[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4278 Enrolled Bill (ENR)]

        H.R.4278

                       One Hundred Third Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
 the twenty-fifth day of January, one thousand nine hundred and ninety-
                                  four


                                 An Act

  
 
  To make improvements in the old-age, survivors, and disability 
insurance program under title II of the Social Security Act.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Social Security Domestic Employment 
Reform Act of 1994''.
SEC. 2. SIMPLIFICATION OF EMPLOYMENT TAXES ON DOMESTIC SERVICES.
    (a) Threshold Requirement for Social Security Taxes.--
        (1) Amendments of internal revenue code.--
            (A) General rule.--Subparagraph (B) of section 3121(a)(7) 
        of the Internal Revenue Code of 1986 (defining wages) is 
        amended to read as follows:
            ``(B) cash remuneration paid by an employer in any calendar 
        year to an employee for domestic service in a private home of 
        the employer (including domestic service described in 
        subsection (g)(5)), if the cash remuneration paid in such year 
        by the employer to the employee for such service is less than 
        the applicable dollar threshold (as defined in subsection (x)) 
        for such year;''.
            (B) Applicable dollar threshold.--Section 3121 of such Code 
        is amended by adding at the end thereof the following new 
        subsection:
    ``(x) Applicable Dollar Threshold.--For purposes of subsection 
(a)(7)(B), the term `applicable dollar threshold' means $1,000. In the 
case of calendar years after 1995, the Commissioner of Social Security 
shall adjust such $1,000 amount at the same time and in the same manner 
as under section 215(a)(1)(B)(ii) of the Social Security Act with 
respect to the amounts referred to in section 215(a)(1)(B)(i) of such 
Act, except that, for purposes of this paragraph, 1993 shall be 
substituted for the calendar year referred to in section 
215(a)(1)(B)(ii)(II) of such Act. If any amount as adjusted under the 
preceding sentence is not a multiple of $100, such amount shall be 
rounded to the next lowest multiple of $100.''.
            (C) Employment of domestic employees under age 18 excluded 
        from coverage.--Section 3121(b) of such Code (defining 
        employment) is amended--
                (i) by striking ``or'' at the end of paragraph (19),
                (ii) by striking the period at the end of paragraph 
            (20) and inserting ``; or'', and
                (iii) by adding at the end the following new paragraph:
        ``(21) domestic service in a private home of the employer 
    which--
            ``(A) is performed in any year by an individual under the 
        age of 18 during any portion of such year; and
            ``(B) is not the principal occupation of such employee.''.
            (D) Conforming amendments.--The second sentence of section 
        3102(a) of such Code is amended--
                (i) by striking ``calendar quarter'' each place it 
            appears and inserting ``calendar year'', and
                (ii) by striking ``$50'' and inserting ``the applicable 
            dollar threshold (as defined in section 3121(x)) for such 
            year''.
        (2) Amendment of social security act.--
            (A) General rule.--Subparagraph (B) of section 209(a)(6) of 
        the Social Security Act (42 U.S.C. 409(a)(6)(B)) is amended to 
        read as follows:
        ``(B) Cash remuneration paid by an employer in any calendar 
    year to an employee for domestic service in a private home of the 
    employer (including domestic service described in section 
    210(f)(5)), if the cash remuneration paid in such year by the 
    employer to the employee for such service is less than the 
    applicable dollar threshold (as defined in section 3121(x) of the 
    Internal Revenue Code of 1986) for such year;''.
            (B) Employment of domestic employees under age 18 excluded 
        from coverage.--Section 210(a) of such Act (42 U.S.C. 410(a)) 
        is amended--
                (i) by striking ``or'' at the end of paragraph (19),
                (ii) by striking the period at the end of paragraph 
            (20) and inserting ``; or'', and
                (iii) by adding at the end the following new paragraph:
        ``(21) Domestic service in a private home of the employer 
    which--
            ``(A) is performed in any year by an individual under the 
        age of 18 during any portion of such year; and
            ``(B) is not the principal occupation of such employee.''.
        (3) Effective dates.--
            (A) In general.--Except as provided in subparagraph (B), 
        the amendments made by this subsection shall apply to 
        remuneration paid after December 31, 1993.
            (B) Excluded employment.--The amendments made by paragraphs 
        (1)(C) and (2)(B) shall apply to services performed after 
        December 31, 1994.
        (4) No loss of social security coverage for 1994; continuation 
    of w-2 filing requirement.--Notwithstanding the amendments made by 
    this subsection, if the wages (as defined in section 3121(a) of the 
    Internal Revenue Code of 1986) paid during 1994 to an employee for 
    domestic service in a private home of the employer are less than 
