I
104TH CONGRESS
2D SESSION
H. R. 4230
To amend title II of the Social Security Act and the Internal Revenue
Code of 1986 to make improvements in the rehabilitation programs
provided for disabled individuals under such Act, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 27, 1996
Mr. BUNNING of Kentucky (for himself, Mr. JACOBS, Mr. GIBBONS, Mr.
CRANE, Mr. THOMAS, Mr. SHAW, Mrs. JOHNSON of Connecticut, Mr.
CAMP, Mr. SAM JOHNSON of Texas, Mr. COLLINS of Georgia, Mr.
PORTMAN, Mr. LAUGHLIN, Mr. ENGLISH
of Pennsylvania, Mr.
CHRISTENSEN, and Ms. DUNN of Washington) introduced the following
bill; which was referred to the Committee on Ways and Means
A BILL
To amend title II of the Social Security Act and the Internal
Revenue Code of 1986 to make improvements in the
rehabilitation programs provided for disabled individuals
under such Act, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Rehabilitation and Re-
turn to Work Opportunity Act of 1996’’.
SEC. 2. REHABILITATION SERVICES UNDER REHABILITA-
TION AND RETURN-TO-WORK PROGRAM.
(a) IN GENERAL.—Section 222 of the Social Security
Act (42 U.S.C. 422) is amended—
(1) by redesignating subsection (e) as sub-
section (f); and
(2) by inserting after subsection (d) the follow-
ing new subsection:
‘‘(e) REHABILITATION AND RETURN-TO-WORK PRO-
GRAM.—
‘‘(1) IN GENERAL.—There is established under
the Social Security Administration a Rehabilitation
and Return-to-Work Program.
‘‘(2) ASSESSMENT OF CAPABILITY FOR VOCA-
TIONAL
ADJUSTMENT.—Under the Program, each
determination under section 221 or sections 1631(c)
and 1633(a) that an individual is under a disability
shall be accompanied by a determination, by the offi-
cials making such determination under section 221
or sections 1631(c) and 1633(a), of whether or not
the individual is capable of vocational adjustment.
The individual shall be determined to be capable of
vocational adjustment if such officials determine
that there is a reasonable possibility that the individ-
ual will be capable, upon provision of vocational re-
habilitation services to the individual under the Pro-
gram or under a State plan approved under title I
of the Rehabilitation Act of 1973, to perform sub-
stantial gainful activity. Participation in the Pro-
gram or such a State plan by individuals determined
capable of vocational adjustment shall be mandatory,
until a determination is made by a provider of reha-
bilitation services, in the course of employment eval-
uation under paragraph (5)(B) or during the imple-
mentation of the employment plan under paragraph
(5), that the individual is no longer capable of voca-
tional adjustment or that the original determination
that the individual is capable of vocational adjust-
ment was in error. Nothing in this paragraph shall
be construed to preclude voluntary participation in
the Program by any individual determined to be
under a disability under section 221 for whom par-
ticipation is not mandatory.
‘‘(3) REGIONAL ADMINISTRATORS.—
‘‘(A) SERVICE
REGIONS.—The Program
shall provide for the division of the geographic
area of the United States into specified service
regions for purposes of the Program.
‘‘(B) SELECTION
AND
ASSIGNMENT
TO
SERVICE
REGIONS.—Under the Program, the
Commissioner of Social Security shall enter into
‘‘(i) measures for timely operation of
provider payment systems,
‘‘(ii) measures for ease of access by
recipients to vocational rehabilitation serv-
ices, and
‘‘(iii) measures for determining the
extent to which failures in obtaining voca-
tional rehabilitation for participants for
each service region, and in relation to
other service regions, fall within acceptable
parameters.
‘‘(D) PRECLUSION FROM DIRECT PARTICI-
PATION
IN
DELIVERY
OF
SERVICES
IN
OWN
SERVICE AREA.—
‘‘(i) IN GENERAL.—Agreements under
this paragraph shall conform to require-
ments which shall be provided in regula-
tions prescribed under this section which
preclude—
‘‘(I) direct participation by the
regional administrator for any service
region in the delivery of vocational re-
habilitation services to participants in
such region, and
‘‘(II) the holding by regional ad-
ministrators of financial interests in
network coordinators and service pro-
viders under their administration.
‘‘(ii) DELIVERY
OF
SERVICES
IN
OTHER AREAS PERMITTED.—No agreement
under this paragraph shall limit the ability
of a regional administrator for any service
region to operate as a service provider
under the Program in any other service re-
gion not under its administration.
