[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3841 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 3841

 To provide assistance to displaced workers by extending unemployment 
benefits 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 
   Committee on Ways and Means, and in addition to the Committees on 
 Energy and Commerce, and the Budget, for a period to be subsequently 
   determined 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 unemployment 
benefits and by providing a credit for health insurance costs, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives 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 compensation 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 compensation 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 compensation 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 compensation have been 
        terminated by reason of the expiration 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 unemployment 
        compensation which shall be payable to any individual for any 
        week of total unemployment shall be equal to the amount of the 
        regular compensation (including dependents' allowances) payable 
        to such individual during such individual's benefit year under 
        the State law for a week of total unemployment;
            (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 temporary extended unemployment 
        compensation and the payment thereof, except--
                    (A) that an individual shall not be eligible for 
                temporary extended unemployment compensation under this 
                title unless, in the base period with respect to which 
                the individual exhausted 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 under the provisions of 
                the State law implementing section 202(a)(5) of the 
                Federal-State Extended Unemployment Compensation Act of 
                1970 (26 U.S.C. 3304 note); and
                    (B) where otherwise inconsistent with the 
                provisions of this title or with the regulations or 
                operating instructions of the Secretary promulgated to 
                carry out this title; and
            (3) the maximum amount of temporary extended unemployment 
        compensation payable to any individual for whom a temporary 
        extended unemployment compensation account is established under 
        section 103 shall not exceed the amount established in such 
        account for such individual.
    (e) Election by States.--Notwithstanding any other provision of 
Federal law (and if State law permits), the Governor of a State that is 
in an extended benefit period may provide for the payment of temporary 
extended unemployment compensation in lieu of extended compensation to 
individuals who otherwise meet the requirements of this section. Such 
an election shall not require a State to trigger off an extended 
benefit period.

SEC. 103. TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION 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 unemployment compensation account with respect to 
such individual'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 regular 
                compensation (including dependents' allowances) payable 
                to the individual during the individual's benefit year 
                under such law, or
                    (B) 13 times the individual's average weekly 
                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 compensation (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 individual'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 originally 
        established in such account (as determined under subsection 
        (b)(1)).
            (2) Extended benefit period.--For purposes 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 Unemployment 
                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 Compensation.--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 
compensation 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 extent 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 Secretary), 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 Secretary'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 unemployment 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 entered into under this 
title.
    (b) Certification.--The Secretary shall from time to time certify 
to the Secretary of the Treasury for payment 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 certification, 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 appropriated out of the 
employment security administration account (as established by section 
901(a) of the Social Security 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 agreements 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 services to which 
        section 3309(a)(1) of the Internal Revenue 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 compensation under this 
title to which he was not entitled, such individual--
            (1) shall be ineligible for further temporary extended 
        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 unemployment 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 recover the amount to 
        be repaid, or any part thereof, by deductions from any 
        temporary extended unemployment compensation payable to such 
        individual under this title or from any unemployment 
        compensation payable to such individual under any Federal 
        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 respect to any week of unemployment, during the 3-year 
        period after the date such individuals received the payment of 
        the temporary extended unemployment compensation to which they 
        were not entitled, except that no single deduction may exceed 
        50 percent of the weekly benefit amount from which such 
        deduction is made.
            (2) Opportunity for hearing.--No repayment 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 respective 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 transferred 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 Security Act, as last in effect before such date of 
        enactment.
    (b) Special Transfer in Fiscal Year 2002.--Section 903 of the 
Social Security Act is amended by adding 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 determined with respect to such State under paragraph (2).
    ``(2)(A) The amount to be transferred under this subsection to a 
State account shall (as determined by the Secretary of Labor and 
certified by such Secretary to the Secretary of the Treasury) be equal 
to--
            ``(i) the amount which would have been required 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 subparagraph (A) shall 
        be reduced ratably, if and to the extent 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 unemployment, 
        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 exhaustion of any 
        temporary extended unemployment compensation (if such State has 
        entered into an agreement 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 determination relating to the 
amount of any extended compensation 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 otherwise eligible for regular 
compensation under the unemployment compensation law of such State, 
including those described in clause (iii).
    ``(ii) The benefits paid under this subparagraph to any individual 
may not, for any period of unemployment, exceed the maximum amount of 
regular compensation authorized under the unemployment compensation law 
of such State for that same period, plus any additional compensation 
(described in subparagraph (B)(i)) which could have been paid with 
respect to that amount.
    ``(iii) The categories of individuals described in this clause 
include the following:
            ``(I) Individuals who are seeking, or available for, only 
        part-time (and not full-time) work.
            ``(II) Individuals who would be eligible for regular 
        compensation under the unemployment compensation law of such 
        State under an alternative base period.
    ``(D) Amounts transferred to a State account under this subsection 
may be used in the payment of cash benefits to individuals only for 
weeks of unemployment beginning after the date of enactment of this 
subsection.
    ``(4) Amounts transferred to a State account under this subsection 
may be used for the administration of its unemployment compensation law 
and public employment offices (including in connection with benefits 
described in paragraph (3) and any recipients thereof), subject to the 
same conditions as set forth in subsection (c)(2) (excluding 
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 paragraph.''.
    (c) Limitations on Transfers.--Section 903(b) of the Social 
Security Act shall apply to transfers under section 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 unemployment 
        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 necessary 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 CREDIT.