    $1,000--
            (A) the employer shall file any return or statement 
        required under section 6051 of such Code with respect to such 
        wages (determined without regard to such amendments), and
            (B) the employee shall be entitled to credit under section 
        209 of the Social Security Act with respect to any such wages 
        required to be included on any such return or statement.
    (b) Coordination of Collection of Domestic Service Employment Taxes 
With Collection of Income Taxes.--
        (1) In general.--Chapter 25 of the Internal Revenue Code of 
    1986 (relating to general provisions relating to employment taxes) 
    is amended by adding at the end thereof the following new section:
``SEC. 3510. COORDINATION OF COLLECTION OF DOMESTIC SERVICE EMPLOYMENT 
TAXES WITH COLLECTION OF INCOME TAXES.
    ``(a) General Rule.--Except as otherwise provided in this section--
        ``(1) returns with respect to domestic service employment taxes 
    shall be made on a calendar year basis,
        ``(2) any such return for any calendar year shall be filed on 
    or before the 15th day of the fourth month following the close of 
    the employer's taxable year which begins in such calendar year, and
        ``(3) no requirement to make deposits (or to pay installments 
    under section 6157) shall apply with respect to such taxes.
    ``(b) Domestic Service Employment Taxes Subject to Estimated Tax 
Provisions.--
        ``(1) In general.--Solely for purposes of section 6654, 
    domestic service employment taxes imposed with respect to any 
    calendar year shall be treated as a tax imposed by chapter 2 for 
    the taxable year of the employer which begins in such calendar 
    year.
        ``(2) Employers not otherwise required to make estimated 
    payments.--Paragraph (1) shall not apply to any employer for any 
    calendar year if--
            ``(A) no credit for wage withholding is allowed under 
        section 31 to such employer for the taxable year of the 
        employer which begins in such calendar year, and
            ``(B) no addition to tax would (but for this section) be 
        imposed under section 6654 for such taxable year by reason of 
        section 6654(e).
        ``(3) Annualization.--Under regulations prescribed by the 
    Secretary, appropriate adjustments shall be made in the application 
    of section 6654(d)(2) in respect of the amount treated as tax under 
    paragraph (1).
        ``(4) Transitional rule.--In the case of any taxable year 
    beginning before January 1, 1998, no addition to tax shall be made 
    under section 6654 with respect to any underpayment to the extent 
    such underpayment was created or increased by this section.
    ``(c) Domestic Service Employment Taxes.--For purposes of this 
section, the term `domestic service employment taxes' means--
        ``(1) any taxes imposed by chapter 21 or 23 on remuneration 
    paid for domestic service in a private home of the employer, and
        ``(2) any amount withheld from such remuneration pursuant to an 
    agreement under section 3402(p).
For purposes of this subsection, the term `domestic service in a 
private home of the employer' includes domestic service described in 
section 3121(g)(5).
    ``(d) Exception Where Employer Liable for Other Employment Taxes.--
To the extent provided in regulations prescribed by the Secretary, this 
section shall not apply to any employer for any calendar year if such 
employer is liable for any tax under this subtitle with respect to 
remuneration for services other than domestic service in a private home 
of the employer.
    ``(e) General Regulatory Authority.--The Secretary shall prescribe 
such regulations as may be necessary or appropriate to carry out the 
purposes of this section. Such regulations may treat domestic service 
employment taxes as taxes imposed by chapter 1 for purposes of 
coordinating the assessment and collection of such employment taxes 
with the assessment and collection of domestic employers' income taxes.
    ``(f) Authority To Enter Into Agreements To Collect State 
Unemployment Taxes.--
        ``(1) In general.--The Secretary is hereby authorized to enter 
    into an agreement with any State to collect, as the agent of such 
    State, such State's unemployment taxes imposed on remuneration paid 
    for domestic service in a private home of the employer. Any taxes 
    to be collected by the Secretary pursuant to such an agreement 
    shall be treated as domestic service employment taxes for purposes 
    of this section.
        ``(2) Transfers to state account.--Any amount collected under 
    an agreement referred to in paragraph (1) shall be transferred by 
    the Secretary to the account of the State in the Unemployment Trust 
    Fund.
        ``(3) Subtitle f made applicable.--For purposes of subtitle F, 
    any amount required to be collected under an agreement under 
    paragraph (1) shall be treated as a tax imposed by chapter 23.
        ``(4) State.--For purposes of this subsection, the term `State' 
    has the meaning given such term by section 3306(j)(1).''.
        (2) Clerical amendment.--The table of sections for chapter 25 
    of such Code is amended by adding at the end thereof the following:

        ``Sec. 3510. Coordination of collection of domestic service 
                  employment taxes with collection of income taxes.''.

