I
107TH CONGRESS
2D SESSION
H. R. 3841
To provide assistance to displaced workers by extending unemployment bene-
fits and by providing a credit for health insurance costs, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 5, 2002
Mr. THOMAS introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committees on Energy
and Commerce, and the Budget, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To provide assistance to displaced workers by extending un-
employment benefits and by providing a credit for health
insurance costs, 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; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Displaced Worker Assistance Act of 2002’’.
(b) TABLE OF CONTENTS.—
TITLE I—UNEMPLOYMENT ASSISTANCE
Sec. 101. Short title.
Sec. 102. Federal-State agreements.
Sec. 103. Temporary extended unemployment compensation account.
Sec. 104. Payments to States having agreements for the payment of temporary
extended unemployment compensation.
Sec. 105. Financing provisions.
Sec. 106. Fraud and overpayments.
Sec. 107. Definitions.
Sec. 108. Applicability.
Sec. 109. Special Reed Act transfer in fiscal year 2002.
TITLE II—DISPLACED WORKER HEALTH INSURANCE CREDIT
Sec. 201. Displaced worker health insurance credit.
Sec. 202. Advance payment of displaced worker health insurance credit.
TITLE III—SOCIAL SECURITY HELD HARMLESS; BUDGETARY
TREATMENT OF ACT
Sec. 301. No impact on social security trust funds.
Sec. 302. Emergency designation.
TITLE I—UNEMPLOYMENT
ASSISTANCE
SEC. 101. SHORT TITLE.
This title may be cited as the ‘‘Temporary Extended
Unemployment Compensation Act of 2002’’.
SEC. 102. FEDERAL-STATE AGREEMENTS.
(a) IN GENERAL.—Any State which desires to do so
may enter into and participate in an agreement under this
title with the Secretary of Labor (in this title referred to
as the ‘‘Secretary’’). Any State which is a party to an
agreement under this title may, upon providing 30 days’
written notice to the Secretary, terminate such agreement.
(b) PROVISIONS OF AGREEMENT.—Any agreement
under subsection (a) shall provide that the State agency
of the State will make payments of temporary extended
unemployment compensation to individuals who—
(1) have exhausted all rights to regular com-
pensation under the State law or under Federal law
with respect to a benefit year (excluding any benefit
year that ended before March 15, 2001);
(2) have no rights to regular compensation or
extended compensation with respect to a week under
such law or any other State unemployment com-
pensation law or to compensation under any other
Federal law;
(3) are not receiving compensation with respect
to such week under the unemployment compensation
law of Canada; and
(4) filed an initial claim for regular compensa-
tion on or after March 15, 2001.
(c) EXHAUSTION OF BENEFITS.—For purposes of
subsection (b)(1), an individual shall be deemed to have
exhausted such individual’s rights to regular compensation
under a State law when—
(1) no payments of regular compensation can
be made under such law because such individual has
received all regular compensation available to such
individual based on employment or wages during
such individual’s base period; or
(2) such individual’s rights to such compensa-
tion have been terminated by reason of the expira-
tion of the benefit year with respect to which such
rights existed.
(d) WEEKLY BENEFIT AMOUNT, ETC.—For purposes
of any agreement under this title—
(1) the amount of temporary extended unem-
ployment compensation which shall be payable to
any individual for any week of total unemployment
shall be equal to the amount of the regular com-
pensation (including dependents’ allowances) payable
to such individual during such individual’s benefit
year under the State law for a week of total unem-
ployment;
(2) the terms and conditions of the State law
which apply to claims for regular compensation and
to the payment thereof shall apply to claims for tem-
porary extended unemployment compensation and
the payment thereof, except—
(A) that an individual shall not be eligible
for temporary extended unemployment com-
pensation under this title unless, in the base pe-
riod with respect to which the individual ex-
hausted all rights to regular compensation
under the State law, the individual had 20
weeks of full-time insured employment or the
equivalent in insured wages, as determined
SEC. 103. TEMPORARY EXTENDED UNEMPLOYMENT COM-
PENSATION ACCOUNT.
(a) IN GENERAL.—Any agreement under this title
shall provide that the State will establish, for each eligible
individual who files an application for temporary extended
unemployment compensation, a temporary extended un-
employment compensation account with respect to such in-
dividual’s benefit year.
