[Congressional Record Volume 140, Number 144 (Thursday, October 6, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 6, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
  CONFERENCE REPORT ON H.R. 4278, SOCIAL SECURITY DOMESTIC EMPLOYMENT 
                           REFORM ACT OF 1994

  Mr. GIBBONS submitted the following conference report and statement 
on the bill (H.R. 4278) to make improvements in the old-age, survivors, 
and disability insurance program under title II of the Social Security 
Act:

                  Conference Report (H. Rept. 103-842)

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H.R. 
     4278), to make improvements in the old-age, survivors, and 
     disability insurance program under title II of the Social 
     Security Act, having met, after full and free conference, 
     have agreed to recommend and do recommend to their respective 
     Houses as follows:
       That the House recede from its disagreement to the 
     amendment of the Senate and agree to the same with an 
     amendment as follows:
       In lieu of the matter proposed to be inserted by the Senate 
     amendment, insert the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Social Security Domestic 
     Employment Reform Act of 1994''.

     SEC. 2. SIMPLIFICATION OF EMPLOYMENT TAXES ON DOMESTIC 
                   SERVICES.

       (a) Threshold Requirement for Social Security Taxes.--
       (1) Amendments of internal revenue code.--
       (A) General rule.--Subparagraph (B) of section 3121(a)(7) 
     of the Internal Revenue Code of 1986 (defining wages) is 
     amended to read as follows:
       ``(B) cash remuneration paid by an employer in any calendar 
     year to an employee for domestic service in a private home of 
     the employer (including domestic service described in 
     subsection (g)(5)), if the cash remuneration paid in such 
     year by the employer to the employee for such service is less 
     than the applicable dollar threshold (as defined in 
     subsection (x)) for such year;''.
       (B) Applicable dollar threshold.--Section 3121 of such Code 
     is amended by adding at the end thereof the following new 
     subsection:
       ``(x) Applicable Dollar Threshold.--For purposes of 
     subsection (a)(7)(B), the term `applicable dollar threshold' 
     means $1,000. In the case of calendar years after 1995, the 
     Commissioner of Social Security shall adjust such $1,000 
     amount at the same time and in the same manner as under 
     section 215(a)(1)(B)(ii) of the Social Security Act with 
     respect to the amounts referred to in section 215(a)(1)(B)(i) 
     of such Act, except that, for purposes of this paragraph, 
     1993 shall be substituted for the calendar year referred to 
     in section 215(a)(1)(B)(ii)(II) of such Act. If any amount as 
     adjusted under the preceding sentence is not a multiple of 
     $100, such amount shall be rounded to the next lowest 
     multiple of $100.''.
       (C) Employment of domestic employees under age 18 excluded 
     from coverage.--Section 3121(b) of such Code (defining 
     employment) is amended--
       (i) by striking ``or'' at the end of paragraph (19),
       (ii) by striking the period at the end of paragraph (20) 
     and inserting ``; or'', and
       (iii) by adding at the end the following new paragraph:
       ``(21) domestic service in a private home of the employer 
     which--
       ``(A) is performed in any year by an individual under the 
     age of 18 during any portion of such year; and
       ``(B) is not the principal occupation of such employee.''.
       (D) Conforming amendments.--The second sentence of section 
     3102(a) of such Code is amended--
       (i) by striking ``calendar quarter'' each place it appears 
     and inserting ``calendar year'', and
       (ii) by striking ``$50'' and inserting ``the applicable 
     dollar threshold (as defined in section 3121(x)) for such 
     year''.
       (2) Amendment of social security act.--
       (A) General rule.--Subparagraph (B) of section 209(a)(6) of 
     the Social Security Act (42 U.S.C. 409(a)(6)(B)) is amended 
     to read as follows:
       ``(B) Cash remuneration paid by an employer in any calendar 
     year to an employee for domestic service in a private home of 
     the employer (including domestic service described in section 
     210(f)(5)), if the cash remuneration paid in such year by the 
     employer to the employee for such service is less than the 
     applicable dollar threshold (as defined in section 3121(x) of 
     the Internal Revenue Code of 1986) for such year;''.
       (B) Employment of domestic employees under age 18 excluded 
     from coverage.--Section 210(a) of such Act (42 U.S.C. 410(a)) 
     is amended--
       (i) by striking ``or'' at the end of paragraph (19),
       (ii) by striking the period at the end of paragraph (20) 
     and inserting ``; or'', and
       (iii) by adding at the end the following new paragraph:
       ``(21) Domestic service in a private home of the employer 
     which--
       ``(A) is performed in any year by an individual under the 
     age of 18 during any portion of such year; and
       ``(B) is not the principal occupation of such employee.''.
       (3) Effective dates.--
       (A) In general.--Except as provided in subparagraph (B), 
     the amendments made by this subsection shall apply to 
     remuneration paid after December 31, 1993.
       (B) Excluded employment.--The amendments made by paragraphs 
     (1)(C) and (2)(B) shall apply to services performed after 
     December 31, 1994.
       (4) No loss of social security coverage for 1994; 
     continuation of w-2 filing requirement.--Notwithstanding the 
     amendments made by this subsection, if the wages (as defined 
     in section 3121(a) of the Internal Revenue Code of 1986) paid 
     during 1994 to an employee for domestic service in a private 
     home of the employer are less than $1,000--
       (A) the employer shall file any return or statement 
     required under section 6051 of such Code with respect to such 
     wages (determined without regard to such amendments), and
       (B) the employee shall be entitled to credit under section 
     209 of the Social Security Act with respect to any such wages 
     required to be included on any such return or statement.
       (b) Coordination of Collection of Domestic Service 
     Employment Taxes With Collection of Income Taxes.--
       (1) In general.--Chapter 25 of the Internal Revenue Code of 
     1986 (relating to general provisions relating to employment 
     taxes) is amended by adding at the end thereof the following 
     new section:

     ``SEC. 3510. COORDINATION OF COLLECTION OF DOMESTIC SERVICE 
                   EMPLOYMENT TAXES WITH COLLECTION OF INCOME 
                   TAXES.

       ``(a) General Rule.--Except as otherwise provided in this 
     section--
       ``(1) returns with respect to domestic service employment 
     taxes shall be made on a calendar year basis,
       ``(2) any such return for any calendar year shall be filed 
     on or before the 15th day of the fourth month following the 
     close of the employer's taxable year which begins in such 
     calendar year, and
       ``(3) no requirement to make deposits (or to pay 
     installments under section 6157) shall apply with respect to 
     such taxes.
       ``(b) Domestic Service Employment Taxes Subject to 
     Estimated Tax Provisions.--
       ``(1) In general.--Solely for purposes of section 6654, 
     domestic service employment taxes imposed with respect to any 
     calendar year shall be treated as a tax imposed by chapter 2 
     for the taxable year of the employer which begins in such 
     calendar year.
       ``(2) Employers not otherwise required to make estimated 
     payments.--Paragraph (1) shall not apply to any employer for 
     any calendar year if--
       ``(A) no credit for wage withholding is allowed under 
     section 31 to such employer for the taxable year of the 
     employer which begins in such calendar year, and
       ``(B) no addition to tax would (but for this section) be 
     imposed under section 6654 for such taxable year by reason of 
     section 6654(e).
       ``(3) Annualization.--Under regulations prescribed by the 
     Secretary, appropriate adjustments shall be made in the 
     application of section 6654(d)(2) in respect of the amount 
     treated as tax under paragraph (1).
       ``(4) Transitional rule.--In the case of any taxable year 
     beginning before January 1, 1998, no addition to tax shall be 
     made under section 6654 with respect to any underpayment to 
     the extent such underpayment was created or increased by this 
     section.
       ``(c) Domestic Service Employment Taxes.--For purposes of 
     this section, the term `domestic service employment taxes' 
     means--
       ``(1) any taxes imposed by chapter 21 or 23 on remuneration 
     paid for domestic service in a private home of the employer, 
     and
       ``(2) any amount withheld from such remuneration pursuant 
     to an agreement under section 3402(p).