        (3) Effective date.--The amendments made by this subsection 
    shall apply to remuneration paid in calendar years beginning after 
    December 31, 1994.
        (4) Expanded information to employers.--The Secretary of the 
    Treasury or the Secretary's delegate shall prepare and make 
    available information on the Federal tax obligations of employers 
    with respect to employees performing domestic service in a private 
    home of the employer. Such information shall also include a 
    statement that such employers may have obligations with respect to 
    such employees under State laws relating to unemployment insurance 
    and workers compensation.
SEC. 3. ALLOCATIONS TO FEDERAL DISABILITY INSURANCE TRUST FUND.
    (a) Allocation With Respect to Wages.--Section 201(b)(1) of the 
Social Security Act (42 U.S.C. 401(b)(1)) is amended by striking ``(O) 
1.20 per centum'' and all that follows through ``December 31, 1999, and 
so reported,'' and inserting ``(O) 1.20 per centum of the wages (as so 
defined) paid after December 31, 1989, and before January 1, 1994, and 
so reported, (P) 1.88 per centum of the wages (as so defined) paid 
after December 31, 1993, and before January 1, 1997, and so reported, 
(Q) 1.70 per centum of the wages (as so defined) paid after December 
31, 1996, and before January 1, 2000, and so reported, and (R) 1.80 per 
centum of the wages (as so defined) paid after December 31, 1999, and 
so reported,''.
    (b) Allocation With Respect to Self-Employment Income.--Section 
201(b)(2) of such Act (42 U.S.C. 401(b)(2)) is amended by striking 
``(O) 1.20 per centum'' and all that follows through ``December 31, 
1999,'' and inserting ``(O) 1.20 per centum of the amount of self-
employment income (as so defined) so reported for any taxable year 
beginning after December 31, 1989, and before January 1, 1994, (P) 1.88 
per centum of the amount of self-employment income (as so defined) so 
reported for any taxable year beginning after December 31, 1993, and 
before January 1, 1997, (Q) 1.70 per centum of the amount of self-
employment income (as so defined) so reported for any taxable year 
beginning after December 31, 1996, and before January 1, 2000, and (R) 
1.80 per centum of the amount of self-employment income (as so defined) 
so reported for any taxable year beginning after December 31, 1999,''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to wages paid after December 31, 1993, and self-
employment income for taxable years beginning after such date.
    (d) Study on Rising Costs of Disability Benefits.--
        (1) In general.--As soon as practicable after the date of the 
    enactment of this Act, the Commissioner of Social Security shall 
    conduct a comprehensive study of the reasons for rising costs 
    payable from the Federal Disability Insurance Trust Fund.
        (2) Matters to be included in study.--In conducting the study 
    under this subsection, the Commissioner of Social Security shall--
            (A) determine the relative importance of the following 
        factors in increasing the costs payable from the Trust Fund:
                (i) increased numbers of applications for benefits;
                (ii) higher rates of benefit allowances; and
                (iii) decreased rates of benefit terminations; and
            (B) identify, to the extent possible, underlying social, 
        economic, demographic, programmatic, and other trends 
        responsible for changes in disability benefit applications, 
        allowances, and terminations.
        (3) Report.--Not later than October 1, 1995, the Commissioner 
    of Social Security shall transmit a report to the Committee on Ways 
    and Means of the House of Representatives and the Committee on 
    Finance of the Senate setting forth the results of the study 
    conducted under this subsection, together with any recommendations 
    for legislative changes which the Commissioner determines 
    appropriate.
SEC. 4. NONPAYMENT OF BENEFITS TO INCARCERATED INDIVIDUALS AND 
INDIVIDUALS CONFINED IN CRIMINAL CASES PURSUANT TO CONVICTION OR BY 
COURT ORDER BASED ON FINDINGS OF INSANITY.
    (a) In General.--Section 202(x) of the Social Security Act (42 
U.S.C. 402(x)) is amended--
        (1) in the heading, by inserting ``and Certain Other Inmates of 
    Publicly Funded Institutions'' after ``Prisoners'';
        (2) by striking ``(x)(1) Notwithstanding'' and all that follows 
    through the end of paragraph (1) and inserting the following:
    ``(x)(1)(A) Notwithstanding any other provision of this title, no 
monthly benefits shall be paid under this section or under section 223 
to any individual for any month during which such individual--
        ``(i) is confined in a jail, prison, or other penal institution 
    or correctional facility pursuant to his conviction of an offense 
    punishable by imprisonment for more than 1 year (regardless of the 
    actual sentence imposed), or
        ``(ii) is confined by court order in an institution at public 
    expense in connection with--
            ``(I) a verdict or finding that the individual is guilty 
        but insane, with respect to an offense punishable by 
        imprisonment for more than 1 year,
            ``(II) a verdict or finding that the individual is not 
        guilty of such an offense by reason of insanity,
            ``(III) a finding that such individual is incompetent to 
        stand trial under an allegation of such an offense, or
            ``(IV) a similar verdict or finding with respect to such an 
        offense based on similar factors (such as a mental disease, a 
        mental defect, or mental incompetence).
    ``(B)(i) For purposes of clause (i) of subparagraph (A), an 
individual shall not be considered confined in an institution 
comprising a jail, prison, or other penal institution or correctional 
facility during any month throughout which such individual is residing 
outside such institution at no expense (other than the cost of 
monitoring) to such institution or the penal system or to any agency to 
which the penal system has transferred jurisdiction over the 
individual.
    ``(ii) For purposes of clause (ii) of subparagraph (A), an 
individual confined in an institution as described in such clause (ii) 
shall be treated as remaining so confined until--
        ``(I) he or she is released from the care and supervision of 
    such institution, and
        ``(II) such institution ceases to meet the individual's basic 
    living needs.'';
    and
        (3) in paragraph (3), by striking ``any individual'' and all 
    that follows and inserting ``any individual who is confined as 
    described in paragraph (1) if the confinement is under the 
    jurisdiction of such agency and the Commissioner of Social Security 
    requires such information to carry out the provisions of this 
    section.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to benefits for months commencing after 90 days 
after the date of the enactment of this Act.

