II 

108TH CONGRESS 

2D SESSION S. 2531 

To assist displaced American workers during a jobless recovery, and for 

other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 16, 2004 

Mr. WYDEN introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To assist displaced American workers during a jobless 

recovery, and for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Keeping American 

5 Jobs at Home Act’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—The Senate finds the following: 

8 (1) The unusually prolonged period in which 

9 there has been negative job growth has caused an 

10 unprecedented number of people to refrain from ac-
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1 tively looking for work and, therefore, to be excluded 

2 from the unemployment measurement, effectively 

3 creating a ‘‘missing’’ labor force. If the unemploy4 ment rate in February 2004 took into account this 

5 missing labor force, the unemployment rate would 

6 have been 7.4 percent or 1.8 percent greater than 

7 the official rate of 5.6 percent. 

8 (2) Newly released unemployment figures show 

9 that the trend toward growing long-term unemploy10 ment continued last year, the second year after the 

11 recession ended. 

12 (3) An analysis of long-term unemployment 

13 from 2000 to 2003 shows that the number of people 

14 without work for 6 months or more has risen at the 

15 extraordinarily high rate of 198.2 percent over this 

16 period, from just over 649,000 in 2000 to nearly 

17 2,000,000 in 2003. 

18 (4) According to the Bureau of Labor Statis19 tics, in 2003, 22.1 percent of all unemployed work20 ers had been out of work for more than 6 months, 

21 an increase from 18.3 percent in 2002. This propor22 tion is higher than at comparable points in the re23 covery periods of the 4 most recent recessions, and 

24 is the highest rate since 1983. 
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1 (5) In 2005, 588,000 American jobs are pro2 jected to be moved overseas. In 2010, that number 

3 is expected to grow to 1,600,000 and by 2015, 

4 3,300,000 American jobs will be moved overseas. 

5 (6) In February 2004, the Chairman of the 

6 Council of Economic Advisors, called offshoring 

7 ‘‘just a new way of doing international trade. More 

8 things are tradable than were tradable in the past, 

9 and that’s a good thing. When a good or service is 

10 produced at lower cost in another country, it makes 

11 sense to import it rather than to produce it domesti12 cally.’’. 

13 (7) Immediate action is necessary to encourage 

14 United States companies to keep American jobs at 

15 home, to assist displaced American workers in find16 ing new, family wage jobs, and to assure that the 

17 current American workforce has the skills to com18 pete and win in the global economy. 

19 (b) PURPOSE.—The purpose of this Act is to assist 

20 displaced American workers during a jobless recovery by— 

21 (1) ensuring displaced workers in the software, 

22 information technology, and services sectors have ac23 cess to the same trade adjustment assistance and 

24 health care tax credits as displaced manufacturing 

25 workers; 
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•S 2531 IS 

1 (2) providing wage insurance for qualifying dis2 placed workers upon reemployment (to make up part 

3 of the difference between a new, lower salary and a 

4 previous, higher salary); and 

5 (3) providing a legal safe harbor for United 

6 States businesses that choose to keep American jobs 

7 at home. 

8 TITLE I—ASSISTANCE FOR DIS9 PLACED AMERICAN WORKERS 

10 SEC. 101. ELIMINATION OF TAX SUBSIDIES FOR 

11 OUTSOURCING OF AMERICAN JOBS. 

12 (a) IN GENERAL.—Part IX of subchapter B of chap13 ter 1 of the Internal Revenue Code of 1986 (relating to 

14 items not deductible) is amended by adding at the end 

15 the following new section: 

16 ‘‘SEC. 280I. ELIMINATION OF TAX SUBSIDIES FOR 

17 OUTSOURCING OF AMERICAN JOBS. 

18 ‘‘(a) IN GENERAL.—No deduction or credit shall be 

19 allowed under this chapter with respect to any applicable 

20 outsourcing item. 