    (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 taxpayer, 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 paragraph (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 satisfies such 
                requirements.
            ``(3) Other specified coverage.--For purposes 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 insurance 
                        under which at least 50 percent of the cost of 
                        coverage (determined under section 4980B) is 
                        paid or incurred by an employer (or former 
                        employer) of the taxpayer or the taxpayer's 
                        spouse.
                            ``(ii) Treatment of cafeteria plans and 
                        flexible spending accounts.--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, medicaid, 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 section 
                85(b)), or
                    ``(B) for which such individual is certified by a 
                State agency (or by any other entity designated by the 
                Secretary) as otherwise being entitled to receive 
                unemployment compensation (as so defined) but for--
                            ``(i) the termination of the period during 
                        which such compensation was payable, or
                            ``(ii) an exhaustion of such individual's 
                        rights to such compensation.
    ``(d) Qualified Health Insurance.--For purposes of this section, 
the term `qualified health insurance' means insurance which constitutes 
medical care; except that such term shall not include any insurance if 
substantially 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 payments.--If any payment 
        is made by the Secretary under section 7527 during any calendar 
        year to a provider of qualified health insurance for an 
        individual, then the tax imposed by this chapter for the 
        individual's last taxable year beginning in such calendar year 
        shall be increased by the aggregate amount of such payments.
            ``(2) Reconciliation of payments advanced 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 
        allowed by subsection (a)) allowable under part IV of 
        subchapter A of chapter 1.
    ``(f) Special Rules.--
            ``(1) Coordination with other deductions.--Amounts taken 
        into account under subsection (a) shall not be taken into 
        account in determining any deduction allowed under section 
        162(l) or 213.
            ``(2) MSA distributions.--Amounts distributed from an 
        Archer MSA (as defined in section 220(d)) shall not be taken 
        into account under subsection (a).
            ``(3) Denial of credit to dependents.--No credit shall be 
        allowed under this section to any individual with respect to 
        whom a deduction under section 151 is allowable to another 
        taxpayer for a taxable year beginning in the calendar year in 
        which such individual's taxable year begins.
            ``(4) Credit treated as refundable credit.--For purposes of 
        this title, the credit allowed under this section shall be 
        treated as a credit allowable under subpart C of part IV of 
        subchapter A of chapter 1.
            ``(5) Regulations.--The Secretary may prescribe 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 determining 
        who is an eligible individual (as defined in section 2741(b) of 
        such Act) in the case of an individual 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 insurance 
        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 following 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 creation 
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 restricts 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 allotted to 
        the State under paragraph (2), the Secretary 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 subsection 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 Defined.--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 subsection 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 availability 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 inserting after section 6050S the following new 
        section:

``SEC. 6050T. RETURNS RELATING TO DISPLACED WORKER HEALTH INSURANCE 
              CREDIT.

    ``(a) Requirement of Reporting.--Every person--
            ``(1) who, in connection with a trade or business 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 
        section 6429(d)), and
            ``(2) who claims a reimbursement for an advance 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 prescribe, 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 Secretary may 
                prescribe.
    ``(c) Statements To Be Furnished to Individuals With Respect to 
Whom Information Is Required.--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 statement showing--
            ``(1) the name and address of the person required 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 sentence 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 definitions) 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 returns 
                        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 sections 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 following new item:

                              ``Sec. 6050T. Returns relating to 
                                        displaced worker health 
                                        insurance credit.''.
    (d) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before 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 Revenue 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 individuals to providers of 
health insurance for such individuals.
    ``(b) Eligible Individual.--For purposes of this section, the term 
`eligible individual' means any individual for whom a qualified health 
insurance credit eligibility certificate is in effect.
    ``(c) Qualified Health Insurance Credit Eligibility 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 entity designated by the Secretary) which--
            ``(1) certifies that the individual was unemployed (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 insurance 
                                        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; BUDGETARY TREATMENT OF ACT

SEC. 301. NO IMPACT ON SOCIAL SECURITY TRUST FUNDS.

    (a) In General.--Nothing in this Act (or an amendment 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 paragraph (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 established 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 revenues of 
        the Federal Government an amount sufficient 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 pursuant to section 
252(e) of the Balanced Budget and Emergency 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 recommended 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, 
        provided in the conference report accompanying H. Con. Res. 83, 
        the concurrent resolution on the budget for fiscal year 2002.
            (2) Amounts equal to the amounts of new budget authority 
        and outlays provided in this Act in excess 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.
                                 <all>