[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2202 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 2202

  To amend the Social Security Act to provide for wage insurance for 
                          dislocated workers.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 8, 2007

Mr. McDermott introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
  To amend the Social Security Act to provide for wage insurance for 
                          dislocated workers.

    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 ``Worker Empowerment 
Act''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title; table of contents.
              TITLE I--REEMPLOYMENT ADJUSTMENT ASSISTANCE

Sec. 101. Establishment of programs.
Sec. 102. Administrative costs.
Sec. 103. Technical assistance.
Sec. 104. Reports to Congress.
Sec. 105. Effective date.
                 TITLE II--WAGE INSURANCE CONTRIBUTIONS

Sec. 201. Wage insurance contributions.

              TITLE I--REEMPLOYMENT ADJUSTMENT ASSISTANCE

SEC. 101. ESTABLISHMENT OF PROGRAMS.

    (a) In General.--Section 303 of the Social Security Act (42 U.S.C. 
503) is amended by adding at the end the following:
    ``(l)(1) Each State (through the State agency charged with the 
administration of the State law of such State) shall, not earlier than 
January 1, 2009, and not later than 2 years after the date of the 
enactment of this subsection, implement a reemployment adjustment 
assistance program that provides the benefits described in paragraph 
(2).
    ``(2)(A) A State shall use the funds provided to the State under 
section 101(b) of the Worker Empowerment Act to pay to an individual 
described in paragraph (3) the amount equal to 50 percent of the amount 
by which--
            ``(i) the wages received by such individual at the time of 
        the separation described in paragraph (3)(A), as certified by 
        the State in accordance with subparagraph (B), exceeds (if at 
        all)
            ``(ii) the wages received by such individual from 
        reemployment, as certified by the State in accordance with 
        subparagraph (C).
    ``(B) For purposes of subparagraph (A)(i)--
            ``(i) the wages received by an individual at the time of 
        separation shall be computed based on the wages received by 
        such individual for the 52-week period ending before the date 
        of separation; and
            ``(ii) a certification under subparagraph (A)(i) as to the 
        amount of those wages so received shall be based on (I) 
        information collected directly from the person or persons 
        employing such individual during the 52-week period before the 
        date of separation, (II) statements of earnings submitted by 
        the individual (as provided to such individual by the person or 
        persons referred to in subclause (I)), or (III) applicable wage 
        data collected by the State.
    ``(C) For purposes of subparagraph (A)(ii)--
            ``(i) the wages received by an individual from 
        reemployment--
                    ``(I) shall be initially certified using wages 
                received for the individual's first full week of 
                reemployment; and
                    ``(II) shall thereafter be periodically 
                recertified, to reflect any changes in wages, not more 
                than quarterly; and
            ``(ii) a certification under subparagraph (A)(ii) as to the 
        amount of wages received from reemployment shall be based on 
        (I) statements of earnings submitted by the individual (as 
        provided by the reemploying entity) or (II) applicable wage 
        data collected by the State.
    ``(D)(i) To the extent that a State makes its certifications under 
subparagraph (A)(i) on the basis of information obtained pursuant to 
subparagraph (B)(ii)(I) or (II), the State shall regularly conduct 
random audits against relevant information obtained pursuant to 
subparagraph (B)(ii)(III).
    ``(ii) To the extent that a State makes its certifications under 
subparagraph (A)(ii) on the basis of information obtained pursuant to 
subparagraph (C)(ii)(I), the State shall regularly conduct random 
audits against relevant information obtained pursuant to subparagraph 
(C)(ii)(II).
    ``(E)(i) Notwithstanding any other provision of this paragraph--
            ``(I) for purposes of computing benefits in the case of an 
        individual to whom clause (ii) applies, subparagraph (A) shall 
        be applied by substituting the applicable percentage under 
        clause (ii)(II) for `50 percent'; and
            ``(II) for purposes of computing benefits in the case of an 
        individual to whom clause (iii) applies, subparagraph (A) shall 
        be applied by substituting the applicable percentage under 
        clause (iii)(II) for `50 percent'.
    ``(ii)(I) This clause applies in the case of any individual whose 
weekly wages at the time of separation (determined based on the amount 
most recently certified with respect to such individual under 
subparagraph (A)(i)) exceed the contribution and benefit base (as 
determined under section 230 of the Social Security Act) which is 
effective with respect to the year which includes the last day of the 
52-week period on the basis of which weekly wages are computed.
    ``(II) The applicable percentage under this subclause is, with 
respect to any individual, the percentage obtained by subtracting from 
50 percent the product of 2.5 times the lesser of the percentage by 
which the individual's weekly wages at the time of separation (as 
described in subclause (I)) exceeds the contribution and benefit base 
(as so described) or 20 percent.
    ``(iii)(I) This clause applies in the case of any individual whose 
weekly wages from reemployment (determined based on the amount most 
recently certified with respect to such individual under subparagraph 
(A)(ii)) are less than 50 percent of the median of weekly wages within 
the individual's State (determined in accordance with any regulations 
prescribed by the Secretary of Labor), except as provided in subclause 
(III).
    ``(II) The applicable percentage under this subclause is, with 
respect to any individual, the percentage equal to the sum of 50 