     For purposes of this subsection, the term `domestic service 
     in a private home of the employer' includes domestic service 
     described in section 3121(g)(5).
       ``(d) Exception Where Employer Liable for Other Employment 
     Taxes.--To the extent provided in regulations prescribed by 
     the Secretary, this section shall not apply to any employer 
     for any calendar year if such employer is liable for any tax 
     under this subtitle with respect to remuneration for services 
     other than domestic service in a private home of the 
     employer.
       ``(e) General Regulatory Authority.--The Secretary shall 
     prescribe such regulations as may be necessary or appropriate 
     to carry out the purposes of this section. Such regulations 
     may treat domestic service employment taxes as taxes imposed 
     by chapter 1 for purposes of coordinating the assessment and 
     collection of such employment taxes with the assessment and 
     collection of domestic employers' income taxes.
       ``(f) Authority To Enter Into Agreements To Collect State 
     Unemployment Taxes.--
       ``(1) In general.--The Secretary is hereby authorized to 
     enter into an agreement with any State to collect, as the 
     agent of such State, such State's unemployment taxes imposed 
     on remuneration paid for domestic service in a private home 
     of the employer. Any taxes to be collected by the Secretary 
     pursuant to such an agreement shall be treated as domestic 
     service employment taxes for purposes of this section.
       ``(2) Transfers to state account.--Any amount collected 
     under an agreement referred to in paragraph (1) shall be 
     transferred by the Secretary to the account of the State in 
     the Unemployment Trust Fund.
       ``(3) Subtitle f made applicable.--For purposes of subtitle 
     F, any amount required to be collected under an agreement 
     under paragraph (1) shall be treated as a tax imposed by 
     chapter 23.
       ``(4) State.--For purposes of this subsection, the term 
     `State' has the meaning given such term by section 
     3306(j)(1).''.
       (2) Clerical amendment.--The table of sections for chapter 
     25 of such Code is amended by adding at the end thereof the 
     following:

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

       (3) Effective date.--The amendments made by this subsection 
     shall apply to remuneration paid in calendar years beginning 
     after December 31, 1994.
       (4) Expanded information to employers.--The Secretary of 
     the Treasury or the Secretary's delegate shall prepare and 
     make available information on the Federal tax obligations of 
     employers with respect to employees performing domestic 
     service in a private home of the employer. Such information 
     shall also include a statement that such employers may have 
     obligations with respect to such employees under State laws 
     relating to unemployment insurance and workers compensation.

     SEC. 3. ALLOCATIONS TO FEDERAL DISABILITY INSURANCE TRUST 
                   FUND.

       (a) Allocation With Respect to Wages.--Section 201(b)(1) of 
     the Social Security Act (42 U.S.C. 401(b)(1)) is amended by 
     striking ``(O) 1.20 per centum'' and all that follows through 
     ``December 31, 1999, and so reported,'' and inserting ``(O) 
     1.20 per centum of the wages (as so defined) paid after 
     December 31, 1989, and before January 1, 1994, and so 
     reported, (P) 1.88 per centum of the wages (as so defined) 
     paid after December 31, 1993, and before January 1, 1997, and 
     so reported, (Q) 1.70 per centum of the wages (as so defined) 
     paid after December 31, 1996, and before January 1, 2000, and 
     so reported, and (R) 1.80 per centum of the wages (as so 
     defined) paid after December 31, 1999, and so reported,''.
       (b) Allocation With Respect to Self-Employment Income.--
     Section 201(b)(2) of such Act (42 U.S.C. 401(b)(2)) is 
     amended striking ``(O) 1.20 per centum'' and all that follows 
     through ``December 31, 1999,'' and inserting ``(O) 1.20 per 
     centum of the amount of self-employment income (as so 
     defined) so reported for any taxable year beginning after 
     December 31, 1989, and before January 1, 1994, (P) 1.88 per 
     centum of the amount of self-employment income (as so 
     defined) so reported for any taxable year beginning after 
     December 31, 1993, and before January 1, 1997, (Q) 1.70 per 
     centum of the amount of self-employment income (as so 
     defined) so reported for any taxable year beginning after 
     December 31, 1996, and before January 1, 2000, and (R) 1.80 
     per centum of the amount of self-employment income (as so 
     defined) so reported for any taxable year beginning after 
     December 31, 1999,''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to wages paid after December 31, 
     1993, and self-employment income for taxable years beginning 
     after such date.
       (d) Study on Rising Costs of Disability Benefits.--
       (1) In general.--As soon as practicable after the date of 
     the enactment of this Act, the Commissioner of Social 
     Security shall conduct a comprehensive study of the reasons 
     for rising costs payable from the Federal Disability 
     Insurance Trust Fund.
       (2) Matters to be included in study.--In conducting the 
     study under this subsection, the Commissioner of Social 
     Security shall--
       (A) determine the relative importance of the following 
     factors in increasing the costs payable from the Trust Fund:
       (i) increased numbers of applications for benefits;
       (ii) higher rates of benefit allowances; and
       (iii) decreased rates of benefit terminations; and
       (B) identify, to the extent possible, underlying social, 
     economic, demographic, programmatic, and other trends 
     responsible for changes in disability benefit applications, 
     allowances, and terminations.
       (3) Report.--Not later than October 1, 1995, the 
     Commissioner of Social Security shall transmit a report to 
     the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate 
     setting forth the results of the study conducted under this 
     subsection, together with any recommendations for legislative 
     changes which the Commissioner determines appropriate.