‘‘(E) REFERRAL OF BENEFICIARIES AND
APPLICANTS TO PROVIDERS.—The regional ad-
ministrator for each service region shall provide
for expedited referral of beneficiaries and appli-
cants to providers of vocational rehabilitation
services in the service region. The regional ad-
ministrator shall ensure that each beneficiary or
applicant is allowed changes in providers for
good cause without being deemed to have re-
jected services under the Program, under stand-
ards which shall be provided in regulations pre-
scribed under this section in order to promote
the mutual responsibility of the provider of such
services and the recipient of such services to
avoid unnecessary disruption in the delivery of
such services by the provider. The regional ad-
ministrator for each service region shall estab-
lish and maintain lists of providers of vocational
rehabilitation services eligible for referrals in
the service region and shall make such lists
generally available to the public.
‘‘(F) QUALITY ASSURANCE.—The regional
administrator for each service region shall enter
into arrangements providing at least annually
for such reviews by consumer groups and pri-
vate auditing firms as are necessary to provide
for effective quality assurance in the provision
of services by providers in the service region
and in the administration of the milestone pay-
ment system prescribed pursuant to paragraph
(6) with respect to such providers. The primary
focus of such reviews shall be on the extent to
which the required components of employment
evaluation under paragraph (5)(B) and of indi-
vidual employment plans under paragraph
(5)(C) are reflected in the files of the recipients
of vocational rehabilitation under the Program.
Such reviews shall also determine the extent to
which such recipients have received information
required under the Program relating to the
availability of the services of providers of core
services, providers of support services, and pro-
viders of specialized services, and the extent to
which such recipients have been given the op-
portunity of personal choice regarding the selec-
tion of providers and of their own employment
goals and objectives. The regional administrator
shall publish locally the results obtained from
the arrangements entered into under this sub-
paragraph, in accordance with regulations pre-
scribed under this section, so as to effectively
educate prospective recipients of vocational re-
habilitation services as they select their provid-
ers.
‘‘(G) DISPUTE RESOLUTION.—Under regu-
lations which shall be prescribed under this sec-
tion, the regional administrator for each service
region—
‘‘(i) shall afford to any party to a dis-
pute arising under the Program a reason-
able opportunity for a full and fair review
by the regional administrator of the matter
in dispute, and
‘‘(ii) shall afford to all parties to the
dispute an opportunity to submit the dis-
pute to arbitration by a third party se-
lected by the parties from persons deter-
mined by the regional administrator as
qualified to serve as an independent arbi-
trator.
An award by an arbitrator pursuant to arbitra-
tion entered into under this subparagraph shall
be final and binding between the parties to the
arbitration but shall have no force or effect on
any other person. Nothing in this subparagraph
shall be construed to otherwise limit the appli-
cation of subsections (b) and (g) of section 205
and sections 221, 1631(c), and 1633(a) with re-
spect to any beneficiary or applicant.
‘‘(4) NETWORK COORDINATORS.—
‘‘(A) HIRING BY REGIONAL ADMINISTRA-
TORS.—The regional administrator for each
service region under the Program shall recruit,
hire, monitor, and authorize the compensation
by the Social Security Administration of such
network coordinators for the service region as
are necessary and appropriate to ensure that
adequate choices for vocational rehabilitation
services are made available to recipients of such
services under the Program.
‘‘(B) QUALIFICATIONS FOR NETWORK CO-
ORDINATORS.—The network coordinators re-
ferred to in subparagraph (A) shall consist of
organizations which have substantial expertise
and experience in the field of vocational reha-
bilitation.
‘‘(C) ENSURING
AVAILABILITY
OF
ADE-
QUATE SERVICES.—In accordance with regula-
tions which shall be prescribed under this sec-
tion, each network coordinator assigned to a
service region shall ensure that—
‘‘(i) a comprehensive array of voca-
tional rehabilitation services are available
throughout the service region, including
rural areas, and
‘‘(ii) such services are provided by
both—
‘‘(I) providers who are generalists
with respect to all populations, and
‘‘(II) providers who are special-
ists with respect to particular popu-
lations, which may include specialists
in mobility, cognitive, sensory, and
mental impairments and other areas
specified in such regulations.
A network coordinator may meet the require-
ments of this subparagraph by providing voca-
tional rehabilitation services directly, or by en-
tering into agreements with other vocational re-
habilitation service providers.
‘‘(D) REASONABLE
ACCESS
TO
SERV-
ICES.—Under standards which shall be provided
in regulations prescribed under this section,
each network coordinator shall take such meas-
ures as are necessary to ensure that each bene-
ficiary or applicant has reasonable access under
the Program to vocational rehabilitation serv-
ices, including career planning, career plan de-
velopment, vocational assessment, job training,
placement, and follow-up services and such
other vocational rehabilitation services as may
be specified in regulations issued under this sec-
tion as core services.
‘‘(E) REQUIREMENTS RELATING TO PROVI-
SION OF SERVICES.—Each network coordinator
shall take such measures as are necessary to
ensure that—
nual performance reviews measured against es-
tablished quality measures applied to recipients
of rehabilitation services. Such measures shall
include return-to-work rates, job retention,
timeliness, cost, and other factors which shall
be specified in regulations prescribed under this
section.