percent plus one-quarter of the number of percentage points by which 
the individual's weekly wages from reemployment (as described in 
subclause (I) and expressed as a percentage relative to the median of 
weekly wages within the individual's State (as so described)) is less 
than 50 percent.
    ``(III) This clause shall not apply in the case of any individual 
who is subject to clause (ii).
    ``(F) Benefits under any program described in paragraph (1) shall 
be payable on at least a monthly basis.
    ``(3) An individual shall not be eligible for benefits under any 
program described in paragraph (1) unless such individual--
            ``(A) is separated from employment with an employer that 
        employed such individual continuously for at least the 2-year 
        period before the date of separation either--
                    ``(i) involuntarily (other than for cause); or
                    ``(ii) voluntarily under circumstances which would, 
                by virtue of the terms of a collective bargaining 
                agreement, satisfy the relevant State law requirements 
                relating to the type of separation from employment that 
                is required in order to be eligible for unemployment 
                compensation;
            ``(B) is reemployed for substantially the same number of 
        hours each pay period as at the time of separation; and
            ``(C) is not reemployed by the employer from which the 
        individual was separated.
    ``(4) The benefits described in paragraph (2) shall not, in the 
case of any individual, be payable--
            ``(A) by virtue of any separation, beyond the date that 
        occurs 2 years after the date of such separation; or
            ``(B) in an amount exceeding $10,000 for either year of the 
        2-year period that begins on the date of such separation.
    ``(5) For purposes of this subsection--
            ``(A) the term `wages' means all cash or cash equivalent 
        remuneration (as defined by the Secretary of Labor) for 
        employment, excluding any tips;
            ``(B) the term `employment' means any service performed 
        within the United States for an employer by an individual who 
        is a citizen of the United States or who is authorized to work 
        in the United States; and the term `United States', when used 
        in this subparagraph in a geographical sense, includes the 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, and the Virgin Islands;
            ``(C) the term `employer' includes each employer, as 
        defined by the State law of the State concerned; and
            ``(D) the term `pay period', with respect to an individual, 
        means a period (of not more than 31 consecutive days) for which 
        a payment of remuneration is ordinarily made to the individual 
        by the person employing such individual.
    ``(6) Not later than December 31, 2008, the Secretary of Labor 
shall by regulation establish guidelines to provide for the uniform 
application of paragraph (3).''.
    (b) Payments to States.--
            (1) In general.--There shall be paid to each State which 
        has a reemployment adjustment assistance program that (in the 
        judgment of the Secretary of Labor) meets the requirements of 
        section 303(l) of the Social Security Act, as amended by 
        subsection (a), an amount equal to 100 percent of the benefits 
        paid to individuals by such State under such program.
            (2) Estimation, frequency, etc. of amounts payable.--Sums 
        payable to any State under this subsection shall be payable, 
        either in advance or by way of reimbursement (as determined by 
        the Secretary of Labor), in such amounts as the Secretary 
        estimates the State will be entitled to receive under this 
        subsection for each calendar month, reduced or increased, as 
        the case may be, by any amount which the Secretary finds that 
        the estimates of the Secretary for any prior calendar month 
        were greater or less than the amounts which should have been 
        paid to the State. Estimates shall be made on such basis as the 
        Secretary considers appropriate.
            (3) Certification and payment of amounts.--The Secretary of 
        Labor shall, from time to time, certify to the Secretary of the 
        Treasury the sum payable to each State under this subsection. 
        The Secretary of the Treasury, prior to audit and settlement by 
        the Government Accountability Office, shall make payments to 
        the State in accordance with the certification from amounts 
        available in the Wage Insurance Trust Fund under section 9511 
        of the Internal Revenue Code of 1986.
            (4) Limitation on use of amounts received.--Money paid to a 
        State under this subsection may be used solely for the purpose 
        of paying benefits described in paragraph (1). Money so paid 
        which is not used for such purpose shall be returned, at the 
        time specified by the Secretary of Labor, to the Treasury of 
        the United States and credited to the Wage Insurance Trust 
        Fund.
            (5) State defined.--For purposes of this subsection, the 
        term ``State'' has the meaning given such term under section 
        205 of the Federal-State Extended Unemployment Compensation Act 
        of 1970.
            (6) Rule of construction.--Nothing in this subsection shall 
        prevent or limit any distribution of amounts from the Wage 
        Insurance Trust Fund for reasonable costs associated with the 
        implementation and operation of reemployment adjustment 
        assistance programs (as described in section 303(l) of the 
        Social Security Act) or for any other purpose (other than the 
        payment of benefits) allowable under section 9511 of the 
        Internal Revenue Code of 1986.
    (c) Conforming Amendment.--Section 303(a) of the Social Security 
Act (42 U.S.C. 503(a)) is amended--
            (1) by striking the period at the end of paragraph (10) and 
        inserting ``; and''; and
            (2) by adding at the end the following:
            ``(11) A reemployment adjustment assistance program that 
        meets the requirements of subsection (l).''.

SEC. 102. ADMINISTRATIVE COSTS.

    Section 302(a) of the Social Security Act (42 U.S.C. 502(a)) is 
amended by striking the period at the end of the first sentence and 
inserting ``and 100 percent of so much of the reasonable expenditures 
of the State as are attributable to the costs of the implementation and 
operation of its reemploment adjustment assistance program (as 
described in section 303(l)).''.

SEC. 103. TECHNICAL ASSISTANCE.

    The Secretary of Labor shall provide technical assistance and 
advice to assist the States in implementing the reemployment adjustment 
assistance programs required under the amendments made by this title.

SEC. 104. REPORTS TO CONGRESS.

    (a) Initial Report.--Not later than 3 years after the date of the 
enactment of this Act, the Secretary of Labor shall submit to Congress 
a report on the operation and effectiveness of the reemployment 
adjustment assistance programs required under the amendments made by 
this title.
    (b) Annual Reports.--Not later than 4 years after the date of the 
enactment of this Act, the Secretary of Labor shall submit to Congress 
the first of 5 annual reports. Each such report shall include a 
detailed analysis of the following:
            (1) The average annual income from wages that individuals 
        receiving reemployment adjustment assistance from programs 
        under section 303(l) of the Social Security Act (hereinafter 
        ``beneficiaries of the Worker Empowerment Act'') earned in the 
        2 years prior to employment dislocation, and the average 
        quarterly income of such individuals in the 2 years following 
        reemployment.
            (2) The average amount of quarterly benefits provided to 
        beneficiaries of the Worker Empowerment Act from programs under 
        section 303(l) of the Social Security Act, and the average 
        duration of those benefits.
            (3) The average duration of unemployment experienced by 
        beneficiaries of the Worker Empowerment Act before becoming 
        eligible for benefits described in paragraph (2).
            (4) Whether beneficiaries of the Worker Empowerment Act 
        accepted lower-wage employment that they would otherwise have 
        refused (if this Act had not been enacted), and whether such 
        employment would have been refused in the absence of the 
        receipt of unemployment compensation.
            (5) To what extent beneficiaries of the Worker Empowerment 
        Act displaced lower-skilled workers seeking the same job.
            (6) To what extent employers paid lower wages than they 
        would otherwise have because of the implementation of the 
        reemployment adjustment assistance programs described in 
        section 303(l) of the Social Security Act.

SEC. 105. EFFECTIVE DATE.

    Nothing in this title or in any amendment made by this title shall 
be considered to permit or require the payment of reemployment 
adjustment assistance benefits--
            (1) based on any separation from employment taking effect 
        before January 1, 2009; or
            (2) to supplement remuneration for employment performed in 
        any pay period beginning before the commencement date of the 
        program under which such benefits would be payable.

                 TITLE II--WAGE INSURANCE CONTRIBUTIONS

SEC. 201. WAGE INSURANCE CONTRIBUTIONS.

