[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1759 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                S. 1759

To provide a short-term enhanced safety net for Americans losing their 
    jobs and to provide our Nation's economy with a necessary boost.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            December 3, 2001

   Mr. Kerry introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To provide a short-term enhanced safety net for Americans losing their 
    jobs and to provide our Nation's economy with a necessary boost.

    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 ``Putting Americans First Act''.

              TITLE I--TEMPORARY UNEMPLOYMENT COMPENSATION

SEC. 101. 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 (hereinafter 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.--
            (1) In general.--Any agreement under subsection (a) shall 
        provide that the State agency of the State will make--
                    (A) payments of regular compensation to individuals 
                in amounts and to the extent that such payments would 
                be determined if the State law were applied with the 
                modifications described in paragraph (2), and
                    (B) payments of temporary supplemental unemployment 
                compensation to individuals who--
                            (i) have--
                                    (I) exhausted all rights to regular 
                                compensation under the State law; or
                                    (II) received 26 weeks of regular 
                                compensation under the State law;
                            (ii) do not have any rights to regular 
                        compensation under the State law of any other 
                        State; and
                            (iii) are not receiving compensation under 
                        the unemployment compensation law of Canada.
            (2) Modifications described.--The modifications described 
        in this paragraph are as follows:
                    (A) An individual shall be eligible for regular 
                compensation if the individual would be so eligible, 
                determined by applying--
                            (i) the base period that would otherwise 
                        apply under the State law if this title had not 
                        been enacted, or
                            (ii) a base period ending at the close of 
                        the calendar quarter most recently completed 
                        before the date of the individual's application 
                        for benefits,
                whichever results in the greater amount.
                    (B) An individual shall not be denied regular 
                compensation under the State law's provisions relating 
                to availability for work, active search for work, or 
                refusal to accept work, solely by virtue of the fact 
                that such individual is seeking, or available for, only 
                part-time (and not full-time) work.
                    (C)(i) Subject to clause (ii), the amount of 
                regular compensation (including dependents' allowances) 
                payable for any week shall be equal to the amount 
                determined under the State law (before the application 
                of this subparagraph), plus an additional--
                            (I) 25 percent, or
                            (II) $65,
                whichever is greater.
                    (ii) In no event may the total amount determined 
                under clause (i) with respect to any individual exceed 
                the average weekly insured wages of that individual in 
                that calendar quarter of the base period in which such 
                individual's insured wages were the highest (or one 
                such quarter if his wages were the same for more than 
                one such quarter).
    (c) Nonreduction Rule.--Under the agreement, subsection (b)(2)(C) 
shall not apply (or shall cease to apply) with respect to a State upon 
a determination by the Secretary that the method governing the 
computation of regular compensation under the State law of that State 
has been modified in a way such that--
            (1) the average weekly amount of regular compensation which 
        will be payable during the period of the agreement (determined 
        disregarding the modifications described in subsection (b)(2)) 
        will be less than
            (2) the average weekly amount of regular compensation which 
        would otherwise have been payable during such period under the 
        State law, as in effect on September 11, 2001.
    (d) Coordination Rules.--
            (1) Regular compensation payable under a federal law.--The 
        modifications described in subsection (b)(2) shall also apply 
        in determining the amount of benefits payable under any Federal 
        law to the extent that those benefits are determined by 
        reference to regular compensation payable under the State law 
        of the State involved.
            (2) TSUC to serve as second-tier benefits.--Notwithstanding 
        any other provision of law, neither regular compensation, 
        extended compensation, nor additional compensation under any 
        Federal or State law shall be payable to any individual for any 
        week for which temporary supplemental unemployment compensation 
        is payable to such individual.
            (3) Treatment of other unemployment compensation.--After 
        the date on which a State enters into an agreement under this 
        title, any regular compensation in excess of 26 weeks, any 
        extended compensation, and any additional compensation under 
        any Federal or State law shall be payable to an individual in 
        accordance with the State law after such individual has 
        exhausted any rights to temporary supplemental unemployment 
        compensation under the agreement.
    (e) Exhaustion of Benefits.--For purposes of subsection 
(b)(1)(B)(i)(I), an individual shall be considered 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.
    (f) Weekly Benefit Amount, Terms and Conditions, ETC. Relating to 
TSUC.--For purposes of any agreement under this title--
            (1) the amount of temporary supplemental unemployment 
        compensation which shall be payable to an individual for any 
        week of total unemployment shall be equal to the amount of 
regular compensation (including dependents' allowances) payable to such 
individual under the State law for a week for total unemployment during 
such individual's benefit year,
            (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 supplemental unemployment 
        compensation and the payment thereof, except where 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 supplemental 
        unemployment compensation payable to any individual for whom a 
        temporary supplemental unemployment compensation account is 
        established under section 103 shall not exceed the amount 
        established in such account for such individual.