‘‘(G) PROVISION OF SERVICES UNDER IN-
DIVIDUAL
EMPLOYMENT
PLANS
ENSURED.—
Each network coordinator shall take such meas-
ures as are necessary to ensure that vocational
rehabilitation services provided under the Pro-
gram by, or under agreements entered into
with, the network coordinator are provided
under appropriate individual employment plans
meeting the requirements of paragraph (4).
‘‘(H) ADMINISTRATION
OF
MILESTONE
PAYMENT
SYSTEM.—Each regional adminis-
trator for a service region shall take such meas-
ures as are necessary, in accordance with regu-
lations prescribed under this section, to ensure
that any compensation received, by network co-
ordinators or by other providers under agree-
ments entered into with network coordinators,
for vocational rehabilitation services provided
under the Program in the service region com-
plies with the requirements of the milestone
payment system prescribed pursuant to para-
graph (6). Each network coordinator shall ad-
minister the milestone payment system with re-
spect to vocational rehabilitation services pro-
vided by, or under agreements with, such net-
work coordinator, including the authorization
and verification of payments to providers and
securing restitution of overpayments.
‘‘(I) ANNUAL FINANCIAL REPORTING.—In
accordance with regulations which shall be pre-
scribed under this section, each network coordi-
nator for a service region shall engage a cer-
tified public accountant, who shall prepare such
annual financial reports to the regional admin-
istrator for such region as are necessary to pro-
vide for the quality assurance required under
paragraph (3)(F).
‘‘(J) PERIODIC OUTCOMES REPORTING.—
Each network coordinator for a service region
shall prepare periodic reports, on at least an
annual basis, itemizing for the covered period
specific outcomes achieved with respect to spe-
cific services provided by the network coordina-
tor. Such report shall conform to a national
model which shall be prescribed in regulations
under this section. In such report, outcomes
shall be measured at least in part on uniform
customer satisfaction surveys. Each network co-
ordinator shall provide a copy of the latest re-
port issued by the network coordinator pursu-
ant to this subparagraph to each beneficiary or
applicant upon enrollment under the Program
for services to be received through such network
coordinator. Upon issuance of such report to
each beneficiary or applicant, a copy of such re-
port shall be maintained in the files of the net-
work coordinator pertaining to such beneficiary
or applicant. The regional administrator for
each service region shall ensure that copies of
all such reports issued under this subparagraph
are made available to the public under reason-
able terms.
‘‘(5) INDIVIDUAL EMPLOYMENT PLANS.—
‘‘(A) IN
GENERAL.—In accordance with
regulations which shall be prescribed under this
section, each provider of vocational rehabilita-
tion services under the Program shall develop,
jointly with each recipient of such services, an
employment plan meeting the requirements of
this paragraph.
‘‘(B) EMPLOYMENT EVALUATION.—In de-
vising the employment plan, the provider shall
undertake an employment evaluation with re-
spect to the recipient. Each employment evalua-
tion shall set forth in writing with respect to
the recipient at least the following:
‘‘(i) A review and assessment of—
‘‘(I) the recipient’s prior work
history,
‘‘(II) the recipient’s educational
background,
‘‘(III) the recipient’s mobility,
cognitive, sensory, and mental abilities
and limitations, and
‘‘(IV) the recipient’s interests
and aptitudes.
‘‘(ii) An inventory of the services de-
termined by the network coordinator as
most efficacious in obtaining employment
for the recipient or facilitating training for
employment for the recipient, identifying—
‘‘(I) those services which are to
be provided by providers who are gen-
eralists with respect to all populations,
and
‘‘(II) those services which are to
be provided by providers in areas of
specialty, which may include special-
ties in mobility, cognitive, sensory,
and mental impairment and other
areas specified in regulations pre-
scribed under this section.