21 ‘‘(b) APPLICABLE OUTSOURCING ITEM.—For pur22 poses of this section— 

23 ‘‘(1) IN GENERAL.—The term ‘applicable 

24 outsourcing item’ means any item of expense (in25 cluding any allowance for depreciation or amortiza-
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1 tion) or loss arising in connection with 1 or more 

2 transactions which— 

3 ‘‘(A) transfer the production of goods (or 

4 the performance of services) from within the 

5 United States to outside the United States, and 

6 ‘‘(B) result in the replacement of workers 

7 who reside in the United States with other 

8 workers who reside outside of the United 

9 States. 

10 ‘‘(2) CERTAIN ITEMS INCLUDED.—The term 

11 ‘applicable outsourcing item’ shall include with re12 spect to any transaction described in paragraph 

13 (1)— 

14 ‘‘(A) any amount paid or incurred in train15 ing the replacement workers described in para16 graph (1)(B), 

17 ‘‘(B) any amount paid or incurred in 

18 transporting tangible property outside the 

19 United States in connection with the transfer 

20 described in paragraph (1)(A), 

21 ‘‘(C) any expense or loss incurred in con22 nection with the sale, abandonment, or other 

23 disposition of any property or facility located 

24 within the United States and used in the pro-
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1 duction of goods (or the performance of serv2 ices) before such transfer, 

3 ‘‘(D) expenses paid or incurred for travel 

4 in connection with the planning and carrying 

5 out of any such transaction, 

6 ‘‘(E) any general or administrative ex7 penses properly allocable to any such trans8 action, 

9 ‘‘(F) any amount paid or incurred in con10 nection with any such transaction for the acqui11 sition of any property or facility located outside 

12 the United States, and 

13 ‘‘(G) any other item specified by the Sec14 retary. 

15 ‘‘(3) CERTAIN ITEMS NOT INCLUDED.—The 

16 term ‘applicable outsourcing item’ shall not include 

17 any expenses directly allocable to the sale of goods 

18 and services without the United States. 

19 ‘‘(c) REGULATIONS.—The Secretary shall prescribe 

20 such regulations as are necessary or appropriate to carry 

21 out the provisions of this section. The Secretary shall pre22 scribe initial regulations not later than 180 days after the 

23 date of enactment of this section.’’. 

24 (b) CONFORMING AMENDMENT.—The table of sec25 tions for part IX of subchapter B of chapter 1 of the In-
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•S 2531 IS 

1 ternal Revenue Code of 1986 is amended by adding at the 

2 end the following new item: 

‘‘Sec. 280I. Elimination of tax subsidies for outsourcing of American jobs.’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to transactions occurring on or 

5 after the date of enactment of this Act. 

6 SEC. 102. EXTENSION OF TRADE ADJUSTMENT ASSISTANCE 

7 TO SERVICES SECTOR. 

8 (a) ADJUSTMENT ASSISTANCE FOR WORKERS.—Sec9 tion 221(a)(1)(A) of the Trade Act of 1974 (19 U.S.C. 

10 2271(a)(1)(A)) is amended by striking ‘‘firm)’’ and insert11 ing ‘‘firm, and workers in a service sector firm or subdivi12 sion of a service sector firm or public agency)’’. 

13 (b) GROUP ELIGIBILITY REQUIREMENTS.—Section 

14 222 of the Trade Act of 1974 (19 U.S.C. 2272) is amend15 ed— 

16 (1) in subsection (a)— 

17 (A) in the matter preceding paragraph (1), 

18 by striking ‘‘agricultural firm)’’ and inserting 

19 ‘‘agricultural firm, and workers in a service sec20 tor firm or subdivision of a service sector firm 

21 or public agency)’’; 

22 (B) in paragraph (1), by inserting ‘‘or 

23 public agency’’ after ‘‘of the firm’’; and 

24 (C) in paragraph (2)— 
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•S 2531 IS 

1 (i) in subparagraph (A)(ii), by strik2 ing ‘‘like or directly competitive with arti3 cles produced’’ and inserting ‘‘or services 

4 like or directly competitive with articles 

5 produced or services provided’’; and 

6 (ii) by striking subparagraph (B) and 

7 inserting the following: 

8 ‘‘(B)(i) there has been a shift, by such 

9 workers’ firm, subdivision, or public agency to 

10 a foreign country, of production of articles, or 

11 in provision of services, like or directly competi12 tive with articles which are produced, or serv13 ices which are provided, by such firm, subdivi14 sion, or public agency; or 

15 ‘‘(ii) such workers’ firm, subdivision, or 

16 public agency has obtained or is likely to obtain 

17 such services from a foreign country.’’; 

18 (2) in subsection (b)— 

19 (A) in the matter preceding paragraph (1), 

20 by striking ‘‘agricultural firm)’’ and inserting 

21 ‘‘agricultural firm, and workers in a service sec22 tor firm or subdivision of a service sector firm 

23 or public agency)’’; 

