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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 534 Introduced in House (IH)]

105th CONGRESS
  1st Session
                                H. R. 534

To provide as a demonstration project a Transition to Work Program for 
   individuals entitled to disability benefits under title II of the 
              Social Security Act, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            February 4, 1997

 Mrs. Kennelly of Connecticut introduced the following bill; which was 
  referred to the Committee on Ways and Means, and in addition to the 
     Committee on Education and the Workforce, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL

 
To provide as a demonstration project a Transition to Work Program for 
   individuals entitled to disability benefits under title II of the 
              Social Security Act, 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.

    This Act may be cited as the ``Transition to Work Act of 1997''.

SEC. 2. TRANSITION TO WORK PROGRAM.

    (a) In General.--The Commissioner of Social Security shall 
establish as a demonstration project, in accordance with this section, 
a Transition to Work Program (hereinafter in this section referred to 
as the ``TWP'') in such localities as the Commissioner considers 
appropriate to meet the purpose of the TWP. The purpose of the TWP 
shall be to determine the best practicable means of providing 
individuals entitled to disability benefits prompt access to vocational 
rehabilitation services in order to move them from disability benefits 
to work.
    (b) TWOs Provided to Beneficiaries.--
            (1) In general.--The Commissioner shall include with each 
        notification to an individual covered under the TWP of--
                    (A) the individual's entitlement to disability 
                benefits, or
                    (B) the commencement of a review of the 
                individual's case for purposes of continuing 
                eligibility,
        a ticket for work opportunity (hereinafter in this section 
        referred to as a `TWO'), together with an explanation of the 
        purpose of, and the method of using, the TWO under this 
        subsection.
            (2) TWO defined.--For purposes of this section, the terms 
        ``ticket for work opportunity'' and ``TWO'' mean a document 
        issued by the Commissioner which provides that, upon 
        presentation by the individual named therein to a provider of 
        vocational rehabilitation services participating in the TWP, 
        compensation will be provided to the provider, under the terms 
        of the TWP, for the services rendered to the individual.
            (3) Commencement of twp and individuals covered.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the TWP shall apply with respect to beneficiaries, 
                under any entitlement to benefits--
                            (i) whose first month of such entitlement 
                        commences after the date of the enactment of 
                        this Act or who receive after such date a 
                        notice of a review for purposes of continuing 
                        eligibility, and
                            (ii) who reside, on the date of the 
                        establishment of the TWP, in the localities 
                        affected by the TWP.
                The Commissioner shall establish the TWP not later than 
                January 1, 1998.
                    (B) Current beneficiaries.--Individuals who are 
                entitled to disability benefits for the month in which 
                this Act is enacted and who reside in a locality 
                affected by the TWP may apply to the Commissioner, in 
such form and manner as shall be prescribed by the Commissioner, for 
inclusion in the TWP. Any such individual making such an application 
shall be treated as an individual covered by the TWP, and the 
Commissioner shall issue a TWO to such individual as soon as 
practicable after receipt of the application.
    (d) Redemption of TWOs.--
            (1) In general.--After receipt, by a participating 
        provider, of a TWO from the individual to whom the TWO was 
        issued, the provider may redeem the TWO, upon presentation to 
        the Commissioner, as provided in this subsection.
            (2) Timing and amount of payments to providers.--
                    (A) In general.--The TWP shall provide for payments 
                from the Federal Disability Insurance Trust Fund to the 
                provider, as compensation for the provision of services 
                to an individual, upon presentation of the TWO to the 
                Commissioner, as follows:
                            (i) upon initial placement of the 
                        individual in employment while the individual 
                        is in the course of receiving the services from 
                        the provider, a milestone payment to the 
                        provider in a fixed dollar amount which shall 
                        be established by the Commissioner from time to 
                        time in accordance with the terms of the TWP; 