‘‘(C) REQUIREMENTS FOR INDIVIDUAL EM-
PLOYMENT
PLANS.—Each individual employ-
ment plan shall—
‘‘(i) take into account results obtained
from the employment evaluation under-
taken pursuant to subparagraph (B), iden-
tifying any particular strengths and abili-
ties of the recipient,
‘‘(ii) set forth specific employment
goals that relate to the availability of gain-
ful activity within the economy of the serv-
ice region or the economy of any alter-
native service region within which the re-
cipient chooses to relocate,
‘‘(iii) outline specific steps and activi-
ties necessary to prepare for employment,
obtain employment, retain employment,
and pursue advancement after initial em-
ployment,
‘‘(iv) identify and promote career
paths that will allow the recipient to main-
tain a level of compensation upon obtain-
ing employment which equals or exceeds
the greater of—
‘‘(I) the minimum level of earn-
ings which, under regulations of the
Commissioner of Social Security, dem-
onstrates an ability to engage in sub-
stantial gainful activity, or
‘‘(II) the level of benefits received
by the recipient while disabled as cash
benefits under this title and title XVI
and the cash value of items and serv-
ices received under title XVIII or
under State plans under title XIX,
‘‘(v) incorporate to the extent prac-
ticable existing resources and programs,
including (but not limited to):
‘‘(I) co-enrollment in vocational
rehabilitation 
programs 
provided
under State plans approved under
title I of the Rehabilitation Act of
1973,
‘‘(II) any unexhausted training
resources available from the carrier
through which the recipient’s worker’s
compensation benefits are provided,
‘‘(III) personal resources of the
recipient,
‘‘(IV) stipends, grants, and loans
available from other Federal, State, or
local governmental programs,
‘‘(V) stipends, grants, or loans
from, or partnership agreements with,
organizations of network coordinators,
and
‘‘(VI) 
cooperative 
agreements
with prospective employers providing
for assistance with training and relat-
ed costs, and
‘‘(vi) take effect upon approval by the
recipient.
‘‘(6) MILESTONE PAYMENT SYSTEM.—
‘‘(A) IN
GENERAL.—Under regulations
prescribed under this section, the Program shall
provide for a milestone payment system, which
shall consist of an incremental fee structure
governing providers of vocational rehabilitation
services under the Program which meets the re-
quirements of this paragraph. The milestone
payment system shall provide for capitation of
costs and fees in the case of each recipient of
such services under managed competition
(thereby precluding the use of any cost-reim-
bursement, cost-plus, or other cost-based pay-
ment methodology).
‘‘(B) MILESTONES.—The milestone pay-
ment system shall provide for milestones, with
respect to all recipients of vocational rehabilita-
tion services from a provider under the Pro-
gram, which are directed toward the goal of
permanent employment and which shall serve as
the basis for graduated fee levels applicable
with respect to providers. Such milestones may
include:
‘‘(i) completion of the employment
plan developed with the recipient under
paragraph (5);
‘‘(ii) initial employment of the recipi-
ent secured after enrollment under the
Program; and
‘‘(iii) retention by the recipient of em-
ployment secured after enrollment under
the Program for specified periods of time.
‘‘(C) INITIAL
FIXED
FEES
AND
SUBSE-
QUENT
DEFERRED
RETENTION
FEES.—The
milestone payment system shall provide for—
‘‘(i) payment of a fixed fee to the net-
work coordinator upon the attainment of
each milestone by the recipient of voca-
tional rehabilitation services, as consider-
ation for the attainment by the recipient of
such milestone, and
‘‘(ii) subsequent payment of deferred
retention fees to the network coordinator
for a recipient who ceases to be entitled to
benefits under this title or ceases to be eli-
gible for benefits under title XVI by reason
of retention by the recipient of employment
after enrollment under the Program.
‘‘(D) 
BACKLOADED
PAYMENT
STRUC-
TURE.—Under regulations prescribed under
this section, the milestone payment system shall
provide for a schedule of fee payments in con-
nection with milestones attained by a recipient
prior to termination of entitlement to benefits
under this title or eligibility for benefits under
title XVI. The fee schedule shall be designed
so that the total amount of such fee payments
do not exceed 33 percent of all fees payable
under the Program with respect to such a recip-
ient if the recipient were to attain all milestones
and retain employment upon termination of
such entitlement or eligibility for a substantially
continuous period of not less than 5 years.
Such fees shall be scheduled so as to ensure
that profits attained by providers for providing
vocational rehabilitation services under the Pro-
gram are deferred generally until after reten-
tion by the recipient of employment for a sig-
nificant period of time. At least 67 percent of
all fees payable under the Program shall consist
of deferred retention fees described in subpara-
graph (C)(ii).
‘‘(E) PERIODIC REVISIONS.—Under regula-
tions prescribed under this section, any fee
schedule established under the milestone pay-
ment system shall be revised on a periodic
basis, based on information provided to the
Commissioner of Social Security by the regional
administrators under the Program and on com-
parisons made by the Commissioner of the Pro-
gram with other similar programs established
by the Federal Government.’’.
(b) CONFORMING AMENDMENTS.—
(1) AMENDMENTS TO TITLE II.—
(A) Section 222 of such Act (42 U.S.C.