24 (B) in paragraph (2), by inserting ‘‘or 

25 service’’ after ‘‘related to the article’’; and 
9 

•S 2531 IS 

1 (C) in paragraph (3)(A), by inserting ‘‘or 

2 services’’ after ‘‘component parts’’; 

3 (3) in subsection (c)— 

4 (A) in paragraph (3)— 

5 (i) by inserting ‘‘or services’’ after 

6 ‘‘value-added production processes’’; 

7 (ii) by striking ‘‘or finishing’’ and in8 serting ‘‘, finishing, or testing’’; 

9 (iii) by inserting ‘‘or services’’ after 

10 ‘‘for articles’’; and 

11 (iv) by inserting ‘‘(or subdivision)’’ 

12 after ‘‘such other firm’’; and 

13 (B) in paragraph (4)— 

14 (i) by striking ‘‘for articles’’ and in15 serting ‘‘, or services, used in the produc16 tion of articles or in the provision of serv17 ices’’; and 

18 (ii) by inserting ‘‘(or subdivision)’’ 

19 after ‘‘such other firm’’; and 

20 (4) by adding at the end the following new sub21 section: 

22 ‘‘(d) BASIS FOR SECRETARY’S DETERMINATIONS.— 

23 ‘‘(1) INCREASED IMPORTS.—For purposes of 

24 subsection (a)(2)(A)(ii), the Secretary may deter25 mine that increased imports of like or directly com-
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•S 2531 IS 

1 petitive articles or services exist if the workers’ firm 

2 or subdivision or customers of the workers’ firm or 

3 subdivision accounting for not less than 20 percent 

4 of the sales of the workers’ firm or subdivision cer5 tify to the Secretary that they are obtaining such ar6 ticles or services from a foreign country. 

7 ‘‘(2) OBTAINING SERVICES ABROAD.—For pur8 poses of subsection (a)(2)(B)(ii), the Secretary may 

9 determine that the workers’ firm, subdivision, or 

10 public agency has obtained or is likely to obtain like 

11 or directly competitive services from a firm in a for12 eign country based on a certification thereof from 

13 the workers’ firm, subdivision, or public agency. 

14 ‘‘(3) AUTHORITY OF THE SECRETARY.—The 

15 Secretary may obtain the certifications under para16 graphs (1) and (2) through questionnaires or in 

17 such other manner as the Secretary determines is 

18 appropriate.’’. 

19 (c) TRAINING.—Section 236(a)(2)(A) of the Trade 

20 Act of 1974 (19 U.S.C. 2296(a)(2)(A)) is amended by 

21 striking ‘‘$220,000,000’’ and inserting ‘‘$440,000,000’’. 

22 (d) DEFINITIONS.—Section 247 of the Trade Act of 

23 1974 (19 U.S.C. 2319) is amended— 

24 (1) in paragraph (1)— 
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1 (A) by inserting ‘‘or public agency’’ after 

2 ‘‘of a firm’’; and 

3 (B) by inserting ‘‘or public agency’’ after 

4 ‘‘or subdivision’’; 

5 (2) in paragraph (2)(B), by inserting ‘‘or public 

6 agency’’ after ‘‘the firm’’; 

7 (3) by redesignating paragraphs (8) through 

8 (17) as paragraphs (9) through (18), respectively; 

9 and 

10 (4) by inserting after paragraph (6) the fol11 lowing: 

12 ‘‘(7) The term ‘public agency’ means a depart13 ment or agency of a State or local government or of 

14 the Federal Government. 

15 ‘‘(8) The term ‘service sector firm’ means an 

16 entity engaged in the business of providing serv17 ices.’’. 

18 (e) TECHNICAL AMENDMENT.—Section 245(a) of the 

19 Trade Act of 1974 (19 U.S.C. 2317(a)) is amended by 

20 striking ‘‘, other than subchapter D’’. 

21 SEC. 103. WAGE INSURANCE FOR QUALIFYING DISPLACED 

22 WORKERS UPON REEMPLOYMENT. 

23 (a) IN GENERAL.—Section 246 of the Trade Act of 

24 1974 (19 U.S.C. 2318) is amended to read as follows: 
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•S 2531 IS 

1 ‘‘SEC. 246. WAGE INSURANCE FOR DISPLACED WORKERS. 

2 ‘‘(a) IN GENERAL.— 

3 ‘‘(1) ESTABLISHMENT.—The Secretary shall es4 tablish a wage insurance program for displaced 

5 workers that provides the benefits described in para6 graph (2). 

7 ‘‘(2) BENEFITS. 