SEC. 103. TEMPORARY SUPPLEMENTAL 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 supplemental unemployment compensation, a 
temporary supplemental unemployment compensation account.
    (b) Amount in Account.--
            (1) In general.--The amount established in an account under 
        subsection (a) shall be equal to the product obtained by 
        multiplying an individual's weekly benefit amount by the 
        applicable factor under paragraph (3).
            (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 
        a week of total unemployment in such individual's benefit year.
            (3) Applicable factor.--
                    (A) General rule.--The applicable factor under this 
                paragraph is 13, unless the individual's benefit year 
                begins or ends during a period of high unemployment 
                within such individual's State, in which case the 
                applicable factor is 26.
                    (B) Period of high unemployment.--For purposes of 
                this paragraph, a period of high unemployment within a 
                State shall begin and end, if at all, in a way (to be 
set forth in the State's agreement under this title) similar to the way 
in which an extended benefit period would under section 203 of the 
Federal-State Extended Unemployment Compensation Act of 1970, subject 
to the following:
                            (i) To determine if there is a State ``on'' 
                        or ``off'' indicator, apply section 203(f) of 
                        such Act, but--
                                    (I) substitute ``5 percent'' for 
                                ``6.5 percent'' in paragraph (1)(A)(i) 
                                thereof, and
                                    (II) disregard paragraph (1)(A)(ii) 
                                thereof and the last sentence of 
                                paragraph (1) thereof.
                            (ii) To determine the beginning and ending 
                        dates of a period of high unemployment within a 
                        State, apply section 203(a) and (b) of such 
                        Act, except that--
                                    (I) in applying such section 
                                203(a), deem paragraphs (1) and (2) 
                                thereof to be amended by striking ``the 
                                third week after'', and
                                    (II) in applying such section 
                                203(b), deem paragraph (1)(A) thereof 
                                amended by striking ``thirteen'' and 
                                inserting ``twenty-six'' and paragraph 
                                (1)(B) thereof amended by striking 
                                ``fourteenth'' and inserting ``twenty-
                                seventh''.
            (4) Rule of construction.--For purposes of any computation 
        under paragraph (1) (and any determination of amount under 
        section 101(f)(1)), the modification described in section 
        101(b)(2)(C) (relating to increased benefits) shall be deemed 
        to have been in effect with respect to the entirety of the 
        benefit year involved.
    (c) Eligibility Period.--An individual whose applicable factor 
under subsection (b)(3) is 26 shall be eligible for temporary 
supplemental unemployment compensation for each week of total 
unemployment in his benefit year which begins in the State's period of 
high unemployment and, if his benefit year ends within such period, any 
such weeks thereafter which begin in such period of high unemployment, 
not to exceed a total of 26 weeks.

SEC. 104. PAYMENTS TO STATES HAVING AGREEMENTS UNDER THIS TITLE.

    (a) General Rule.--There shall be paid to each State which has 
entered into an agreement under this title an amount equal to--
            (1) 100 percent of any regular compensation made payable to 
        individuals by such State by virtue of the modifications which 
        are described in section 101(b)(2) and deemed to be in effect 
        with respect to such State pursuant to section 101(b)(1)(A),
            (2) 100 percent of any regular compensation--
                    (A) which is paid to individuals by such State by 
                reason of the fact that its State law contains 
                provisions comparable to the modifications described in 
                section 101(b)(2)(A)-(B), but only
                    (B) to the extent that those amounts would, if such 
                amounts were instead payable by virtue of the State 
                law's being deemed to be so modified pursuant to 
                section 101(b)(1)(A), have been reimbursable under 
                paragraph (1), and
            (3) 100 percent of the temporary supplemental unemployment 
        compensation paid to individuals by the State pursuant to such 
        agreement.
    (b) Determination of Amount.--Sums under subsection (a) 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.
    (c) Administrative Expenses, Etc.--There is hereby appropriated out 
of the employment security administration account of the Unemployment 
Trust Fund (as established by section 901(a) of the Social Security 
Act) $500,000,000 to reimburse States for the costs of the 
administration of agreements under this title (including any 
improvements in technology in connection therewith) and to provide 
reemployment services to unemployment compensation claimants in States 
having agreements under this title. Each State's share of the amount 
appropriated by the preceding sentence shall be determined by the 
Secretary according to the factors described in section 302(a) of the 
Social Security Act and certified by the Secretary to the Secretary of 
the Treasury.

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), 
and the Federal unemployment account (as established by section 904(g) 
of the Social Security Act), of the Unemployment Trust Fund shall be 
used, in accordance with subsection (b), for the making of payments 
(described in section 103(a)) 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 
described in section 103(a) which are 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 (or, to the extent that there are 
insufficient funds in that account, from the Federal unemployment 
account) to the account of such State in the Unemployment Trust Fund.

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 
any regular compensation or temporary supplemental unemployment 
compensation under this title to which he was not entitled, such 
individual--
            (1) shall be ineligible for any further benefits 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 any 
regular compensation or temporary supplemental unemployment 
compensation under this title to which they were not entitled, the 
State shall require such individuals to repay those benefits to the 
State agency, except that the State agency may waive such repayment if 
it determines that--
            (1) the payment of such benefits 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 regular 
        compensation or temporary supplemental 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 regular compensation or 
        temporary supplemental 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.

    For purposes of this title:
            (1) In general.--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, 
        subject to paragraph (2).
            (2) State law and regular compensation.--In the case of a 
        State entering into an agreement under this title--
                    (A) ``State law'' shall be considered to refer to 
                the State law of such State, applied in conformance 
                with the modifications described in section 101(b)(2), 
                subject to section 101(c), and
                    (B) ``regular compensation'' shall be considered to 
                refer to such compensation, determined under its State 
                law (applied in the manner described in subparagraph 
                (A)),
        except as otherwise provided or where the context clearly 
        indicates otherwise.