422) is further amended—
(i) in subsection (a), by striking ‘‘shall
be promptly referred’’ and all that follows
through ‘‘services,’’ and inserting the fol-
lowing: ‘‘shall be promptly referred to
qualified providers of vocational rehabilita-
tion services,’’;
(ii) in subsection (b)(1)—
(I) by striking ‘‘for any month in
which such individual, if’’ and insert-
ing ‘‘for any month, if (A) such indi-
vidual is’’;
(II) by striking ‘‘refuses’’ and in-
serting ‘‘(B) participation by the indi-
vidual in the Rehabilitation and Re-
turn-to-Work Program or a State plan
approved under title I of the Rehabili-
tation Act of 1973 is mandatory
under subsection (e)(2), and (C) the
individual refuses in such month’’;
and
(III) by striking ‘‘a State plan
approved under title I of the Rehabili-
tation Act of 1973’’ each place it ap-
pears and inserting ‘‘the Program or
such a State plan’’;
(iii) in subsection (d)(1)—
(I) by inserting ‘‘to operate, ad-
minister, and provide for payments
under the Rehabilitation and Return-
to-Work Program and’’ before ‘‘to re-
imburse’’; and
(II) by inserting ‘‘under such a
State plan’’ after ‘‘under this para-
graph’’ in clause (ii);
(iv) by striking paragraph (2) of sub-
section (d) and redesignating paragraphs
(3), (4), and (5) of subsection (d) as para-
graph (2), (3), and (4), respectively;
(v) in paragraph (2) (as redesignated)
of subsection (d), by inserting ‘‘to States’’
after ‘‘Payments’’;
(vi) in paragraph (3) (as redesig-
nated) of subsection (d), by striking ‘‘for
the reimbursement of the costs of provid-
ing services to’’ and inserting ‘‘for the op-
eration and administration of the Rehabili-
tation and Return-to-Work Program with
respect to services provided to’’, and by in-
serting ‘‘and otherwise for the reimburse-
ment of the costs of providing services to
such individuals,’’ after ‘‘such individ-
uals,’’, and by striking ‘‘to be reimbursed’’
in subparagraph (A) and inserting ‘‘to be
paid for the operation and administration
of the Rehabilitation and Return-to-Work
Program and otherwise for reimburse-
ment’’; and
(vii) in paragraph (4) (as redesig-
nated) of subsection (d), by striking ‘‘sub-
section’’ each place it appears and insert-
ing ‘‘section’’.
(B) Section 225(b)(1) of such Act (42
U.S.C. 425(b)(1)) is amended by striking ‘‘a
program’’ and inserting ‘‘a program consisting
of the Rehabilitation and Return-to-Work Pro-
gram or another program’’.
(2) AMENDMENTS
TO
TITLE
XVI.—Section
1615 of such Act (42 U.S.C. 1382d) is amended—
(A) in subsection (a), by inserting after
‘‘referral of such individual’’ the following: ‘‘(A)
to the Rehabilitation and Return-to-Work Pro-
gram established under section 222(e) or (B)’’;
and
(B) in subsection (b), by inserting ‘‘under
the Rehabilitation and Return-to-Work Pro-
gram or’’ after ‘‘available to him’’.
(c) 
EFFECTIVE
DATE.—Subject 
to 
subsection
(d)(2)(C), the amendments made by subsections (a) and
(b) shall apply with respect to applications filed, and re-
views of continuing disability commenced, after 6 months
after the date of the enactment of this Act.
(d) THE REHABILITATION AND RETURN-TO-WORK
COMMISSION.—
(1) ESTABLISHMENT.—There is established in
the Social Security Administration a commission to
be known as the ‘‘Rehabilitation and Return-to-
Work Commission’’ (in this subsection referred to as
the ‘‘Commission’’).
(2) DUTIES OF COMMISSION.—
(A) IN GENERAL.—The Commission shall,
jointly with the Commissioner of Social Secu-
rity, take such actions, including issuance of
appropriate regulations under the amendments
made by this section, as are necessary for the
full implementation of such amendments as
soon as practicable after the date of the enact-
ment of this Act but not later than 3 years
after such date of enactment.
(B) SPECIFIC
PROGRAM
DEVELOPMENT
RESPONSIBILITIES.—As soon as practicable
after the date of the enactment of this Act, the
Commission shall, in direct consultation with
Commissioner of Social Security—
(i) formulate and develop for purposes
of subparagraph (A) the procedures for as-
sessing the capability of beneficiaries and
applicants for vocational rehabilitation,
(ii) formulate and develop for pur-
poses of subparagraph (A) the milestone
payment 
system 
described 
in 
section
222(e)(5) of the Social Security Act (as
amended by subsection (a)) and establish
annual oversight procedures for such sys-
tem,
(iii) formulate and develop for pur-
poses of subparagraph (A) the referral
services, quality assurance measures, and
dispute resolution procedures referred to in
subparagraphs (E), (F), and (G) (respec-
tively) of section 222(e)(3) of such Act (as
so amended),
(iv) establish, for the Rehabilitation
and Return-to-Work Program upon its es-
tablishment and for programs undertaken
in preparation for the establishment of the
Program, procedures for effective oversight
by the Commission and by the Commis-
sioner of Social Security, including periodic
reviews and reporting requirements, and
(v) establish the initial service regions
for the Rehabilitation and Return-to-Work
Program and carry out the provisions of
subparagraph (C) in each such region.