                        and
                            (ii) after commencement by the individual 
                        of a period of work, payment upon completion of 
                        each calendar quarter beginning or ending 
                        during such period of work, of an amount equal 
                        to 50 percent of the total amount of the 
                        benefit payments which were not payable for any 
                        month in such quarter but would have been 
                        payable but for the cessation of benefit 
                        payments by reason of the individual's 
                        engagement in, or ability to engage in, 
                        substantial gainful activity.
                    (B) Period of work defined.--For purposes of this 
                paragraph, the term ``period of work'' means, in 
                connection with any entitlement to disability benefits, 
                a period beginning with the month following the first 
                month for which such benefits are not payable by reason 
                of engagement in, or a determination of ability to 
                engage in, substantial gainful activity, and ending 
                with the end of the 60th month following such first 
                month for which such benefits are not payable.
                    (C) Adjustments by the commissioner.--The 
                Commissioner may alter the percentage specified in 
                subparagraph (A)(ii), the length of the period 
                specified in subparagraph (B), or both, to the extent 
                that the Commissioner determines that such an 
                alteration would not otherwise provide an adequage 
                incentive for work.
                    (D) Certification of payments.--Payments under 
                subparagraph (A) shall be made by means of 
                certification by the Commissioner to the Managing 
                Trustee of the Federal Disability Insurance Trust Fund 
                of the amount of the payments. The Managing Trustee 
                shall make the payments from the Trust Fund in 
                accordance with the certification.
            (3) Changing of providers.--The Commissioner shall make 
        provision, upon the request of an individual who has been 
        issued a TWO, for changing the provider receiving compensation 
        under the TWP in connection with the TWO.
    (e) Provider Requirements.--
            (1) Certification of providers.--A provider of vocational 
        rehabilitation services may participate in the TWP only if the 
        provider is certified under the TWP. Under the TWP, any such 
        provider shall be certified, irrespective of whether the 
        provider is public or private, if the provider--
                    (A) meets criteria established under the TWP to 
                ensure to the satisfaction of the Commissioner 
                reasonable access to providers who meet applicable 
                requirements for professional certification,
                    (B) includes in the services provided a broad range 
                of vocational rehabilitation services, including job 
                training and liaison and placement with employers, and
                    (C) otherwise maintains, in the provider's practice 
                and procedures, compliance with the requirements of 
                this section and the terms of the TWP.
            (2) Expiration, cancellation, renewal.--The TWP shall 
        provide for reasonable terms for expiration, cancellation, and 
        renewal of certifications under the TWP.
            (3) Lists of providers.--The Commissioner shall establish 
        and maintain for each locality affected by the TWP lists of 
        providers of vocational rehabilitation services who are 
        certified under the TWP and shall make the lists generally 
        available to the public.
    (f) Transition to Work Plans.--Providers of vocational 
rehabilitation services under the TWP shall be required under the terms 
of the TWP to establish and maintain an individual transition to work 
plan for each individual receiving the services. Each such plan shall 
be developed jointly by the individual and the provider, taking into 
account an employment evaluation which shall be conducted in accordance 
with requirements of the TWP. An individual transition to work plan 
shall take effect only upon approval by the individual.
    (g) Appeals.--Any provider dissatisfied with any determination of 
the Commissioner under this section shall be entitled to a hearing 
thereon by the Commissioner to the same extent as is provided in 
section 205(b) of the Social Security Act with respect to decisions of 
the Commissioner, and to judicial reivew of the Commissioner's final 
decision after such hearing as is provided in section 205(g) of such 
Act.
    (h) Disability Benefit Defined.--For purposes of this section, the 
term ``disability benefit'' means a benefit under section 223 of the 
Social Security Act or a benefit under section 202 of such Act based on 
the disability of the beneficiary.

SEC. 3. DISABLED WORKER TAX CREDIT.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 35 as section 36 and by inserting 
after section 34 the following new section:

``SEC. 35. DISABLED WORKER CREDIT.

    ``(a) Allowance of Credit.--In the case of an eligible disabled 
individual, there shall be allowed as a credit against the tax imposed 
by this subtitle for the taxable year an amount equal to the credit 
percentage of so much of such individual's earned income for the 
taxable year as does not exceed the earned income amount.
    ``(b) Phaseout of Credit.--The amount of the credit allowable to a 
taxpayer under subsection (a) for any taxable year shall not exceed the 
excess (if any) of--
            ``(1) the credit percentage of the earned income amount, 
        over
            ``(2) the phaseout percentage of so much of the earned 
        income of the taxpayer for the taxable year as exceeds the 
        phaseout amount.
    ``(c) Percentages and Amounts.--For purposes of this section--
            ``(1) Percentages.--The credit percentage and the phaseout 
        percentage shall be determined as follows:
      

                                                                        
        ``In the case of an          The credit          The phaseout   
 eligible disabled individual      percentage is:       percentage is:  
             with:                                                      
    No qualifying children....           15                 17.14       
    1 qualifying child........          7.14                 3.74       
    2 or more qualifying                                                
     children.................          7.58                 4.5.       
                                                                        

            ``(2) Amounts.--The earned income amount and the phaseout 
        amount shall be determined as follows:
      

                                                                        
        ``In the case of an      The earned income   The phaseout amount
 eligible disabled individual        amount is:              is:        
             with:                                                      
    No qualifying children....         $8,000              $11,000      
    1 qualifying child........         $7,000              $12,430      
    2 or more qualifying               $9,890              $12,680.     
     children.                                                          
                                                                        

    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Eligible disabled individual.--The term `eligible 
        disabled individual' means any individual if--
                    ``(A) for any month during the taxable year or any 
                prior month after December 1996, such individual 
                received disability insurance benefits under section 
                223 of the Social Security Act or benefits under 
                subsection (d), (e), or (f) of section 202 of such Act 
                based on such individual's disability, and
                    ``(B) for any subsequent month during such taxable 
                year, such individual was not entitled to such benefits 
                solely on the basis of a determination by the 
                Commissioner of Social Security under section 223(d)(4) 
                of the Social Security Act that earnings derived by 
                such individual from services demonstrated such 
                individual's ability to engage in substantial gainful 
                activity.
            ``(2) Earned income.--The term `earned income' has the 
        meaning given to such term by section 32(c)(2).
            ``(3) Qualifying child.--The term `qualifying child' has 
        the meaning given to such term by section 32(c)(3).
            ``(4) Certain rules to apply.--Rules similar to the 
        following rules of section 32 shall apply for purposes of this 
        section:
                    ``(A) Subsection (c)(1)(E) (relating to individuals 
                claiming benefits of section 911).
                    ``(B) Subsection (c)(1)(F) (relating to limitation 
                on eligibility of nonresident aliens).
                    ``(C) Subsections (c)(1)(F)(i) and (l) (relating to 
                identification number requirement).
                    ``(D) Subsection (c)(4) (relating to treatment of 
                military personnel stationed outside the United 
                States).
                    ``(E) Subsection (e) (relating to taxable year must 
                be full taxable year).
                    ``(F) Subsection (f) (relating to amount of credit 
                to be determined under tables).
            ``(5) Joint returns.--In the case of a joint return, this 
        section shall be applied separately with respect to the earned 
        income of each spouse.
            ``(6) Part-year eligibility.--If the period referred to in 
        paragraph (1)(B) is less than the entire taxable year, the 
        credit allowed under this section for such taxable year shall 
        not exceed the amount which bears the same ratio to the amount 
        of credit which would be allowed under this section but for 
        this paragraph as such period bears to the entire taxable year.
    ``(e) Inflation Adjustments.--
            ``(1) In general.--In the case of any taxable year 
        beginning after 1998, each of the dollar amounts in subsection 
        (c)(2) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3), for the calendar year in which 
                the taxable year begins, determined by 
substituting `calendar year 1997' for `calendar year 1992' in 
subparagraph (B) thereof.
            ``(2) Rounding.--If any dollar amount, after being 
        increased under paragraph (1), is not a multiple of $10, such 
        dollar amount shall be rounded to the nearest multiple of 
        $10.''
    (b) Advance Payment of Credit.--Chapter 25 of such Code (relating 
to general provisions relating to employment taxes) is amended by 
inserting after section 3507 the following new section:

``SEC. 3507A. ADVANCE PAYMENT OF DISABLED WORKER CREDIT.