SEC. 108. APPLICABILITY.

    (a) In General.--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.
    (b) Specific Rules.--
            (1) In general.--Under such an agreement, the following 
        rules shall apply:
                    (A) Alternative base periods.--
                            (i) Applicability.--The modification 
                        described in section 702(b)(2)(A) (relating to 
                        alternative base periods) shall not apply 
                        except in the case of initial claims filed on 
                        or after the first day of the week that 
                        includes September 11, 2001.
                            (ii) Nonretroactivity.--The weekly benefit 
                        amount payable with respect to weeks of regular 
                        compensation and temporary supplemental 
                        unemployment compensation shall not be 
                        recalculated as a result of the application of 
                        the modification described in clause (i) with 
                        respect to an individual who was receiving any 
                        unemployment compensation as of the date on 
                        which the State enters into such an agreement.
                    (B) Part-time employment and increased benefits.--
                The modifications described in subparagraphs (B) and 
                (C) of section 702(b)(2) (relating to part-time 
                employment and increased benefits, respectively) shall 
                apply to weeks of unemployment described in subsection 
                (a), regardless of the date on which an individual's 
                initial claim for benefits is filed.
                    (C) Eligibility for tsuc.--The payments described 
                in section 702(b)(1)(B) (relating to temporary 
                supplemental unemployment compensation) shall not apply 
                except in the case of individuals who have--
                            (i) exhausted all rights to regular 
                        compensation under the State law (as described 
                        in clause (i)(I) of such section) on or after 
                        the first day of the week that includes 
                        September 11, 2001; or
                            (ii) received 26 weeks of regular 
                        compensation under the State law as of such 
                        date (as described in clause (i)(II) of such 
                        section).
            (2) Reapplication process.--
                    (A) Alternative base periods.--In the case of an 
                individual who filed an initial claim for regular 
                compensation on or after the first day of the week that 
                includes September 11, 2001, and before the date that 
                the State entered into an agreement under subsection 
                (a)(1) that was denied as a result of the application 
                of the base period that applied under the State law 
                prior to the date on which the State entered into the 
                such agreement, such individual--
                            (i) may refile a claim for regular 
                        compensation based on the modification 
                        described in section 702(b)(2)(A) (relating to 
                        alternative base periods) on or after the date 
                        on which the State enters into such agreement 
                        and before the date on which such agreement 
                        terminates; and
                            (ii) if eligible, shall be entitled to such 
                        compensation only for weeks of unemployment 
                        described in subsection (a) beginning on or 
                        after the date on which the individual files 
                        such claim.
                    (B) Part-time employment.--In the case of an 
                individual who before the date that the State entered 
                into an agreement under subsection (a)(1) was denied 
                regular compensation under the State law's provisions 
                relating to availability for work, active search for 
                work, or refusal to accept work, solely by virtue of 
                the fact that such individual is seeking, or available 
                for, only part-time (and not full-time) work, such 
                individual--
                            (i) may refile a claim for regular 
                        compensation based on the modification 
                        described in section 702(b)(2)(B) (relating to 
                        part-time employment) on or after the date on 
                        which the State enters into the agreement under 
                        subsection (a)(1) and before the date on which 
                        such agreement terminates; and
                            (ii) if eligible, shall be entitled to such 
                        compensation only for weeks of unemployment 
                        described in subsection (a) beginning on or 
                        after the date on which the individual files 
                        such claim.
            (3) No retroactive payments for weeks prior to agreement.--
        No amounts shall be payable to an individual under an agreement 
        entered into under this title for any week of unemployment 
        prior to the week beginning after the date on which such 
        agreement is entered into.

  TITLE II--HEALTH INSURANCE COVERAGE OPTIONS FOR RECENTLY UNEMPLOYED 
                     INDIVIDUALS AND THEIR FAMILIES

SEC. 201. PREMIUM ASSISTANCE FOR COBRA CONTINUATION COVERAGE FOR 
              INDIVIDUALS AND THEIR FAMILIES.