(b) AMOUNT IN ACCOUNT.—
(1) IN GENERAL.—The amount established in
an account under subsection (a) shall be equal to the
lesser of—
(A) 50 percent of the total amount of reg-
ular compensation (including dependents’ allow-
ances) payable to the individual during the indi-
vidual’s benefit year under such law, or
(B) 13 times the individual’s average week-
ly benefit amount for the benefit year.
(2) WEEKLY BENEFIT AMOUNT.—For purposes
of this subsection, an individual’s weekly benefit
amount for any week is the amount of regular com-
pensation (including dependents’ allowances) under
the State law payable to such individual for such
week for total unemployment.
(c) SPECIAL RULE.—
(1) IN GENERAL.—Notwithstanding any other
provision of this section, if, at the time that the indi-
vidual’s account is exhausted, such individual’s State
is in an extended benefit period (as determined
under paragraph (2)), then, such account shall be
augmented by an amount equal to the amount origi-
nally established in such account (as determined
under subsection (b)(1)).
(2) EXTENDED
BENEFIT
PERIOD.—For pur-
poses of paragraph (1), a State shall be considered
to be in an extended benefit period if, at the time
of exhaustion (as described in paragraph (1))—
(A) such a period is then in effect for such
State under the Federal-State Extended Unem-
ployment Compensation Act of 1970; or
(B) such a period would then be in effect
for such State under such Act if section 203(d)
of such Act were applied as if it had been
amended by striking ‘‘5’’ each place it appears
and inserting ‘‘4’’.
SEC. 104. PAYMENTS TO STATES HAVING AGREEMENTS FOR
THE PAYMENT OF TEMPORARY EXTENDED
UNEMPLOYMENT COMPENSATION.
(a) GENERAL RULE.—There shall be paid to each
State that has entered into an agreement under this title
an amount equal to 100 percent of the temporary extended
unemployment compensation paid to individuals by the
State pursuant to such agreement.
(b) TREATMENT
OF REIMBURSABLE COMPENSA-
TION.—No payment shall be made to any State under this
section in respect of any compensation to the extent the
State is entitled to reimbursement in respect of such com-
pensation under the provisions of any Federal law other
than this title or chapter 85 of title 5, United States Code.
A State shall not be entitled to any reimbursement under
such chapter 85 in respect of any compensation to the ex-
tent the State is entitled to reimbursement under this title
in respect of such compensation.
(c) DETERMINATION OF AMOUNT.—Sums payable to
any State by reason of such State having an agreement
under this title shall be payable, either in advance or by
way of reimbursement (as may be determined by the Sec-
retary), in such amounts as the Secretary estimates the
State will be entitled to receive under this title for each
calendar month, reduced or increased, as the case may be,
by any amount by which the Secretary finds that the Sec-
retary’s estimates for any prior calendar month were
greater or less than the amounts which should have been
paid to the State. Such estimates may be made on the
basis of such statistical, sampling, or other method as may
be agreed upon by the Secretary and the State agency of
the State involved.
SEC. 105. FINANCING PROVISIONS.
(a) IN GENERAL.—Funds in the extended unemploy-
ment compensation account (as established by section
905(a) of the Social Security Act (42 U.S.C. 1105(a)) of
the Unemployment Trust Fund (as established by section
904(a) of such Act (42 U.S.C. 1104(a)) shall be used for
the making of payments to States having agreements en-
tered into under this title.
(b) CERTIFICATION.—The Secretary shall from time
to time certify to the Secretary of the Treasury for pay-
ment to each State the sums payable to such State under
this title. The Secretary of the Treasury, prior to audit
or settlement by the General Accounting Office, shall
make payments to the State in accordance with such cer-
tification, by transfers from the extended unemployment
compensation account (as so established) to the account
of such State in the Unemployment Trust Fund (as so
established).
(c) ASSISTANCE
TO STATES.—There are appro-
priated out of the employment security administration ac-
count (as established by section 901(a) of the Social Secu-
rity Act (42 U.S.C. 1101(a)) of the Unemployment Trust
Fund, without fiscal year limitation, such funds as may
be necessary for purposes of assisting States (as provided
in title III of the Social Security Act (42 U.S.C. 501 et
seq.)) in meeting the costs of administration of agree-
ments under this title.