    (a) In General.--Subtitle C of the Internal Revenue Code of 1986 
(relating to employment taxes) is amended by adding at the end the 
following new chapter:

               ``CHAPTER 26--WAGE INSURANCE CONTRIBUTIONS

               ``Chapter 26--Wage Insurance Contributions

``Sec. 3601. Rate of tax.

``SEC. 3601. RATE OF TAX.

    ``(a) In General.--In addition to other taxes, there is hereby 
imposed on every employer an excise tax, with respect to having 
individuals in his employ, equal to 0.06 percent of the wages (as 
defined in section 3401(a)) paid by him with respect to employment.
    ``(b) Limitation.--The amount of wages taken into account under 
subsection (a) with respect to an employee for a calendar year shall 
not exceed the contribution and benefit base (as determined under 
section 230 of the Social Security Act) which is effective with respect 
to such year.
    ``(c) Applicable Rules.--For purposes of this chapter, rules 
similar to the rules of sections 3122, 3123, 3125, 3126, and 3127 shall 
apply.''.
    (b) Establishment of Wage Insurance Trust Fund.--Subchapter A of 
chapter 98 of such Code (relating to trust fund code) is amended by 
adding at the end the following:

``SEC. 9511. WAGE INSURANCE TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Wage Insurance 
Trust Fund' (referred to in this section as the `Trust Fund'), 
consisting of such amounts as may be appropriated or credited to the 
Trust Fund as provided in this section or section 9602(b).
    ``(b) Transfers to Trust Fund.--There is hereby appropriated to the 
Trust Fund an amount equivalent to the taxes received in the Treasury 
under section 3601.
    ``(c) Distribution of Amounts in Trust Fund.--Amounts in the Trust 
Fund shall be available without further appropriation to make 
expenditures to carry out--
            ``(1) section 303(l), and so much of section 302(a), of the 
        Social Security Act as relates to the implementation and 
        operation of the program under such section 303(l), and
            ``(2) the Worker Empowerment Act.
    ``(d) Authority To Borrow.--
            ``(1) In general.--There are authorized to be appropriated 
        to the Trust Fund, as repayable advances, such sums as may be 
        necessary to carry out the purposes of the Trust Fund.
            ``(2) Limitation on aggregate advances.--The maximum 
        aggregate amount of repayable advances to the Trust Fund which 
        is outstanding at any one time shall not exceed an amount equal 
        to the amount which the Secretary estimates will be equal to 
        the sum of the amounts appropriated to the Trust Fund under 
        subsection (b) during the following 24 months.
            ``(3) Repayment of advances.--
                    ``(A) In general.--Advances made to the Trust Fund 
                shall be repaid, and interest on such advances shall be 
                paid, to the general fund of the Treasury when the 
                Secretary determines that moneys are available for such 
                purposes in the Trust Fund. Any amount transferred as a 
                repayment under this subsection shall be credited 
                against, and shall operate to reduce, any balance of 
                advances repayable under this subsection.
                    ``(B) Rate of interest.--Interest on advances made 
                to the Trust Fund shall be--
                            ``(i) at a rate determined by the Secretary 
                        (as of the close of the calendar month 
                        preceding the month in which the advance is 
                        made) to be equal to the current average market 
                        yield on outstanding marketable obligations of 
                        the United States with remaining periods to 
                        maturity comparable to the anticipated period 
                        during which the advance will be outstanding, 
                        and
                            ``(ii) compounded annually.''.
    (c) Conforming Amendments.--
            (1) Section 6302(b) of such Code is amended by inserting 
        ``26,'' after ``21,''.
            (2) Section 6513(c) of such Code is amended by striking 
        ``or 24'' and inserting ``24, or 26''.
            (3) Section 7507(d) of such Code is amended is amended by 
        striking ``chapter 21 or chapter 23'' and inserting ``chapter 
        21, 23, or 26''.
            (4) Section 7509 of such Code by adding at the end the 
        following new sentence: ``The preceding sentence shall apply 
        with respect to the tax imposed by chapter 26 in the same 
        manner as such sentence applies to the tax imposed with respect 
        to chapter 21.''.
    (d) Clerical Amendments.--
            (1) The table of chapters for subtitle C of such Code is 
        amended by adding at the end the following new item:

             ``Chapter 26. Wage Insurance Contributions.''.

            (2) Conforming amendment.--The table of sections for 
        subchapter A of chapter 98 of such Code is amended by adding at 
        the end the following:

``Sec. 9511. Wage Insurance Trust Fund.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to wages paid after December 31, 2007.
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