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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 331 Introduced in Senate (IS)]

106th CONGRESS
  1st Session
                                 S. 331

 To amend the Social Security Act to expand the availability of health 
care coverage for working individuals with disabilities, to establish a 
  Ticket to Work and Self-Sufficiency Program in the Social Security 
      Administration to provide such individuals with meaningful 
             opportunities to work, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            January 28, 1999

  Mr. Jeffords (for himself, Mr. Kennedy, Mr. Roth, Mr. Moynihan, Mr. 
Chafee, Mr. Grassley, Mr. Hatch, Mr. Murkowski, Mr. Breaux, Mr. Graham, 
 Mr. Kerrey, Mr. Robb, Mr. Rockefeller, Mr. Bingaman, Mrs. Boxer, Mr. 
 Cleland, Ms. Collins, Mr. Daschle, Mr. DeWine, Mr. Dodd, Mr. Durbin, 
  Mr. Enzi, Mrs. Feinstein, Mr. Grams, Mr. Harkin, Mr. Hollings, Mr. 
  Hutchinson, Mr. Inouye, Mr. Johnson, Mr. Kerry, Ms. Mikulski, Mrs. 
 Murray, Mr. Reed, Mr. Reid, Mr. Sarbanes, Ms. Snowe, Mr. Stevens, Mr. 
Torricelli, and Mr. Wellstone) introduced the following bill; which was 
          read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
 To amend the Social Security Act to expand the availability of health 
care coverage for working individuals with disabilities, to establish a 
  Ticket to Work and Self-Sufficiency Program in the Social Security 
      Administration to provide such individuals with meaningful 
             opportunities to work, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Work Incentives 
Improvement Act of 1999''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
         TITLE I--EXPANDED AVAILABILITY OF HEALTH CARE SERVICES

Sec. 101. Expanding State options under medicaid for workers with 
                            disabilities.
Sec. 102. Continuation of medicare coverage for working individuals 
                            with disabilities.
Sec. 103. Grants to develop and establish State infrastructures to 
                            support working individuals with 
                            disabilities.
Sec. 104. Demonstration of coverage of workers with potentially severe 
                            disabilities.
  TITLE II--TICKET TO WORK AND SELF-SUFFICIENCY AND RELATED PROVISIONS

            Subtitle A--Ticket to Work and Self-Sufficiency

Sec. 201. Establishment of the Ticket to Work and Self-Sufficiency 
                            Program.
Sec. 202. Work Incentives Advisory Panel.
             Subtitle B--Elimination of Work Disincentives

Sec. 211. Prohibition on using work activity as a basis for review of 
                            an individual's disabled status.
Sec. 212. Expedited eligibility determinations for applications of 
                            former long-term beneficiaries that 
                            completed an extended period of 
                            eligibility.
     Subtitle C--Work Incentives Planning, Assistance, and Outreach

Sec. 221. Work incentives outreach program.
Sec. 222. State grants for work incentives assistance to disabled 
                            beneficiaries.
             TITLE III--DEMONSTRATION PROJECTS AND STUDIES

Sec. 301. Extension of disability insurance program demonstration 
                            project authority.
Sec. 302. Demonstration projects providing for reductions in disability 
                            insurance benefits based on earnings.
Sec. 303. Sense of Congress regarding additional demonstration 
                            projects.
Sec. 304. Studies and reports.
                     TITLE IV--TECHNICAL AMENDMENTS

Sec. 401. Technical amendments relating to drug addicts and alcoholics.
Sec. 402. Treatment of prisoners.
Sec. 403. Revocation by members of the clergy of exemption from Social 
                            Security coverage.
Sec. 404. Additional technical amendment relating to cooperative 
                            research or demonstration projects under 
                            titles II and XVI.
Sec. 405. Authorization for State to permit annual wage reports.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress makes the following findings:
            (1) Health care is important to all Americans.
            (2) Health care is particularly important to individuals 
        with disabilities and special health care needs who often 
        cannot afford the insurance available to them through the 
        private market, are uninsurable by the plans available in the 
        private sector, and are at great risk of incurring very high 
        and economically devastating health care costs.
            (3) Americans with significant disabilities often are 
        unable to obtain health care insurance that provides coverage 
        of the services and supports that enable them to live 
        independently and enter or rejoin the workforce. Personal 
        assistance services (such as attendant services, personal 
        assistance with transportation to and from work, reader 
        services, job coaches, and related assistance) remove many of 
        the barriers between significant disability and work. Coverage 
        for such services, as well as for prescription drugs, durable 
        medical equipment, and basic health care are powerful and 
        proven tools for individuals with significant disabilities to 
        obtain and retain employment.
            (4) For individuals with disabilities, the fear of losing 
        health care and related services is one of the greatest 
        barriers keeping the individuals from maximizing their 
        employment, earning potential, and independence.
            (5) Individuals with disabilities who are beneficiaries 
        under title II or XVI of the Social Security Act (42 U.S.C. 401 
        et seq., 1381 et seq.) risk losing medicare or medicaid 
        coverage that is linked to their cash benefits, a risk that is 
        an equal, or greater, work disincentive than the loss of cash 
        benefits associated with working.
            (6) Currently, less than \1/2\ of 1 percent of social 
        security disability insurance and supplemental security income 
        beneficiaries cease to receive benefits as a result of 
        employment.
            (7) Beneficiaries have cited the lack of adequate 
        employment training and placement services as an additional 
        barrier to employment.
            (8) If an additional \1/2\ of 1 percent of the current 
        social security disability insurance (DI) and supplemental 
        security income (SSI) recipients were to cease receiving 
        benefits as a result of employment, the savings to the Social 
        Security Trust Funds in cash assistance would total 
        $3,500,000,000 over the worklife of the individuals.
    (b) Purposes.--The purposes of this Act are as follows:
            (1) To provide health care and employment preparation and 
        placement services to individuals with disabilities that will 
        enable those individuals to reduce their dependency on cash 
        benefit programs.
            (2) To encourage States to adopt the option of allowing 
        individuals with disabilities to purchase medicaid coverage 
        that is necessary to enable such individuals to maintain 
        employment.
            (3) To provide individuals with disabilities the option of 
        maintaining medicare coverage while working.
            (4) To establish a return to work ticket program that will 
        allow individuals with disabilities to seek the services 
        necessary to obtain and retain employment and reduce their 
        dependency on cash benefit programs.

         TITLE I--EXPANDED AVAILABILITY OF HEALTH CARE SERVICES

SEC. 101. EXPANDING STATE OPTIONS UNDER MEDICAID FOR WORKERS WITH 
              DISABILITIES.

    (a) State Option To Eliminate Income, Assets, and Resource 
Limitations for Workers With Disabilities Buying Into Medicaid.--
Section 1902(a)(10)(A)(ii) of the Social Security Act (42 U.S.C. 
1396a(a)(10)(A)(ii)) is amended--
            (1) in subclause (XIII), by striking ``or'' at the end;
            (2) in subclause (XIV), by adding ``or'' at the end; and
            (3) by adding at the end the following:
                                    ``(XV) who, but for earnings in 
                                excess of the limit established under 
                                section 1905(q)(2)(B), and subject to 
                                limitations on assets, resources, or 
                                unearned income that may be set by the 
                                State, would be considered to be 
                                receiving supplemental security income 
                                (subject, notwithstanding section 1916, 
                                to payment of premiums or other cost-
                                sharing charges (set on a sliding scale 
                                based on income that the State may 
                                determine and that may require an 
                                individual with income that exceeds 250 
                                percent of the income official poverty 
                                line (as defined by the Office of 
                                Management and Budget, and revised 
                                annually in accordance with section 
                                673(2) of the Omnibus Budget 
                                Reconciliation Act of 1981) applicable 
                                to a family of the size involved to pay 
                                an amount equal to 100 percent of the 
                                premium cost for providing medical 
                                assistance to the individual), so long 
                                as any such premiums or other cost-
                                sharing charges are the same as any 
                                premiums or other cost-sharing charges 
                                imposed for individuals described in 
                                subclause (XVI));''.
    (b) State Option To Expand Opportunities for Workers With 
Disabilities To Buy Into Medicaid.--
            (1) Eligibility.--Section 1902(a)(10)(A)(ii) of the Social 
        Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by 
        subsection (a), is amended--
                    (A) in subclause (XIV), by striking ``or'' at the 
                end;
                    (B) in subclause (XV), by adding ``or'' at the end; 
                and
                    (C) by adding at the end the following:
                                    ``(XVI) who are working individuals 
                                with disabilities described in section 
                                1905(v) (subject, notwithstanding 
                                section 1916, to payment of premiums or 
                                other cost-sharing charges (set on a 
                                sliding scale based on income) that the 
                                State may determine so long as any such 
                                premiums or other cost-sharing charges 
                                are the same as any premiums or other 
                                cost-sharing charges imposed for 
                                individuals described in subclause 
                                (XV)), but only if the State provides 
                                medical assistance to individuals 
                                described in subclause (XV);''.
            (2) Definition of working individuals with disabilities.--
        Section 1905 of the Social Security Act (42 U.S.C. 1396d) is 
        amended by adding at the end the following:
    ``(v)(1) The term `working individuals with disabilities' means 
individuals ages 16 through 64 who--
            ``(A) by reason of medical improvement, cease to be 
        eligible for benefits under section 223(d) or 1614(a)(3) at the 
        time of a regularly scheduled continuing disability review but 
        who continue to have a severe medically determinable 
        impairment; and
            ``(B) are employed.
    ``(2) An individual is considered to be `employed' if the 
individual--
            ``(A) is earning at least the applicable minimum wage 
        requirement under section 6 of the Fair Labor Standards Act (29 
        U.S.C. 206) and working at least 40 hours per month; or
            ``(B) is engaged in a work effort that meets substantial 
        and reasonable threshold criteria for hours of work, wages, or 
        other measures, as defined by the State and approved by the 
        Secretary.''.
            (3) Conforming amendment.--Section 1905(a) of the Social 
        Security Act (42 U.S.C. 1396d(a)) is amended in the matter 
        preceding paragraph (1)--
                    (A) in clause (x), by striking ``or'' at the end;
                    (B) in clause (xi), by adding ``or'' at the end; 
                and
                    (C) by inserting after clause (xi), the following:
            ``(xii) individuals described in subsection (v),''.
    (c) Prohibition Against Supplantation of State Funds; Maintenance 
of Effort Requirement; Condition for Approval of State Plan 
Amendment.--
            (1) No supplantation of state funds.--Federal funds paid to 
        a State for medical assistance provided to an individual 
        described in subclause (XV) or (XVI) of section 
        1902(a)(10)(A)(ii) of the Social Security Act (42 U.S.C. 
        1396a(a)(10)(A)(ii)) must be used to supplement but not 
        supplant the level of State funds expended as of October 1, 
        1998 for programs to enable working individuals with 
        disabilities to work.
            (2) Maintenance of effort.--With respect to a fiscal year 
        quarter, no Federal funds may be paid to a State for medical 
        assistance provided to an individual described in subclause 
        (XV) or (XVI) of section 1902(a)(10)(A)(ii) of the Social 
        Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) for such fiscal 
        year quarter if the Secretary of Health and Human Services 
        determines that the total of the State expenditures for 
        programs to enable working individuals with disabilities to 
        work for the preceding fiscal year quarter is less than the 
        total of such expenditures for the same fiscal year quarter of 
        the preceding fiscal year.
            (3) Condition for approval of state plan amendments.--No 
        State plan amendment that proposes to provide medical 
        assistance to an individual described in subclause (XV) or 
        (XVI) of section 1902(a)(10)(A)(ii) of the Social Security Act 
        (42 U.S.C. 1396a(a)(10)(A)(ii)) may be approved unless the 
        chief executive officer of the State certifies to the Secretary 
        of Health and Human Services that the plan, as so amended, will 
        satisfy the requirements of paragraphs (1) and (2) of this 
        subsection.
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply on and after October 1, 1999.
            (2) Extension of effective date for state law amendment.--
        In the case of a State plan under title XIX of the Social 
        Security Act which the Secretary of Health and Human Services 
        determines requires State legislation in order for the plan to 
        meet the additional requirements imposed by the amendments made 
        by this section, the State plan shall not be regarded as 
        failing to comply with the requirements of this section solely 
        on the basis of its failure to meet these additional 
        requirements before the first day of the first calendar quarter 
        beginning after the close of the first regular session of the 
        State legislature that begins after the date of enactment of 
        this Act. For purposes of the previous sentence, in the case of 
        a State that has a 2-year legislative session, each year of the 
        session is considered to be a separate regular session of the 
        State legislature.

SEC. 102. CONTINUATION OF MEDICARE COVERAGE FOR WORKING INDIVIDUALS 
              WITH DISABILITIES.