SEC. 5. ADDITIONAL DEBT COLLECTION PRACTICES.

    (a) In General.--Section 204 of the Social Security Act (42 U.S.C. 
404) is amended by adding at the end the following new subsection:
    ``(f)(1) With respect to any delinquent amount, the Commissioner of 
Social Security may use the collection practices described in sections 
3711(f), 3716, and 3718 of title 31, United States Code, as in effect 
on October 1, 1994.
    ``(2) For purposes of paragraph (1), the term `delinquent amount' 
means an amount--
        ``(A) in excess of the correct amount of payment under this 
    title;
        ``(B) paid to a person after such person has attained 18 years 
    of age; and
        ``(C) determined by the Commissioner of Social Security, under 
    regulations, to be otherwise unrecoverable under this section after 
    such person ceases to be a beneficiary under this title.''.
    (b) Conforming Amendment.--Section 3701(d) of title 31, United 
States Code, is amended by inserting ``, except to the extent provided 
under section 204(f) of such Act (42 U.S.C. 404(f)),'' after ``the 
Social Security Act (42 U.S.C. 301 et seq.)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to collection activities begun on or after the date of the 
enactment of this Act and before October 1, 1999.
SEC. 6. NURSING HOMES REQUIRED TO REPORT ADMISSIONS OF SSI RECIPIENTS.
    (a) In General.--Section 1631(e)(1) of the Social Security Act (42 
U.S.C. 1383(e)(1)) is amended by adding at the end the following new 
subparagraph:
    ``(C) For purposes of making determinations under section 1611(e), 
the requirements prescribed by the Commissioner of Social Security 
pursuant to subparagraph (A) of this paragraph shall require each 
administrator of a nursing home, extended care facility, or 
intermediate care facility, within 2 weeks after the admission of any 
eligible individual or eligible spouse receiving benefits under this 
title, to transmit to the Commissioner a report of the admission.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to admissions occurring on or after October 1, 1995.

SEC. 7. RULE OF CONSTRUCTION.

    Until March 31, 1995, any reference in this Act (other than section 
3(d)) or any amendment made by this Act to the Commissioner of Social 
Security shall be deemed a reference to the Secretary of Health and 
Human Services.







                               Speaker of the House of Representatives.







                            Vice President of the United States and    
                                               President of the Senate.