(d) APPROPRIATIONS
FOR CERTAIN PAYMENTS.—
There are appropriated from the general fund of the
Treasury, without fiscal year limitation, to the extended
unemployment compensation account (as so established)
of the Unemployment Trust Fund (as so established) such
sums as the Secretary estimates to be necessary to make
the payments under this section in respect of—
(1) compensation payable under chapter 85 of
title 5, United States Code; and
(2) compensation payable on the basis of serv-
ices to which section 3309(a)(1) of the Internal Rev-
enue Code of 1986 applies.
Amounts appropriated pursuant to the preceding sentence
shall not be required to be repaid.
SEC. 106. FRAUD AND OVERPAYMENTS.
(a) IN GENERAL.—If an individual knowingly has
made, or caused to be made by another, a false statement
or representation of a material fact, or knowingly has
failed, or caused another to fail, to disclose a material fact,
and as a result of such false statement or representation
or of such nondisclosure such individual has received an
amount of temporary extended unemployment compensa-
tion under this title to which he was not entitled, such
individual—
(1) shall be ineligible for further temporary ex-
tended unemployment compensation under this title
in accordance with the provisions of the applicable
State unemployment compensation law relating to
fraud in connection with a claim for unemployment
compensation; and
(2) shall be subject to prosecution under section
1001 of title 18, United States Code.
(b) REPAYMENT.—In the case of individuals who
have received amounts of temporary extended unemploy-
ment compensation under this title to which they were not
entitled, the State shall require such individuals to repay
the amounts of such temporary extended unemployment
compensation to the State agency, except that the State
agency may waive such repayment if it determines that—
(1) the payment of such temporary extended
unemployment compensation was without fault on
the part of any such individual; and
(2) such repayment would be contrary to equity
and good conscience.
(c) RECOVERY BY STATE AGENCY.—
(1) IN GENERAL.—The State agency may re-
cover the amount to be repaid, or any part thereof,
by deductions from any temporary extended unem-
ployment compensation payable to such individual
under this title or from any unemployment com-
pensation payable to such individual under any Fed-
eral unemployment compensation law administered
by the State agency or under any other Federal law
administered by the State agency which provides for
the payment of any assistance or allowance with re-
spect to any week of unemployment, during the 3-
year period after the date such individuals received
the payment of the temporary extended unemploy-
ment compensation to which they were not entitled,
except that no single deduction may exceed 50 per-
cent of the weekly benefit amount from which such
deduction is made.
(2) OPPORTUNITY FOR HEARING.—No repay-
ment shall be required, and no deduction shall be
made, until a determination has been made, notice
thereof and an opportunity for a fair hearing has
been given to the individual, and the determination
has become final.
(d) REVIEW.—Any determination by a State agency
under this section shall be subject to review in the same
manner and to the same extent as determinations under
the State unemployment compensation law, and only in
that manner and to that extent.
SEC. 107. DEFINITIONS.
In this title, the terms ‘‘compensation’’, ‘‘regular
compensation’’, ‘‘extended compensation’’, ‘‘additional
compensation’’, ‘‘benefit year’’, ‘‘base period’’, ‘‘State’’,
‘‘State agency’’, ‘‘State law’’, and ‘‘week’’ have the respec-
tive meanings given such terms under section 205 of the
Federal-State Extended Unemployment Compensation Act
of 1970 (26 U.S.C. 3304 note).
SEC. 108. APPLICABILITY.
An agreement entered into under this title shall apply
to weeks of unemployment—
(1) beginning after the date on which such
agreement is entered into; and
(2) ending before January 1, 2003.
SEC. 109. SPECIAL REED ACT TRANSFER IN FISCAL YEAR
2002.
(a) REPEAL OF CERTAIN PROVISIONS ADDED BY
THE BALANCED BUDGET ACT OF 1997.—
(1) IN GENERAL.—The following provisions of
section 903 of the Social Security Act (42 U.S.C.
1103) are repealed:
(A) Paragraph (3) of subsection (a).
(B) The last sentence of subsection (c)(2).
(2) SAVINGS PROVISION.—Any amounts trans-
ferred before the date of enactment of this Act
under the provision repealed by paragraph (1)(A)
shall remain subject to section 903 of the Social Se-
curity Act, as last in effect before such date of en-
actment.
(b) SPECIAL TRANSFER IN FISCAL YEAR 2002.—
Section 903 of the Social Security Act is amended by add-
ing at the end the following:
‘‘Special Transfer in Fiscal Year 2002
‘‘(d)(1) The Secretary of the Treasury shall transfer
(as of the date determined under paragraph (5)) from the
Federal unemployment account to the account of each
State in the Unemployment Trust Fund the amount deter-
mined with respect to such State under paragraph (2).