    (a) Continuation of Coverage.--Section 1818A of the Social Security 
Act (42 U.S.C. 1395i-2a) is amended by adding at the end the following:
    ``(e)(1) During the 10-year period beginning with the first month 
that begins after the date of enactment of this subsection, this 
section shall apply--
            ``(A) in subsection (a), by inserting--
                    ``(i) in paragraph (2)(C), ``on or after the date 
                of enactment of the Work Incentives Improvement Act of 
                1999'' after ``ends''; and
                    ``(ii) ``without being subject to a premium'' 
                before the period; and
            ``(B) without regard to subsections (c)(2)(D) and (d).
    ``(2) Any individual who, as of the date of enactment of this 
subsection is enrolled in the medicare program under this section and 
would, without regard to paragraph (1), otherwise satisfy the 
eligibility requirements for enrollment set forth in subsection (a) 
shall be deemed to satisfy the requirement of subsection (a)(2)(C) of 
that section after the application of paragraph (1)(A)(i) for purposes 
of not being subject to a premium for enrollment in the medicare 
program under this section.
    ``(3) Notwithstanding paragraph (1), paragraph (1) shall continue 
to apply after the termination of the 10-year period described in that 
paragraph in the case of any individual who is enrolled in the medicare 
program under this section for the month that ends such 10-year 
period.''.
    (b) GAO Report.--Not later than 8 years after the date of enactment 
of this Act, the Comptroller General of the United States shall submit 
a report to Congress that--
            (1) examines the effectiveness and cost of section 1818A of 
        the Social Security Act (42 U.S.C. 1395i-2a) as amended by 
        subsection (a); and
            (2) recommends whether that section should continue to be 
        applied, as so amended, beyond the 10-year period described in 
        subsection (e) of that section.

SEC. 103. GRANTS TO DEVELOP AND ESTABLISH STATE INFRASTRUCTURES TO 
              SUPPORT WORKING INDIVIDUALS WITH DISABILITIES.

    (a) Establishment.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall award 
        grants described in subsection (b) to States to support the 
        design, establishment, and operation of State infrastructures 
        that provide items and services to support working individuals 
        with disabilities. A State may submit an application for a 
        grant authorized under this section at such time, in such 
        manner, and containing such information as the Secretary may 
        determine.
            (2) Definition of state.--In this section, the term 
        ``State'' means each of the 50 States, the District of 
        Columbia, Puerto Rico, Guam, the United States Virgin Islands, 
        American Samoa, and the Commonwealth of the Northern Mariana 
        Islands.
    (b) Grants for Infrastructure and Outreach.--
            (1) In general.--Out of the funds appropriated under 
        subsection (e), the Secretary shall award grants to States to--
                    (A) support the establishment, implementation, and 
                operation of the State infrastructures described in 
                subsection (a); and
                    (B) conduct outreach campaigns regarding the 
                existence of such infrastructures.
            (2) Eligibility for grants.--
                    (A) In general.--No State may receive a grant under 
                this subsection unless--
                            (i) the State has an approved amendment to 
                        the State plan under title XIX of the Social 
                        Security Act (42 U.S.C. 1396 et seq.) that--
                                    (I) provides medical assistance 
                                under such plan to individuals 
                                described in section 
                                1902(a)(10)(A)(ii)(XV) of the Social 
                                Security Act (42 U.S.C. 
                                1396a(a)(10)(A)(ii)(XV)); or
                                    (II) provides medical assistance 
                                under such plan to individuals 
                                described in subclauses (XV) and (XVI) 
                                of section 1902(a)(10)(A)(ii) of the 
                                Social Security Act (42 U.S.C. 
                                1396a(a)(10)(A)(ii)); and
                            (ii) the State demonstrates to the 
                        satisfaction of the Secretary that the State 
                        makes personal assistance services available 
                        under the State plan under title XIX of the 
                        Social Security Act (42 U.S.C. 1396 et seq.) to 
                        the extent necessary to enable individuals 
                        described in subclause (I) or (II) of clause 
                        (i) to remain employed (as determined under 
                        section 1905(v)(2) of the Social Security Act 
                        (42 U.S.C. 1396d(v)(2)).
                    (B) Definition of personal assistance services.--In 
                this paragraph, the term ``personal assistance 
                services'' means a range of services, provided by 1 or 
                more persons, designed to assist an individual with a 
                disability to perform daily activities on and off the 
                job that the individual would typically perform if the 
                individual did not have a disability. Such services 
                shall be designed to increase the individual's control 
                in life and ability to perform everyday activities on 
                or off the job.
            (3) Determination of awards.--
                    (A) In general.--Subject to subparagraph (B), the 
                Secretary shall determine a formula for awarding grants 
                to States under this section that provides special 
                consideration to States that provide medical assistance 
                under title XIX of the Social Security Act to 
                individuals described in section 
                1902(a)(10)(A)(ii)(XVI) of that Act (42 U.S.C. 
                1396a(a)(10)(A)(ii)(XVI)).
                    (B) Award limits.--
                            (i) Minimum awards.--No State that submits 
                        an approved application for funding under this 
                        section shall receive a grant for a fiscal year 
                        that is less than $500,000.
                            (ii) Maximum awards.--No State that submits 
                        an approved application for funding under this 
                        section shall receive a grant for a fiscal year 
                        that exceeds 15 percent of the total 
                        expenditures by the State (including the 
                        reimbursed Federal share of such expenditures) 
                        for medical assistance for individuals eligible 
                        under subclause (XV) or (XVI) of section 
                        1902(a)(10)(A)(ii), whichever is greater, as 
                        estimated by the State and approved by the 
                        Secretary.
    (c) Availability of Funds.--
            (1) Funds allocated to states.--Funds allocated to a State 
        under a grant made under this section for a fiscal year shall 
        remain available until expended.
            (2) Funds not allocated to states.--Funds not allocated to 
        States in the fiscal year for which they are appropriated shall 
        remain available in succeeding fiscal years for allocation by 
        the Secretary using the allocation formula established by the 
        Secretary under subsection (c)(3)(A).
    (d) Annual Report.--A State that receives a grant under this 
section shall submit an annual report to the Secretary on the use of 
funds provided under the grant. Each report shall include the 
percentage increase in the number of title II disability beneficiaries, 
as defined in section 1148(k)(3) of the Social Security Act (as amended 
by section 201) in the State, and title XVI disability beneficiaries, 
as defined in section 1148(k)(4) of the Social Security Act (as so 
amended) in the State who return to work.
    (e) Appropriation.--Out of any funds in the Treasury not otherwise 
appropriated, there is authorized to be appropriated and there is 
appropriated to make grants under this section--
            (1) for fiscal year 2000, $20,000,000;
            (2) for fiscal year 2001, $25,000,000;
            (3) for fiscal year 2002, $30,000,000;
            (4) for fiscal year 2003, $35,000,000;
            (5) for fiscal year 2004, $40,000,000; and
            (6) for fiscal years 2005 through 2010, the amount 
        appropriated for the preceding fiscal year increased by the 
        percentage increase (if any) in the Consumer Price Index for 
        All Urban Consumers (United States city average) for the 
        preceding fiscal year.
    (f) Recommendation.--Not later than October 1, 2009, the Secretary 
of Health and Human Services, in consultation with the Work Incentives 
Advisory Panel established under section 202, shall submit a 
recommendation to the Committee on Commerce and the Committee on Ways 
and Means of the House of Representatives and the Committee on Finance 
of the Senate regarding whether the grant program established under 
this section should be continued after fiscal year 2010.

SEC. 104. DEMONSTRATION OF COVERAGE OF WORKERS WITH POTENTIALLY SEVERE 
              DISABILITIES.

    (a) State Application.--A State may apply to the Secretary of 
Health and Human Services (in this section referred to as the 
``Secretary'') for approval of a demonstration project (in this section 
referred to as a ``demonstration project'') under which up to a 
specified maximum number of individuals who are workers with a 
potentially severe disability (as defined in subsection (b)(1)) are 
provided medical assistance equal to that provided under section 
1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) to individuals 
described in section 1902(a)(10)(A)(ii)(XV) of that Act (42 U.S.C. 
1396a(a)(10)(A)(ii)(XV)).
    (b) Worker With a Potentially Severe Disability Defined.--For 
purposes of this section--
            (1) In general.--The term ``worker with a potentially 
        severe disability'' means, with respect to a demonstration 
        project, an individual who--
                    (A) is at least 16, but less than 65, years of age;
                    (B) has a specific physical or mental impairment 
                that, as defined by the State under the demonstration 
                project, is reasonably expected, but for the receipt of 
                items and services described in section 1905(a) of the 
                Social Security Act, to become blind or disabled (as 
                defined under section 1614(a) of the Social Security 
                Act); and
                    (C) is employed (as defined in paragraph (2)).
            (2) Definition of employed.--An individual is considered to 
        be ``employed'' if the individual--
                    (A) is earning at least the applicable minimum wage 
                requirement under section 6 of the Fair Labor Standards 
                Act (29 U.S.C. 206) and working at least 40 hours per 
                month; or
                    (B) is engaged in a work effort that meets 
                substantial and reasonable threshold criteria for hours 
                of work, wages, or other measures, as defined under the 
                demonstration project and approved by the Secretary.
    (c) Approval of Demonstration Projects.--
            (1) In general.--Subject to paragraph (3), the Secretary 
        shall approve applications under subsection (a) that meet the 
        requirements of paragraph (2) and such additional terms and 
        conditions as the Secretary may require. The Secretary may 
        waive the requirement of section 1902(a)(1) of the Social 
        Security Act (42 U.S.C. 1396a(a)(1)) to allow for sub-State 
        demonstrations.
            (2) Terms and conditions of demonstration projects.--The 
        Secretary may not approve a demonstration project under this 
        section unless the State provides assurances satisfactory to 
        the Secretary that the following conditions are or will be met:
                    (A) Election of optional category.--The State has 
                elected to provide coverage under its plan under title 
                XIX of the Social Security Act of individuals described 
                in section 1902(a)(10)(A)(ii)(XV) of the Social 
                Security Act.
                    (B) Maintenance of state effort.--Federal funds 
                paid to a State pursuant to this section must be used 
                to supplement, but not supplant, the level of State 
                funds expended for workers with potentially severe 
                disabilities under programs in effect for such 
                individuals at the time the demonstration project is 
                approved under this section.
                    (C) Independent evaluation.--The State provides for 
                an independent evaluation of the project.
            (3) Limitations on federal funding.--
                    (A) Appropriation.--Out of any funds in the 
                Treasury not otherwise appropriated, there is 
                authorized to be appropriated and there is appropriated 
                to carry out this section--
                            (i) for fiscal year 2000, $70,000,000;
                            (ii) for fiscal year 2001, $73,000,000;
                            (iii) for fiscal year 2002, $77,000,000; 
                        and
                            (iv) for fiscal year 2003, $80,000,000.
                    (B) Limitation on payments.--In no case may--
                            (i) the aggregate amount of payment made by 
                        the Secretary to States under this section 
                        exceed $300,000,000; or
                            (ii) payment be provided by the Secretary 
                        for a fiscal year after fiscal year 2005.
                    (C) Funds allocated to states.--The Secretary shall 
                allocate funds to States based on their applications 
                and the availability of funds. Funds allocated to a 
                State under a grant made under this section for a 
                fiscal year shall remain available until expended.
                    (D) Funds not allocated to states.--Funds not 
                allocated to States in the fiscal year for which they 
                are appropriated shall remain available in succeeding 
                fiscal years for allocation by the Secretary using the 
                allocation formula established under this section.
                    (E) Payments to states.--Subject to the succeeding 
                provisions of this section, the Secretary shall pay to 
                each State with a demonstration project approved under 
                this section, from its allocation under subparagraph 
                (C), an amount for each quarter equal to the Federal 
                medical assistance percentage (as defined in section 
                1905(b) of the Social Security Act (42 U.S.C. 1395d(b)) 
                of expenditures in the quarter for medical assistance 
                provided to workers with a potentially severe 
                disability.
    (d) State Defined.--In this section, the term ``State'' has the 
meaning given such term for purposes of title XIX of the Social 
Security Act.

  TITLE II--TICKET TO WORK AND SELF-SUFFICIENCY AND RELATED PROVISIONS

            Subtitle A--Ticket to Work and Self-Sufficiency

SEC. 201. ESTABLISHMENT OF THE TICKET TO WORK AND SELF-SUFFICIENCY 
              PROGRAM.