    (a) Establishment.--
            (1) In general.--Not later than 30 days after the date of 
        enactment of this Act, the Secretary of the Treasury, in 
        consultation with the Secretary of Labor, shall establish a 
        program under which 75 percent of the premium for COBRA 
        continuation coverage shall be provided for an individual who--
                    (A) at any time during the period that begins on 
                September 11, 2001, and ends on December 31, 2002, is 
                separated from employment; and
                    (B) is eligible for, and has elected coverage 
                under, COBRA continuation coverage.
            (2) Inclusion of certain individuals.--For purposes of 
        paragraph (1), the spouse, child, or other individual who was 
an insured under health insurance coverage of an individual who was 
killed as a result of the terrorist-related aircraft crashes on 
September 11, 2001, or as a result of any other terrorist-related event 
occurring during the period described in that paragraph, and who is 
eligible for, and has elected coverage under, COBRA continuation 
coverage shall be eligible for premium assistance under the program 
established under this section.
            (3) State option to elect administration of program.--
                    (A) In general.--A State may elect to administer 
                the premium assistance program established under this 
                section if the State submits to the Secretary of the 
                Treasury, not later than January 1, 2002, a plan that 
                describes how the State will administer such program on 
                behalf of the individuals described in paragraph (1) or 
                (2) who reside in the State beginning on that date.
                    (B) State entitlement.--In the case of a State that 
                submits a plan under subparagraph (A), the Secretary of 
                the Treasury shall pay to each such State an amount for 
                each quarter equal to the total amount of premium 
                subsidies provided in that quarter on behalf of such 
                individuals.
            (4) Immediate implementation.--The program established 
        under this section shall be implemented without regard to 
        whether or not final regulations to carry out such program have 
        been promulgated by the date described in paragraph (1).
    (b) Limitation of Period of Premium Assistance.--
            (1) In general.--Premium assistance provided in accordance 
        with this section shall end with respect to an individual on 
        the earlier of--
                    (A) the date the individual is no longer covered 
                under COBRA continuation coverage; or
                    (B) 12 months after the date the individual is 
                first enrolled in the premium assistance program 
                established under this section.
            (2) No assistance after december 31, 2002.--No premium 
        assistance (including payment for such assistance) may be 
        provided under this section after December 31, 2002.
    (c) Payment Arrangements; Crediting of Assistance.--
            (1) Provision of assistance.--
                    (A) In general.--Premium assistance shall be 
                provided under the program established under this 
                section through direct payment arrangements with a 
                group health plan (including a multiemployer plan), an 
                issuer of health insurance coverage, an administrator, 
                or an employer as appropriate with respect to the 
                individual provided such assistance.
                    (B) Additional option for state-run program.--In 
                the case of a State that elects to administer the 
                program established under this section, such assistance 
                may be provided through the State public employment 
                office or other agency responsible for administering 
                the State unemployment compensation program.
            (2) Premiums payable by individual reduced by amount of 
        assistance.--Premium assistance provided under this section 
        shall be credited by the group health plan, issuer of health 
        insurance coverage, or an administrator against the premium 
        otherwise owed by the individual involved for COBRA 
        continuation coverage.
    (d) Program Requirements.--Premium assistance shall be provided 
under the program established under this section consistent with the 
following:
            (1) All qualifying individuals may apply.--All individuals 
        described in paragraph (1) or (2) of subsection (a) may apply 
        for such assistance at any time during the period described in 
        subsection (a)(1)(A).
            (2) Selection on first-come, first-served basis.--Such 
        assistance shall be provided to such individuals who apply for 
        the assistance in the order in which they apply.
    (e) Limitation on Entitlement.--Nothing in this section shall be 
construed as establishing any entitlement of individuals described in 
paragraph (1) or (2) of subsection (a) to premium assistance under this 
section.
    (f) Disregard of Subsidies for Purposes of Federal and State 
Programs.--Notwithstanding any other provision of law, any premium 
assistance provided to, or on behalf of, an individual under this 
section, shall not be considered income or resources in determining 
eligibility for, or the amount of assistance or benefits provided 
under, any other Federal public benefit or State or local public 
benefit.
    (g) Change in COBRA Notice.--
            (1) General notice.--
                    (A) In general.--In the case of notices provided 
                under section 4980B(f)(6) of the Internal Revenue Code 
                of 1986, section 2206 of the Public Health Service Act 
                (42 U.S.C. 300bb-6), section 606 of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1166), or section 8905a(f)(2)(A) of title 5, United 
                States Code, with respect to individuals who, during 
                the period described in subsection (a)(1)(A), become 
                entitled to elect COBRA continuation coverage, such 
                notices shall include an additional notification to the 
                recipient of the availability of premium assistance for 
                such coverage under this section and for temporary 
                medicaid assistance under section 203 for the remaining 
                portion of COBRA continuation premiums.
                    (B) Alternative notice.--In the case of COBRA 
                continuation coverage to which the notice provision 
                under such sections does not apply, the Secretary of 
                the Treasury, in consultation with the Secretary of 
                Labor, shall, in coordination with administrators of 
                the group health plans (or other entities) that provide 
                or administer the COBRA continuation coverage involved, 
assure the provision of such notice.
                    (C) Form.--The requirement of the additional 
                notification under this paragraph may be met by 
                amendment of existing notice forms or by inclusion of a 
                separate document with the notice otherwise required.
            (2) Specific requirements.--Each additional notification 
        under paragraph (1) shall include--
                    (A) the forms necessary for establishing 
                eligibility and enrollment in the premium assistance 
                program established under this section in connection 
                with the COBRA continuation coverage with respect to 
                individuals described in paragraph (1) or (2) of 
                subsection (a);
                    (B) the name, address, and telephone number 
                necessary to contact the administrator and any other 
                person maintaining relevant information in connection 
                with the premium assistance; and
                    (C) the following statement displayed in a 
                prominent manner:
    ``You may be eligible to receive assistance with payment of 75 
percent of your COBRA continuation coverage premiums and with temporary 
medicaid coverage for the remaining premium portion for a duration of 
not to exceed 12 months.''.
            (3) Notice relating to retroactive coverage.--In the case 
        of such notices previously transmitted before the date of 
        enactment of this Act in the case of an individual described in 
        paragraph (1) who has elected (or is still eligible to elect) 
        COBRA continuation coverage as of the date of enactment of this 
        Act, the administrator of the group health plan (or other 
        entity) involved or the Secretary of the Treasury, in 
        consultation with the Secretary of Labor, (in the case 
        described in the paragraph (1)(B)) shall provide (within 60 
        days after the date of enactment of this Act) for the 
        additional notification required to be provided under paragraph 
        (1).
            (4) Model notices.--Not later than 30 days after the date 
        of enactment of this Act, the Secretary of the Treasury shall 
        prescribe models for the additional notification required under 
        this subsection.
    (h) Reports.--Beginning on January 1, 2002, and every 3 months 
thereafter until January 1, 2003, the Secretary of the Treasury shall 
submit a report to Congress regarding the premium assistance program 
established under this section that includes the following:
            (1) The status of the implementation of the program.
            (2) The number of individuals provided assistance under the 
        program as of the date of the report.
            (3) The average dollar amount (monthly and annually) of the 
        premium assistance provided under the program.
            (4) The number and identification of the States that have 
        elected to administer the program.
            (5) The total amount of expenditures incurred (with 
        administrative expenditures noted separately) under the program 
        as of the date of the report.
    (i) Appropriation.--
            (1) In general.--Out of any funds in the Treasury not 
        otherwise appropriated, there is appropriated to carry out this 
        section, such sums as are necessary for each of fiscal years 
        2002 and 2003.
            (2) Obligation of funds.--This section constitutes budget 
        authority in advance of appropriations Acts and represents the 
        obligation of the Federal Government to provide for the payment 
        of premium assistance under this section.
    (j) Sunset.--No premium assistance (including payment for such 
assistance) may be provided under this section after December 31, 2002.