‘‘(2)(A) The amount to be transferred under this sub-
section to a State account shall (as determined by the Sec-
retary of Labor and certified by such Secretary to the Sec-
retary of the Treasury) be equal to—
‘‘(i) the amount which would have been re-
quired to have been transferred under this section to
such account at the beginning of fiscal year 2002
if—
‘‘(I) section 109(a)(1) of the Temporary
Extended Unemployment Compensation Act of
2002 had been enacted before the close of fiscal
year 2001, and
‘‘(II) section 5402 of Public Law 105–33
(relating to increase in Federal unemployment
account ceiling) had not been enacted,
minus
‘‘(ii) the amount which was in fact transferred
under this section to such account at the beginning
of fiscal year 2002.
‘‘(B) Notwithstanding the provisions of subparagraph
(A)—
‘‘(i) the aggregate amount transferred to the
States under this subsection may not exceed a total
of $8,000,000,000; and
‘‘(ii) all amounts determined under subpara-
graph (A) shall be reduced ratably, if and to the ex-
tent necessary in order to comply with the limitation
under clause (i).
‘‘(3)(A) Except as provided in paragraph (4),
amounts transferred to a State account pursuant to this
subsection may be used only in the payment of cash
benefits—
‘‘(i) to individuals with respect to their unem-
ployment, and
‘‘(ii) which are allowable under subparagraph
(B) or (C).
‘‘(B)(i) At the option of the State, cash benefits
under this paragraph may include amounts which shall be
payable as—
‘‘(I) regular compensation, or
‘‘(II) additional compensation, upon the exhaus-
tion of any temporary extended unemployment com-
pensation (if such State has entered into an agree-
ment under the Temporary Extended Unemployment
Compensation Act of 2002), for individuals eligible
for regular compensation under the unemployment
compensation law of such State.
‘‘(ii) Any additional compensation under clause (i)
may not be taken into account for purposes of any deter-
mination relating to the amount of any extended com-
pensation for which an individual might be eligible.
‘‘(C)(i) At the option of the State, cash benefits
under this paragraph may include amounts which shall be
payable to 1 or more categories of individuals not other-
wise eligible for regular compensation under the unem-
ployment compensation law of such State, including those
described in clause (iii).
ing subparagraph (B) thereof, and deeming the reference
to ‘subsections (a) and (b)’ in subparagraph (D) thereof
to include this subsection).
‘‘(5) Transfers under this subsection shall be made
within 10 days after the date of enactment of this para-
graph.’’.
(c) LIMITATIONS ON TRANSFERS.—Section 903(b) of
the Social Security Act shall apply to transfers under sec-
tion 903(d) of such Act (as amended by this section). For
purposes of the preceding sentence, such section 903(b)
shall be deemed to be amended as follows:
(1) By substituting ‘‘the transfer date described
in subsection (d)(5)’’ for ‘‘October 1 of any fiscal
year’’.
(2) By substituting ‘‘remain in the Federal un-
employment account’’ for ‘‘be transferred to the
Federal unemployment account as of the beginning
of such October 1’’.
(3) By substituting ‘‘fiscal year 2002 (after the
transfer date described in subsection (d)(5))’’ for
‘‘the fiscal year beginning on such October 1’’.
(4) By substituting ‘‘under subsection (d)’’ for
‘‘as of October 1 of such fiscal year’’.
(5) By substituting ‘‘(as of the close of fiscal
year 2002)’’ for ‘‘(as of the close of such fiscal
year)’’.
(d) 
TECHNICAL
AMENDMENTS.—(1) 
Sections
3304(a)(4)(B) and 3306(f)(2) of the Internal Revenue
Code of 1986 are amended by inserting ‘‘or 903(d)(4)’’
before ‘‘of the Social Security Act’’.
(2) Section 303(a)(5) of the Social Security Act is
amended in the second proviso by inserting ‘‘or 903(d)(4)’’
after ‘‘903(c)(2)’’.
(e) REGULATIONS.—The Secretary of Labor may
prescribe any operating instructions or regulations nec-
essary to carry out this section and the amendments made
by this section.
TITLE II—DISPLACED WORKER
HEALTH INSURANCE CREDIT
SEC. 201. DISPLACED WORKER HEALTH INSURANCE CRED-
IT.
(a) IN GENERAL.—Subchapter B of chapter 65 of the
Internal Revenue Code of 1986 (relating to abatements,
credits, and refunds) is amended by inserting after section
6428 the following new section:
‘‘SEC. 6429. DISPLACED WORKER HEALTH INSURANCE
CREDIT.
‘‘(a) IN GENERAL.—In the case of an individual,
there shall be allowed as a credit against the tax imposed
by subtitle A an amount equal to 60 percent of the amount
paid during the taxable year for coverage for the taxpayer,
the taxpayer’s spouse, and dependents of the taxpayer
under qualified health insurance during eligible coverage
months.
‘‘(b) ONLY 12 ELIGIBLE COVERAGE MONTHS.—The
number of eligible coverage months taken into account
under subsection (a) for all taxable years shall not exceed
12.
‘‘(c) ELIGIBLE COVERAGE MONTH.—For purposes of
this section—
‘‘(1) IN GENERAL.—The term ‘eligible coverage
month’ means any month during 2002 or 2003 if,
as of the first day of such month—
‘‘(A) the taxpayer is unemployed,
‘‘(B) the taxpayer is covered by qualified
health insurance,
‘‘(C) the premium for coverage under such
insurance for such month is paid by the tax-
payer, and
‘‘(D) the taxpayer does not have other
specified coverage.
‘‘(2) SPECIAL RULES.—
‘‘(A) TREATMENT
OF
FIRST
MONTH
OF
EMPLOYMENT.—The taxpayer shall be treated
as meeting the requirement of paragraph (1)(A)
for the first month beginning on or after the
date that the taxpayer ceases to be unemployed
by reason of beginning work for an employer.
‘‘(B) INITIAL
CLAIM
MUST
BE
AFTER
MARCH
15, 2001.—The taxpayer shall not be
treated as meeting the requirement of para-
graph (1)(A) with respect to any unemployment
if the initial claim for regular compensation for
such unemployment is filed on or before March
15, 2001.
‘‘(C) JOINT RETURNS.—In the case of a
joint return, the requirements of paragraph (1)
shall be treated as met if at least 1 spouse sat-
isfies such requirements.
‘‘(3) OTHER SPECIFIED COVERAGE.—For pur-
poses of this subsection, an individual has other
specified coverage for any month if, as of the first
day of such month—
‘‘(A) SUBSIDIZED COVERAGE.—
‘‘(i) IN GENERAL.—Such individual is
covered under any qualified health insur-
ance under which at least 50 percent of
the cost of coverage (determined under sec-
tion 4980B) is paid or incurred by an em-
ployer (or former employer) of the tax-
payer or the taxpayer’s spouse.
‘‘(ii) 
TREATMENT
OF
CAFETERIA
PLANS
AND
FLEXIBLE
SPENDING
AC-
COUNTS.—For purposes of clause (i), the
cost of benefits—
‘‘(I) which are chosen under a
cafeteria plan (as defined in section
125(d)), or provided under a flexible
spending or similar arrangement, of
such an employer, and
‘‘(II) which are not includible in
gross income under section 106,
shall be treated as borne by such employer.
‘‘(B) COVERAGE UNDER MEDICARE, MED-
ICAID, OR SCHIP.—Such individual—
‘‘(i) is entitled to benefits under part
A of title XVIII of the Social Security Act
or is enrolled under part B of such title, or
‘‘(ii) is enrolled in the program under
title XIX or XXI of such Act.
‘‘(C) CERTAIN
OTHER
COVERAGE.—Such
individual—
‘‘(i) is enrolled in a health benefits
plan under chapter 89 of title 5, United
States Code, or
‘‘(ii) is entitled to receive benefits
under chapter 55 of title 10, United States
Code.
‘‘(4) DETERMINATION
OF
UNEMPLOYMENT.—
For purposes of paragraph (1), an individual shall
be treated as unemployed during any period—
‘‘(A) for which such individual is receiving
unemployment compensation (as defined in sec-
tion 85(b)), or
‘‘(B) for which such individual is certified
by a State agency (or by any other entity des-
ignated by the Secretary) as otherwise being en-
titled to receive unemployment compensation
(as so defined) but for—
‘‘(i) the termination of the period dur-
ing which such compensation was payable,
or
‘‘(ii) an exhaustion of such individ-
ual’s rights to such compensation.
‘‘(d) QUALIFIED HEALTH INSURANCE.—For pur-
poses of this section, the term ‘qualified health insurance’
means insurance which constitutes medical care; except
that such term shall not include any insurance if substan-
tially all of its coverage is of excepted benefits described
in section 9832(c).
‘‘(e) COORDINATION WITH ADVANCE PAYMENTS OF
CREDIT.—
‘‘(1) RECAPTURE
OF
EXCESS
ADVANCE
PAY-
MENTS.—If any payment is made by the Secretary
under section 7527 during any calendar year to a
provider of qualified health insurance for an indi-
vidual, then the tax imposed by this chapter for the
individual’s last taxable year beginning in such cal-
endar year shall be increased by the aggregate
amount of such payments.
‘‘(2) 
RECONCILIATION
OF
PAYMENTS
AD-
VANCED AND CREDIT ALLOWED.—Any increase in
tax under paragraph (1) shall not be treated as tax
imposed by this chapter for purposes of determining
the amount of any credit (other than the credit al-
lowed by subsection (a)) allowable under part IV of
subchapter A of chapter 1.
‘‘(f) SPECIAL RULES.—
‘‘(1) COORDINATION
WITH
OTHER
DEDUC-
TIONS.—Amounts taken into account under sub-
section (a) shall not be taken into account in deter-
mining any deduction allowed under section 162(l)
or 213.
‘‘(2) MSA DISTRIBUTIONS.—Amounts distrib-
uted from an Archer MSA (as defined in section
220(d)) shall not be taken into account under sub-
section (a).
‘‘(3) DENIAL OF CREDIT TO DEPENDENTS.—No
credit shall be allowed under this section to any indi-
vidual with respect to whom a deduction under sec-
tion 151 is allowable to another taxpayer for a tax-
able year beginning in the calendar year in which
such individual’s taxable year begins.
‘‘(4) CREDIT TREATED AS REFUNDABLE CRED-
IT.—For purposes of this title, the credit allowed
under this section shall be treated as a credit allow-
able under subpart C of part IV of subchapter A of
chapter 1.
‘‘(5) REGULATIONS.—The Secretary may pre-
scribe such regulations and other guidance as may
be necessary or appropriate to carry out this section
and section 7527.’’.
(b) INCREASED ACCESS TO HEALTH INSURANCE FOR
INDIVIDUALS ELIGIBLE FOR TAX CREDIT THROUGH USE
OF GUARANTEED ISSUE, QUALIFIED HIGH RISK POOLS,
AND OTHER APPROPRIATE STATE MECHANISMS.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, in applying section 2741 of the
Public Health Service Act (42 U.S.C. 300gg–41))
and any alternative State mechanism under section
2744 of such Act (42 U.S.C.300gg–44)), in deter-
mining who is an eligible individual (as defined in
section 2741(b) of such Act) in the case of an indi-
vidual who may be covered by insurance for which
credit is allowable under section 6429 of the Internal
Revenue Code of 1986 for an eligible coverage
month, if the individual seeks to obtain health insur-
ance coverage under such section during an eligible
coverage month under such section—
(A) paragraph (1) of such section 2741(b)
shall be applied as if any reference to 18
months is deemed a reference to 12 months,
and
(B) paragraphs (4) and (5) of such section
2741(b) shall not apply.
(2) PROMOTION OF STATE HIGH RISK POOLS.—
Title XXVII of the Public Health Service Act is
amended by inserting after section 2744 the fol-
lowing new section:
‘‘SEC. 2745. PROMOTION OF QUALIFIED HIGH RISK POOLS.
‘‘(a) SEED GRANTS TO STATES.—The Secretary shall
provide from the funds appropriated under subsection
(c)(1) a grant of up to $1,000,000 to each State that has
not created a qualified high risk pool as of the date of
the enactment of this section for the State’s costs of cre-
ation and initial operation of such a pool.
‘‘(b) MATCHING
FUNDS
FOR
OPERATION
OF
POOLS.—
‘‘(1) IN GENERAL.—In the case of a State that
has established a qualified high risk pool that re-
stricts premiums charged under the pool to no more
than 150 percent of the premium for applicable
standard risk rates and that offers a choice of two
or more coverage options through the pool, from the
funds appropriated under subsection (c)(2) and al-
lotted to the State under paragraph (2), the Sec-
retary shall provide a grant of up to 50 percent of
the losses incurred by the State in connection with
the operation of the pool.