8 ‘‘(A) PAYMENTS.—A State shall use the 

9 funds provided to the State under section 241 

10 to pay, for a period not to exceed 2 years, to 

11 a worker described in paragraph (3)(B), 50 per12 cent of the difference between— 

13 ‘‘(i) the wages received by the worker 

14 from reemployment; and 

15 ‘‘(ii) the wages received by the worker 

16 at the time of separation. 

17 ‘‘(B) HEALTH INSURANCE.—A worker de18 scribed in paragraph (3)(B) participating in the 

19 program established under paragraph (1) is eli20 gible to receive, for a period not to exceed 2 

21 years, a credit for health insurance costs under 

22 section 35 of the Internal Revenue Code of 

23 1986, as added by section 201 of the Trade Act 

24 of 2002. 

25 ‘‘(3) ELIGIBILITY.— 

26 ‘‘(A) FIRM ELIGIBILITY.— 
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1 ‘‘(i) IN GENERAL.—The Secretary 

2 shall provide the opportunity for a group 

3 of workers on whose behalf a petition is 

4 filed under section 221 to request that the 

5 group of workers be certified for the wage 

6 insurance program under this section at 

7 the time the petition is filed. 

8 ‘‘(ii) CRITERIA.—In determining 

9 whether to certify a group of workers as el10 igible for the wage insurance program, the 

11 Secretary shall consider the following cri12 teria: 

13 ‘‘(I) Whether the workers in the 

14 workers’ firm possess skills that are 

15 not easily transferable. 

16 ‘‘(II) The competitive conditions 

17 within the workers’ industry. 

18 ‘‘(iii) DEADLINE.—The Secretary 

19 shall determine whether the workers in the 

20 group are eligible for the wage insurance 

21 program by the date specified in section 

22 223(a). 

23 ‘‘(B) INDIVIDUAL ELIGIBILITY.—A worker 

24 in the group that the Secretary has certified as 

25 eligible for the wage insurance program may 
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•S 2531 IS 

1 elect to receive benefits under the wage insur2 ance program if the worker— 

3 ‘‘(i) is covered by a certification under 

4 subchapter A of this chapter; 

5 ‘‘(ii) obtains reemployment not more 

6 than 26 weeks after the date of separation 

7 from the adversely affected employment; 

8 and 

9 ‘‘(iii) earns not more than $50,000 a 

10 year in wages from reemployment; 

11 ‘‘(iv) is employed on a full-time basis 

12 as defined by State law in the State in 

13 which the worker is employed; and 

14 ‘‘(v) does not return to the employ15 ment from which the worker was sepa16 rated. 

17 ‘‘(4) TOTAL AMOUNT OF PAYMENTS.—The pay18 ments described in paragraph (2)(A) made to a 

19 worker may not exceed $10,000 per worker during 

20 the 2-year eligibility period. 

21 ‘‘(5) LIMITATION ON OTHER BENEFITS.—Ex22 cept as provided in section 238(a)(2)(B), if a worker 

23 is receiving payments pursuant to the program es24 tablished under paragraph (1), the worker shall not 
15 

•S 2531 IS 

1 be eligible to receive any other benefits under this 

2 title. 

3 ‘‘(b) TERMINATION.— 

4 ‘‘(1) IN GENERAL.—Except as provided in para5 graph (2), no payments may be made by a State 

6 under the program established under subsection 

7 (a)(1) after the date that is 5 years after the date 

8 on which such program is implemented by the State. 

9 ‘‘(2) EXCEPTION.—Notwithstanding paragraph 

10 (1), a worker receiving payments under the program 

11 established under subsection (a)(1) on the termi12 nation date described in paragraph (1) shall con13 tinue to receive such payments provided that the 

14 worker meets the criteria described in subsection 

15 (a)(3)(B).’’. 

16 (b) CONFORMING AMENDMENT.—The table of con17 tents for title II of the Trade Act of 1974 is amended 

18 by striking the item relating to section 246 and inserting 

19 the following: 

‘‘Sec. 246. Wage insurance for displaced workers.’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to workers certified as eligible for 

22 adjustment assistance under chapter 2 of title II of the 

23 Trade Act of 1974 on or after the date of enactment of 

24 this Act. 
16 

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1 SEC. 104. BUSINESS JUDGMENT DEFENSE FOR NON2 OUTSOURCING. 