     SEC. 4. NONPAYMENT OF BENEFITS TO INCARCERATED INDIVIDUALS 
                   AND INDIVIDUALS CONFINED IN CRIMINAL CASES 
                   PURSUANT TO CONVICTION OR BY COURT ORDER BASED 
                   ON FINDINGS OF INSANITY.

       (a) In General.--Section 202(x) of the Social Security Act 
     (42 U.S.C. 402(x)) is amended--
       (1) in the heading, by inserting ``and Certain Other 
     Inmates of Publicly Funded Institutions'' after 
     ``Prisoners'';
       (2) by striking ``(x)(1) Notwithstanding'' and all that 
     follows through the end of paragraph (1) and inserting the 
     following:
       ``(x)(1)(A) Notwithstanding any other provision of this 
     title, no monthly benefits shall be paid under this section 
     or under section 223 to any individual for any month during 
     which such individual--
       ``(i) is confined in a jail, prison, or other penal 
     institution or correctional facility pursuant to his 
     conviction of an offense punishable by imprisonment for more 
     than 1 year (regardless of the actual sentence imposed), or
       ``(ii) is confined by court order in an institution at 
     public expense in connection with--
       ``(I) a verdict or finding that the individual is guilty 
     but insane, with respect to an offense punishable by 
     imprisonment for more than 1 year,
       ``(II) a verdict or finding that the individual is not 
     guilty of such an offense by reason of insanity,
       ``(III) a finding that such individual is incompetent to 
     stand trial under an allegation of such an offense, or
       ``(IV) a similar verdict or finding with respect to such an 
     offense based on similar factors (such as a mental disease, a 
     mental defect, or mental incompetence).
       ``(B)(i) For purposes of clause (i) of subparagraph (A), an 
     individual shall not be considered confined in an institution 
     comprising a jail, prison, or other penal institution or 
     correctional facility during any month throughout which such 
     individual is residing outside such institution at no expense 
     (other than the cost of monitoring) to such institution or 
     the penal system or to any agency to which the penal system 
     has transferred jurisdiction over the individual.
       ``(ii) For purposes of clause (ii) of subparagraph (A), an 
     individual confined in an institution as described in such 
     clause (ii) shall be treated as remaining so confined until--
       ``(I) he or she is released from the care and supervision 
     of such institution, and
       ``(II) such institution ceases to meet the individual's 
     basic living needs.'';
     and
       (3) in paragraph (3), by striking ``any individual'' and 
     all that follows and inserting ``any individual who is 
     confined as described in paragraph (1) if the confinement is 
     under the jurisdiction of such agency and the Commissioner of 
     Social Security requires such information to carry out the 
     provisions of this section.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply with respect to benefits for months commencing 
     after 90 days after the date of the enactment of this Act.

     SEC. 5. ADDITIONAL DEBT COLLECTION PRACTICES.

       (a) In General.--Section 204 of the Social Security Act (42 
     U.S.C. 404) is amended by adding at the end the following new 
     subsection:
       ``(f)(1) With respect to any delinquent amount, the 
     Commissioner of Social Security may use the collection 
     practices described in sections 3711(f), 3716, and 3718 of 
     title 31, United States Code, as in effect on October 1, 
     1994.
       ``(2) For purposes of paragraph (1), the term `delinquent 
     amount' means an amount--
       ``(A) in excess of the correct amount of payment under this 
     title;
       ``(B) paid to a person after such person has attained 18 
     years of age; and
       ``(C) determined by the Commissioner of Social Security, 
     under regulations, to be otherwise unrecoverable under this 
     section after such person ceases to be a beneficiary under 
     this title.''.
       (b) Conforming Amendment.--Section 3701(d) of title 31, 
     United States Code, is amended by inserting ``, except to the 
     extent provided under section 204(f) of such Act (42 U.S.C. 
     404(f)),'' after ``the Social Security Act (42 U.S.C. 301 et 
     seq.)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to collection activities begun on or after the 
     date of the enactment of this Act and before October 1, 1999.

     SEC. 6. NURSING HOMES REQUIRED TO REPORT ADMISSIONS OF SSI 
                   RECIPIENTS.