(C) GRADUATED
IMPLEMENTATION
OF
PROGRAM.—
(i) IN GENERAL.—Not later than 6
months after the date of the enactment of
this Act, the Commission, in consultation
with the Commissioner of Social Security,
shall commence implementation of the
amendments made by this Act in grad-
uated phases at pilot sites selected by the
Commission. Such pilot sites shall be se-
lected so as to ensure, prior to full imple-
mentation of the Program, the develop-
ment and refinement of referral processes,
payment systems, computer linkages, man-
agement information systems, and admin-
istrative processes necessary to provide for
full implementation of such amendments.
(ii) REQUIREMENTS.—Implementation
of the Program at each pilot site shall be
carried out on a wide enough scale to per-
mit a thorough evaluation of the alter-
native methods under consideration, so as
to ensure that the most efficacious meth-
ods are determined and in place for full
implementation of the Rehabilitation and
Return-to-Work Program on a timely
basis. In selecting pilot sites under this
subparagraph, the Commission shall take
full advantage of the results of experiments
and demonstration projects conducted pur-
suant to section 505 of the Social Security
Disability Amendments of 1980 selecting
pilot sites which have participated in such
demonstration projects (including ‘‘Project
Network’’). The Commission shall also se-
lect sites which have participated in the
‘‘Project with Industries’’ programs estab-
lished under title VI of the Rehabilitation
Act of 1973.
(iii) FULL
IMPLEMENTATION.—The
Commission, in consultation with the Com-
missioner of Social Security, shall ensure
that the Rehabilitation and Return-to-
Work Program is fully implemented as
soon as practicable after the date of the
enactment of this Act but not later than 3
years after such date of enactment.
(D) OVERSIGHT DUTIES.—After full imple-
mentation of the Rehabilitation and Return-to-
Work Program pursuant to subparagraph
(C)(iii), until termination of the Commission,
the Commission shall oversee the operation of
the Rehabilitation and Return-to-Work Pro-
gram and include the results of its oversight of
the Program in its reports to the President and
the Congress pursuant to paragraph (6). The
Commissioner of Social Security shall cooperate
with the Commission in carrying out its duties
under this subparagraph and, to the extent per-
mitted by law, provide to the Commission such
information and facilities as the Commission
may request in the performance of its duties
under this subparagraph.
(3) MEMBERSHIP.—
(A) NUMBER
AND
APPOINTMENT.—The
Commission shall be composed of 9 members
appointed by the President as follows:
(i) 3 members selected for appoint-
ment 
from 
among 
individuals 
rec-
ommended by the Speaker of the House of
Representatives.
(ii) 3 members selected for appoint-
ment 
from 
among 
individuals 
rec-
ommended by the Majority Leader of the
Senate.
(iii) 3 members selected for appoint-
ment from among such other individuals as
the President may consider appropriate.
(B) POLITICAL
AFFILIATION.—Not more
than 2 members appointed under each of
clauses (i), (ii), and (iii) of subparagraph (A)
may be of the same political party.
(C) REPRESENTATION.—Of the members
appointed under each of clauses (i), (ii), and
(iii) of subparagraph (A)—
(i) one shall represent the interests of
recipients of vocational rehabilitation serv-
ices,
(ii) one shall represent the interests of
providers of vocational rehabilitation serv-
ices, and
(iii) one shall represent the interests
of private employers.
(D) TERMS.—
(i) IN GENERAL.—Each member shall
be appointed for a term of 4 years (or, if
less, for the remaining life of the Commis-
sion), except as provided in clauses (ii) and
(iii).
(ii) 
TERMS
OF
INITIAL
AP-
POINTEES.—As designated by the Presi-
dent at the time of appointment, of the
members first appointed—
(I) 4 shall be appointed for a
term of 2 years, and
(II) 5 shall be appointed for a
term of 4 years.
(iii) VACANCIES.—Any member ap-
pointed 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 expi-
ration of that member’s term until a suc-
cessor has taken office. A vacancy in the
Commission shall be filled in the manner
in which the original appointment was
made.
(E) BASIC PAY.—Members shall each be
paid at a rate equal to the daily equivalent of
the rate of basic pay for level 4 of the Senior
Executive Service, as in effect from time to
time under section 5382 of title 5, United
States Code, for each day (including travel
time) during which they are engaged in the ac-
tual performance of duties vested in the Com-
mission.
(F) TRAVEL EXPENSES.—Each member
shall receive travel expenses, including per diem
in lieu of subsistence, in accordance with sec-
tions 5702 and 5703 of title 5, United States
Code.