3 Notwithstanding any other provision of law, a deter4 mination by the officers or directors of a corporation that 

5 it is in the best interest of the corporation to keep jobs 

6 within the United States and to not locate the domicile 

7 of the corporation outside of the United States, or move 

8 or carry out production or other business activities of the 

9 corporation or any portion thereof, outside of the United 

10 States, shall be considered in any action brought against 

11 the corporation based on such determination by the court 

12 of competent jurisdiction to be a matter of business judg13 ment, and such officers or directors may not be found to 

14 have violated their fiduciary duty to the corporation in any 

15 such action, based on that determination. 

16 TITLE II—IMPROVEMENT OF 

17 CREDIT FOR HEALTH INSUR18 ANCE COSTS OF ELIGIBLE IN19 DIVIDUALS 

20 SEC. 201. EXPEDITED REFUND OF CREDIT FOR PRORATED 

21 FIRST MONTHLY PREMIUM AND SUBSE22 QUENT MONTHLY PREMIUMS PAID PRIOR TO 

23 CERTIFICATION OF ELIGIBILITY FOR THE 

24 CREDIT. 

25 Section 7527 of the Internal Revenue Code of 1986 

26 (relating to advance payment of credit for health insur-
17 

•S 2531 IS 

1 ance costs of eligible individuals) is amended by adding 

2 at the end the following: 

3 ‘‘(e) EXPEDITED PAYMENT OF PREMIUMS PAID

4 PRIOR TO ISSUANCE OF CERTIFICATE.—The program es5 tablished under subsection (a) shall provide for payment 

6 to a certified individual of an amount equal to the percent7 age specified in section 35(a) of the premiums paid by 

8 such individual for coverage of the taxpayer and qualifying 

9 family members under qualified health insurance for eligi10 ble coverage months (as defined in section 35(b)) occur11 ring prior to the issuance of a qualified health insurance 

12 costs credit eligibility certificate upon receipt by the Sec13 retary of evidence of such payment by the certified indi14 vidual.’’. 

15 SEC. 202. TAA PRE-CERTIFICATION PERIOD RULE FOR PUR16 POSES OF DETERMINING WHETHER THERE IS 

17 A 63-DAY LAPSE IN CREDITABLE COVERAGE. 

18 (a) ERISA AMENDMENT.—Section 701(c)(2) of the 

19 Employee Retirement Income Security Act of 1974 (29 

20 U.S.C. 1181(c)(2)) is amended by adding at the end the 

21 following: 

22 ‘‘(C) TAA-ELIGIBLE INDIVIDUALS.— 

23 ‘‘(i) TAA PRE-CERTIFICATION PERIOD

24 RULE.—In the case of a TAA-eligible indi25 vidual, the period beginning on the date 
18 

•S 2531 IS 

1 the individual has a TAA-related loss of 

2 coverage and ending on the date the indi3 vidual is certified by the Secretary (or by 

4 any person or entity designated by the Sec5 retary) as being eligible for a qualified 

6 health insurance costs credit eligibility cer7 tificate for purposes of section 7527 of the 

8 Internal Revenue Code of 1986 shall not 

9 be taken into account in determining the 

10 continuous period under subparagraph (A). 

11 ‘‘(ii) DEFINITIONS.—The terms ‘TAA12 eligible individual’, and ‘TAA-related loss 

13 of coverage’ have the meanings given such 

14 terms in section 605(b)(4)(C).’’. 

15 (b) PHSA AMENDMENT.—Section 2701(c)(2) of the 

16 Public Health Service Act (42 U.S.C. 300gg(c)(2)) is 

17 amended by adding at the end the following: 

18 ‘‘(C) TAA-ELIGIBLE INDIVIDUALS.— 

19 ‘‘(i) TAA PRE-CERTIFICATION PERIOD

20 RULE.—In the case of a TAA-eligible indi21 vidual, the period beginning on the date 

22 the individual has a TAA-related loss of 

23 coverage and ending on the date the indi24 vidual is certified by the Secretary (or by 

25 any person or entity designated by the Sec-
19 

•S 2531 IS 

1 retary) as being eligible for a qualified 

2 health insurance costs credit eligibility cer3 tificate for purposes of section 7527 of the 

4 Internal Revenue Code of 1986 shall not 

5 be taken into account in determining the 

6 continuous period under subparagraph (A). 

7 ‘‘(ii) DEFINITIONS.—The terms ‘TAA8 eligible individual’, and ‘TAA-related loss 

9 of coverage’ have the meanings given such 

10 terms in section 2205(b)(4)(C).’’. 