       (a) In General.--Section 1631(e)(1) of the Social Security 
     Act (42 U.S.C. 1383(e)(1)) is amended by adding at the end 
     the following new subparagraph:
       ``(C) For purposes of making determinations under section 
     1611(e), the requirements prescribed by the Commissioner of 
     Social Security pursuant to subparagraph (A) of this 
     paragraph shall require each administrator of a nursing home, 
     extended care facility, or intermediate care facility, within 
     2 weeks after the admission of any eligible individual or 
     eligible spouse receiving benefits under this title, to 
     transmit to the Commissioner a report of the admission.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to admissions occurring on or after October 1, 
     1995.

     SEC. 7. RULE OF CONSTRUCTION.

       Until March 31, 1995, any reference in this Act (other than 
     section 3(d)) or any amendment made by this Act to the 
     Commissioner of Social Security shall be deemed a reference 
     to the Secretary of Health and Human Services.
       And the Senate agree to the same.
     Sam Gibbons,
     Dan Rostenkowski,
     J.J. Pickle,
     Andrew Jacobs, Jr.,
     Harold Ford,
     Bill Archer,
     Jim Bunning,
     Rick Santorum,
                                 Managers on the Part of the House

     Daniel Patrick Moynihan,
     Max Baucus,
     John Breaux,
     Bob Packwood,
     Bob Dole,
                               Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

       The managers on the part of the House and the Senate at the 
     conference on the disagreeing votes of the two Houses on the 
     amendment of the Senate to the bill (H.R. 4278) to make 
     improvements in the old-age, survivors, and disability 
     insurance program under title II of the Social Security Act, 
     submit the following joint statement to the House and the 
     Senate in explanation of the effect of the action agreed upon 
     by the managers and recommended in the accompanying 
     conference report:
       The Senate amendment struck all of the House bill after the 
     enacting clause and inserted a substitute text.
       The House recedes from its disagreement to the amendment of 
     the Senate with an amendment that is a substitute for the 
     House bill and the Senate amendment. The differences between 
     the House bill, the Senate amendment, and the substitute 
     agreed to in conference are noted below, except for clerical 
     corrections, conforming changes made necessary by agreements 
     reached by the conferees, and minor drafting and clerical 
     changes.

         Social Security Domestic Employment Reform Act of 1994


 1. Simplification of employment taxes on domestic services (Sec. 2 of 
               House bill and Sec. 2 of Senate amendment)

