I
106TH CONGRESS
1ST SESSION
H. R. 2500
To establish demonstration projects to provide family income to respond
to significant transitions, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 13, 1999
Ms. WOOLSEY introduced the following bill; which was referred to the
Committee on Education and the Workforce
A BILL
To establish demonstration projects to provide family income
to respond to significant transitions, 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 ‘‘Family Income to
Respond to Significant Transitions Insurance Act’’.
SEC. 2. FINDINGS.
Congress finds that—
(1) nearly every industrialized nation other than
the United States, and most developing nations, pro-
vide parents with paid leave for infant care;
(2)(A) parents’ interactions with their infants
have a major influence on the physical, cognitive,
and social development of the infants; and
(B) optimal development of an infant depends
on a strong attachment between an infant and the
infant’s parents;
(3) nearly 2⁄3 of employees, who need to take
family or medical leave, but do not take the leave,
report that they cannot afford to take the leave;
(4) although some employees in the United
States receive wage replacement during periods of
family or medical leave, the benefit of wage replace-
ment is not shared equally in the workforce, as dem-
onstrated by the fact that—
(A) employees with less education and
lower income are less likely to receive wage re-
placement than employees with more education
and higher salaries; and
(B) female employees, employees from ra-
cial minority groups, and younger employees
are slightly less likely to receive wage replace-
ment than male employees, white employees,
and older employees, respectively;
(5) in order to cope financially with taking fam-
ily or medical leave, of persons taking that leave
without full wage replacement—
(A) 40 percent cut their leave short;
(B) 39 percent put off paying bills;
(C) 25 percent borrowed money; and
(D) 9 percent obtained public assistance;
(6) taking family or medical leave often drives
employees earning low wages into poverty, and 21
percent of such low-wage employees who take family
or medical leave without full wage replacement re-
sort to public assistance;
(7) studies document shortages in the supply of
infant care, and that the shortages are expected to
worsen as welfare reform measures are implemented;
and
(8) compared to 30 years ago, families have ex-
perienced an average decrease of 22 hours per week
in time that parents spend with their children.
SEC. 3. PURPOSES.
The purposes of this Act are—
(1) to establish a demonstration program that
supports the efforts of States and political subdivi-
sions to provide partial or full wage replacement,
often referred to as FIRST insurance, to new par-
ents so that the new parents are able to spend time
with a new infant or newly adopted child, and to
other employees; and
(2) to learn about the most effective mecha-
nisms for providing the wage replacement assistance.
SEC. 4. DEFINITIONS.
In this Act:
(1) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Labor, acting after consultation
with the Secretary of Health and Human Services.
(2) SON
OR
DAUGHTER; STATE.—The terms
‘‘son or daughter’’ and ‘‘State’’ have the meanings
given the terms in section 101 of the Family and
Medical Leave Act of 1993 (29 U.S.C. 2611).
SEC. 5. DEMONSTRATION PROJECTS.
(a) GRANTS.—The Secretary shall make grants to eli-
gible entities to pay for the Federal share of the cost of
carrying out projects that assist families by providing,
through various mechanisms, wage replacement for eligi-
ble individuals that are responding to caregiving needs re-
sulting from the birth or adoption of a son or daughter
or other family caregiving needs. The Secretary shall make
the grants for periods of 5 years.
(b) ELIGIBLE ENTITIES.—To be eligible to receive a
grant under this section, an entity shall be a State or polit-
ical subdivision of a State.
(c) USE OF FUNDS.—
(1) IN
GENERAL.—An entity that receives a
grant under this section may use the funds made
available through the grant to provide partial or full
wage replacement as described in subsection (a) to
eligible individuals—
(A) directly;
(B) through an insurance program, such
as a State temporary disability insurance pro-
gram or the State unemployment compensation
benefit program;
(C) through a private disability or other
insurance plan, or another mechanism provided
by a private employer; or
(D) through another mechanism.
(2) ADMINISTRATIVE
COSTS.—No entity may
use more than 10 percent of the total funds made
available through the grant during the 5-year period
of the grant to pay for the administrative costs re-
lating to a project described in subsection (a).
(d) ELIGIBLE INDIVIDUALS.—To be eligible to re-
ceive wage replacement under subsection (a), an individual
shall—
(1) meet such eligibility criteria as the eligible
entity providing the wage replacement may specify
in an application described in subsection (e); and
(2) be—
(A) an individual who is taking leave,
under the Family and Medical Leave Act of
1993 (29 U.S.C. 2601 et seq.), other Federal,
State, or local law, or a private plan, for a rea-
son described in subparagraph (A) or (B) of
section 102(a)(1) of the Family and Medical
Leave Act of 1993 (29 U.S.C. 2612(a)(1));
(B) at the option of the eligible entity, an
individual who—
(i) is taking leave, under that Act,
other Federal, State, or local law, or a pri-
vate plan, for a reason described in sub-
paragraph (C) or (D) of section 102(a)(1)
of the Family and Medical Leave Act of
1993 (29 U.S.C. 2612(a)(1)); or
(ii) leaves employment because the in-
dividual has elected to care for a son or
daughter under age 1; or
(C) at the option of the eligible entity, an
individual with other characteristics specified by
the eligible entity in an application described in
subsection (e).