11 (c) IRC AMENDMENT.—Section 9801(c)(2) of the In12 ternal Revenue Code of 1986 (relating to not counting pe13 riods before significant breaks in creditable coverage) is 

14 amended by adding at the end the following: 

15 ‘‘(D) TAA-ELIGIBLE INDIVIDUALS.— 

16 ‘‘(i) TAA PRE-CERTIFICATION PERIOD

17 RULE.—In the case of a TAA-eligible indi18 vidual, the period beginning on the date 

19 the individual has a TAA-related loss of 

20 coverage and ending on the date the indi21 vidual is certified by the Secretary of 

22 Labor (or by any person or entity des23 ignated by the Secretary of Labor) as 

24 being eligible for a qualified health insur25 ance costs credit eligibility certificate for 
20 

•S 2531 IS 

1 purposes of section 7527 shall not be taken 

2 into account in determining the continuous 

3 period under subparagraph (A). 

4 ‘‘(ii) DEFINITIONS.—The terms ‘TAA5 eligible individual’, and ‘TAA-related loss 

6 of coverage’ have the meanings given such 

7 terms in section 4980B(f)(5)(C)(iv).’’. 

8 SEC. 203. CLARIFICATION OF ELIGIBILITY OF SPOUSE OF 

9 CERTAIN INDIVIDUALS ENTITLED TO MEDI10 CARE. 

11 (a) IN GENERAL.—Subsection (b) of section 35 of the 

12 Internal Revenue Code of 1986 (defining eligible coverage 

13 month) is amended by adding at the end the following: 

14 ‘‘(3) SPECIAL RULE FOR SPOUSE OF INDI15 VIDUAL ENTITLED TO MEDICARE.—Any month 

16 which would be an eligible coverage month with re17 spect to a taxpayer (determined without regard to 

18 subsection (f)(2)(A)) shall be an eligible coverage 

19 month for any spouse of such taxpayer.’’. 

20 (b) CONFORMING AMENDMENT.—Section 

21 173(f)(5)(A)(i) of the Workforce Investment Act of 1998 

22 (29 U.S.C. 2918(f)(5)(A)(i)) is amended by inserting ‘‘(in23 cluding with respect to any month for which the eligible 

24 individual would have been treated as such but for the ap25 plication of paragraph (7)(B)(i))’’ before the comma. 
21 

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1 SEC. 204. IMPROVEMENT OF THE AFFORDABILITY OF THE 

2 CREDIT. 

3 (a) IN GENERAL.—Section 35(a) of the Internal Rev4 enue Code of 1986 (relating to credit for health insurance 

5 costs of eligible individuals) is amended by striking ‘‘65’’ 

6 and inserting ‘‘75’’. 

7 (b) CONFORMING AMENDMENT.—Section 7527(b) of 

8 such Code (relating to advance payment of credit for 

9 health insurance costs of eligible individuals) is amended 

10 by striking ‘‘65’’ and inserting ‘‘75’’. 

11 (c) EFFECTIVE DATE.—The amendments made by 

12 this section apply to taxable years beginning after Decem13 ber 31, 2004. 

14 SEC. 205. EXTENSION OF NATIONAL EMERGENCY GRANTS 

15 TO FACILITATE ESTABLISHMENT OF GROUP 

16 COVERAGE OPTION AND TO PROVIDE IN17 TERIM HEALTH COVERAGE FOR ELIGIBLE IN18 DIVIDUALS IN ORDER TO QUALIFY FOR 

19 GUARANTEED ISSUE AND OTHER CONSUMER 

20 PROTECTIONS; CLARIFICATION OF REQUIRE21 MENT FOR GROUP COVERAGE OPTION. 

22 (a) IN GENERAL.—Section 173(f) of the Workforce 

23 Investment Act of 1998 (29 U.S.C. 2918(f)) is amended— 

24 (1) by striking paragraph (1) and inserting the 

25 following: 

26 ‘‘(1) USE OF FUNDS.— 
22 

•S 2531 IS 

1 ‘‘(A) HEALTH INSURANCE COVERAGE FOR

2 ELIGIBLE INDIVIDUALS IN ORDER TO OBTAIN

3 QUALIFIED HEALTH INSURANCE THAT HAS

4 GUARANTEED ISSUE AND OTHER CONSUMER

5 PROTECTIONS.—Funds made available to a 

6 State or entity under paragraph (4)(A) of sub7 section (a) shall be used to provide an eligible 

8 individual described in paragraph (4)(C) and 

9 such individual’s qualifying family members 

10 with health insurance coverage for the 3-month 

11 period that immediately precedes the first eligi12 ble coverage month (as defined in section 35(b) 

13 of the Internal Revenue Code of 1986) in which 

14 such eligible individual and such individual’s 

15 qualifying family members are covered by quali16 fied health insurance that meets the require17 ments described in clauses (i) through (iv) of 

18 section 35(e)(2)(A) of the Internal Revenue 

19 Code of 1986 (or such longer minimum period 

20 as is necessary in order for such eligible indi21 vidual and such individual’s qualifying family 

22 members to be covered by qualified health in23 surance that meets such requirements). 