    (a) In General.--Part A of title XI of the Social Security Act (42 
U.S.C. 1301 et seq.) is amended by adding after section 1147 (as added 
by section 8 of the Noncitizen Benefit Clarification and Other 
Technical Amendments Act of 1998 (Public Law 105-306; 112 Stat. 2928)) 
the following:

             ``ticket to work and self-sufficiency program

    ``Sec. 1148. (a) In General.--The Commissioner shall establish a 
Ticket to Work and Self-Sufficiency Program, under which a disabled 
beneficiary may use a ticket to work and self-sufficiency issued by the 
Commissioner in accordance with this section to obtain employment 
services, vocational rehabilitation services, or other support services 
from an employment network which is of the beneficiary's choice and 
which is willing to provide such services to the beneficiary.
    ``(b) Ticket System.--
            ``(1) Distribution of tickets.--The Commissioner may issue 
        a ticket to work and self-sufficiency to disabled beneficiaries 
        for participation in the Program.
            ``(2) Assignment of tickets.--A disabled beneficiary 
        holding a ticket to work and self-sufficiency may assign the 
        ticket to any employment network of the beneficiary's choice 
        which is serving under the Program and is willing to accept the 
        assignment.
            ``(3) Ticket terms.--A ticket issued under paragraph (1) 
        shall consist of a document which evidences the Commissioner's 
        agreement to pay (as provided in paragraph (4)) an employment 
        network, which is serving under the Program and to which such 
        ticket is assigned by the beneficiary, for such employment 
        services, vocational rehabilitation services, and other support 
        services as the employment network may provide to the 
        beneficiary.
            ``(4) Payments to employment networks.--The Commissioner 
        shall pay an employment network under the Program in accordance 
        with the outcome payment system under subsection (h)(2) or 
        under the outcome-milestone payment system under subsection 
        (h)(3) (whichever is elected pursuant to subsection (h)(1)). An 
        employment network may not request or receive compensation for 
        such services from the beneficiary.
    ``(c) State Participation.--
            ``(1) In general.--Each State agency administering or 
        supervising the administration of the State plan approved under 
        title I of the Rehabilitation Act of 1973 may elect to 
        participate in the Program as an employment network with 
        respect to a disabled beneficiary. If the State agency does 
        elect to participate in the Program, the State agency also 
        shall elect to be paid under the outcome payment system or the 
        outcome-milestone payment system in accordance with subsection 
        (h)(1). With respect to a disabled beneficiary that the State 
        agency does not elect to have participate in the Program, the 
        State agency shall be paid for services provided to that 
        beneficiary under the system for payment applicable under 
        section 222(d) and subsections (d) and (e) of section 1615. The 
        Commissioner shall provide for periodic opportunities for 
        exercising such elections (and revocations).
            ``(2) Effect of participation by state agency.--
                    ``(A) State agencies participating.--In any case in 
                which a State agency described in paragraph (1) elects 
                under that paragraph to participate in the Program, the 
                employment services, vocational rehabilitation 
                services, and other support services which, upon 
                assignment of tickets to work and self-sufficiency, are 
                provided to disabled beneficiaries by the State agency 
                acting as an employment network shall be governed by 
                plans for vocational rehabilitation services approved 
                under title I of the Rehabilitation Act of 1973.
                    ``(B) State agencies administering maternal and 
                child health services programs.--Subparagraph (A) shall 
                not apply with respect to any State agency 
                administering a program under title V of this Act.
            ``(3) Special requirements applicable to cross-referral to 
        certain state agencies.--
                    ``(A) In general.--In any case in which an 
                employment network has been assigned a ticket to work 
                and self-sufficiency by a disabled beneficiary, no 
                State agency shall be deemed required, under this 
                section, title I of the Workforce Investment Act of 
                1998, title I of the Rehabilitation Act of 1973, or a 
State plan approved under such title, to accept any referral of such 
disabled beneficiary from such employment network unless such 
employment network and such State agency have entered into a written 
agreement that meets the requirements of subparagraph (B). Any 
beneficiary who has assigned a ticket to work and self-sufficiency to 
an employment network that has not entered into such a written 
agreement with such a State agency may not access vocational 
rehabilitation services under title I of the Rehabilitation Act of 1973 
until such time as the beneficiary is reassigned to a State vocational 
rehabilitation agency by the Program Manager.
                    ``(B) Terms of agreement.--An agreement required by 
                subparagraph (A) shall specify, in accordance with 
                regulations prescribed pursuant to subparagraph (C)--
                            ``(i) the extent (if any) to which the 
                        employment network holding the ticket will 
                        provide to the State agency--
                                    ``(I) reimbursement for costs 
                                incurred in providing services 
                                described in subparagraph (A) to the 
                                disabled beneficiary; and
                                    ``(II) other amounts from payments 
                                made by the Commissioner to the 
                                employment network pursuant to 
                                subsection (h); and
                            ``(ii) any other conditions that may be 
                        required by such regulations.
                    ``(C) Regulations.--The Commissioner and the 
                Secretary of Education shall jointly prescribe 
                regulations specifying the terms of agreements required 
                by subparagraph (A) and otherwise necessary to carry 
                out the provisions of this paragraph.
                    ``(D) Penalty.--No payment may be made to an 
                employment network pursuant to subsection (h) in 
                connection with services provided to any disabled 
                beneficiary if such employment network makes referrals 
                described in subparagraph (A) in violation of the terms 
                of the agreement required under subparagraph (A) or 
                without having entered into such an agreement.
    ``(d) Responsibilities of the Commissioner.--
            ``(1) Selection and qualifications of program managers.--
        The Commissioner shall enter into agreements with 1 or more 
        organizations in the private or public sector for service as a 
        program manager to assist the Commissioner in administering the 
        Program. Any such program manager shall be selected by means of 
        a competitive bidding process, from among organizations in the 
        private or public sector with available expertise and 
        experience in the field of vocational rehabilitation and 
        employment services.
            ``(2) Tenure, renewal, and early termination.--Each 
        agreement entered into under paragraph (1) shall provide for 
        early termination upon failure to meet performance standards 
        which shall be specified in the agreement and which shall be 
        weighted to take into account any performance in prior terms. 
        Such performance standards shall include--
                    ``(A) measures for ease of access by beneficiaries 
                to services; and
                    ``(B) measures for determining the extent to which 
                failures in obtaining services for beneficiaries fall 
                within acceptable parameters, as determined by the 
                Commissioner.
            ``(3) Preclusion from direct participation in delivery of 
        services in own service area.--Agreements under paragraph (1) 
        shall preclude--
                    ``(A) direct participation by a program manager in 
                the delivery of employment services, vocational 
                rehabilitation services, or other support services to 
                beneficiaries in the service area covered by the 
                program manager's agreement; and
                    ``(B) the holding by a program manager of a 
                financial interest in an employment network or service 
                provider which provides services in a geographic area 
                covered under the program manager's agreement.
            ``(4) Selection of employment networks.--
                    ``(A) In general.--The Commissioner shall select 
                and enter into agreements with employment networks for 
                service under the Program. Such employment networks 
                shall be in addition to State agencies serving as 
                employment networks pursuant to elections under 
                subsection (c).
                    ``(B) Alternate participants.--In any State where 
                the Program is being implemented, the Commissioner 
                shall enter into an agreement with any alternate 
                participant that is operating under the authority of 
                section 222(d)(2) in the State as of the date of 
                enactment of this section and chooses to serve as an 
                employment network under the Program.
            ``(5) Termination of agreements with employment networks.--
        The Commissioner shall terminate agreements with employment 
        networks for inadequate performance, as determined by the 
        Commissioner.
            ``(6) Quality assurance.--The Commissioner shall provide 
        for such periodic reviews as are necessary to provide for 
        effective quality assurance in the provision of services by 
        employment networks. The Commissioner shall solicit and 
        consider the views of consumers and the program manager under 
        which the employment networks serve and shall consult with 
        providers of services to develop performance measurements. The 
        Commissioner shall ensure that the results of the periodic 
        reviews are made available to beneficiaries who are prospective 
        service recipients as they select employment networks. The 
        Commissioner shall ensure that the periodic surveys of 
        beneficiaries receiving services under the Program are designed 
        to measure customer service satisfaction.
            ``(7) Dispute resolution.--The Commissioner shall provide 
        for a mechanism for resolving disputes between beneficiaries 
        and employment networks, between program managers and 
        employment networks, and between program managers and providers 
        of services. The Commissioner shall afford a party to such a 
        dispute a reasonable opportunity for a full and fair review of 
        the matter in dispute.
    ``(e) Program Managers.--
            ``(1) In general.--A program manager shall conduct tasks 
        appropriate to assist the Commissioner in carrying out the 
        Commissioner's duties in administering the Program.
            ``(2) Recruitment of employment networks.--A program 
        manager shall recruit, and recommend for selection by the 
        Commissioner, employment networks for service under the 
        Program. The program manager shall carry out such recruitment 
        and provide such recommendations, and shall monitor all 
        employment networks serving in the Program in the geographic 
        area covered under the program manager's agreement, to the 
        extent necessary and appropriate to ensure that adequate 
        choices of services are made available to beneficiaries. 
        Employment networks may serve under the Program only pursuant 
        to an agreement entered into with the Commissioner under the 
        Program incorporating the applicable provisions of this section 
        and regulations thereunder, and the program manager shall 
        provide and maintain assurances to the Commissioner that 
        payment by the Commissioner to employment networks pursuant to 
        this section is warranted based on compliance by such 
        employment networks with the terms of such agreement and this 
        section. The program manager shall not impose numerical limits 
        on the number of employment networks to be recommended pursuant 
        to this paragraph.
            ``(3) Facilitation of access by beneficiaries to employment 
        networks.--A program manager shall facilitate access by 
        beneficiaries to employment networks. The program manager shall 
        ensure that each beneficiary is allowed changes in employment 
        networks for good cause, as determined by the Commissioner, 
        without being deemed to have rejected services under the 
        Program. The program manager shall establish and maintain lists 
        of employment networks available to beneficiaries and shall 
        make such lists generally available to the public. The program 
        manager shall ensure that all information provided to disabled 
        beneficiaries pursuant to this paragraph is provided in 
        accessible formats.
            ``(4) Ensuring availability of adequate services.--The 
        program manager shall ensure that employment services, 
        vocational rehabilitation services, and other support services 
        are provided to beneficiaries throughout the geographic area 
        covered under the program manager's agreement, including rural 
        areas.
            ``(5) Reasonable access to services.--The program manager 
        shall take such measures as are necessary to ensure that 
        sufficient employment networks are available and that each 
        beneficiary receiving services under the Program has reasonable 
        access to employment services, vocational rehabilitation 
        services, and other support services. Services provided under 
        the Program may include case management, work incentives 
        planning, supported employment, career planning, career plan 
        development, vocational assessment, job training, placement, 
        followup services, and such other services as may be specified 
        by the Commissioner under the Program. The program manager 
        shall ensure that such services are available in each service 
        area.
    ``(f) Employment Networks.--
            ``(1) Qualifications for employment networks.--
                    ``(A) In general.--Each employment network serving 
                under the Program shall consist of an agency or 
                instrumentality of a State (or a political subdivision 
                thereof) or a private entity that assumes 
                responsibility for the coordination and delivery of 
                services under the Program to individuals assigning to 
                the employment network tickets to work and self-
                sufficiency issued under subsection (b).
                    ``(B) One-stop delivery systems.--An employment 
                network serving under the Program may consist of a one-
                stop delivery system established under subtitle B of 
                title I of the Workforce Investment Act of 1998.
                    ``(C) Compliance with selection criteria.--No 
                employment network may serve under the Program unless 
                it meets and maintains compliance with both general 
                selection criteria (such as professional and 
                educational qualifications (where applicable)) and 
specific selection criteria (such as substantial expertise and 
experience in providing relevant employment services and supports).
                    ``(D) Single or associated providers allowed.--An 
                employment network shall consist of either a single 
                provider of such services or of an association of such 
                providers organized so as to combine their resources 
                into a single entity. An employment network may meet 
                the requirements of subsection (e)(4) by providing 
                services directly, or by entering into agreements with 
                other individuals or entities providing appropriate 
                employment services, vocational rehabilitation 
                services, or other support services.
            ``(2) Requirements relating to provision of services.--Each 
        employment network serving under the Program shall be required 
        under the terms of its agreement with the Commissioner to--
                    ``(A) serve prescribed service areas; and
                    ``(B) take such measures as are necessary to ensure 
                that employment services, vocational rehabilitation 
                services, and other support services provided under the 
                Program by, or under agreements entered into with, the 
                employment network are provided under appropriate 