    ``(a) General Rule.--Except as otherwise provided in this section, 
every employer making payment of wages to an employee with respect to 
whom a disabled worker credit eligibility certificate is in effect 
shall, at the time of paying such wages, make an additional payment 
equal to the disabled worker credit advance amount of such employee.
    ``(b) Disabled Worker Credit Eligibility Certificate.--For purposes 
of this title, a disabled worker credit eligibility certificate is a 
statement furnished by an employee to the employer which--
            ``(1) certifies that the employee will be eligible to 
        receive the credit provided by section 35 for the taxable year,
            ``(2) certifies that the employee does not have a disabled 
        worker credit eligibility certificate in effect for the 
        calendar year with respect to the payment of wages by another 
        employer, and
            ``(3) states whether or not the employee's spouse has such 
        a certificate in effect.
For purposes of this section, a certificate shall be treated as being 
in effect with respect to a spouse if such a certificate will be in 
effect on the first status determination date following the date on 
which the employee furnishes the statement in question.
    ``(c) Disabled Worker Credit Advance Amount.--
            ``(1) In general.--For purposes of this title, the term 
        `disabled worker credit advance amount' means, with respect to 
        any payroll period, the amount determined--
                    ``(A) on the basis of the employee's wages from the 
                employer for such period, and
                    ``(B) in accordance with tables prescribed by the 
                Secretary.
            ``(2) Advance amount tables.--The tables referred to in 
        paragraph (1)(B)--
                    ``(A) shall be similar in form to the tables 
                prescribed under section 3402 and, to the maximum 
                extent feasible, shall be coordinated with such tables 
                and the tables prescribed under section 3507(c), and
                    ``(B) shall be structured to carry out the 
                principles of subparagraphs (B) and (C) of section 
                3507(c)(2).
    ``(d) Disabled Worker Credit.--For purposes of this section, the 
term `disabled worker credit' means the credit allowable by section 35.
    ``(e) Other Rules.--For purposes of this section, rules similar to 
the rules of subsections (d) and (e) of section 3507 shall apply.
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the purposes of this section.''.
    (c) Technical Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before the period ``or 
        from section 35 of such Code''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
the last item and inserting the following new items:

                              ``Sec. 35. Disabled worker credit.''
                              ``Sec. 36. Overpayments of tax.''
            (3) The table of sections for chapter 25 of such Code is 
        amended by inserting after the item relating to section 3507 
        the following new item:

                              ``Sec. 3507A. Advance payment of disabled 
                                        worker credit.''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after December 31, 1997.
            (2) Advance payments.--The amendment made by subsection (b) 
        shall apply to remuneration paid after December 31, 1997.

SEC. 4. IMPROVED MEDICARE COVERAGE.

    (a) Providing for 5-Year Period of Continuation Coverage For Those 
Returning to Work.--
            (1) In general.--The next to last sentence of section 
        226(b) of the Social Security Act (42 U.S.C. 426) is amended--
                    (A) by striking ``throughout all of which'' and 
                inserting ``throughout the first 24 months of which'', 
                and
                    (B) by striking ``24 such months'' and inserting 
                ``48 months''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to months beginning with January 1998 and shall not 
        apply to individuals with respect to any period of entitlement 
        to benefits under section 226(b) of the Social Security Act 
        that terminated before December 31, 1997.
    (b) Establishing Ceiling on Premiums for Disabled Buy-In 
Individuals.--
            (1) In general.--Section 1818A(d)(2) of the Social Security 
        Act (42 U.S.C. 1395i-2a(d)(2)) is amended by striking the 
        period at the end and inserting the following: ``; except 
        that--
            ``(A) the amount of an individual's monthly premium for any 
        month in a calendar year under this section shall not exceed 
        \1/12\ of 10 percent of the amount (if any) by which--
                    ``(i) such individual's earned income (as defined 
                in section 32(c) of the Internal Revenue Code of 1986) 
                for taxable year ending in the preceding calendar year, 
                exceeded
                    ``(ii) $15,000; and
            ``(B) section 1818(d)(4) shall be applied without regard to 
        subparagraph (A) of this paragraph.
The Secretary shall provide for such adjustments to premiums charged as 
may be necessary to carry out subparagraph (A).''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply with respect to premiums for months beginning with 
        January 1998.
                                 <all>
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