24 ‘‘(B) ADDITIONAL USES.—Funds made 

25 available to a State or entity under paragraph 
23 

•S 2531 IS 

1 (4)(A) of subsection (a) may be used by the 

2 State or entity for the following: 

3 ‘‘(i) HEALTH INSURANCE COV4 ERAGE.—To assist an eligible individual 

5 and such individual’s qualifying family 

6 members in enrolling in health insurance 

7 coverage and qualified health insurance. 

8 ‘‘(ii) ADMINISTRATIVE EXPENSES AND

9 START-UP EXPENSES TO ESTABLISH

10 GROUP COVERAGE OPTIONS FOR QUALI11 FIED HEALTH INSURANCE.—To pay the 

12 administrative expenses related to the en13 rollment of eligible individuals and such in14 dividuals’ qualifying family members in 

15 health insurance coverage and qualified 

16 health insurance, including— 

17 ‘‘(I) eligibility verification activi18 ties; 

19 ‘‘(II) the notification of eligible 

20 individuals of available health insur21 ance and qualified health insurance 

22 options; 

23 ‘‘(III) processing qualified health 

24 insurance costs credit eligibility cer25 tificates provided for under section 
24 

•S 2531 IS 

1 7527 of the Internal Revenue Code of 

2 1986; 

3 ‘‘(IV) providing assistance to eli4 gible individuals in enrolling in health 

5 insurance coverage and qualified 

6 health insurance; 

7 ‘‘(V) the development or installa8 tion of necessary data management 

9 systems; and 

10 ‘‘(VI) any other expenses deter11 mined appropriate by the Secretary, 

12 including start-up costs and on going 

13 administrative expenses, in order for 

14 the State to treat at least 1 of the op15 tions described in subparagraphs (B) 

16 through (H) of subsection (e)(1) of 

17 section 35 of the Internal Revenue 

18 Code of 1986 as qualified health in19 surance under that section. 

20 ‘‘(iii) OUTREACH.—To pay for out21 reach to eligible individuals to inform such 

22 individuals of available health insurance 

23 and qualified health insurance options, in24 cluding outreach consisting of notice to eli25 gible individuals of such options made 
25 

•S 2531 IS 

1 available after the date of enactment of 

2 this clause.’’; and 

3 (2) by striking paragraph (2) and inserting the 

4 following: 

5 ‘‘(2) QUALIFIED HEALTH INSURANCE.—For 

6 purposes of this subsection and subsection (g), the 

7 term ‘qualified health insurance’ has the meaning 

8 given that term in section 35(e) of the Internal Rev9 enue Code of 1986.’’. 

10 (b) FUNDING.—Section 174(c)(1) of the Workforce 

11 Investment Act of 1998 (29 U.S.C. 2919(c)(1)) is amend12 ed— 

13 (1) in the paragraph heading, by striking ‘‘AU14 THORIZATION AND APPROPRIATION FOR FISCAL

15 YEAR 2002’’ and inserting ‘‘APPROPRIATIONS’’; and 

16 (2) by striking subparagraph (A) and inserting 

17 the following: 

18 ‘‘(A) to carry out subsection (a)(4)(A) of 

19 section 173— 

20 ‘‘(i) $10,000,000 for fiscal year 2002; 

21 and 

22 ‘‘(ii) $300,000,000 for the period of 

23 fiscal years 2004 through 2006; and’’. 