                individual work plans meeting the requirements of 
                subsection (g).
            ``(3) Annual financial reporting.--Each employment network 
        shall meet financial reporting requirements as prescribed by 
        the Commissioner.
            ``(4) Periodic outcomes reporting.--Each employment network 
        shall prepare periodic reports, on at least an annual basis, 
        itemizing for the covered period specific outcomes achieved 
        with respect to specific services provided by the employment 
        network. Such reports shall conform to a national model 
        prescribed under this section. Each employment network shall 
        provide a copy of the latest report issued by the employment 
        network pursuant to this paragraph to each beneficiary upon 
        enrollment under the Program for services to be received 
        through such employment network. Upon issuance of each report 
        to each beneficiary, a copy of the report shall be maintained 
        in the files of the employment network. The program manager 
        shall ensure that copies of all such reports issued under this 
        paragraph are made available to the public under reasonable 
        terms.
    ``(g) Individual Work Plans.--
            ``(1) Requirements.--Each employment network shall--
                    ``(A) take such measures as are necessary to ensure 
                that employment services, vocational rehabilitation 
                services, and other support services provided under the 
                Program by, or under agreements entered into with, the 
                employment network are provided under appropriate 
                individual work plans that meet the requirements of 
                subparagraph (C);
                    ``(B) develop and implement each such individual 
                work plan in partnership with each beneficiary 
                receiving such services in a manner that affords the 
                beneficiary the opportunity to exercise informed choice 
                in selecting an employment goal and specific services 
                needed to achieve that employment goal;
                    ``(C) ensure that each individual work plan 
                includes at least--
                            ``(i) a statement of the vocational goal 
                        developed with the beneficiary;
                            ``(ii) a statement of the services and 
                        supports that have been deemed necessary for 
                        the beneficiary to accomplish that goal;
                            ``(iii) a statement of any terms and 
                        conditions related to the provision of such 
                        services and supports; and
                            ``(iv) a statement of understanding 
                        regarding the beneficiary's rights under the 
                        Program (such as the right to retrieve the 
                        ticket to work and self-sufficiency if the 
                        beneficiary is dissatisfied with the services 
                        being provided by the employment network) and 
                        remedies available to the individual, including 
                        information on the availability of advocacy 
                        services and assistance in resolving disputes 
                        through the State grant program authorized 
                        under section 1150;
                    ``(D) provide a beneficiary the opportunity to 
                amend the individual work plan if a change in 
                circumstances necessitates a change in the plan; and
                    ``(E) make each beneficiary's individual work plan 
                available to the beneficiary in, as appropriate, an 
                accessible format chosen by the beneficiary.
            ``(2) Effective upon written approval.--A beneficiary's 
        individual work plan shall take effect upon written approval by 
the beneficiary or a representative of the beneficiary and a 
representative of the employment network that, in providing such 
written approval, acknowledges assignment of the beneficiary's ticket 
to work and self-sufficiency.
    ``(h) Employment Network Payment Systems.--
            ``(1) Election of payment system by employment networks.--
                    ``(A) In general.--The Program shall provide for 
                payment authorized by the Commissioner to employment 
                networks under either an outcome payment system or an 
                outcome-milestone payment system. Each employment 
                network shall elect which payment system will be 
                utilized by the employment network, and, for such 
                period of time as such election remains in effect, the 
                payment system so elected shall be utilized exclusively 
                in connection with such employment network (except as 
                provided in subparagraph (B)).
                    ``(B) No change in method of payment for 
                beneficiaries with tickets already assigned to the 
                employment networks.--Any election of a payment system 
                by an employment network that would result in a change 
                in the method of payment to the employment network for 
                services provided to a beneficiary who is receiving 
                services from the employment network at the time of the 
                election shall not be effective with respect to payment 
                for services provided to that beneficiary and the 
                method of payment previously selected shall continue to 
                apply with respect to such services.
            ``(2) Outcome payment system.--
                    ``(A) In general.--The outcome payment system shall 
                consist of a payment structure governing employment 
                networks electing such system under paragraph (1)(A) 
                which meets the requirements of this paragraph.
                    ``(B) Payments made during outcome payment 
                period.--The outcome payment system shall provide for a 
                schedule of payments to an employment network in 
                connection with each individual who is a beneficiary 
                for each month during the individual's outcome payment 
                period for which benefits (described in paragraphs (3) 
                and (4) of subsection (k)) are not payable to such 
                individual because of work or earnings.
                    ``(C) Computation of payments to employment 
                network.--The payment schedule of the outcome payment 
                system shall be designed so that--
                            ``(i) the payment for each of the 60 months 
                        during the outcome payment period for which 
                        benefits (described in paragraphs (3) and (4) 
                        of subsection (k)) are not payable is equal to 
                        a fixed percentage of the payment calculation 
                        base for the calendar year in which such month 
                        occurs; and
                            ``(ii) such fixed percentage is set at a 
                        percentage which does not exceed 40 percent.
            ``(3) Outcome-milestone payment system.--
                    ``(A) In general.--The outcome-milestone payment 
                system shall consist of a payment structure governing 
                employment networks electing such system under 
                paragraph (1)(A) which meets the requirements of this 
                paragraph.
                    ``(B) Early payments upon attainment of milestones 
                in advance of outcome payment periods.--The outcome-
                milestone payment system shall provide for 1 or more 
                milestones with respect to beneficiaries receiving 
                services from an employment network under the Program 
                that are directed toward the goal of permanent 
                employment. Such milestones shall form a part of a 
                payment structure that provides, in addition to 
                payments made during outcome payment periods, payments 
                made prior to outcome payment periods in amounts based 
                on the attainment of such milestones.
                    ``(C) Limitation on total payments to employment 
                network.--The payment schedule of the outcome-milestone 
                payment system shall be designed so that the total of 
                the payments to the employment network with respect to 
                each beneficiary is less than, on a net present value 
                basis (using an interest rate determined by the 
                Commissioner that appropriately reflects the cost of 
                funds faced by providers), the total amount to which 
                payments to the employment network with respect to the 
                beneficiary would be limited if the employment network 
                were paid under the outcome payment system.
            ``(4) Definitions.--In this subsection:
                    ``(A) Payment calculation base.--The term `payment 
                calculation base' means, for any calendar year--
                            ``(i) in connection with a title II 
                        disability beneficiary, the average disability 
                        insurance benefit payable under section 223 for 
                        all beneficiaries for months during the 
                        preceding calendar year; and
                            ``(ii) in connection with a title XVI 
                        disability beneficiary (who is not concurrently 
                        a title II disability beneficiary), the average 
                        payment of supplemental security income 
                        benefits based on disability payable under 
                        title XVI (excluding State supplementation) for 
                        months during the preceding calendar year to 
                        all beneficiaries who have attained age 18 but 
                        have not attained age 65.
                    ``(B) Outcome payment period.--The term `outcome 
                payment period' means, in connection with any 
                individual who had assigned a ticket to work and self-
                sufficiency to an employment network under the Program, 
                a period--
                            ``(i) beginning with the first month, 
                        ending after the date on which such ticket was 
                        assigned to the employment network, for which 
                        benefits (described in paragraphs (3) and (4) 
                        of subsection (k)) are not payable to such 
                        individual by reason of engagement in 
                        substantial gainful activity or by reason of 
                        earnings from work activity; and
                            ``(ii) ending with the 60th month 
                        (consecutive or otherwise), ending after such 
                        date, for which such benefits are not payable 
                        to such individual by reason of engagement in 
                        substantial gainful activity or by reason of 
                        earnings from work activity.
            ``(5) Periodic review and alterations of prescribed 
        schedules.--
                    ``(A) Percentages and periods.--The Commissioner 
                shall periodically review the percentage specified in 
                paragraph (2)(C), the total payments permissible under 
                paragraph (3)(C), and the period of time specified in 
                paragraph (4)(B) to determine whether such percentages, 
                such permissible payments, and such period provide an 
                adequate incentive for employment networks to assist 
                beneficiaries to enter the workforce, while providing 
                for appropriate economies. The Commissioner may alter 
                such percentage, such total permissible payments, or 
                such period of time to the extent that the Commissioner 
                determines, on the basis of the Commissioner's review 
                under this paragraph, that such an alteration would 
                better provide the incentive and economies described in 
                the preceding sentence.
                    ``(B) Number and amounts of milestone payments.--
                The Commissioner shall periodically review the number 
                and amounts of milestone payments established by the 
                Commissioner pursuant to this section to determine 
                whether they provide an adequate incentive for 
                employment networks to assist beneficiaries to enter 
                the workforce, taking into account information provided 
                to the Commissioner by program managers, the Work 
                Incentives Advisory Panel established under section 202 
                of the Work Incentives Improvement Act of 1999, and 
                other reliable sources. The Commissioner may from time 
                to time alter the number and amounts of milestone 
                payments initially established by the Commissioner 
                pursuant to this section to the extent that the 
                Commissioner determines that such an alteration would 
                allow an adequate incentive for employment networks to 
                assist beneficiaries to enter the workforce. Such 
                alteration shall be based on information provided to 
                the Commissioner by program managers, the Work 
                Incentives Advisory Panel established under section 202 
                of the Work Incentives Improvement Act of 1999, or 
                other reliable sources.
    ``(i) Suspension of Disability Reviews.--During any period for 
which an individual is using, as defined by the Commissioner, a ticket 
to work and self-sufficiency issued under this section, the 
Commissioner (and any applicable State agency) may not initiate a 
continuing disability review or other review under section 221 of 
whether the individual is or is not under a disability or a review 
under title XVI similar to any such review under section 221.
    ``(j) Allocation of Costs.--
            ``(1) Payments to employment networks.--Payments to 
        employment networks (including State agencies that elect to 
        participate in the Program as an employment network) shall be 
        made from the Federal Old-Age and Survivors Insurance Trust 
        Fund or the Federal Disability Insurance Trust Fund, as 
appropriate, in the case of ticketed title II disability beneficiaries 
who return to work, or from the appropriation made available for making 
supplemental security income payments under title XVI, in the case of 
title XVI disability beneficiaries who return to work. With respect to 
ticketed beneficiaries who concurrently are entitled to benefits under 
title II and eligible for payments under title XVI who return to work, 
the Commissioner shall allocate the cost of payments to employment 
networks to which the tickets of such beneficiaries have been assigned 
among such Trust Funds and appropriation, as appropriate.
            ``(2) Administrative expenses.--The costs of administering 
        this section (other than payments to employment networks) shall 
        be paid from amounts made available for the administration of 
        title II and amounts made available for the administration of 
        title XVI, and shall be allocated among those amounts as 
        appropriate.
    ``(k) Definitions.--In this section:
            ``(1) Commissioner.--The term `Commissioner' means the 
        Commissioner of Social Security.
            ``(2) Disabled beneficiary.--The term `disabled 
        beneficiary' means a title II disability beneficiary or a title 
        XVI disability beneficiary.
            ``(3) Title ii disability beneficiary.--The term `title II 
        disability beneficiary' means an individual entitled to 
        disability insurance benefits under section 223 or to monthly 
        insurance benefits under section 202 based on such individual's 
        disability (as defined in section 223(d)). An individual is a 
        title II disability beneficiary for each month for which such 
        individual is entitled to such benefits.
            ``(4) Title xvi disability beneficiary.--The term `title 
        XVI disability beneficiary' means an individual eligible for 
        supplemental security income benefits under title XVI on the 
        basis of blindness (within the meaning of section 1614(a)(2)) 
        or disability (within the meaning of section 1614(a)(3)). An 
        individual is a title XVI disability beneficiary for each month 
        for which such individual is eligible for such benefits.
            ``(5) Supplemental security income benefit under title 
        xvi.--The term `supplemental security income benefit under 
        title XVI' means a cash benefit under section 1611 or 1619(a), 
        and does not include a State supplementary payment, 
        administered federally or otherwise.
    ``(l) Regulations.--Not later than 1 year after the date of 
enactment of this section, the Commissioner shall prescribe such 
regulations as are necessary to carry out the provisions of this 
section.
    ``(m) Sunset of Program.--The Program established under this 
section shall terminate on September 30, 2004.''.
    (b) Conforming Amendments.--
            (1) Amendments to title ii.--