(G) QUORUM.—5 members of the Commis-
sion shall constitute a quorum but a lesser
number may hold hearings.
(H) CHAIRPERSON.—The Chairperson of
the Commission shall be designated by the
President. The term of office of the Chair-
person shall be 4 years.
(I) MEETINGS.—The Commission shall
meet at least quarterly and at other times at
the call of the Chairperson or a majority of its
members.
(4) DIRECTOR AND STAFF OF COMMISSION; EX-
PERTS AND CONSULTANTS.—
(A) DIRECTOR.—The Commission shall
have a Director who shall be appointed by the
Commission. The Director shall be paid at a
rate not to exceed the maximum rate of pay
payable for GS-15 of the General Schedule.
(B) STAFF.—Subject to rules prescribed
by the Commission, the Director may appoint
and fix the pay of additional personnel as the
Director considers appropriate.
(C) EXPERTS AND CONSULTANTS.—Sub-
ject to rules prescribed by the Commission, the
Director may procure temporary and intermit-
tent services under section 3109(b) of title 5,
United States Code.
(D) STAFF
OF
FEDERAL
AGENCIES.—
Upon request of the Commission, 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 Commission
to assist it in carrying out its duties under this
Act.
(5) POWERS OF COMMISSION.—
(A) HEARINGS AND SESSIONS.—The Com-
mission may, for the purpose of carrying out
this its duties under this subsection, hold such
hearings, sit and act at such times and places,
and take such testimony and evidence as the
Commission considers appropriate.
(B) POWERS OF MEMBERS AND AGENTS.—
Any member or agent of the Commission may,
if authorized by the Commission, take any ac-
tion which the Commission is authorized to take
by this section.
(C) MAILS.—The Commission may use the
United States mails in the same manner and
under the same conditions as other departments
and agencies of the United States.
(D) 
ADMINISTRATIVE
SUPPORT
SERV-
ICES.—Upon the request of the Commission,
the Administrator of General Services shall pro-
vide to the Commission, on a reimbursable
basis, the administrative support services nec-
essary for the Commission to carry out its du-
ties under this subsection.
(6) REPORTS.—
(A) INTERIM REPORTS.—The Commission
shall submit to the President and the Congress
interim reports at least annually.
(B) FINAL
REPORT.—The Commission
shall transmit a final report to the President
and the Congress not later than 5 years after
the date of the enactment of this Act. The final
report shall contain a detailed statement of the
findings and conclusions of the Commission, to-
gether with its recommendations for legislation
and administrative actions which the Commis-
sion considers appropriate.
(7) TERMINATION.—The Commission shall ter-
minate immediately upon submission of its final re-
port under paragraph (6)(B).
(8) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated from the
Federal Old-Age and Survivors Insurance Trust
Fund and the Federal Disability Insurance Trust
Fund, as appropriate, such sums as are necessary to
carry out this subsection.
SEC. 3. MEDICARE COVERAGE FOR OASDI DISABILITY BEN-
EFIT RECIPIENTS WHO RETURN TO WORK.
(a) PROVIDING FOR 5-YEAR PERIOD OF CONTINU-
ATION COVERAGE FOR THOSE RETURNING TO WORK.—
Section 226 of the Social Security Act (42 U.S.C. 426)
is amended—
(1) in the first sentence of subsection (b), by in-
serting ‘‘(subject to subsection (h))’’ after ‘‘and end-
ing’’;
(2) by redesignating subsection (h) as sub-
section (i); and
(3) by inserting after subsection (g) the follow-
ing new subsection:
‘‘(h)(1) If an individual, in each month during a 3-
consecutive-month period (covered under paragraph
(2))—
‘‘(A)(i) is entitled to benefits described in sub-
section (b)(2)(A), (ii) is a disabled qualified railroad
retirement beneficiary (within the meaning of section
7(d) of the Railroad Retirement Act of 1974), or
(iii) is described in subsection (b)(2)(C)(i) and would
be entitled to benefits described in subsection
(b)(2)(A) if subclauses (I) and (II) of subsection
(b)(2)(C)(ii)(II) were applicable, and
‘‘(B) has earnings from employment of at least
160 times the minimum hourly wage rate in effect
under section 6(a)(1) of the Fair Labor Standards
Act of 1938 (29 U.S.C. 206(a)(1)) for the month,
then the entitlement to benefits pursuant to subsection (b)
shall not end before the earlier of (i) the end of the 5-
year period beginning with the month immediately follow-
ing such 3-consecutive-month period, or (ii) the month be-
fore the month in which the individual attains age 65.
‘‘(2) Paragraph (1) shall apply only to a 3-consecu-
tive-month period that—
‘‘(A) begins on or after the 4th month that be-
gins after the date of the enactment of the Disability
Benefits Reform Act of 1996, and
‘‘(B) does not begin (with respect to an individ-
ual) during a 5-year coverage period previously pro-
vided under such paragraph with respect to the indi-
vidual.