24 (c) REPORT REGARDING FAILURE TO COMPLY WITH

25 REQUIREMENTS FOR EXPEDITED APPROVAL PROCE-
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1 DURES.—Section 173(f) of the Workforce Investment Act 

2 of 1998 (29 U.S.C. 2918(f)) is amended by adding at the 

3 end the following: 

4 ‘‘(8) REPORT FOR FAILURE TO COMPLY WITH

5 REQUIREMENTS FOR EXPEDITED APPROVAL PROCE6 DURES.—If the Secretary fails to make the notifica7 tion required under clause (i) of paragraph (3)(A) 

8 within the 15-day period required under that clause, 

9 or fails to provide the technical assistance required 

10 under clause (ii) of such paragraph within a timely 

11 manner so that a State or entity may submit an ap12 proved application within 2 months of the date on 

13 which the State or entity’s previous application was 

14 disapproved, the Secretary shall submit a report to 

15 Congress explaining such failure.’’. 

16 (d) CLARIFICATION OF REQUIREMENT TO ESTAB17 LISH GROUP COVERAGE OPTION.—Subsection (g) of sec18 tion 35 of the Internal Revenue Code of 1986 (relating 

19 to special rules) is amended— 

20 (1) by redesignating paragraph (9) as para21 graph (11); and 

22 (2) by inserting after paragraph (8) the fol23 lowing: 

24 ‘‘(9) REQUIREMENT TO ESTABLISH GROUP COV25 ERAGE OPTION.—With respect to a State, no credit 
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1 shall be allowed under this section to an individual 

2 who resides in that State on or after the date that 

3 is 2 years after the date of the enactment of this 

4 paragraph unless, not later than such date, the 

5 State has elected to have at least 1 of the options 

6 described in subparagraphs (B) through (H) of sub7 section (e)(1) treated as qualified health insurance 

8 under this section. 

9 ‘‘(10) GROUP HEALTH PLAN.—For purposes of 

10 this section, the term ‘group health plan’ has the 

11 meaning given that term in section 5000(b)(1).’’. 

12 (e) TECHNICAL AMENDMENT.—Effective as if in13 cluded in the enactment of the Trade Act of 2002 (Public 

14 Law 107–210; 116 Stat. 933), subsection (f) of section 

15 203 of that Act is repealed. 

16 SEC. 206. ALIGNMENT OF COBRA COVERAGE WITH TAA PE17 RIOD FOR TAA-ELIGIBLE INDIVIDUALS. 

18 (a) ERISA.—Section 605(b) of the Employee Retire19 ment Income Security Act of 1974 (29 U.S.C. 1165(b)) 

20 is amended— 

21 (1) in the subsection heading, by inserting 

22 ‘‘AND COVERAGE’’ after ‘‘ELECTION’’; and 

23 (2) in paragraph (2)— 

24 (A) in the paragraph heading, by inserting 

25 ‘‘AND PERIOD’’ after ‘‘COMMENCEMENT’’; 
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1 (B) by striking ‘‘and shall’’ and inserting 

2 ‘‘, shall’’; and 

3 (C) by inserting ‘‘, and in no event shall 

4 the maximum period required under section 

5 602(2)(A) be less than the period during which 

6 the individual is a TAA-eligible individual’’ be7 fore the period at the end. 

8 (b) INTERNAL REVENUE CODE OF 1986.—Section 

9 4980B(f)(5)(C) of the Internal Revenue Code of 1986 is 

10 amended— 

11 (1) in the subparagraph heading, by inserting 

12 ‘‘AND COVERAGE’’ after ‘‘ELECTION’’; and 

13 (2) in clause (ii)— 

14 (A) in the clause heading, by inserting 

15 ‘‘AND PERIOD’’ after ‘‘COMMENCEMENT’’; 

16 (B) by striking ‘‘and shall’’ and inserting 

17 ‘‘, shall’’; and 

18 (C) by inserting ‘‘, and in no event shall 

19 the maximum period required under paragraph 

20 (2)(B)(i) be less than the period during which 

21 the individual is a TAA-eligible individual’’ be22 fore the period at the end. 

23 (c) PUBLIC HEALTH SERVICE ACT.—Section 

24 2205(b) of the Public Health Service Act (42 U.S.C. 

25 300bb–5(b)) is amended— 
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1 (1) in the subsection heading, by inserting 

2 ‘‘AND COVERAGE’’ after ‘‘ELECTION’’; and 

3 (2) in paragraph (2)— 

4 (A) in the paragraph heading, by inserting 

5 ‘‘AND PERIOD’’ after ‘‘COMMENCEMENT’’; 

6 (B) by striking ‘‘and shall’’ and inserting 

7 ‘‘, shall’’; and 

8 (C) by inserting ‘‘, and in no event shall 

9 the maximum period required under section 

10 2202(2)(A) be less than the period during 

11 which the individual is a TAA-eligible indi12 vidual’’ before the period at the end. 

Æ