SEC. 202. STATE OPTION TO PROVIDE TEMPORARY MEDICAID COVERAGE FOR 
              CERTAIN UNINSURED INDIVIDUALS.

    (a) State Option.--Notwithstanding any other provision of law, a 
State may elect to provide under its medicaid program under title XIX 
of the Social Security Act medical assistance in the case of an 
individual--
            (1) who at any time during the period that begins on 
        September 11, 2001, and ends on December 31, 2002, is separated 
        from employment;
            (2) who is not eligible for COBRA continuation coverage;
            (3) who is uninsured; and
            (4) whose assets, resources, and earned or unearned income 
        (or both) do not exceed such limitations (if any) as the State 
        may establish.
    (b) Limitation of Period of Coverage.--Medical assistance provided 
in accordance with this section shall end with respect to an individual 
on the earlier of--
            (1) the date the individual is no longer uninsured; or
            (2) subject to subsection (c)(4), 12 months after the date 
        the individual first receives such assistance.
    (c) Special Rules.--In the case of medical assistance provided 
under this section--
            (1) the Federal medical assistance percentage under section 
        1905(b) of the Social Security Act (42 U.S.C. 1396d(b)) shall 
        be the enhanced FMAP (as defined in section 2105(b) of such Act 
        (42 U.S.C. 1397ee(b)));
            (2) a State may elect to apply any income, asset, or 
        resource limitation permitted under the State medicaid plan or 
        under title XIX of such Act;
            (3) the provisions of section 1916(g) of the Social 
        Security Act (42 U.S.C. 1396o) shall apply to the provision of 
        such assistance in the same manner as the provisions of such 
        section apply with respect to individuals provided medical 
        assistance only under subclause (XV) or (XVI) of section 
        1902(a)(10)(A)(ii) of such Act (42 U.S.C. 1396a(a)(10)(A)(ii));
            (4) a State may elect to provide such assistance in 
        accordance with section 1902(a)(34) of the Social Security Act 
        (42 U.S.C. 1396a(a)(34)) and any assistance provided with 
        respect to a month described in that section shall not be 
included in the determination of the 12-month period under subsection 
(b)(2);
            (5) a State may elect to make eligible for such medical 
        assistance a dependent spouse or children of an individual 
        eligible for medical assistance under subsection (a), if such 
        spouse or children are uninsured;
            (6) individuals eligible for medical assistance under this 
        section shall be deemed to be described in the list of 
        individuals described in the matter preceding paragraph (1) of 
        section 1905(a) of such Act (42 U.S.C. 1396d(a));
            (7) a State may elect to provide such medical assistance 
        without regard to any limitation under sections 401(a), 402(b), 
        403, and 421 of the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 (8 U.S.C. 1611(a), 
        1612(b), 1613, and 1631) and no debt shall accrue under an 
        affidavit of support against any sponsor of an individual who 
        is an alien who is provided such assistance, and the cost of 
        such assistance shall not be considered as an unreimbursed 
        cost; and
            (8) the Secretary of Health and Human Services shall not 
        count, for purposes of section 1108(f) of the Social Security 
        Act (42 U.S.C. 1308(f)), such amount of payments under this 
        section as bears a reasonable relationship to the average 
        national proportion of payments made under this section for the 
        50 States and the District of Columbia to the payments 
        otherwise made under title XIX for such States and District.
    (d) Sunset.--No medical assistance may be provided under this 
section after December 31, 2002.

SEC. 203. STATE OPTION TO PROVIDE TEMPORARY COVERAGE UNDER MEDICAID FOR 
              THE UNSUBSIDIZED PORTION OF COBRA CONTINUATION PREMIUMS.