(e) APPLICATION.—To be eligible to receive a grant
under this section, an entity shall submit an application
to the Secretary, at such time, in such manner, and con-
taining such information as the Secretary may require, in-
cluding, at a minimum—
(1) a plan for the project to be carried out with
the grant;
(2) information demonstrating that the appli-
cant consulted representatives of employers and em-
ployees, including labor organizations, in developing
the plan;
(3) estimates of the costs and benefits of the
project;
(4)(A) information on the number and type of
families to be covered by the project, and the extent
of such coverage in the area served under the grant;
and
(B) information on any criteria or characteris-
tics that the entity will use to determine whether an
individual is eligible for wage replacement under
subsection (a), as described in paragraphs (1) and
(2)(C) of subsection (d);
(5) if the project will expand on State and pri-
vate systems of wage replacement for eligible indi-
viduals, information on the manner in which the
project will expand on the systems;
(6) information demonstrating the manner in
which the wage replacement assistance provided
through the project will assist families in which an
individual takes leave as described in subsection
(d)(1); and
(7) an assurance that the applicant will partici-
pate in efforts to evaluate the effectiveness of the
project.
(f) SELECTION CRITERIA.—In selecting entities to re-
ceive grants for projects under this section, the Secretary
shall—
(1) take into consideration—
(A) the scope of the proposed projects;
(B) the cost-effectiveness, feasibility, and
financial soundness of the proposed projects;
(C) the extent to which the proposed
projects would expand access to wage replace-
ment in response to family caregiving needs,
particularly for low-wage employees, in the area
served by the grant; and
(D) the benefits that would be offered to
families and children through the proposed
projects; and
(2) to the extent feasible, select entities pro-
posing projects that utilize diverse mechanisms, in-
cluding expansion of State unemployment compensa-
tion benefit programs, and establishment or expan-
sion of State temporary disability insurance pro-
grams, to provide the wage replacement.
(g) FEDERAL SHARE.—
(1) IN GENERAL.—The Federal share of the
cost described in subsection (a) shall be—
(A) 50 percent for the first year of the
grant period;
(B) 40 percent for the second year of that
period;
(C) 30 percent for the third year of that
period; and
(D) 20 percent for each subsequent year.
(2) NON-FEDERAL
SHARE.—The non-Federal
share of the cost may be in cash or in kind, fairly
evaluated, including plant, equipment, and services
and may be provided from State, local, or private
sources, or Federal sources other than this Act.
(h) SUPPLEMENT NOT SUPPLANT.—Funds appro-
priated pursuant to the authority of this Act shall be used
to supplement and not supplant other Federal, State, and
local public funds and private funds expended to provide
wage replacement.
(i) EFFECT ON EXISTING RIGHTS.—Nothing in this
Act shall be construed to supersede, preempt, or otherwise
infringe on the provisions of any collective bargaining
agreement or any employment benefit program or plan
that provides greater rights to employees than the rights
established under this Act.
SEC. 6. EVALUATIONS AND REPORTS.
(a) AVAILABLE FUNDS.—The Secretary shall use not
more than 2 percent of the funds made available under
section 5 to carry out this section.
(b) EVALUATIONS.—The Secretary shall, directly or
by contract, evaluate the effectiveness of projects carried
out with grants made under section 5, including
conducting—
(1) research relating to the projects, including
research comparing—
(A) the scope of the projects, including the
type of insurance or other wage replacement
mechanism used, the method of financing used,
the eligibility requirements, the level of the
wage replacement benefit provided (such as the
percentage of salary replaced), and the length
of the benefit provided, for the projects;
(B) the utilization of the projects, includ-
ing the characteristics of individuals who ben-
efit from the projects, particularly low-wage
workers, and factors that determine the ability
of eligible individuals to obtain wage replace-
ment through the projects; and
(C) the costs of and savings achieved by
the projects, including the cost-effectiveness of
the projects and their benefits for children and
families;
(2) analysis of the overall need for wage re-
placement; and
(3) analysis of the impact of the projects on the
overall availability of wage replacement.
(c) REPORTS.—
(1) INITIAL REPORT.—Not later than 3 years
after the beginning of the grant period for the first
grant made under section 5, the Secretary shall pre-
pare and submit to Congress a report that contains
information resulting from the evaluations conducted
under subsection (b).
(2) SUBSEQUENT REPORTS.—Not later than 4
years after the beginning of that grant period, and
annually thereafter, the Secretary shall prepare and
submit to Congress a report that contains—
(A) information resulting from the evalua-
tions conducted under subsection (b); and
(B) usage data for the demonstration
projects, for the most recent year for which
data are available.
SEC. 7. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out
this Act $400,000,000 for fiscal year 2000 and such sums
as may be necessary for each subsequent fiscal year.
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