‘‘(2) ALLOTMENT.—The amounts appropriated
under subsection (c)(2) for a fiscal year shall be
made available to the States in accordance with a
formula that is based upon the number of uninsured
individuals in the States.
‘‘(3) CONSTRUCTION.—Nothing in this sub-
section shall be construed as preventing a State
from supplementing the funds made available under
this subsection for the support and operation of
qualified high risk pools.
‘‘(c) FUNDING.—Out of any money in the Treasury
of the United States not otherwise appropriated, there are
appropriated—
‘‘(1) $20,000,000 for fiscal year 2002 to carry
out subsection (a); and
‘‘(2) $40,000,000 for each of fiscal years 2002
and 2003.
Funds appropriated under this subsection for a fiscal year
shall remain available for obligation through the end of
the following fiscal year. Nothing in this section shall be
construed as providing a State with an entitlement to a
grant under this section.
‘‘(d) QUALIFIED HIGH RISK POOL AND STATE DE-
FINED.—For purposes of this section, the term ‘qualified
high risk pool’ has the meaning given such term in section
2744(c)(2) and the term ‘State’ means any of the 50
States and the District of Columbia.’’.
(3) CONSTRUCTION.—Nothing in this sub-
section shall be construed as affecting the ability of
a State to use mechanisms, described in sections
2741(c) and 2744 of the Public Health Service Act,
as an alternative to applying the guaranteed avail-
ability provisions of section 2741(a) of such Act.
(c) INFORMATION REPORTING.—
(1) IN GENERAL.—Subpart B of part III of
subchapter A of chapter 61 of the Internal Revenue
Code of 1986 (relating to information concerning
transactions with other persons) is amended by in-
serting after section 6050S the following new sec-
tion:
‘‘SEC. 6050T. RETURNS RELATING TO DISPLACED WORKER
HEALTH INSURANCE CREDIT.
‘‘(a) 
REQUIREMENT
OF
REPORTING.—Every
person—
‘‘(1) who, in connection with a trade or busi-
ness conducted by such person, receives payments
during any calendar year from any individual for
coverage of such individual or any other individual
under qualified health insurance (as defined in sec-
tion 6429(d)), and
‘‘(2) who claims a reimbursement for an ad-
vance credit amount,
shall, at such time as the Secretary may prescribe, make
the return described in subsection (b) with respect to each
individual from whom such payments were received or for
whom such a reimbursement is claimed.
‘‘(b) FORM AND MANNER OF RETURNS.—A return
is described in this subsection if such return—
‘‘(1) is in such form as the Secretary may pre-
scribe, and
‘‘(2) contains—
‘‘(A) the name, address, and TIN of each
individual referred to in subsection (a),
‘‘(B) the aggregate of the advance credit
amounts provided to such individual and for
which reimbursement is claimed,
‘‘(C) the number of months for which such
advance credit amounts are so provided, and
‘‘(D) such other information as the Sec-
retary may prescribe.
‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID-
UALS WITH RESPECT TO WHOM INFORMATION IS RE-
QUIRED.—Every person required to make a return under
subsection (a) shall furnish to each individual whose name
is required to be set forth in such return a written state-
ment showing—
‘‘(1) the name and address of the person re-
quired to make such return and the phone number
of the information contact for such person, and
‘‘(2) the information required to be shown on
the return with respect to such individual.
The written statement required under the preceding sen-
tence shall be furnished on or before January 31 of the
year following the calendar year for which the return
under subsection (a) is required to be made.
‘‘(d) ADVANCE CREDIT AMOUNT.—For purposes of
this section, the term ‘advance credit amount’ means an
amount for which the person can claim a reimbursement
pursuant to a program established by the Secretary under
section 7527.’’.
(2) ASSESSABLE PENALTIES.—
(A) 
Subparagraph 
(B) 
of 
section
6724(d)(1) of such Code (relating to defini-
tions) is amended by redesignating clauses (xi)
through (xvii) as clauses (xii) through (xviii),
respectively, and by inserting after clause (x)
the following new clause:
‘‘(xi) section 6050T (relating to re-
turns relating to displaced worker health
insurance credit),’’.