     Present law
       Individuals who hire domestic employees such as baby-
     sitters, housekeepers, and yard workers are required to 
     withhold and pay employment taxes when the worker's wages 
     exceed certain thresholds. (Individuals who hire domestic 
     workers who are properly classified as independent 
     contractors to provide these services are excluded from these 
     requirements.) For Social Security, the wage threshold is 
     reached, generally, when an employer pays $50 or more per 
     quarter to a domestic employee.
       However, wages paid to domestic employees hired by farm 
     operators are subject to the thresholds that are used for 
     determining coverage for agricultural employees. For these 
     employees, the wage threshold is reached if either (1) the 
     farm operator's total farm payroll for a year is $2,500 or 
     more, or (2) the wages paid to an employee in a year are $150 
     or more. (This latter test applies only if the farm 
     operator's total payroll for a year is less than $2,500.)
       For Federal unemployment insurance (FUTA), the threshold is 
     reached when an employer pays $1,000 or more in a calendar 
     quarter to one or more domestic employees.
       When the $50 threshold is reached, the employer must file a 
     quarterly report (Form 942) with the Internal Revenue 
     Service, submitting with it the required Social Security tax 
     for both the employer and the employee. The employer must 
     also provide the employee and the Social Security 
     Administration with a Wage and Tax Statement (Form W-2) at 
     the end of the year. When the $1,000 unemployment insurance 
     wage threshold is reached in any calendar quarter, the 
     employer must file a report (Form 940) with the IRS at the 
     end of the year, submitting the required tax.
       In addition, employers of domestic workers must: notify 
     employees who may be eligible for the earned income tax 
     credit of the existence of this credit; withhold income tax 
     if the employee requests it and the employer agrees; file and 
     pay State unemployment insurance tax in each quarter in which 
     the State unemployment insurance wage threshold (equal to the 
     $1,000 Federal threshold in 45 States) is reached; and, in 
     some States, report wages paid to domestic employees to the 
     State for purposes of State income tax.
     House bill
       Reporting
       The bill requires individuals who employ only domestic 
     workers to report on a calendar-year basis any Social 
     Security or Federal unemployment tax obligations for wages 
     paid these workers and authorizes the Secretary of the 
     Treasury to revise Federal Form 1040 to enable such employers 
     to report both taxes on their own Federal income tax returns.
       The bill also requires the Secretary of the Treasury to 
     provide to domestic employers a comprehensive package of 
     informational materials, including all requirements of 
     Federal law and a notification that they may also be subject 
     to State unemployment insurance and workers compensation 
     laws.
       Threshold
       The bill changes the threshold for withholding and paying 
     Social Security taxes on domestic workers from $50 per 
     quarter to $1,250 annually in 1995.
       Indexing
       The bill indexes the threshold for increases in average 
     wages in the economy, rounded to $50 increments.
       Farm service
       The bill does not apply to domestic service on a farm.
       Estimated taxes
       The bill includes domestic employers' Social Security and 
     Federal unemployment taxes in estimated tax provisions. 
     Employers may satisfy their tax obligations through regular 
     estimated tax payments or increased tax withholding from 
     their own wages.
       State unemployment
       The bill authorizes the Secretary of the Treasury to enter 
     into agreements with States to collect State unemployment 
     taxes in the manner described above.
       Age limitation
       No provision.
       Effective date.--Generally applies to remuneration paid in 
     calendar years beginning after 1994.
       The bill adjusts the Social Security tax threshold 
     retroactively to $1,150 for 1993 and to $1,200 for 1994. No 
     underpayment of taxes could be assessed (or, if assessed, 
     could be collected), effective on or after the date of 
     enactment. No refunds would be provided.
     Senate amendment
       Reporting
       Same as House bill.
       Threshold
       The amendment changes the threshold from $50 per quarter to 
     an annual threshold equal to the amount required for one 
     quarter of Social Security coverage (estimated to be $630 in 
     1995).
       Indexing
       Same as House bill, except the amendment would use a 
     technically different indexing mechanism.
       Farm service
       The amendment applies to domestic service on a farm.
       Estimated taxes
       Same as House bill, except no estimated tax penalty would 
     apply to an underpayment of these taxes if they were paid on 
     or before April 15 (or the date the return of the employer is 
     filed, if earlier.)
       State unemployment
       Same as House bill.
       Age limitation
       The amendment exempts from Social Security taxes any wages 
     paid to a worker for domestic services performed in any year 
     during which the worker is under the age of 18.
       Effective date.--Generally applies to remuneration paid in 
     calendar years beginning after 1994 (same as House bill). 
     Exemption for workers under the age of 18 applies to services 
     performed in calendar years beginning after 1994.
       No provision with respect to retroactive adjustment of the 
     threshold for 1993 and 1994.
     Conference agreement


                               Reporting

       The conference agreement follows the House bill and the 
     Senate amendment.
       The Secretary of the Treasury continues to have regulatory 
     authority to allow States to pay the employment taxes for 
     certain public assistance recipients who employ household 
     workers. Several States have agreements under which the State 
     handles the appropriate Federal employment taxes for 
     household workers employed by public assistance recipients 
     under State programs.


                               Threshold

       The conference agreement provides that the threshold is 
     $1,000.


                                Indexing

       The conference agreement follows the House bill and the 
     Senate amendment by indexing the $1,000 threshold. Indexing 
     will occur in $100 increments, rounded down to the nearest 
     $100.


                              Farm service

       The conference agreement follows the Senate amendment.


                            Estimated taxes

       The conference agreement follows the House bill, except 
     that estimated tax penalties will not apply to amounts 
     affected by the conference agreement until 1998. The 
     conferees intend that the Internal Revenue Service 
     disseminate the informational materials required by the 
     statute so that taxpayers will be fully apprised of the 
     provisions of the conference agreement (including the 
     provision related to estimated taxes).
       Individuals not required to make estimated tax payments 
     (including by having income taxes withheld from their wages) 
     are not required to begin making estimated tax payments (or 
     wage withholding) solely as a consequence of the conference 
     agreement. Individuals otherwise required to make estimated 
     tax payments (including by having income taxes withheld from 
     their wages) are required, after 1997, to include amounts 
     affected by the conference agreement in those estimated tax 
     payment (or wage withholding).


                           State unemployment

       The conference agreement follows the House bill and the 
     Senate amendment.