                    (A) Section 221(i) of the Social Security Act (42 
                U.S.C. 421(i)) is amended by adding at the end the 
                following:
    ``(5) For suspension of reviews under this subsection in the case 
of an individual using a ticket to work and self-sufficiency, see 
section 1148(i).''.
                    (B) Section 222(a) of the Social Security Act (42 
                U.S.C. 422(a)) is repealed.
                    (C) Section 222(b) of the Social Security Act (42 
                U.S.C. 422(b)) is repealed.
                    (D) Section 225(b)(1) of the Social Security Act 
                (42 U.S.C. 425(b)(1)) is amended by striking ``a 
                program of vocational rehabilitation services'' and 
                inserting ``a program consisting of the Ticket to Work 
                and Self-Sufficiency Program under section 1148 or 
                another program of vocational rehabilitation services, 
                employment services, or other support services''.
            (2) Amendments to title xvi.--
                    (A) Section 1615(a) of the Social Security Act (42 
                U.S.C. 1382d(a)) is amended to read as follows:
    ``Sec. 1615. (a) In the case of any blind or disabled individual 
who--
            ``(1) has not attained age 16, and
            ``(2) with respect to whom benefits are paid under this 
        title,
the Commissioner of Social Security shall make provision for referral 
of such individual to the appropriate State agency administering the 
State program under title V.''.
                    (B) Section 1615(c) of the Social Security Act (42 
                U.S.C. 1382d(c)) is repealed.
                    (C) Section 1631(a)(6)(A) of the Social Security 
                Act (42 U.S.C. 1383(a)(6)(A)) is amended by striking 
                ``a program of vocational rehabilitation services'' and 
                inserting ``a program consisting of the Ticket to Work 
                and Self-Sufficiency Program under section 1148 or 
                another program of vocational rehabilitation services, 
                employment services, or other support services''.
                    (D) Section 1633(c) of the Social Security Act (42 
                U.S.C. 1383b(c)) is amended--
                            (i) by inserting ``(1)'' after ``(c)''; and
                            (ii) by adding at the end the following:
    ``(2) For suspension of continuing disability reviews and other 
reviews under this title similar to reviews under section 221 in the 
case of an individual using a ticket to work and self-sufficiency, see 
section 1148(i).''.
    (c) Effective Date.--Subject to subsection (d), the amendments made 
by subsections (a) and (b) shall take effect with the first month 
following 1 year after the date of enactment of this Act.
    (d) Graduated Implementation of Program.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Commissioner of Social Security 
        shall commence implementation of the amendments made by this 
        section (other than paragraphs (1)(C) and (2)(B) of subsection 
        (b)) in graduated phases at phase-in sites selected by the 
        Commissioner. Such phase-in sites shall be selected so as to 
        ensure, prior to full implementation of the Ticket to Work and 
        Self-Sufficiency Program, the development and refinement of 
referral processes, payment systems, computer linkages, management 
information systems, and administrative processes necessary to provide 
for full implementation of such amendments. Subsection (c) shall apply 
with respect to paragraphs (1)(C) and (2)(B) of subsection (b) without 
regard to this subsection.
            (2) Requirements.--Implementation of the Program at each 
        phase-in site shall be carried out on a wide enough scale to 
        permit a thorough evaluation of the alternative methods under 
        consideration, so as to ensure that the most efficacious 
        methods are determined and in place for full implementation of 
        the Program on a timely basis.
            (3) Full implementation.--The Commissioner shall ensure 
        that the ability to provide tickets and services to individuals 
        under the Program exists in every State as soon as practicable 
        on or after the effective date specified in subsection (c) but 
        not later than 3 years after such date.
            (4) Ongoing evaluation of program.--
                    (A) In general.--The Commissioner shall design and 
                conduct a series of evaluations to assess the cost-
                effectiveness of activities carried out under this 
                section and the amendments made thereby, as well as the 
                effects of this section and the amendments made thereby 
                on work outcomes for beneficiaries receiving tickets to 
                work and self-sufficiency under the Program.
                    (B) Consultation.--The Commissioner shall design 
                and carry out the series of evaluations after receiving 
                relevant advice from experts in the fields of 
                disability, vocational rehabilitation, and program 
                evaluation and individuals using tickets to work and 
                self-sufficiency under the Program and consulting with 
                the Work Incentives Advisory Panel established under 
                section 202, the Comptroller General of the United 
                States, other agencies of the Federal Government, and 
                private organizations with appropriate expertise.
                    (C) Methodology.--
                            (i) Implementation.--The Commissioner, in 
                        consultation with the Work Incentives Advisory 
                        Panel established under section 202, shall 
                        ensure that plans for evaluations and data 
                        collection methods under the Program are 
                        appropriately designed to obtain detailed 
                        employment information.
                            (ii) Specific matters to be addressed.--
                        Each such evaluation shall address (but is not 
                        limited to)--
                                    (I) the annual cost (including net 
                                cost) of the Program and the annual 
                                cost (including net cost) that would 
                                have been incurred in the absence of 
                                the Program;
                                    (II) the determinants of return to 
                                work, including the characteristics of 
                                beneficiaries in receipt of tickets 
                                under the Program;
                                    (III) the types of employment 
                                services, vocational rehabilitation 
                                services, and other support services 
                                furnished to beneficiaries in receipt 
                                of tickets under the Program who return 
                                to work and to those who do not return 
                                to work;
                                    (IV) the duration of employment 
                                services, vocational rehabilitation 
                                services, and other support services 
                                furnished to beneficiaries in receipt 
                                of tickets under the Program who return 
                                to work and the duration of such 
                                services furnished to those who do not 
                                return to work and the cost to 
                                employment networks of furnishing such 
                                services;
                                    (V) the employment outcomes, 
                                including wages, occupations, benefits, 
                                and hours worked, of beneficiaries who 
                                return to work after receiving tickets 
                                under the Program and those who return 
                                to work without receiving such tickets;
                                    (VI) the characteristics of 
                                providers whose services are provided 
                                within an employment network under the 
                                Program;
                                    (VII) the extent (if any) to which 
                                employment networks display a greater 
                                willingness to provide services to 
                                beneficiaries with a range of 
                                disabilities;
                                    (VIII) the characteristics 
                                (including employment outcomes) of 
                                those beneficiaries who receive 
                                services under the outcome payment 
                                system and of those beneficiaries who 
                                receive services under the outcome-
milestone payment system;
                                    (IX) measures of satisfaction among 
                                beneficiaries in receipt of tickets 
                                under the Program; and
                                    (X) reasons for (including comments 
                                solicited from beneficiaries regarding) 
                                their choice not to use their tickets 
                                or their inability to return to work 
                                despite the use of their tickets.
                    (D) Periodic evaluation reports.--Following the 
                close of the third and fifth fiscal years ending after 
                the effective date under subsection (c), and prior to 
                the close of the seventh fiscal year ending after such 
                date, the Commissioner shall transmit to the Committee 
                on Ways and Means of the House of Representatives and 
                the Committee on Finance of the Senate a report 
                containing the Commissioner's evaluation of the 
                progress of activities conducted under the provisions 
                of this section and the amendments made thereby. Each 
                such report shall set forth the Commissioner's 
                evaluation of the extent to which the Program has been 
                successful and the Commissioner's conclusions on 
                whether or how the Program should be modified. Each 
                such report shall include such data, findings, 
                materials, and recommendations as the Commissioner may 
                consider appropriate.
            (5) Extent of state's right of first refusal in advance of 
        full implementation of amendments in such state.--
                    (A) In general.--In the case of any State in which 
                the amendments made by subsection (a) have not been 
                fully implemented pursuant to this subsection, the 
                Commissioner shall determine by regulation the extent 
                to which--
                            (i) the requirement under section 222(a) of 
                        the Social Security Act for prompt referrals to 
                        a State agency, and
                            (ii) the authority of the Commissioner 
                        under section 222(d)(2) of the Social Security 
                        Act to provide vocational rehabilitation 
                        services in such State by agreement or contract 
                        with other public or private agencies, 
                        organizations, institutions, or individuals,
                shall apply in such State.
                    (B) Existing agreements.--Nothing in subparagraph 
                (A) or the amendments made by subsection (a) shall be 
                construed to limit, impede, or otherwise affect any 
                agreement entered into pursuant to section 222(d)(2) of 
                the Social Security Act before the date of enactment of 
                this Act with respect to services provided pursuant to 
                such agreement to beneficiaries receiving services 
                under such agreement as of such date, except with 
                respect to services (if any) to be provided after 3 
                years after the effective date provided in subsection 
                (c).
    (e) Specific Regulations Required.--
            (1) In general.--The Commissioner of Social Security shall 
        prescribe such regulations as are necessary to implement the 
        amendments made by this section.
            (2) Specific matters to be included in regulations.--The 
        matters which shall be addressed in such regulations shall 
        include--
                    (A) the form and manner in which tickets to work 
                and self-sufficiency may be distributed to 
                beneficiaries pursuant to section 1148(b)(1) of the 
                Social Security Act;
                    (B) the format and wording of such tickets, which 
                shall incorporate by reference any contractual terms 
                governing service by employment networks under the 
                Program;
                    (C) the form and manner in which State agencies may 
                elect participation in the Ticket to Work and Self-
                Sufficiency Program (and revoke such an election) 
                pursuant to section 1148(c)(1) of the Social Security 
                Act and provision for periodic opportunities for 
                exercising such elections (and revocations);
                    (D) the status of State agencies under section 
                1148(c)(1) at the time that State agencies exercise 
                elections (and revocations) under that section;
                    (E) the terms of agreements to be entered into with 
                program managers pursuant to section 1148(d) of the 
                Social Security Act, including--
                            (i) the terms by which program managers are 
                        precluded from direct participation in the 
                        delivery of services pursuant to section 
                        1148(d)(3) of the Social Security Act;
                            (ii) standards which must be met by quality 
                        assurance measures referred to in paragraph (6) 
                        of section 1148(d) and methods of recruitment 
                        of employment networks utilized pursuant to 
                        paragraph (2) of section 1148(e); and
                            (iii) the format under which dispute 
                        resolution will operate under section 
                        1148(d)(7);
                    (F) the terms of agreements to be entered into with 
                employment networks pursuant to section 1148(d)(4) of 
                the Social Security Act, including--
                            (i) the manner in which service areas are 
                        specified pursuant to section 1148(f)(2)(A) of 
                        the Social Security Act;
                            (ii) the general selection criteria and the 
                        specific selection criteria which are 
                        applicable to employment networks under section 
                        1148(f)(1)(C) of the Social Security Act in 
                        selecting service providers;
                            (iii) specific requirements relating to 
                        annual financial reporting by employment 
                        networks pursuant to section 1148(f)(3) of the 
                        Social Security Act; and
                            (iv) the national model to which periodic 
                        outcomes reporting by employment networks must 
                        conform under section 1148(f)(4) of the Social 
                        Security Act;
                    (G) standards which must be met by individual work 
                plans pursuant to section 1148(g) of the Social 
                Security Act;
                    (H) standards which must be met by payment systems 
                required under section 1148(h) of the Social Security 
                Act, including--
                            (i) the form and manner in which elections 
                        by employment networks of payment systems are 
                        to be exercised pursuant to section 
                        1148(h)(1)(A);
                            (ii) the terms which must be met by an 
                        outcome payment system under section 
                        1148(h)(2);
                            (iii) the terms which must be met by an 
                        outcome-milestone payment system under section 
                        1148(h)(3);
                            (iv) any revision of the percentage 
                        specified in paragraph (2)(C) of section 
                        1148(h) of the Social Security Act or the 
                        period of time specified in paragraph (4)(B) of 
                        such section 1148(h); and
                            (v) annual oversight procedures for such 
                        systems; and
                    (I) procedures for effective oversight of the 
                Program by the Commissioner of Social Security, 
                including periodic reviews and reporting requirements.