    (a) State Option.--
            (1) In general.--Notwithstanding any other provision of 
        law, a State may elect to provide under its medicaid program 
        under title XIX of the Social Security Act medical assistance 
        in the form of payment for the portion of the premium for COBRA 
        continuation coverage for which an individual does not receive 
        a subsidy under the premium assistance program established 
        under section 201 in the case of an individual--
                    (A) who at any time during the period that begins 
                on September 11, 2001, and ends on December 31, 2002, 
                is separated from employment;
                    (B) who is eligible for, and has elected coverage 
                under, COBRA continuation coverage;
                    (C) who is receiving premium assistance under the 
                program established under section 201; and
                    (D) whose family income does not exceed 200 percent 
                of the poverty line.
            (2) Inclusion of certain individuals.--For purposes of 
        paragraph (1), the spouse, child, or other individual who was 
        an insured under health insurance coverage of an individual who 
        was killed as a result of the terrorist-related aircraft 
        crashes on September 11, 2001, or as a result of any other 
        terrorist-related event occurring during the period described 
        in that paragraph, and who satisfies the requirements of 
        subparagraphs (B), (C), and (D) of paragraph (1) shall be 
        eligible for medical assistance under this section.
    (b) Limitation of Period of Coverage.--Medical assistance provided 
in accordance with this section shall end with respect to an individual 
on the earlier of--
            (1) the date the individual is no longer covered under 
        COBRA continuation coverage; or
            (2) 12 months after the date the individual first receives 
        such assistance under this section.
    (c) Special Rules.--In the case of medical assistance provided 
under this section--
            (1) such assistance may be provided without regard to--
                    (A) whether the State otherwise has elected to make 
                medical assistance available for COBRA premiums under 
                section 1902(a)(10)(F) of the Social Security Act (42 
                U.S.C. 1396a(a)(10)(F)); or
                    (B) the conditions otherwise imposed for the 
                provision of medical assistance for such COBRA premiums 
                under clause (XII) of the matter following section 
                1902(a)(10)(G) of the Social Security Act (42 U.S.C. 
                1396a(a)(10)(G)), or paragraphs (1)(B), (1)(C), (1)(D), 
                and (4) of section 1902(u) of such Act (42 U.S.C. 
                1396a(u)); and
            (2) paragraphs (1), (2), (4), (5), (7), and (8) of 
        subsection (c) of section 202 apply to such assistance in the 
        same manner as such paragraphs apply to the provision of 
        medical assistance under that section.
    (d) Sunset.--No medical assistance may be provided under this 
section after December 31, 2002.

SEC. 204. TEMPORARY INCREASES OF MEDICAID FMAP FOR FISCAL YEAR 2002.

    (a) Permitting Maintenance of Fiscal Year 2001 FMAP.--
Notwithstanding any other provision of law, but subject to subsection 
(d), if the FMAP determined without regard to this section for a State 
for fiscal year 2002 is less than the FMAP as so determined for fiscal 
year 2001, the FMAP for the State for fiscal year 2001 shall be 
substituted for the State's FMAP for fiscal year 2002, before the 
application of this section.
    (b) General 1.50 Percentage Points Increase.--Notwithstanding any 
other provision of law, but subject to subsections (e) and (f), for 
each State for each calendar quarter in fiscal year 2002, the FMAP 
(taking into account the application of subsection (a)) shall be 
increased by 1.50 percentage points.
    (c) Further Increase for States With High Unemployment Rates.--
            (1) In general.--Notwithstanding any other provision of 
        law, but subject to subsections (e) and (f), the FMAP for a 
        high unemployment State for a calendar quarter in fiscal year 
        2002 (and any subsequent calendar quarter in such fiscal year 
        regardless of whether the State continues to be a high 
        unemployment State for a calendar quarter in such fiscal year) 
        shall be increased (after the application of subsections (a) 
        and (b)) by 1.50 percentage points.
            (2) High unemployment state.--For purposes of this 
        subsection, a State is a high unemployment State for a calendar 
        quarter if, for any 3 consecutive months beginning on or after 
        June 2001 and ending with the second month before the beginning 
        of the calendar quarter, the State has an unemployment rate 
        that exceeds the national average unemployment rate. Such 
        unemployment rates for such months shall be determined based on 
        publications of the Bureau of Labor Statistics of the 
        Department of Labor.
    (d) 1-Year Increase in Cap on Medicaid Payments to Territories.--
Notwithstanding any other provision of law, with respect to fiscal year 
2002, the amounts otherwise determined for Puerto Rico, the Virgin 
Islands, Guam, the Northern Mariana Islands, and American Samoa under 
section 1108 of the Social Security Act (42 U.S.C. 1308) shall each be 
increased by an amount equal to 3.093 percentage points of such 
amounts.
    (e) Scope of Application.--The increases in the FMAP for a State 
under this section shall apply only for purposes of title XIX of the 
Social Security Act and shall not apply with respect to--
            (1) disproportionate share hospital payments described in 
        section 1923 of such Act (42 U.S.C. 1396r-4); and
            (2) payments under titles IV and XXI of such Act (42 U.S.C. 
        601 et seq. and 1397aa et seq.).
    (f) State Eligibility.--A State is eligible for an increase in its 
FMAP under subsection (b) or (c) only if the eligibility under its 
State plan under title XIX of the Social Security Act (including any 
waiver under such title or under section 1115 of such Act (42 U.S.C. 
1315)) is no more restrictive than the eligibility under such plan (or 
waiver) as in effect on October 1, 2001.

SEC. 205. DEFINITIONS.

    In this title:
            (1) Administrator.--The term ``administrator'' has the 
        meaning given that term in section 3(16)(A) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1002(16)(A)).
            (2) COBRA continuation coverage.--
                    (A) In general.--The term ``COBRA continuation 
                coverage'' means coverage under a group health plan 
                provided by an employer pursuant to title XXII of the 
                Public Health Service Act, section 4980B of the 
                Internal Revenue Code of 1986, part 6 of subtitle B of 
                title I of the Employee Retirement Income Security Act 
                of 1974, or section 8905a of title 5, United States 
                Code.
                    (B) Application to employers in states requiring 
                such coverage.--Such term includes such coverage 
                provided by an employer in a State that has enacted a 
                law that requires the employer to provide such coverage 
                even though the employer would not otherwise be 
                required to provide such coverage under the provisions 
                of law referred to in subparagraph (A).
            (3) Covered employee.--The term ``covered employee'' has 
        the meaning given that term in section 607(2) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1167(2)).
            (4) Federal public benefit.--The term ``Federal public 
        benefit'' has the meaning given that term in section 401(c) of 
        the Personal Responsibility and Work Opportunity Reconciliation 
        Act of 1996 (8 U.S.C. 1611(c)).
            (5) FMAP.--The term ``FMAP'' means the Federal medical 
        assistance percentage, as defined in section 1905(b) of the 
        Social Security Act (42 U.S.C. 1396d(b)).
            (6) Group health plan.--The term ``group health plan'' has 
        the meaning given that term in section 2791(a) of the Public 
        Health Service Act (42 U.S.C. 300gg-91(a)) and in section 
        607(1) of the Employee Retirement Income Security Act of 1974 
        (29 U.S.C. 1167(1)).
            (7) Health insurance coverage.--The term ``health insurance 
        coverage'' has the meaning given that term in section 
        2791(b)(1) of the Public Health Service Act (42 U.S.C. 300gg-
        91(b)(1)).
            (8) Multiemployer plan.--The term ``multiemployer plan'' 
        has the meaning given that term in section 3(37) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1002(37)).
            (9) Poverty line.--The term ``poverty line'' has the 
        meaning given that term in section 2110(c)(5) of the Social 
        Security Act (42 U.S.C. 1397jj(c)(5)).
            (10) State.--The term ``State'' has the meaning given such 
        term for purposes of title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.).
            (11) State or local public benefit.--The term ``State or 
        local public benefit'' has the meaning given that term in 
        section 411(c) of the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 (8 U.S.C. 1621(c)).
            (12) Uninsured.--
                    (A) In general.--The term ``uninsured'' means, with 
                respect to an individual, that the individual is not 
                covered under--
                            (i) a group health plan;
                            (ii) health insurance coverage; or
                            (iii) a program under title XVIII, XIX, or 
                        XXI of the Social Security Act (other than 
                        under such title XIX pursuant to section 202).
                    (B) Exclusion.--Such coverage under clause (i) or 
                (ii) shall not include coverage consisting solely of 
                coverage of excepted benefits (as defined in section 
                2791(c) of the Public Health Service Act (42 U.S.C. 
                300gg-91(c))).

      TITLE III--TANF SUPPLEMENTAL GRANTS FOR POPULATION INCREASES

SEC. 301. REAUTHORIZATION OF TANF SUPPLEMENTAL GRANTS FOR POPULATION 
              INCREASES FOR FISCAL YEAR 2002.

    Section 403(a)(3) of the Social Security Act (42 U.S.C. 603(a)(3)) 
is amended by adding at the end the following:
                    ``(H) Reauthorization of grants for fiscal year 
                2002.--Notwithstanding any other provision of this 
                paragraph--
                            ``(i) any State that was a qualifying State 
                        under this paragraph for fiscal year 2001 or 
                        any prior fiscal year shall be entitled to 
                        receive from the Secretary for fiscal year 2002 
                        a grant in an amount equal to the amount 
                        required to be paid to the State under this 
                        paragraph for the most recent fiscal year in 
                        which the State was a qualifying State;
                            ``(ii) subparagraph (G) shall be applied as 
                        if `2002' were substituted for `2001'; and
                            ``(iii) out of any money in the Treasury of 
                        the United States not otherwise appropriated, 
                        there are appropriated for fiscal year 2002 
                        such sums as are necessary for grants under 
                        this subparagraph.''.

SEC. 302. FISCAL YEAR 2002 TANF PAYMENTS.

    Notwithstanding any other provision of law, any payment under 
section 403 of the Social Security Act (42 U.S.C. 603) that would 
otherwise be sent to a State on September 30, 2002, by the Secretary of 
the Treasury shall be sent on October 1, 2002.

SEC. 303. TANF BONUSES FOR HIGH PERFORMANCE STATES.

    (a) Rescission.--Effective upon the date of enactment of this Act 
or October 1, 2001, whichever is later, $319,000,000 of the amount 
appropriated under section 403(a)(4)(F) of the Social Security Act (42 
U.S.C. 603(a)(4)(F)) is rescinded.
    (b) Appropriation.--Effective October 1, 2002, out of any money in 
the Treasury of the United States not otherwise appropriated, there is 
appropriated $319,000,000 for bonus grants under section 403(a)(4) of 
the Social Security Act (42 U.S.C. 603(a)(4)). Amounts appropriated 
under this subsection shall be in addition to amounts appropriated 
under subparagraph (F) of section 403(a)(4) of such Act (42 U.S.C. 
603(a)(4)).

                    TITLE IV--TANF CONTINGENCY FUND

SEC. 401. 1-YEAR EXTENSION AND MODIFICATION OF TANF CONTINGENCY FUND.

    (a) In General.--Section 403(b) of the Social Security Act (42 
U.S.C. 603(b)(5)) is amended by adding at the end the following:
            ``(9) Special rules for fiscal year 2002.--Notwithstanding 
        the preceding provisions of this subsection, with respect to 
        fiscal year 2002, the following shall apply:
                    ``(A) Deposits into fund.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal year 
                2002 such sums as are necessary for payments under this 
                subsection for that fiscal year.
                    ``(B) Increase in state family assistance grant.--
                            ``(i) In general.--For each quarter in 
                        which a State is determined to be a needy 
                        State, the Secretary shall provide a 
                        contingency fund grant equal to 7 percent of 
                        the quarterly TANF grant, as defined in clause 
                        (ii).
                            ``(ii) Definition of quarterly tanf 
                        grant.--In this paragraph, the term `quarterly 
                        TANF grant' means, with respect to a State, \1/
                        4\ of the State family assistance grant under 
                        subsection (a)(1) for fiscal year 2002.
                    ``(C) Needy state.--
                            ``(i) In general.--A State is a needy State 
                        for purposes of this paragraph if--
                                    ``(I) the average rate of total 
                                unemployment in the State (seasonally 
                                adjusted) for the most recent 3 months 
                                for which data are available for all 
                                States--
                                            ``(aa) is at least 6.5 
                                        percent; or
                                            ``(bb) has increased by the 
                                        lesser of 50 percent, or 1.5 
                                        percentage points, over the 
                                        lesser of the average rate of 
                                        total unemployment in the State 
                                        (seasonally adjusted) for a 
                                        comparable 3-month period in 
                                        fiscal year 2001 or fiscal year 
                                        2000; and
                                    ``(II) the amount of the 
                                unobligated Federal funds to be paid to 
                                the State under this part is less than 
                                the amount equal to 50 percent of the 
                                State family assistance grant under 
                                subsection (a)(1) for fiscal year 2001, 
                                as measured, at the option of the 
                                State--
                                            ``(aa) as of September 30, 
                                        2001; or
                                            ``(bb) for the most 
                                        recently completed quarter of 
                                        fiscal year 2002, as determined 
                                        under clause (ii).
                            ``(ii) Determination of unobligated federal 
                        funds.--For purposes of clause (i)(bb), the 
                        unobligated Federal funds to be paid to the 
                        State under this part for the most recently 
                        completed quarter of fiscal year 2002 are the 
                        difference between--
                                    ``(I) the unobligated Federal funds 
                                to be paid to the State at the end of 
                                fiscal year 2001; and
                                    ``(II) the difference between--
                                            ``(aa) the total Federal 
                                        expenditures and obligations 
                                        under this part (regardless of 
                                        the year in which the Federal 
                                        funds were awarded) for the 
                                        most recently completed quarter 
                                        of fiscal year 2002 and all 
                                        previous quarters in fiscal 
                                        year 2002; and
                                            ``(bb) the sum of the total 
                                        of the quarterly TANF grants 
                                        (as defined in subparagraph 
                                        (B)(ii)) awarded to the State 
                                        for the most recently completed 
                                        quarter of fiscal year 2002, 
                                        and the total of the quarterly 
                                        supplemental grants (as defined 
                                        in clause (iii)), if any, made 
                                        to the State for such most 
                                        recent quarter.
                            ``(iii) Definition of quarterly 
                        supplemental grant.--In this paragraph, the 
                        term `quarterly supplemental grant' means, with 
                        respect to a State, \1/4\ of the grant made to 
                        the State (if any) under subsection (a)(3) for 
                        fiscal year 2002.
                    ``(D) Nonapplication of annual reconciliation 
                requirement.--Paragraph (6) shall not apply to payments 
                made under this subsection for fiscal year 2002.''.
    (b) Realignment of Related Maintenance of Effort Requirement.--
Section 409(a)(10) of the Social Security Act (42 U.S.C. 609(a)(10)) is 
amended by striking ``100 percent'' and inserting ``the applicable 
percentage (as defined in paragraph (7)(B)(ii) of this subsection)''.
    (c) Not Extended in Baseline.--Notwithstanding paragraph (2) of 
section 257(b) the Balanced Budget and Emergency Deficit Control Act of 
1985 (2 U.S.C. 907(b)), the contingency fund grants made under section 
403(b)(9) of the Social Security Act (42 U.S.C. 603(b)(9)), as added by 
subsection (a), shall be assumed to expire upon the conclusion of 
fiscal year 2002 for purposes of that Act.
                                 <all>