(B) to withdraw amounts 

from the personal reemployment account on a weekly basis for purposes of income support in amounts up to the average weekly 

amount of unemployment compensation that the individual received 

prior to his or her exhaustion of rights to unemployment compensation if the individual is engaged in job search, intensive services, or 

training that is expected to lead to employment. 

(c) REEMPLOYMENT BONUS.—

(1) IN GENERAL.—Subject to paragraph (2)—

(A) if a recipient determined eligible under section 

135E(b)(2) obtains full-time employment before the end of 

the 13th week of unemployment for which unemployment 

compensation is paid, the balance of his or her personal reemployment account shall be provided directly to the recipient in cash; and 

(B) if a recipient determined eligible under section 

135E(b)(3) obtains full-time employment before the end of 

the 13th week after the date on which the account is established, the balance of his or her personal reemployment account shall be provided directly to the recipient in cash. 

(2) LIMITATIONS.—The following limitations shall apply with 

respect to a recipient described in paragraph (1): 

(A) 60 percent of the remaining personal reemployment 

account balance shall be paid to the recipient at the time 

of reemployment. 

35

(B) 40 percent of the remaining personal reemployment 

account balance shall be paid to the recipient after 26 

weeks of employment retention. 

(3) EXCEPTION REGARDING SUBSEQUENT UNEMPLOYMENT.—If 

a recipient described in paragraph (1) subsequently becomes unemployed due to a lack of work after receiving the portion of the 

reemployment bonus specified under paragraph (2)(A), the individual may use the amount remaining in the personal reemployment account for the purposes described in subsection (a) 

but may not be eligible for additional cash payments under this 

subsection. 

SEC. 135G. STATE AND LOCAL PLANS. 

(a) STATE PLAN.—In order for a State to receive an allotment 

under section 135C, the Governor of the State shall submit to the 

Secretary a plan for approval that includes a description of how the 

State intends to carry out the personal reemployment accounts authorized under this chapter, including— (1) the criteria and methods to be used for determining eligibility for the personal reemployment accounts, including whether the State intends to include the optional categories described 

in section 135E(b)(3), and the additional criteria and priority 

for service that the State intends to apply, if any, pursuant to 

section 135E(b)(2)(B); 

(2) the methods or procedures, developed in consultation with 

local boards and chief elected officials, to be used to provide eligible individuals information relating to services and providers, 

and safeguards, developed in consultation with such boards 

and officials, to ensure that funds from the personal reemployment accounts are used for purposes authorized under this 

chapter and to ensure the quality and integrity of services and 

providers, consistent with the purpose of providing such individuals with enhanced flexibility, choice, and control in obtaining intensive reemployment, training, and supportive services. 

(3) how the State will coordinate the activities carried out 

under this chapter with the employment and training activities 

carried out under section 134 and other activities carried out by 

each local board through the one-stop delivery system in the 

State; and 

(4) the methods and procedures for providing funds to local 

areas under section 135D(a)(3). 

(b) LOCAL PLAN.—In order for a local area to receive an allocation 

under section 135D, the local board, in partnership with the chief 

elected official for the local area involved, shall submit to the Governor a plan for approval that includes a description of how the 

local board intends to carry out the personal reemployment accounts, consistent with the requirements of this chapter and with 

the State plan established under subsection (a), including—

(1) a description of how the local board will coordinate the 

activities carried out under this chapter with the employment 

and training activities carried out in the local area under section 134; and 

(2) a description of the methods or procedures to be used to 

provide eligible individuals information relating to the jobs that 

are available in the local area in high demand occupations and 

information on services and providers, and the safeguards the 

36

local area will initiate to ensure that funds from the personal 

reemployment accounts are used for purposes authorized under 

this chapter and to ensure the quality and integrity of services 

and providers, consistent with the purpose of providing such individuals with enhanced flexibility, choice, and control in obtaining intensive reemployment, training, and supportive services, and consistent with the State plan. 

(c) STATE PLAN SUBMISSION AND APPROVAL.—A State plan submitted to the Secretary under subsection (a) by a Governor shall be 

considered to be approved by the Secretary at the end of the 30-day 

period beginning on the date the Secretary receives the plan, unless 

the Secretary makes a written determination during such period 

that the plan is incomplete or otherwise inconsistent with the provisions of this chapter. 

SEC. 135H. PROGRAM INFORMATION. 

The Secretary may require from States the collection and reporting on such financial, performance, and other program-related information as the Secretary determines is appropriate to carry out 

this chapter, including the evaluation described in section 135I. 

SEC. 135I. EVALUATION. 

(a) EVALUATION.—From the amount made available under section 

135C(a)(1), the Secretary, pursuant to the authority provided under 

section 172, shall, directly or through grants, contracts, or cooperative agreements with appropriate entities, conduct an evaluation of 

the activities carried out under this chapter. 

(b) CONDUCT OF EVALUATION.—The evaluation shall examine the 

effectiveness of such activities in achieving the purposes described in 

section 135A and such other purposes as the Secretary determines 

are appropriate. 

(c) REPORT.—The report to Congress under section 172(e) relating 

to the results of the evaluations required under section 172 shall include the recommendation of the Secretary with respect to the use 

of personal reemployment accounts as a mechanism to assist individuals in obtaining and retaining employment.

* * * * * * *

CHAPTER 6—GENERAL PROVISIONS 

* * * * * * *

SEC. 137. AUTHORIZATION OF APPROPRIATIONS. 

(a) * * *

* * * * * * *

(d) PERSONAL REEMPLOYMENT ACCOUNTS.—

(1) IN GENERAL.—There is authorized to be appropriated 

$3,600,000,000 for fiscal year 2003 to carry out chapter 5A. 

(2) AVAILABILITY.—Amounts appropriated pursuant to the authorization of appropriations under paragraph (1) to carry out 

section 135I are authorized to remain available until expended.

* * * * * * *

(37)

MINORITY VIEWS 

H.R. 444—PERSONAL REEMPLOYMENT ACCOUNTS FAILING TO CRE- ATE JOBS AND UNDERMINING UNEMPLOYMENT FOR AMERICA’S

WORKERS

INTRODUCTION

Unemployment—and a lack of jobs—continues to cripple the 

American economy. Due to the Bush Administration’s failed economic policies and mismangement of the federal budget, we are experiencing some of the highest unemployment rates, and lowest 

levels of consumer confidence in a decade. More than 8.3 million 

individuals are out of work, and by one estimate, there are three 

workers for every available job. At the same time, over 1.2 million 

unemployed Americans who have exhausted their federal unemployment benefits are looking to Congress for urgent relief. 

H.R. 444 fails to provide the nation’s most vulnerable workers 

urgently needed assistance, and undermines key provisions of the 

existing Workforce Investment Act. 

The centerpiece of this bill involves the luring of financially 

strapped unemployed workers out of more intensive job training 

with a ‘‘buy out’’ that could be as little as $500 or less. This is a 

cynical trap for workers who must choose between training or additional financial support for their family. By contrast, extending unemployment benefits provides that urgently needed family support, 

with no draconian cap on job training services. H.R. 444 would require the unemployed to pay for otherwise free job counseling and 

training services and ban them from the system if they accept a 

PRA. 

H.R. 444 would undermine our workforce training and unemployment insurance systems. This bill not only ignores those families 

who need the help the most, it blows a hole in virtually every accountability contained in our job training programs. H.R. 444 

would provide little if any oversight over program dollars spent at 

fly-by-night training providers. State certification requirements 

under the current WIA system would be all but removed with the 

PRAs—opening the door for financial abuse with no means to correct or even measure the potential abuses. Congress just revamped 

the job training system in 1998 to provide a comprehensive universal system of job assistance services, yet the Majority would circumvent their own system to create a new parallel program. 

This bill also fails to provide relief quickly. The Congressional 

Budget Office says funds for this program would not even reach 

workers until next year—and one out of four eligible families would 

not be helped until fiscal year 2005. An unemployment insurance 

extension can provide help to workers in a matter of weeks, not 

months or years—and would provide urgently needed short-term 

economic stimulus. 

38

1 Congressional Budget Office, An Analysis of the President’s Budgetary Proposals for Fiscal 

Year 2004, March 2003. 2Memorandum from Charles V. Dale, Legislative Attorney, American Law Division, Congressional Research Service, March 3, 2003.

Rather than preparing for another extension of unemployment 

insurance that will be needed in the late spring, H.R. 444 seeks to 

utilize precious resources to provide assistance to the smallest fraction of the unemployed. This legislation is part of a strategy to undermine and cut funding to the unemployment and job-training 

systems and head-off another federal unemployment benefit extension that would provide assistance to those who desperately need 

it. 

This legislation bars those who accept Personal Re-employment 

Accounts from receiving counseling and training services at a onestop employment center for one year once the funds within the account are exhausted. Unemployed workers currently receive an average of $5,000 (and as high as $10,000) worth of training services 

under our current WIA system, and yet many of them are unable 

to find a sustainable job due to the jobless stagnation of the economy. H.R. 444 would cut millions of unemployed workers off from 

access to needed job training or retraining programs. 