SEC. 202. WORK INCENTIVES ADVISORY PANEL.

    (a) Establishment.--There is established within the Social Security 
Administration a panel to be known as the ``Work Incentives Advisory 
Panel'' (in this section referred to as the ``Panel'').
    (b) Duties of Panel.--It shall be the duty of the Panel to--
            (1) advise the Secretary of Health and Human Services, the 
        Secretary of Labor, the Secretary of Education, and the 
        Commissioner of Social Security on issues related to work 
        incentives programs, planning, and assistance for individuals 
        with disabilities, including work incentive provisions under 
        titles II, XI, XVI, XVIII, and XIX of the Social Security Act 
        (42 U.S.C. 401 et seq., 1301 et seq., 1381 et seq., 1395 et 
        seq., 1396 et seq.); and
            (2) with respect to the Ticket to Work and Self-Sufficiency 
        Program established under section 1148 of the Social Security 
        Act--
                    (A) advise the Commissioner of Social Security with 
                respect to establishing phase-in sites for such Program 
                and fully implementing the Program thereafter, the 
                refinement of access of disabled beneficiaries to 
                employment networks, payment systems, and management 
                information systems, and advise the Commissioner 
                whether such measures are being taken to the extent 
                necessary to ensure the success of the Program;
                    (B) advise the Commissioner regarding the most 
                effective designs for research and demonstration 
                projects associated with the Program or conducted 
                pursuant to section 302;
                    (C) advise the Commissioner on the development of 
                performance measurements relating to quality assurance 
                under section 1148(d)(6) of the Social Security Act; 
                and
                    (D) furnish progress reports on the Program to the 
                Commissioner and each House of Congress.
    (c) Membership.--
            (1) Number and appointment.--The Panel shall be composed of 
        12 members appointed by the Commissioner of Social Security in 
        consultation with the Speaker of the House of Representatives, 
        the Minority Leader of the House of Representatives, the 
        Majority Leader of the Senate, and the Minority Leader of the 
        Senate.
            (2) Representation.--All members appointed to the Panel 
        shall have experience or expert knowledge in the fields of, or 
        related to, work incentive programs, employment services, 
        vocational rehabilitation services, health care services, and 
        other support services for individuals with disabilities. At 
        least 7 members of the Panel shall be individuals with 
        disabilities or representatives of individuals with 
        disabilities, except that, of those 7 members, at least 5 
        members shall be current or former title II disability 
        beneficiaries or title XVI disability beneficiaries (as such 
        terms are defined in section 1148(k) of the Social Security Act 
        (as added by section 201(a) of this Act)).
            (3) Terms.--
                    (A) In general.--Each member shall be appointed for 
                a term of 4 years (or, if less, for the remaining life 
                of the Panel), except as provided in subparagraphs (B) 
                and (C). The initial members shall be appointed not 
                later than 90 days after the date of enactment of this 
                Act.
                    (B) Terms of initial appointees.--As designated by 
                the Commissioner at the time of appointment, of the 
                members first appointed--
                            (i) 6 of the members appointed under 
                        paragraph (1) shall be appointed for a term of 
                        2 years, and
                            (ii) 6 of the members appointed under 
                        paragraph (1) shall be appointed for a term of 
                        4 years.
                    (C) Vacancies.--Any member appointed to fill a 
                vacancy occurring before the expiration of the term for 
                which the member's predecessor was appointed shall be 
                appointed only for the remainder of that term. A member 
                may serve after the expiration of that member's term 
                until a successor has taken office. A vacancy in the 
                Panel shall be filled in the manner in which the 
                original appointment was made.
            (4) Basic pay.--Members shall each be paid at a rate, and 
        in a manner, that is consistent with guidelines established 
        under section 7 of the Federal Advisory Committee Act (5 U.S.C. 
        App.).
            (5) Travel expenses.--Each member shall receive travel 
        expenses, including per diem in lieu of subsistence, in 
        accordance with sections 5702 and 5703 of title 5, United 
        States Code.
            (6) Quorum.--Eight members of the Panel shall constitute a 
        quorum but a lesser number may hold hearings.
            (7) Chairperson.--The Chairperson of the Panel shall be 
        designated by the Commissioner. The term of office of the 
        Chairperson shall be 4 years.
            (8) Meetings.--The Panel shall meet at least quarterly and 
        at other times at the call of the Chairperson or a majority of 
        its members.
    (d) Director and Staff of Panel; Experts and Consultants.--
            (1) Director.--The Panel shall have a Director who shall be 
        appointed by the Commissioner and paid at a rate, and in a 
        manner, that is consistent with guidelines established under 
        section 7 of the Federal Advisory Committee Act (5 U.S.C. 
        App.).
            (2) Staff.--Subject to rules prescribed by the 
        Commissioner, the Director may appoint and fix the pay of 
        additional personnel as the Director considers appropriate.
            (3) Experts and consultants.--Subject to rules prescribed 
        by the Commissioner, the Director may procure temporary and 
        intermittent services under section 3109(b) of title 5, United 
        States Code.
            (4) Staff of federal agencies.--Upon request of the Panel, 
        the head of any Federal department or agency may detail, on a 
        reimbursable basis, any of the personnel of that department or 
        agency to the Panel to assist it in carrying out its duties 
        under this section.
    (e) Powers of Panel.--
            (1) Hearings and sessions.--The Panel may, for the purpose 
        of carrying out its duties under this section, hold such 
        hearings, sit and act at such times and places, and take such 
        testimony and evidence as the Panel considers appropriate.
            (2) Powers of members and agents.--Any member or agent of 
        the Panel may, if authorized by the Panel, take any action 
        which the Panel is authorized to take by this section.
            (3) Mails.--The Panel may use the United States mails in 
        the same manner and under the same conditions as other 
        departments and agencies of the United States.
    (f) Reports.--
            (1) Interim reports.--The Panel shall submit to the 
        President and Congress interim reports at least annually.
            (2) Final report.--The Panel shall transmit a final report 
        to the President and Congress not later than 8 years after the 
        date of enactment of this Act. The final report shall contain a 
        detailed statement of the findings and conclusions of the 
        Panel, together with its recommendations for legislation and 
        administrative actions which the Panel considers appropriate.
    (g) Termination.--The Panel shall terminate 30 days after the date 
of the submission of its final report under subsection (f)(2).
    (h) Allocation of Costs.--The costs of carrying out this section 
shall be paid from amounts made available for the administration of 
title II of the Social Security Act (42 U.S.C. 401 et seq.) and amounts 
made available for the administration of title XVI of that Act (42 
U.S.C. 1381 et seq.), and shall be allocated among those amounts as 
appropriate.

             Subtitle B--Elimination of Work Disincentives

SEC. 211. PROHIBITION ON USING WORK ACTIVITY AS A BASIS FOR REVIEW OF 
              AN INDIVIDUAL'S DISABLED STATUS.

    Section 221 of the Social Security Act (42 U.S.C. 421) is amended 
by adding at the end the following:
    ``(m)(1) In any case where an individual entitled to disability 
insurance benefits under section 223 or to monthly insurance benefits 
under section 202 based on such individual's disability (as defined in 
section 223(d)) has received such benefits for at least 24 months--
            ``(A) no continuing disability review conducted by the 
        Commissioner may be scheduled for the individual solely as a 
        result of the individual's work activity;
            ``(B) no work activity engaged in by the individual may be 
        used as evidence that the individual is no longer disabled; and
            ``(C) no cessation of work activity by the individual may 
        give rise to a presumption that the individual is unable to 
        engage in work.
    ``(2) An individual to which paragraph (1) applies shall continue 
to be subject to--
            ``(A) continuing disability reviews on a regularly 
        scheduled basis that is not triggered by work; and
            ``(B) termination of benefits under this title in the event 
        that the individual has earnings that exceed the level of 
        earnings established by the Commissioner to represent 
        substantial gainful activity.''.

SEC. 212. EXPEDITED ELIGIBILITY DETERMINATIONS FOR APPLICATIONS OF 
              FORMER LONG-TERM BENEFICIARIES THAT COMPLETED AN EXTENDED 
              PERIOD OF ELIGIBILITY.

    Section 223 of the Social Security Act (42 U.S.C. 423) is amended 
by adding at the end the following:

``Expedited Eligibility Determinations for Applications of Former Long-
  Term Beneficiaries That Completed an Extended Period of Eligibility

    ``(j) The Commissioner of Social Security shall establish a process 
for providing an expedited eligibility determination in the case of an 
application for disability insurance benefits under this section, or 
for monthly insurance benefits under section 202 based on another 
individual's disability, that is filed by an individual that 
previously--
            ``(1) received such benefits for at least 24 months; and
            ``(2) engaged in substantial gainful activity during the 
        36-month period following the end of a trial work period under 
        section 222(c).''.

     Subtitle C--Work Incentives Planning, Assistance, and Outreach

SEC. 221. WORK INCENTIVES OUTREACH PROGRAM.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.), as amended by section 201, is amended by adding after section 
1148 the following:

                   ``work incentives outreach program

    ``Sec. 1149. (a) Establishment.--
            ``(1) In general.--The Commissioner, in consultation with 
        the Work Incentives Advisory Panel established under section 
        202 of the Work Incentives Improvement Act of 1999, shall 
        establish a community-based work incentives planning and 
        assistance program for the purpose of disseminating accurate 
        information to disabled beneficiaries on work incentives 
        programs and issues related to such programs.
            ``(2) Grants, cooperative agreements, contracts, and 
        outreach.--Under the program established under this section, 
        the Commissioner shall--
                    ``(A) establish a competitive program of grants, 
                cooperative agreements, or contracts to provide 
                benefits planning and assistance, including information 
                on the availability of protection and advocacy 
                services, to disabled beneficiaries, including 
                individuals participating in the Ticket to Work and 
                Self-Sufficiency Program established under section 
                1148, the program established under section 1619, and 
                other programs that are designed to encourage disabled 
                beneficiaries to work;
                    ``(B) conduct directly, or through grants, 
                cooperative agreements, or contracts, ongoing outreach 
                efforts to disabled beneficiaries (and to the families 
                of such beneficiaries) who are potentially eligible to 
                participate in Federal or State work incentive programs 
                that are designed to assist disabled beneficiaries to 
                work, including--
                            ``(i) preparing and disseminating 
                        information explaining such programs; and
                            ``(ii) working in cooperation with other 
                        Federal, State, and private agencies and 
                        nonprofit organizations that serve disabled 
                        beneficiaries, and with agencies and 
                        organizations that focus on vocational 
                        rehabilitation and work-related training and 
                        counseling;
                    ``(C) establish a corps of trained, accessible, and 
                responsive work incentives specialists within the 
                Social Security Administration who will specialize in 
                disability work incentives under titles II and XVI for 
                the purpose of disseminating accurate information with 
                respect to inquiries and issues relating to work 
                incentives to--
                            ``(i) disabled beneficiaries;
                            ``(ii) benefit applicants under titles II 
                        and XVI; and
                            ``(iii) individuals or entities awarded 
                        grants under subparagraphs (A) or (B); and
                    ``(D) provide--
                            ``(i) training for the work incentive 
                        specialists and the individuals providing 
                        planning assistance described in subparagraph 
                        (C); and
                            ``(ii) technical assistance to 
                        organizations and entities that are designed to 
                        encourage disabled beneficiaries to return to 
                        work.
            ``(3) Coordination with other programs.--The 
        responsibilities of the Commissioner established under this 
        section shall be coordinated with other public and private 
        programs that provide information and assistance regarding 
        rehabilitation services and independent living supports and 
        benefits planning for disabled beneficiaries including the 
        program under section 1619, the plans for achieving self-
        support program (PASS), and any other Federal or State work 
        incentives programs that are designed to assist disabled 
        beneficiaries, including educational agencies that provide 
        information and assistance regarding rehabilitation, school-to-
        work programs, transition services (as defined in, and provided 
        in accordance with, the Individuals with Disabilities Education 
        Act (20 U.S.C. 1400 et seq.)), and other services.
    ``(b) Conditions.--
            ``(1) Selection of entities.--
                    ``(A) Application.--An entity shall submit an 
                application for a grant, cooperative agreement, or 
                contract to provide benefits planning and assistance to 
                the Commissioner at such time, in such manner, and 
                containing such information as the Commissioner may 
                determine is necessary to meet the requirements of this 
                section.
                    ``(B) Statewideness.--The Commissioner shall ensure 
                that the planning, assistance, and information 
                described in paragraph (2) shall be available on a 
                statewide basis.
                    ``(C) Eligibility of states and private 
                organizations.--
                            ``(i) In general.--The Commissioner may 
                        award a grant, cooperative agreement, or 
                        contract under this section to a State or a 
                        private agency or organization (other than 
                        Social Security Administration Field Offices 
                        and the State agency administering the State 
                        medicaid program under title XIX, including any 
                        agency or entity described in clause (ii), that 
                        the Commissioner determines is qualified to 
                        provide the planning, assistance, and 
                        information described in paragraph (2)).
                            ``(ii) Agencies and entities described.--
                        The agencies and entities described in this 
                        clause are the following:
                                    ``(I) Any public or private agency 
                                or organization (including Centers for 
                                Independent Living established under 
                                title VII of the Rehabilitation Act of 
                                1973, protection and advocacy 
                                organizations, client assistance 
                                programs established in accordance with 
                                section 112 of the Rehabilitation Act 
                                of 1973, and State Developmental 
                                Disabilities Councils established in 
                                accordance with section 124 of the 
                                Developmental Disabilities Assistance 
                                and Bill of Rights Act (42 U.S.C. 
                                6024)) that the Commissioner determines 
                                satisfies the requirements of this 
                                section.
                                    ``(II) The State agency 
                                administering the State program funded 
                                under part A of title IV.
                    ``(D) Exclusion for conflict of interest.--The 
                Commissioner may not award a grant, cooperative 
                agreement, or contract under this section to any entity 
                that the Commissioner determines would have a conflict 
                of interest if the entity were to receive a grant, 
                cooperative agreement, or contract under this section.
            ``(2) Services provided.--A recipient of a grant, 
        cooperative agreement, or contract to provide benefits planning 
        and assistance shall select individuals who will act as 
        planners and provide information, guidance, and planning to 
        disabled beneficiaries on the--
                    ``(A) availability and interrelation of any Federal 
                or State work incentives programs designed to assist 
                disabled beneficiaries that the individual may be 
                eligible to participate in;
                    ``(B) adequacy of any health benefits coverage that 
                may be offered by an employer of the individual and the 
                extent to which other health benefits coverage may be 
                available to the individual; and
                    ``(C) availability of protection and advocacy 
                services for disabled beneficiaries and how to access 
                such services.
            ``(3) Amount of grants, cooperative agreements, or 
        contracts.--
                    ``(A) Based on population of disabled 
                beneficiaries.--Subject to subparagraph (B), the 
                Commissioner shall award a grant, cooperative 
                agreement, or contract under this section to an entity 
                based on the percentage of the population of the State 
                where the entity is located who are disabled 
                beneficiaries.
                    ``(B) Limitations.--
                            ``(i) Per grant.--No entity shall receive a 
                        grant, cooperative agreement, or contract under 
                        this section for a fiscal year that is less 
                        than $50,000 or more than $300,000.
                            ``(ii) Total amount for all grants, 
                        cooperative agreements, and contracts.--The 
                        total amount of all grants, cooperative 
                        agreements, and contracts awarded under this 
                        section for a fiscal year may not exceed 
                        $23,000,000.
            ``(4) Allocation of costs.--The costs of carrying out this 
        section shall be paid from amounts made available for the 
        administration of title II and amounts made available for the 
        administration of title XVI, and shall be allocated among those 
        amounts as appropriate.
    ``(c) Definitions.--In this section:
            ``(1) Commissioner.--The term `Commissioner' means the 
        Commissioner of Social Security.
            ``(2) Disabled beneficiary.--The term `disabled 
        beneficiary' has the meaning given that term in section 
        1148(k)(2).''.