(B) Paragraph (2) of section 6724(d) of
such Code is amended by striking ‘‘or’’ at the
end of subparagraph (Z), by striking the period
at the end of subparagraph (AA) and inserting
‘‘, or’’, and by adding after subparagraph (AA)
the following new subparagraph:
‘‘(BB) section 6050T (relating to returns
relating to displaced worker health insurance
credit).’’.
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subpart B of part III of subchapter A of
chapter 61 of such Code is amended by inserting
after the item relating to section 6050S the fol-
lowing new item:
‘‘Sec. 6050T. Returns relating to displaced worker health insur-
ance credit.’’.
(d) CONFORMING AMENDMENTS.—
(1) Paragraph (2) of section 1324(b) of title
31, United States Code, is amended by inserting be-
fore the period ‘‘, or from section 6429 of such
Code’’.
(2) The table of sections for subchapter B of
chapter 65 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new
item:
‘‘Sec. 6429. Displaced worker health insurance credit.’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
SEC. 202. ADVANCE PAYMENT OF DISPLACED WORKER
HEALTH INSURANCE CREDIT.
(a) IN GENERAL.—Chapter 77 of the Internal Rev-
enue Code of 1986 (relating to miscellaneous provisions)
is amended by adding at the end the following new section:
‘‘SEC. 7527. ADVANCE PAYMENT OF DISPLACED WORKER
HEALTH INSURANCE CREDIT.
‘‘(a) GENERAL RULE.—The Secretary shall establish
a program for making payments on behalf of eligible indi-
viduals to providers of health insurance for such individ-
uals.
‘‘(b) ELIGIBLE INDIVIDUAL.—For purposes of this
section, the term ‘eligible individual’ means any individual
for whom a qualified health insurance credit eligibility cer-
tificate is in effect.
‘‘(c) QUALIFIED HEALTH INSURANCE CREDIT ELIGI-
BILITY CERTIFICATE.—For purposes of this section, a
qualified health insurance credit eligibility certificate is a
statement certified by a State agency (or by any other en-
tity designated by the Secretary) which—
‘‘(1) certifies that the individual was unem-
ployed (within the meaning of section 6429) as of
the first day of any month, and
‘‘(2) provides such other information as the
Secretary may require for purposes of this section.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for chapter 77 of such Code is amended by adding at the
end the following new item:
‘‘Sec. 7527. Advance payment of displaced worker health insur-
ance credit.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
TITLE 
III—SOCIAL 
SECURITY
HELD 
HARMLESS; 
BUDG-
ETARY TREATMENT OF ACT
SEC. 301. NO IMPACT ON SOCIAL SECURITY TRUST FUNDS.
(a) IN GENERAL.—Nothing in this Act (or an amend-
ment made by this Act) shall be construed to alter or
amend title II of the Social Security Act (or any regulation
promulgated under that Act).
(b) TRANSFERS.—
(1) ESTIMATE OF SECRETARY.—The Secretary
of the Treasury shall annually estimate the impact
that the enactment of this Act has on the income
and balances of the trust funds established under
section 201 of the Social Security Act (42 U.S.C.
401).
(2) TRANSFER
OF
FUNDS.—If, under para-
graph (1), the Secretary of the Treasury estimates
that the enactment of this Act has a negative impact
on the income and balances of the trust funds estab-
lished under section 201 of the Social Security Act
(42 U.S.C. 401), the Secretary shall transfer, not
less frequently than quarterly, from the general reve-
nues of the Federal Government an amount suffi-
cient so as to ensure that the income and balances
of such trust funds are not reduced as a result of
the enactment of this Act.
SEC. 302. EMERGENCY DESIGNATION.
Congress designates as emergency requirements pur-
suant to section 252(e) of the Balanced Budget and Emer-
gency Deficit Control Act of 1985 the following amounts:
(1) An amount equal to the amount by which
revenues are reduced by this Act below the rec-
ommended levels of Federal revenues for fiscal year
2002, the total of fiscal years 2002 through 2006,
and the total of fiscal years 2002 through 2011, pro-
vided in the conference report accompanying H.
Con. Res. 83, the concurrent resolution on the budg-
et for fiscal year 2002.
(2) Amounts equal to the amounts of new budg-
et authority and outlays provided in this Act in ex-
cess of the allocations under section 302(a) of the
Congressional Budget Act of 1974 to the Committee
on Finance of the Senate for fiscal year 2002, the
total of fiscal years 2002 through 2006, and the
total of fiscal years 2002 through 2011.
Æ