In addition, the infrastructure that would be required to administer the PRAs in the base bill would take several months, if not 

a year to set up, limiting what immediate help we can provide the 

unemployed. In its budget submission, the Bush Administration 

claimed that funds could be made available to workers in the current fiscal year. As noted above, the Congressional Budget Office 

repudiated this assertion, and has estimated that funds for this 

program would not even reach workers until next year—and one 

out of four eligible families would not be helped until fiscal year 

2005.1

Those that advocate for PRAs also imply that there are plenty 

of jobs for unemployed workers to accept. In reality, the economy 

has lost 2.5 million jobs since the current downturn in March of 

2001. In addition, there are presently 3 unemployed workers competing for each current job opening. 

Finally, PRAs would become the nation’s first multi-billion program for which coverage of the nation’s civil rights laws are in 

jeopardy. According to the Congressional Research Service, H.R. 

444 ‘‘appears to beg the question of whether private providers of reemployment services . . . are subject to federal non-discrimination 

requirements.’’ 2 Under federal law, providers are not subject to certain civil rights laws unless they are considered ‘‘recipients’’ of federal financial aid. Because H.R. 444 employs a voucher scheme to 

provide benefits, CRS has questioned whether ‘‘providers’’ under 

the bill are technically ‘‘recipients.’’ Failure to have the full force 

and effect of the nation’s anti-discrimination laws apply to a multibillion dollar federal program would be a shameful retreat of the 

nation’s commitment to civil rights. 

39

AMENDMENTS

Representative Kildee sought to address H.R. 444’s major shortcomings by offering an amendment that would use the bill’s funding to provide for immediate and future extended federal unemployment benefits and reverse harmful cuts to job training programs in the last 2 years. The last extension of unemployment benefits signed into law in January provided extended benefits to 

some, but not all of the nation’s unemployed. The Administration 

and the Congressional Republican leadership chose not to cover 1.2 

million workers who had previously exhausted their unemployment 

benefits. 

This amendment directly responded to the real needs of the 

American workforce by providing funds to extend unemployment 

benefits to the estimated 1.2 million workers who have exhausted 

their Federal unemployment benefits and are still unable to find 

work. In addition, this amendment would provide funds to extend 

unemployment benefits to September when the current extension 

expires at the end of May and authorize an additional $650 million 

in funding to offset recent cuts to our nation’s job training programs. Unfortunately, this amendment was defeated on a party 

line vote. 

Representative Payne offered an amendment to make clear that 

federal anti-discrimination laws apply to the bill’s job training providers, but the amendment was rejected on a party line vote. 

Representative Wu offered an amendment that would have allowed local workforce boards to determine the actual amount of 

each PRA and struck the one-year prohibition on One-stop services 

to those receiving PRAs. This amendment pointed out two critical 

flaws in the Republican legislation. First, the base bill allows 

States to set the actual amount of each PRA. While the Majority 

has advertised this bill as providing $3,000 in assistance to each 

unemployed individual, PRA recipients are more likely to receive 

substantially less, possibly as little as $500. The Administration estimates that PRAs could serve up to 1.2 million unemployed workers, however, almost 4 million would be eligible forcing Governors 

to either cut the number of workers covered or cut the amount of 

PRAs. Second, individuals who accept PRAs are barred from receiving services at the one-stop centers for one year, except on a fee 

for service basis. This freezes out unemployed workers from the 

very training and services they need to secure employment. This 

amendment was defeated by voice vote. 

Representative Majette offered and withdrew an amendment 

that would have prevented fraud by requiring providers of training 

services to meet the eligibility requirements under WIA.

40

Representative McCollum offered an amendment to make workers injured by unfair economic competition from Turkey to be eligible for PRAs. This amendment was defeated by voice vote. 

CONCLUSION

H.R. 444 fails to address the most significant needs of the unemployed. Extending unemployment benefits, coupled with the assistance that unemployed workers can receive through one-stop service 

centers, will provide workers with the means to achieve high paying jobs. We need to address the needs of our unemployed now, 

while they are struggling to pay their mortgage and put food on the 

table for their families. The bill fails to address these concerns and 

squanders resources better used to provide immediate help to unemployed workers.

GEORGE MILLER, 

BETTY MCCOLLUM, 

DONALD M. PAYNE, 

ED CASE, 

TIM RYAN, 

JOHN F. TIERNEY, 

CAROLYN MCCARTHY, 

SUSAN DAVIS, 

DENNIS J. KUCINICH, 

RON KIND, 

RAUL M. GRIJALVA, 

DAVID WU, 

CHRIS VAN HOLLEN, 

ROBERT E. ANDREWS, 

DANNY K. DAVIS, 

LYNN WOOLSEY, 

TIMOTHY BISHOP, 

DALE E. KILDEE, 

MAJOR R. OWENS, 

RUSH HOLT, 

RUBE ́ N HINOJOSA.

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