SEC. 222. STATE GRANTS FOR WORK INCENTIVES ASSISTANCE TO DISABLED 
              BENEFICIARIES.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.), as amended by section 221, is amended by adding after section 
1149 the following:

``state grants for work incentives assistance to disabled beneficiaries

    ``Sec. 1150. (a) In General.--Subject to subsection (c), the 
Commissioner may make payments in each State to the protection and 
advocacy system established pursuant to part C of title I of the 
Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C. 
6041 et seq.) for the purpose of providing services to disabled 
beneficiaries.
    ``(b) Services Provided.--
            ``(1) In general.--Subject to paragraph (2), services 
        provided to disabled beneficiaries pursuant to a payment made 
        under this section may include--
                    ``(A) information and advice about obtaining 
                vocational rehabilitation and employment services; and
                    ``(B) advocacy or other services that a disabled 
                beneficiary may need to secure or regain gainful 
                employment.
    ``(c) Application.--In order to receive payments under this 
section, a protection and advocacy system shall submit an application 
to the Commissioner, at such time, in such form and manner, and 
accompanied by such information and assurances as the Commissioner may 
require.
    ``(d) Amount of Payments.--
            ``(1) In general.--Subject to the amount appropriated for a 
        fiscal year for making payments under this section, a 
        protection and advocacy system shall not be paid an amount that 
        is less than--
                    ``(A) in the case of a protection and advocacy 
                system located in a State (including the District of 
                Columbia and Puerto Rico) other than Guam, American 
                Samoa, the United States Virgin Islands, and the 
                Commonwealth of the Northern Mariana Islands, the 
                greater of--
                            ``(i) $100,000; or
                            ``(ii) \1/3\ of 1 percent of the amount 
                        available for payments under this section; and
                    ``(B) in the case of a protection and advocacy 
                system located in Guam, American Samoa, the United 
                States Virgin Islands, and the Commonwealth of the 
                Northern Mariana Islands, $50,000.
            ``(2) Inflation adjustment.--For each fiscal year in which 
        the total amount appropriated to carry out this section exceeds 
        the total amount appropriated to carry out this section in the 
        preceding fiscal year, the Commissioner shall increase each 
        minimum payment under subparagraphs (A) and (B) of paragraph 
        (1) by a percentage equal to the percentage increase in the 
        total amount appropriated to carry out this section between the 
        preceding fiscal year and the fiscal year involved.
    ``(e) Annual Report.--Each protection and advocacy system that 
receives a payment under this section shall submit an annual report to 
the Commissioner and the Work Incentives Advisory Panel established 
under section 202 of the Work Incentives Improvement Act of 1999 on the 
services provided to individuals by the system.
    ``(f) Funding.--
            ``(1) Allocation of payments.--Payments under this section 
        shall be made from amounts made available for the 
        administration of title II and amounts made available for the 
        administration of title XVI, and shall be allocated among those 
        amounts as appropriate.
            ``(2) Carryover.--Any amounts allotted for payment to a 
        protection and advocacy system under this section for a fiscal 
        year shall remain available for payment to or on behalf of the 
        protection and advocacy system until the end of the succeeding 
        fiscal year.
    ``(g) Definitions.--In this section:
            ``(1) Commissioner.--The term `Commissioner' means the 
        Commissioner of Social Security.
            ``(2) Disabled beneficiary.--The term `disabled 
        beneficiary' has the meaning given that term in section 
        1148(k)(2).
            ``(3) Protection and advocacy system.--The term `protection 
        and advocacy system' means a protection and advocacy system 
        established pursuant to part C of title I of the Developmental 
        Disabilities Assistance and Bill of Rights Act (42 U.S.C. 6041 
        et seq.).''.

             TITLE III--DEMONSTRATION PROJECTS AND STUDIES

SEC. 301. EXTENSION OF DISABILITY INSURANCE PROGRAM DEMONSTRATION 
              PROJECT AUTHORITY.

    Section 505 of the Social Security Disability Amendments of 1980 
(42 U.S.C. 1310 note) is amended--
            (1) in subsection (a)(1)--
                    (A) by striking ``and (B)'' and inserting ``, 
                (B)'';
                    (B) by inserting ``, and (C) implementing sliding 
                scale benefit offsets using variations in the amount of 
                the offset as a proportion of earned income, the 
                duration of the offset period, and the method of 
                determining the amount of income earned by the 
                beneficiaries, and using state-of-the-art information 
                technology and electronic funds transfer technology to 
                streamline the reporting of data and the implementation 
                of the offsets, and developing and making available to 
                beneficiaries, their families, guardians, and 
                advocates, through the Internet information regarding 
                work incentives and assistance for beneficiaries to 
                make informed decisions regarding work,'' after 
                ``rehabilitation),''; and
                    (C) by adding at the end the following: ``The 
                Commissioner may expand the scope of any such 
                demonstration project to include any group of 
                applicants for benefits under such program with 
                impairments which may reasonably be presumed to be 
                disabling for purposes of such demonstration project, 
                and may limit any such demonstration project to any 
                such group of applicants, subject to the terms of such 
                demonstration project which shall define the extent of 
                any such presumption.'';
            (2) in subsection (a)(3), by striking ``June 10, 1996'' and 
        inserting ``June 10, 2001'';
            (3) in subsection (a)(4), by inserting ``and on or before 
        October 1, 2000,'' after ``1995,''; and
            (4) in subsection (c), by striking ``October 1, 1996'' and 
        inserting ``October 1, 2002''.

SEC. 302. DEMONSTRATION PROJECTS PROVIDING FOR REDUCTIONS IN DISABILITY 
              INSURANCE BENEFITS BASED ON EARNINGS.

    (a) Authority.--The Commissioner of Social Security shall conduct 
demonstration projects for the purpose of evaluating, through the 
collection of data, a program for title II disability beneficiaries (as 
defined in section 1148(k)(3) of the Social Security Act) under which 
each $1 of benefits payable under section 223, or under section 202 
based on the beneficiary's disability, is reduced for each $2 of such 
beneficiary's earnings that is above a level to be determined by the 
Commissioner. Such projects shall be conducted at a number of 
localities which the Commissioner shall determine is sufficient to 
adequately evaluate the appropriateness of national implementation of 
such a program. Such projects shall identify reductions in Federal 
expenditures that may result from the permanent implementation of such 
a program.
    (b) Scope and Scale and Matters To Be Determined.--
            (1) In general.--The demonstration projects developed under 
        subsection (a) shall be of sufficient duration, shall be of 
        sufficient scope, and shall be carried out on a wide enough 
        scale to permit a thorough evaluation of the project to 
        determine--
                    (A) the effects, if any, of induced entry into the 
                project and reduced exit from the project;
                    (B) the extent, if any, to which the project being 
                tested is affected by whether it is in operation in a 
                locality within an area under the administration of the 
                Ticket to Work and Self-Sufficiency Program established 
                under section 1148 of the Social Security Act; and
                    (C) the savings that accrue to the Federal Old-Age 
                and Survivors Insurance Trust Fund, the Federal 
                Disability Insurance Trust Fund, and other Federal 
                programs under the project being tested.
        The Commissioner shall take into account advice provided by the 
        Work Incentives Advisory Panel pursuant to section 
        202(b)(2)(B).
            (2) Additional matters.--The Commissioner shall also 
        determine with respect to each project--
                    (A) the annual cost (including net cost) of the 
                project and the annual cost (including net cost) that 
                would have been incurred in the absence of the project;
                    (B) the determinants of return to work, including 
                the characteristics of the beneficiaries who 
                participate in the project; and
                    (C) the employment outcomes, including wages, 
                occupations, benefits, and hours worked, of 
                beneficiaries who return to work as a result of 
                participation in the project.
        The Commissioner may include within the matters evaluated under 
        the project the merits of trial work periods and periods of 
        extended eligibility.
    (c) Waivers.--The Commissioner may waive compliance with the 
benefit provisions of title II of the Social Security Act, and the 
Secretary of Health and Human Services may waive compliance with the 
benefit requirements of title XVIII of that Act, insofar as is 
necessary for a thorough evaluation of the alternative methods 
under consideration. No such project shall be actually placed in 
operation unless at least 90 days prior thereto a written report, 
prepared for purposes of notification and information only and 
containing a full and complete description thereof, has been 
transmitted by the Commissioner to the Committee on Ways and Means of 
the House of Representatives and to the Committee on Finance of the 
Senate. Periodic reports on the progress of such projects shall be 
submitted by the Commissioner to such committees. When appropriate, 
such reports shall include detailed recommendations for changes in 
administration or law, or both, to carry out the objectives stated in 
subsection (a).
    (d) Interim Reports.--Not later than 2 years after the date of 
enactment of this Act, and annually thereafter, the Commissioner of 
Social Security shall submit to Congress an interim report on the 
progress of the demonstration projects carried out under this 
subsection together with any related data and materials which the 
Commissioner of Social Security may consider appropriate.
    (e) Final Report.--The Commissioner of Social Security shall submit 
to Congress a final report with respect to all demonstration projects 
carried out under this section not later than 1 year after their 
completion.
    (f) Expenditures.--Expenditures made for demonstration projects 
under this section shall be made from the Federal Disability Insurance 
Trust Fund and the Federal Old-Age and Survivors Insurance Trust Fund, 
as determined appropriate by the Commissioner of Social Security, and 
from the Federal Hospital Insurance Trust Fund and the Federal 
Supplementary Medical Insurance Trust Fund, as determined appropriate 
by the Secretary of Health and Human Services, to the extent provided 
in advance in appropriation Acts.

SEC. 303. SENSE OF CONGRESS REGARDING ADDITIONAL DEMONSTRATION 
              PROJECTS.

    It is the sense of Congress that the Commissioner of Social 
Security and the Secretary of Health and Human Services should 
establish additional demonstration projects to assist individuals with 
disabilities to engage in work.

SEC. 304. STUDIES AND REPORTS.

    (a) Study by General Accounting Office of Existing Disability-
Related Employment Incentives.--
            (1) Study.--As soon as practicable after the date of 
        enactment of this Act, the Comptroller General of the United 
        States shall undertake a study to assess existing tax credits 
        and other disability-related employment incentives under the 
        Americans with Disabilities Act of 1990 and other Federal laws. 
        In such study, the Comptroller General shall specifically 
        address the extent to which such credits and other incentives 
        would encourage employers to hire and retain individuals with 
        disabilities.
            (2) Report.--Not later than 3 years after the date of 
        enactment of this Act, the Comptroller General shall transmit 
        to the Committee on Ways and Means of the House of 
        Representatives and the Committee on Finance of the Senate a 
        written report presenting the results of the Comptroller 
        General's study conducted pursuant to this subsection, together 
        with such recommendations for legislative or administrative 
        changes as the Comptroller General determines are appropriate.
    (b) Study by General Accounting Office of Existing Coordination of 
the DI and SSI Programs as They Relate to Individuals Entering or 
Leaving Concurrent Entitlement.--
            (1) Study.--As soon as practicable after the date of 
        enactment of this Act, the Comptroller General of the United 
        States shall undertake a study to evaluate the coordination 
        under current law of the disability insurance program under 
        title II of the Social Security Act and the supplemental 
        security income program under title XVI of that Act, as such 
        programs relate to individuals entering or leaving concurrent 
        entitlement under such programs. In such study, the Comptroller 
        General shall specifically address the effectiveness of work 
        incentives under such programs with respect to such individuals 
        and the effectiveness of coverage of such individuals under 
        titles XVIII and XIX of the Social Security Act.
            (2) Report.--Not later than 3 years after the date of 
        enactment of this Act, the Comptroller General shall transmit 
        to the Committee on Ways and Means of the House of 
        Representatives and the Committee on Finance of the Senate a 
        written report presenting the results of the Comptroller 
        General's study conducted pursuant to this subsection, together 
        with such recommendations for legislative or administrative 
        changes as the Comptroller General determines are appropriate.
    (c) Study by General Accounting Office of the Impact of the 
Substantial Gainful Activity Limit on Return to Work.--
            (1) Study.--As soon as practicable after the date of 
        enactment of this Act, the Comptroller General of the United 
        States shall undertake a study of the substantial gainful 
        activity level applicable as of that date to recipients of 
        benefits under section 223 of the Social Security Act (42 
        U.S.C. 423) and under section 202 of that Act (42 U.S.C. 402) 
        on the basis of a recipient having a disability, and the effect 
        of such level as a disincentive for those recipients to return 
        to work. In the study, the Comptroller General also shall 
        address the merits of increasing the substantial gainful 
        activity level applicable to such recipients of benefits and 
        the rationale for not yearly indexing that level to inflation.
            (2) Report.--Not later than 2 years after the date of 
        enactment of this Act, the Comptroller General shall transmit 
        to the Committee on Ways and Means of the House of 
        Representatives and the Committee on Finance of the Senate a 
        written report presenting the results of the Comptroller 
        General's study conducted pursuant to this subsection, together 
        with such recommendations for legislative or administrative 
        changes as the Comptroller General determines are appropriate.