‘‘(3) Nothing in this subsection shall be construed as
affecting the month in which an entitlement under sub-
section (b) begins with respect to an individual.’’.
(b) MAKING PERMANENT MEDICARE SECONDARY
PAYER
RULES
RELATING
TO
DISABILITY.—Section
1862(b)(1)(A) of such Act (42 U.S.C. 1395y(b)(1)(A)) is
amended by striking clause (iii).
(c) ELIMINATION OF CURRENT CONTINUATION COV-
ERAGE RULES.—
(1) IN GENERAL.—Section 226(b) of such Act
(42 U.S.C. 426(b)) is amended—
(A) by striking ‘‘(subject to the next to last
sentence of this subsection)’’ in the first sen-
tence, and
(B) by striking the third and fourth sen-
tences.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall apply beginning with the 8th
month that begins after the date of the enactment
of this Act, except that such amendments shall not
apply to individuals who are entitled to benefits
under section 226(b) of the Social Security Act pur-
suant to the third sentence of such section for the
7th month that begins after such date of enactment.
SEC. 4. TAX CREDIT FOR EMPLOYERS WHO HIRE CERTAIN
DISABLED INDIVIDUALS.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business-related credits) is amended by
adding at the end the following new section:
‘‘SEC. 45D. CREDIT FOR EMPLOYERS WHO HIRE CERTAIN
DISABLED INDIVIDUALS.
‘‘(a) IN GENERAL.—For purposes of section 38, the
disabled employee hiring credit determined under this sec-
tion for the taxable year is an amount equal to the tax
paid or incurred by the taxpayer under section 3111 dur-
ing such taxable year with respect to wages paid for serv-
ices performed by a qualified disabled individual during
an eligible month of employment.
‘‘(b) QUALIFIED DISABLED INDIVIDUAL.—For pur-
poses of this section, the term ‘qualified disabled individ-
ual’ means any individual who is disabled within the mean-
ing of section 223 of the Social Security Act or blind or
disabled within the meaning of paragraph (2) or (3), re-
spectively, of section 1614(a) of such Act.
‘‘(c) ELIGIBLE MONTH OF EMPLOYMENT.—For pur-
poses of this section:
‘‘(1) IN GENERAL.—The term ‘eligible month of
employment’ means—
‘‘(A) the first month in which the individ-
ual is employed on a substantially full-time
basis by the employer at a monthly rate of pay
equal to at least 160 times the minimum hourly
wage rate in effect under section 6(a)(1) of the
Fair Labor Standards Act of 1938 (29 U.S.C.
206(a)(1)) for the month, and
‘‘(B) subject to paragraph (2), each suc-
ceeding month in which the individual is so em-
ployed.
‘‘(2) LIMITATION
ON
NUMBER
OF
ELIGIBLE
MONTHS.—
‘‘(A) IN GENERAL.—The number of eligi-
ble months which are taken into account under
this section with respect to the employment of
an individual (whether or not with the same
employer) during any period of disability shall
not exceed 12.
‘‘(B) MONTHS OF ELIGIBILITY TO BE CER-
TIFIED.—An employer may treat a month as
one of the 12 months referred to in subpara-
graph (A) only if the employer receives a certifi-
cate to that effect from—
‘‘(i) a provider of rehabilitation serv-
ices providing such services to the em-
ployed individual under section 222 or
1615 of the Social Security Act, or
‘‘(ii) in the case of an individual who
does not receive services from a provider of
rehabilitation services under section 222 or
1615, the Commissioner.
‘‘(C) PERIOD
OF
DISABILITY.—For pur-
poses of subparagraph (A), the term ‘period of
disability’ means the period of eligibility speci-
fied in the disability determination under sec-
tion 221(i) of the Social Security Act.
‘‘(d) DENIAL OF CREDIT FOR EMPLOYMENT OF REL-
ATIVES.—No credit shall be determined under this section
with respect to the employment of any individual described
in a subparagraph of section 51(i)(1).
‘‘(e) DENIAL OF DOUBLE BENEFIT.—No deduction
shall be allowed under this chapter for any amount taken
into account in determining the credit under this section.
‘‘(f) ELECTION NOT TO CLAIM CREDIT.—This sec-
tion shall not apply to a taxpayer for any taxable year
if such taxpayer elects to have this section not apply for
such taxable year.’’
(b) CREDIT TO BE PART OF GENERAL BUSINESS
CREDIT.—
(1) Subsection (b) of section 38 of such Code
(relating to general business credits) is amended by
striking ‘‘plus’’ at the end of paragraph (11), by
striking the period at the end of paragraph (12) and
inserting ‘‘, plus’’, and by adding after paragraph
(12) the following new paragraph: