Notch Fairness Act of 1996

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Notch Fairness Act of 1996''.

SEC. 2. NEW GUARANTEED MINIMUM PRIMARY INSURANCE AMOUNT WHERE 
              ELIGIBILITY ARISES DURING TRANSITIONAL PERIOD.

    (a) In General.--Section 215(a) of the Social Security Act is 
amended--
            (1) in paragraph (4)(B), by inserting ``(with or without 
        the application of paragraph (8))'' after ``would be made'', 
        and by striking ``1984'' in clause (i) and inserting ``1989''; 
        and
            (2) by adding at the end the following:
    ``(8)(A) In the case of an individual described in paragraph (4)(B) 
(subject to subparagraph (F) of this paragraph), the amount of the 
individual's primary insurance amount as computed or recomputed under 
paragraph (1) shall be deemed equal to the sum of--
            ``(i) such amount, and
            ``(ii) the applicable transitional increase amount (if 
        any).
    ``(B) For purposes of subparagraph (A)(ii), the term `applicable 
transitional increase amount' means, in the case of any individual, the 
product derived by multiplying--
            ``(i) the excess under former law, by
            ``(ii) the applicable percentage in relation to the year in 
        which the individual becomes eligible for old-age insurance 
        benefits, as determined by the following table:

                  ``If the individual
                                                                       
                becomes eligible for
                                                         The applicable
                such benefits in:
                                                         percentage is:
                  1979...............................       55 percent 
                  1980...............................       45 percent 
                  1981...............................       35 percent 
                  1982...............................       32 percent 
                  1983...............................       25 percent 
                  1984...............................       20 percent 
                  1985...............................       16 percent 
                  1986...............................       10 percent 
                  1987...............................        3 percent 
                  1988...............................        5 percent.
    ``(C) For purposes of subparagraph (B), the term `excess under 
former law' means, in the case of any individual, the excess of--
            ``(i) the applicable former law primary insurance amount, 
        over
            ``(ii) the amount which would be such individual's primary 
        insurance amount if computed or recomputed under this section 
        without regard to this paragraph and paragraphs (4), (5), and 
        (6).
    ``(D) For purposes of subparagraph (C)(i), the term `applicable 
former law primary insurance amount' means, in the case of any 
individual, the amount which would be such individual's primary 
insurance amount if it were--
            ``(i) computed or recomputed (pursuant to paragraph 
        (4)(B)(i)) under section 215(a) as in effect in December 1978, 
        or
            ``(ii) computed or recomputed (pursuant to paragraph 
        (4)(B)(ii)) as provided by subsection (d),
(as applicable) and modified as provided by subparagraph (E).
    ``(E) In determining the amount which would be an individual's 
primary insurance amount as provided in subparagraph (D)--
            ``(i) subsection (b)(4) shall not apply;
            ``(ii) section 215(b) as in effect in December 1978 shall 
        apply, except that section 215(b)(2)(C) (as then in effect) 
        shall be deemed to provide that an individual's `computation 
        base years' may include only calendar years in the period after 
        1950 (or 1936 if applicable) and ending with the calendar year 
        in which such individual attains age 61, plus the 3 calendar 
        years after such period for which the total of such 
        individual's wages and self-employment income is the largest; 
        and
            ``(iii) subdivision (I) in the last sentence of paragraph 
        (4) shall be applied as though the words `without regard to any 
        increases in that table' in such subdivision read `including 
        any increases in that table'.
    ``(F) This paragraph shall apply in the case of any individual only 
if such application results in a primary insurance amount for such 
individual that is greater than it would be if computed or recomputed 
under paragraph (4)(B) without regard to this paragraph.''.
    (b) Effective Date and Related Rules.--
            (1) Applicability of amendments.--
                    (A) In general.--Except as provided in paragraph 
                (2), the amendments made by this Act shall be effective 
                as though they had been included or reflected in 
                section 201 of the Social Security Amendments of 1977.
                    (B) Prospective applicability.--No monthly benefit 
                or primary insurance amount under title II of the 
                Social Security Act shall be increased by reason of 
                such amendments for any month before April 1996.
            (2) Recomputation to reflect benefit increases.--In any 
        case in which an individual is entitled to monthly insurance 
        benefits under title II of the Social Security Act for March 
        1995, if such benefits are based on a primary insurance amount 
        computed--
                    (A) under section 215 of such Act as in effect (by 
                reason of the Social Security Amendments of 1977) after 
                December 1978, or
                    (B) under section 215 of such Act as in effect 
                prior to January 1979 by reason of subsection (a)(4)(B) 
                of such section (as amended by the Social Security 
                Amendments of 1977),
        the Commissioner of Social Security (notwithstanding section 
        215(f)(1) of the Social Security Act) shall recompute such 
        primary insurance amount so as to take into account the 
        amendments made by this Act.

SEC. 3. ENTITLEMENT OF STEPCHILDREN TO CHILD'S INSURANCE BENEFITS BASED 
              ON ACTUAL DEPENDENCY ON STEPPARENT SUPPORT.

    (a) Requirement of Actual Dependency for Future Entitlements.--
            (1) In general.--Section 202(d)(4) of the Social Security 
        Act (42 U.S.C. 402(d)(4)) is amended by striking ``was living 
        with or''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to benefits of individuals who become 
        entitled to such benefits for months after the third month 
        following the month in which this Act is enacted.
    (b) Termination of Child's Insurance Benefits Based on Work Record 
of Stepparent Upon Natural Parent's Divorce From Stepparent.--
            (1) In general.--Section 202(d)(1) of the Social Security 
        Act (42 U.S.C. 402(d)(1)) is amended--
                    (A) by striking ``or'' at the end of clause (F);
                    (B) by striking the period at the end of clause (G) 
                and inserting ``; or''; and
                    (C) by inserting after clause (G) the following new 
                clause:
            ``(H) if the benefits under this subsection are based on 
        the wages and self-employment income of a stepparent who is 
        subsequently divorced from such child's natural parent, the 
        sixth month after the month in which the Commissioner of Social 
        Security receives formal notification of such divorce.''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply with respect to notifications of divorces received 
        by the Commissioner of Social Security on or after the date of 
        the enactment of this Act.

SEC. 4. DENIAL OF DISABILITY BENEFITS TO DRUG ADDICTS AND ALCOHOLICS.

    (a) Amendments Relating to Title II Disability Benefits.--
            (1) In general.--Section 223(d)(2) of the Social Security 
        Act (42 U.S.C. 423(d)(2)) is amended by adding at the end the 
        following:
            ``(C) An individual shall not be considered to be disabled 
        for purposes of this title if alcoholism or drug addiction 
        would (but for this subparagraph) be a contributing factor 
        material to the Commissioner's determination that the 
        individual is disabled.''.
            (2) Representative payee requirements.--
                    (A) Section 205(j)(1)(B) of such Act (42 U.S.C. 
                405(j)(1)(B)) is amended to read as follows:
    ``(B) In the case of an individual entitled to benefits based on 
disability, the payment of such benefits shall be made to a 
representative payee if the Commissioner of Social Security determines 
that such payment would serve the interest of the individual because 
the individual also has an alcoholism or drug addiction condition (as 
determined by the Commissioner) that prevents the individual from 
managing such benefits.''.
                    (B) Section 205(j)(2)(C)(v) of such Act (42 U.S.C. 
                405(j)(2)(C)(v)) is amended by striking ``entitled to 
                benefits'' and all that follows through ``under a 
                disability'' and inserting ``described in paragraph 
                (1)(B)''.
                    (C) Section 205(j)(2)(D)(ii)(II) of such Act (42 
                U.S.C. 405(j)(2)(D)(ii)(II)) is amended by striking all 
                that follows ``15 years, or'' and inserting ``described 
                in paragraph (1)(B).''.
                    (D) Section 205(j)(4)(A)(ii)(II) (42 U.S.C. 
                405(j)(4)(A)(ii)(II)) is amended by striking ``entitled 
                to benefits'' and all that follows through ``under a 
                disability'' and inserting ``described in paragraph 
                (1)(B)''.
            (3) Treatment referrals for individuals with an alcoholism 
        or drug addiction condition.--Section 222 of such Act (42 
        U.S.C. 422) is amended by adding at the end the following new 
        subsection:

   ``Treatment Referrals for Individuals with an Alcoholism or Drug 
                          Addiction Condition

    ``(e) In the case of any individual whose benefits under this title 
are paid to a representative payee pursuant to section 205(j)(1)(B), 
the Commissioner of Social Security shall refer such individual to the 
appropriate State agency administering the State plan for substance 
abuse treatment services approved under subpart II of part B of title 
XIX of the Public Health Service Act (42 U.S.C. 300x-21 et seq.).''.
            (4) Conforming amendment.--Subsection (c) of section 225 of 
        such Act (42 U.S.C. 425(c)) is repealed.
            (5) Effective dates.--
                    (A) The amendments made by paragraphs (1) and (4) 
                shall apply with respect to monthly insurance benefits 
                under title II of the Social Security Act based on 
                disability for months beginning after the date of the 
                enactment of this Act, except that, in the case of 
                individuals who are entitled to such benefits for the 
                month in which this Act is enacted, such amendments 
                shall apply only with respect to such benefits for 
                months beginning on or after January 1, 1997.
                    (B) The amendments made by paragraphs (2) and (3) 
                shall apply with respect to benefits for which 
                applications are filed on or after the date of the 
                enactment of this Act.
                    (C) If an individual who is entitled to monthly 
                insurance benefits under title II of the Social 
                Security Act based on disability for the month in which 
                this Act is enacted and whose entitlement to such 
                benefits would terminate by reason of the amendments 
                made by this subsection reapplies for benefits under 
                title II of such Act (as amended by this Act) based on 
                disability within 120 days after the date of the 
                enactment of this Act, the Commissioner of Social 
                Security shall, not later than January 1, 1997, 
                complete the entitlement redetermination with respect 
                to such individual pursuant to the procedures of such 
                title.
    (b) Amendments Relating to SSI Benefits.--
            (1) In general.--Section 1614(a)(3) of the Social Security 
        Act (42 U.S.C. 1382c(a)(3)) is amended by adding at the end the 
        following:
    ``(I) Notwithstanding subparagraph (A), an individual shall not be 
considered to be disabled for purposes of this title if alcoholism or 
drug addiction would (but for this subparagraph) be a contributing 
factor material to the Commissioner's determination that the individual 
is disabled.''.
            (2) Representative payee requirements.--
                    (A) Section 1631(a)(2)(A)(ii)(II) of such Act (42 
                U.S.C. 1383(a)(2)(A)(ii)(II)) is amended to read as 
                follows:
    ``(II) In the case of an individual eligible for benefits under 
this title by reason of disability, the payment of such benefits shall 
be made to a representative payee if the Commissioner of Social 
Security determines that such payment would serve the interest of the 
individual because the individual also has an alcoholism or drug 
addiction condition (as determined by the Commissioner) that prevents 
the individual from managing such benefits.''.
                    (B) Section 1631(a)(2)(B)(vii) of such Act (42 
                U.S.C. 1383(a)(2)(B)(vii)) is amended by striking 
                ``eligible for benefits'' and all that follows through 
                ``is disabled'' and inserting ``described in 
                subparagraph (A)(ii)(II)''.
                    (C) Section 1631(a)(2)(B)(ix)(II) of such Act (42 
                U.S.C. 1383(a)(2)(B)(ix)(II)) is amended by striking 
                all that follows ``15 years, or'' and inserting 
                ``described in subparagraph (A)(ii)(II).''.
                    (D) Section 1631(a)(2)(D)(i)(II) of such Act (42 
                U.S.C. 1383(a)(2)(D)(i)(II)) is amended by striking 
                ``eligible for benefits'' and all that follows through 
                ``is disabled'' and inserting ``described in 
                subparagraph (A)(ii)(II)''.
            (3) Treatment services for individuals with a substance 
        abuse condition.--Title XVI of such Act (42 U.S.C. 1381 et 
        seq.) is amended by adding at the end the following new 
        section:

 ``treatment services for individuals with a substance abuse condition

    ``Sec. 1636. In the case of any individual whose benefits under 
this title are paid to a representative payee pursuant to section 
1631(a)(2)(A)(ii)(II), the Commissioner of Social Security shall refer 
such individual to the appropriate State agency administering the State 
plan for substance abuse treatment services approved under subpart II 
of part B of title XIX of the Public Health Service Act (42 U.S.C. 
300x-21 et seq.).''.
            (4) Conforming amendments.--
                    (A) Section 1611(e) of such Act (42 U.S.C. 1382(e)) 
                is amended by striking paragraph (3).
                    (B) Section 1634 of such Act (42 U.S.C. 1383c) is 
                amended by striking subsection (e).
            (5) Effective dates.--
                    (A) The amendments made by paragraphs (1) and (4) 
                shall apply with respect to supplemental security 
                income benefits under title XVI of the Social Security 
                Act based on disability for months beginning after the 
                date of the enactment of this Act, except that, in the 
                case of individuals who are eligible for such benefits 
                for the month in which this Act is enacted, such 
                amendments shall apply only with respect to such 
                benefits for months beginning on or after January 1, 
                1997.
                    (B) The amendments made by paragraphs (2) and (3) 
                shall apply with respect to supplemental security 
                income benefits under title XVI of the Social Security 
                Act for which applications are filed on or after the 
                date of the enactment of this Act.
                    (C) If an individual who is eligible for 
                supplemental security income benefits under title XVI 
                of the Social Security Act for the month in which this 
                Act is enacted and whose eligibility for such benefits 
                would terminate by reason of the amendments made by 
                this subsection reapplies for supplemental security 
                income benefits under title XVI of such Act (as amended 
                by this Act) within 120 days after the date of the 
                enactment of this Act, the Commissioner of Social 
                Security shall, not later than January 1, 1997, 
                complete the eligibility redetermination with respect 
                to such individual pursuant to the procedures of such 
                title.
                    (D) For purposes of this paragraph, the phrase 
                ``supplemental security income benefits under title XVI 
                of the Social Security Act'' includes supplementary 
                payments pursuant to an agreement for Federal 
                administration under section 1616(a) of the Social 
                Security Act and payments pursuant to an agreement 
                entered into under section 212(b) of Public Law 93-66.
    (c) Conforming Amendment.--Section 201(c) of the Social Security 
Independence and Program Improvements Act of 1994 (42 U.S.C. 425 note) 
is repealed.
    (d) Supplemental Funding for Alcohol and Substance Abuse Treatment 
Programs.--
            (1) In general.--Out of any money in the Treasury not 
        otherwise appropriated, there are hereby appropriated to 
        supplement State and Tribal programs funded under section 1933 
        of the Public Health Service Act (42 U.S.C. 300x-33), 
        $100,000,000 for each of the fiscal years 1997 and 1998.
            (2) Additional funds.--Amounts appropriated under paragraph 
        (1) shall be in addition to any funds otherwise appropriated 
        for allotments under section 1933 of the Public Health Service 
        Act (42 U.S.C. 300x-33) and shall be allocated pursuant to such 
        section 1933.
            (3) Use of funds.--A State or Tribal government receiving 
        an allotment under this subsection shall consider as 
        priorities, for purposes of expending funds allotted under this 
        subsection, activities relating to the treatment of the abuse 
        of alcohol and other drugs.
                                 
HR 2930 IH----2

Summary: Notch Fairness Act of 1996 - Amends title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act to revise the formula for the computation of minimum old age insurance benefits for individuals who reached age 65 in or after 1979 and to whom applies the 15-year transition period for the changes in benefit computation rules enacted in the Social Security Amendments of 1977. 
Sets forth a schedule of additional benefit increases for such beneficiaries (and related beneficiaries), with percentages declining from 55 percent to five percent and keyed to the year an individual became eligible for such benefits between 1979 and 1988. 
Requires actual dependency of a stepchild in order to receive a child's insurance benefit under OASDI.  Repeals the benefit eligibility of a stepchild living with the stepparent but not dependent on the stepparent for at least half of his or her support. 
Terminates a child's insurance benefit based upon the work income of a stepparent six months after the month in which the Commissioner of Social Security receives formal notification of the divorce of such stepparent from the natural parent of the child. 
Prohibits payment of OASDI disability benefits if alcoholism or drug addiction would be a contributing factor material to the Commissioner's determination that such individual is disabled. Requires the payment of disability benefits to a representative payee if the Commissioner determines that a disabled individual also has an alcoholism or drug addition condition that prevents the individual from managing such benefits.  Directs the Commissioner to refer an individual with such a condition to the appropriate State agency administering the plan for substance abuse treatment services under the Public Health Service Act.  Amends title XVI (Supplemental Security Income) (SSI) of the Social Security Act to make the same requirements with respect to SSI beneficiaries. 
Appropriates funds for FY 1997 and 1998 for supplemental funding of State and tribal alcohol and substance abuse treatment programs under the Public Health Service Act.  Requires State or tribal governments receiving such funds to consider as a priority in their expenditure those activities relating to the treatment of the abuse of alcohol and other drugs.