                     TITLE IV--TECHNICAL AMENDMENTS

SEC. 401. TECHNICAL AMENDMENTS RELATING TO DRUG ADDICTS AND ALCOHOLICS.

    (a) Clarification Relating to the Effective Date of the Denial of 
Social Security Disability Benefits to Drug Addicts and Alcoholics.--
Section 105(a)(5) of the Contract with America Advancement Act of 1996 
(Public Law 104-121; 110 Stat. 853) is amended--
            (1) in subparagraph (A), by striking ``by the Commissioner 
        of Social Security'' and ``by the Commissioner''; and
            (2) by adding at the end the following:
                    ``(D) For purposes of this paragraph, an 
                individual's claim, with respect to benefits under 
                title II of the Social Security Act based on 
                disability, which has been denied in whole before the 
                date of enactment of this Act, may not be considered to 
                be finally adjudicated before such date if, on or after 
                such date--
                            ``(i) there is pending a request for either 
                        administrative or judicial review with respect 
                        to such claim, or
                            ``(ii) there is pending, with respect to 
                        such claim, a readjudication by the 
                        Commissioner of Social Security pursuant to 
                        relief in a class action or implementation by 
                        the Commissioner of a court remand order.
                    ``(E) Notwithstanding the provisions of this 
                paragraph, with respect to any individual for whom the 
                Commissioner of Social Security does not perform the 
                entitlement redetermination before the date prescribed 
                in subparagraph (C), the Commissioner shall perform 
                such entitlement redetermination in lieu of a 
                continuing disability review whenever the Commissioner 
                determines that the individual's entitlement is subject 
                to redetermination based on the preceding provisions of 
                this paragraph, and the provisions of section 223(f) of 
                the Social Security Act shall not apply to such 
                redetermination.''.
    (b) Correction to Effective Date of Provisions Concerning 
Representative Payees and Treatment Referrals of Social Security 
Beneficiaries Who Are Drug Addicts and Alcoholics.--Section 
105(a)(5)(B) of the Contract with America Advancement Act of 1996 (42 
U.S.C. 405 note) is amended to read as follows:
                    ``(B) The amendments made by paragraphs (2) and (3) 
                shall take effect on July 1, 1996, with respect to any 
                individual--
                            ``(i) whose claim for benefits is finally 
                        adjudicated on or after the date of enactment 
                        of this Act; or
                            ``(ii) whose entitlement to benefits is 
                        based on an entitlement redetermination made 
                        pursuant to subparagraph (C).''.
    (c) Effective Dates.--The amendments made by this section shall 
take effect as if included in the enactment of section 105 of the 
Contract with America Advancement Act of 1996 (Public Law 104-121; 110 
Stat. 852 et seq.).

SEC. 402. TREATMENT OF PRISONERS.

    (a) Implementation of Prohibition Against Payment of Title II 
Benefits to Prisoners.--
            (1) In general.--Section 202(x)(3) of the Social Security 
        Act (42 U.S.C. 402(x)(3)) is amended--
                    (A) by inserting ``(A)'' after ``(3)''; and
                    (B) by adding at the end the following:
    ``(B)(i) The Commissioner shall enter into an agreement under this 
subparagraph with any interested State or local institution comprising 
a jail, prison, penal institution, or correctional facility, or 
comprising any other institution a purpose of which is to confine 
individuals as described in paragraph (1)(A)(ii). Under such 
agreement--
            ``(I) the institution shall provide to the Commissioner, on 
        a monthly basis and in a manner specified by the Commissioner, 
        the names, Social Security account numbers, dates of birth, 
        confinement commencement dates, and, to the extent available to 
        the institution, such other identifying information concerning 
        the individuals confined in the institution as the Commissioner 
        may require for the purpose of carrying out paragraph (1); and
            ``(II) the Commissioner shall pay to the institution, with 
        respect to information described in subclause (I) concerning 
        each individual who is confined therein as described in 
        paragraph (1)(A), who receives a benefit under this title for 
        the month preceding the first month of such confinement, and 
        whose benefit under this title is determined by the 
        Commissioner to be not payable by reason of confinement based 
        on the information provided by the institution, $400 (subject 
        to reduction under clause (ii)) if the institution furnishes 
the information to the Commissioner within 30 days after the date such 
individual's confinement in such institution begins, or $200 (subject 
to reduction under clause (ii)) if the institution furnishes the 
information after 30 days after such date but within 90 days after such 
date.
    ``(ii) The dollar amounts specified in clause (i)(II) shall be 
reduced by 50 percent if the Commissioner is also required to make a 
payment to the institution with respect to the same individual under an 
agreement entered into under section 1611(e)(1)(I).
    ``(iii) The provisions of section 552a of title 5, United States 
Code, shall not apply to any agreement entered into under clause (i) or 
to information exchanged pursuant to such agreement.
    ``(iv) There is authorized to be transferred from the Federal Old-
Age and Survivors Insurance Trust Fund and the Federal Disability 
Insurance Trust Fund, as appropriate, such sums as may be necessary to 
enable the Commissioner to make payments to institutions required by 
clause (i)(II).
    ``(v) The Commissioner is authorized to provide, on a reimbursable 
basis, information obtained pursuant to agreements entered into under 
clause (i) to any agency administering a Federal or federally assisted 
cash, food, or medical assistance program for eligibility purposes.''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to individuals whose period of confinement in an 
        institution commences on or after the first day of the fourth 
        month beginning after the month in which this Act is enacted.
    (b) Elimination of Title II Requirement That Confinement Stem From 
Crime Punishable by Imprisonment for More Than 1 Year.--
            (1) In general.--Section 202(x)(1)(A) of the Social 
        Security Act (42 U.S.C. 402(x)(1)(A)) is amended--
                    (A) in the matter preceding clause (i), by striking 
                ``during'' and inserting ``throughout'';
                    (B) in clause (i), by striking ``an offense 
                punishable by imprisonment for more than 1 year 
                (regardless of the actual sentence imposed)'' and 
                inserting ``a criminal offense''; and
                    (C) in clause (ii)(I), by striking ``an offense 
                punishable by imprisonment for more than 1 year'' and 
                inserting ``a criminal offense''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to individuals whose period of confinement in an 
        institution commences on or after the first day of the fourth 
        month beginning after the month in which this Act is enacted.
    (c) Conforming Title XVI Amendments.--
            (1) Fifty percent reduction in title xvi payment in case 
        involving comparable title ii payment.--Section 1611(e)(1)(I) 
        of the Social Security Act (42 U.S.C. 1382(e)(1)(I)) is 
        amended--
                    (A) in clause (i)(II), by inserting ``(subject to 
                reduction under clause (ii))'' after ``$400'' and after 
                ``$200'';
                    (B) by redesignating clauses (ii) and (iii) as 
                clauses (iii) and (iv), respectively; and
                    (C) by inserting after clause (i) the following:
    ``(ii) The dollar amounts specified in clause (i)(II) shall be 
reduced by 50 percent if the Commissioner is also required to make a 
payment to the institution with respect to the same individual under an 
agreement entered into under section 202(x)(3)(B).''.
            (2) Expansion of categories of institutions eligible to 
        enter into agreements with the commissioner.--Section 
        1611(e)(1)(I)(i) of the Social Security Act (42 U.S.C. 
        1382(e)(1)(I)(i)) is amended in the matter preceding subclause 
        (I) by striking ``institution'' and all that follows through 
        ``section 202(x)(1)(A),'' and inserting ``institution 
        comprising a jail, prison, penal institution, or correctional 
        facility, or with any other interested State or local 
        institution a purpose of which is to confine individuals as 
        described in section 202(x)(1)(A)(ii),''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect as if included in the enactment of section 
        203(a) of the Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 (Public Law 104-193; 110 Stat. 
        2186). The reference to section 202(x)(1)(A)(ii) of the Social 
        Security Act in section 1611(e)(1)(I)(i) of the Social Security 
        Act as amended by paragraph (2) shall be deemed a reference to 
        such section 202(x)(1)(A)(ii) as amended by subsection 
        (b)(1)(C).
    (d) Continued Denial of Benefits to Sex Offenders Remaining 
Confined to Public Institutions Upon Completion of Prison Term.--
            (1) In general.--Section 202(x)(1)(A) of the Social 
        Security Act (42 U.S.C. 402(x)(1)(A)) is amended--
                    (A) in clause (i), by striking ``or'' at the end;
                    (B) in clause (ii)(IV), by striking the period and 
                inserting ``, or''; and
                    (C) by adding at the end the following:
            ``(iii) immediately upon completion of confinement as 
        described in clause (i) pursuant to conviction of a criminal 
        offense an element of which is sexual activity, is confined by 
        court order in an institution at public expense pursuant to a 
        finding that the individual is a sexually dangerous person or a 
        sexual predator or a similar finding.''.
            (2) Conforming amendment.--Section 202(x)(1)(B)(ii) of the 
        Social Security Act (42 U.S.C. 402(x)(1)(B)(ii)) is amended by 
        striking ``clause (ii)'' and inserting ``clauses (ii) and 
        (iii)''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to benefits for months ending after 
        the date of enactment of this Act.

SEC 403. REVOCATION BY MEMBERS OF THE CLERGY OF EXEMPTION FROM SOCIAL 
              SECURITY COVERAGE.

    (a) In General.--Notwithstanding section 1402(e)(4) of the Internal 
Revenue Code of 1986, any exemption which has been received under 
section 1402(e)(1) of such Code by a duly ordained, commissioned, or 
licensed minister of a church, a member of a religious order, or a 
Christian Science practitioner, and which is effective for the taxable 
year in which this Act is enacted, may be revoked by filing an 
application therefore (in such form and manner, and with such official, 
as may be prescribed in regulations made under chapter 2 of such Code), 
if such application is filed no later than the due date of the Federal 
income tax return (including any extension thereof) for the applicant's 
second taxable year beginning after December 31, 1999. Any such 
revocation shall be effective (for purposes of chapter 2 of the 
Internal Revenue Code of 1986 and title II of the Social Security Act), 
as specified in the application, either with respect to the applicant's 
first taxable year beginning after December 31, 1999, or with respect 
to the applicant's second taxable year beginning after such date, and 
for all succeeding taxable years; and the applicant for any such 
revocation may not thereafter again file application for an exemption 
under such section 1402(e)(1). If the application is filed after the 
due date of the applicant's Federal income tax return for a taxable 
year and is effective with respect to that taxable year, it shall 
include or be accompanied by payment in full of an amount equal to the 
total of the taxes that would have been imposed by section 1401 of the 
Internal Revenue Code of 1986 with respect to all of the applicant's 
income derived in that taxable year which would have constituted net 
earnings from self-employment for purposes of chapter 2 of such Code 
(notwithstanding paragraph (4) or (5) of section 1402(c) of such Code) 
except for the exemption under section 1402(e)(1) of such Code.
    (b) Effective Date.--Subsection (a) shall apply with respect to 
service performed (to the extent specified in such subsection) in 
taxable years beginning after December 31, 1999, and with respect to 
monthly insurance benefits payable under title II of the Social 
Security Act on the basis of the wages and self-employment income of 
any individual for months in or after the calendar year in which such 
individual's application for revocation (as described in such 
subsection) is effective (and lump-sum death payments payable under 
such title on the basis of such wages and self-employment income in the 
case of deaths occurring in or after such calendar year).

SEC. 404. ADDITIONAL TECHNICAL AMENDMENT RELATING TO COOPERATIVE 
              RESEARCH OR DEMONSTRATION PROJECTS UNDER TITLES II AND 
              XVI.

    (a) In General.--Section 1110(a)(3) of the Social Security Act (42 
U.S.C. 1310(a)(3)) is amended by striking ``title XVI'' and inserting 
``title II or XVI''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the enactment of the Social Security 
Independence and Program Improvements Act of 1994 (Public Law 103-296; 
108 Stat. 1464).

SEC. 405. AUTHORIZATION FOR STATE TO PERMIT ANNUAL WAGE REPORTS.

    (a) In General.--Section 1137(a)(3) of the Social Security Act (42 
U.S.C. 1320b-7(a)(3)) is amended by inserting before the semicolon the 
following: ``, and except that in the case of wage reports with respect 
to domestic service employment, a State may permit employers (as so 
defined) that make returns with respect to such employment on a 
calendar year basis pursuant to section 3510 of the Internal Revenue 
Code of 1986 to make such reports on an annual basis''.
    (b) Technical Amendments.--Section 1137(a)(3) of the Social 
Security Act (42 U.S.C. 1320b-7(a)(3)) is amended--
            (1) by striking ``(as defined in section 
        453A(a)(2)(B)(iii))''; and
            (2) by inserting ``(as defined in section 453A(a)(2)(B))'' 
        after ``employers'' .
    (c) Effective Date.--The amendments made by this section shall 
apply to wage reports required to be submitted on and after the date of 
enactment of this Act.
                                 <all>
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