                             Age limitation

       The conference agreement follows the Senate amendment, 
     except that the exemption for workers under the age of 18 
     would not apply to individuals whose principal occupation is 
     household employment. Being a student is considered to be an 
     occupation for purposes of this test. Thus, for example, the 
     wages of a student who is 16 years old who also babysits will 
     be exempt from the reporting and payment requirements, 
     regardless of whether the amount of wages paid is above or 
     below the threshold. On the other hand, for example, the 
     wages of a 17 year-old single mother who leaves school and 
     goes to work as a domestic to support her family will be 
     subject to the reporting and payment requirements; she will 
     consequently obtain Social Security coverage with respect to 
     those wages.
       Effective date.--The $1,000 threshold is effective for 
     calendar year 1994. The simplified reporting system, as well 
     as the other provisions of the conference agreement, are 
     effective January 1, 1995. Refunds would be given for payroll 
     taxes on wages paid in 1994 when the total wages that an 
     employee receives from an employer are below the $1,000 
     threshold.
       There will be no loss of Social Security wage credits with 
     respect to amounts refunded for 1994. To provide information 
     reporting the ensure that there is no loss of credits, an 
     employer who would have been required to file a Form W-2 
     (without regard to the enactment of these provisions) will 
     continue to be required to do so, and will be required to 
     report wages paid for the whole year in the ``social security 
     wages'' box, even though the employer will receive a refund 
     of any Social Security taxes paid.
       Example 1.--Assume Employer A pays a domestic employee R 
     $500 in wages for calendar year 1994. A has been making 
     quarterly payments of the payroll taxes due on these wages. A 
     will not be required to make any further quarterly payments 
     of payroll taxes with respect to 1994 that are due on or 
     after the date of enactment of the conference agreement. A 
     can obtain a refund of payroll taxes previously paid. 
     Employee R will get Social Security credit with respect to 
     the $500 of wages.
       Example 2.--Assume Employer B pays a domestic employee 
     $1,500 in wages for calendar year 1994. B has been make 
     quarterly payments of the payroll taxes due on these wages. B 
     must continue to make quarterly payments of payroll taxes to 
     the remainder of 1994.
       Example 3.--Assume Employer A will pay domestic employee R 
     $500 in wages for calendar year 1995. Because the amount of 
     these wages is below the $1,000 threshold, A is not subject 
     to reporting.
       Example 4.--Assume Employer B will pay domestic employee S 
     $1,500 in wages for calendar year 1995. Because the amount of 
     these wages is above the $1,000 threshold, B is subject to 
     reporting.


  2. Reallocation of a Portion of the Old-Age and Survivors Insurance 
Payroll Tax to the Disability Insurance Trust Fund (Sec. 3 of the House 
                                 bill)

     Present law
       Employees and employers each pay a Social Security payroll 
     tax of 7.65 percent of earnings up to a specified ceiling. 
     The self-employed pay at the combined employee-employer rate. 
     The employee and the employer share of the payroll tax is 
     allocated to the Old-Age and Survivors Insurance (OASI), the 
     Disability Insurance (DI), and the Hospital Insurance (HI) 
     programs at the following rates:


------------------------------------------------------------------------
                                          OASI tax    DI tax     HI tax 
             Calendar years                 rate       rate       rate  
                                         (percent)  (percent)  (percent)
------------------------------------------------------------------------
1994-99................................      5.60       0.60       1.45 
2000 on................................      5.49       0.71       1.45 
------------------------------------------------------------------------

     House bill
       The provision would increase the employee and the employer 
     rate of tax for the DI program from 0.6 percent to 0.94 
     percent, with commensurate reduction of the rate of the OASI 
     tax. Beginning in 2000, the DI tax rate would be reduced to 
     0.90 percent, with a commensurate increase of the rate of the 
     OASI tax. The rate of tax would be:


------------------------------------------------------------------------
                                          OASI tax    DI tax     HI tax 
             Calendar years                 rate       rate       rate  
                                         (percent)  (percent)  (percent)
------------------------------------------------------------------------
1994-99................................      5.26       0.94       1.45 
2000 on................................      5.30       0.90       1.45 
------------------------------------------------------------------------

       In addition, the Secretary of Health and Human Services 
     would be required to conduct a comprehensive study of the 
     reasons for rising costs in the DI program. The study would 
     determine the relative importance of: (a) increased numbers 
     of applications for benefits, (b) higher rates of benefit 
     allowances, and (c) decreased rates of benefit terminations 
     in increasing DI program costs. It would also identify, to 
     the extent possible, underlying social, economic, 
     demographic, programmatic, and other trends responsible for 
     changes in DI applications, allowances, and terminations. No 
     later than December 31, 1995, the Secretary would be required 
     to issue a report to the House Committee on Ways and Means 
     and the Senate Committee on Finance summarizing the results 
     of the study and, if appropriate, making legislative 
     recommendations.
       Effective date.--The provision would apply to wages paid 
     after December 31, 1993, and to self-employment income for 
     taxable years beginning after this date.
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement follows the House provision, with 
     an amendment making the allocation to the DI trust fund 0.85 
     percent of payroll for the employer and employee, each, for 
     the years 1997-99. The resulting tax rates are:


------------------------------------------------------------------------
                                          OASI tax    DI tax     HI tax 
             Calendar years                 rate       rate       rate  
                                         (percent)  (percent)  (percent)
------------------------------------------------------------------------
1994-96................................      5.26       0.94       1.45 
1997-99................................      5.35       0.85       1.45 
2000 on................................      5.30       0.90       1.45 
------------------------------------------------------------------------

       The Commissioner of Social Security would be required to 
     provide the study by October 1, 1995. The conferees 
     understand that the Social Security Administration may not 
     have sufficient data to provide as full a report as the 
     Congress may want by the October 1 due date. The conferees 
     expect that the Commissioner will supplement the October 1 
     report with any subsequent findings and recommendations that 
     the Commissioner may wish to make no later than December 31, 
     1995.


  3. Limitation on payments to incarcerated criminals and criminally 
 insane individuals confined to institutions by court order at public 
 expense (Sec. 4 of the House bill and Sec. 4 of the Senate amendment)

     Present law
       Generally, Social Security benefits may not be paid to any 
     individual who is confined in a penal institution pursuant to 
     a felony conviction. (This provision does not apply to an 
     individual who is actively and satisfactorily participating 
     in a rehabilitation program which has been specifically 
     approved for the individual by a court of law and, as 
     determined by the Secretary, is expected to result in the 
     individual being able to engage in substantial gainful 
     activity upon release and within a reasonable time.) Benefits 
     to qualified family members of incarcerated felons continue 
     to be paid.
       When an individual is confined to a public institution 
     pursuant to verdict related to a felony offense for which he 
     or she was found to be not guilty by reason of insanity, the 
     Social Security Act provides no limitation on benefit 
     payments.
     House bill
       The provision would:
       Apply the limitation on Social Security benefit payments, 
     which currently applies only to incarcerated felons, to all 
     individuals convicted of an offense punishable by 
     imprisonment for more than one year;
       Repeal the exception to the limitation for inmates 
     participating in court-approved rehabilitation; and
       Extend the limitation to criminally insane individuals who 
     are confined to institutions by court order at public expense 
     in connection with an offense punishable by imprisonment of 
     more than one year. The court order must be issued pursuant 
     to a verdict of guilty but insane, a verdict of not guilty by 
     reason of insanity, a finding of incompetence to stand trial, 
     or a similar verdict or finding based on similar factors 
     (such as mental disease, mental defect, or mental 
     incompetence).
       The limitation would continue to apply until such time as 
     the individual is unconditionally released from the care and 
     supervision of the institution to which he or she was 
     confined and the institution ceases to meet the cost of the 
     individual's basic living needs.
       A similar limitation would be placed on Medicare Part A 
     hospital insurance (as well as on Medicare Part B 
     supplemental medical insurance in cases where eligibility for 
     Part B is conditioned on eligibility for Part A).
       To enforce the ban, the Secretary of Health and Human 
     Services would be authorized to require from institutions the 
     names and Social Security numbers of the individuals confined 
     there under the conditions described above.
       Effective date.--The provision would apply to benefits for 
     months commencing after 90 days after enactment and with 
     respect to items and services provided after this 90-day 
     period.
     Senate amendment
       The amendment would suspend payment of any Social Security 
     benefit payable under title II of the Social Security Act to 
     any individual while confined in any public institution, if 
     the individual had been found guilty of a felony offense but 
     insane, or not guilty of a felony offense by reason of 
     insanity or other similar disorder. Federal or State agencies 
     having jurisdiction over institutions where such individuals 
     are confined would be required to furnish such information as 
     the Secretary of Health and Human Services may require to 
     carry out this provision.
       Effective date.--The provision would apply with respect to 
     benefits for months commencing after 90 days after enactment.
     Conference agreement
       The conference agreement generally follows the House 
     provision, modified to:
       (1) maintain the current exception for prisoners in 
     courtapproved rehabilitation;
       (2) maintain Medicare eligibility for individuals whose 
     cash benefits have been suspended due to their confinement;
       (3) provide that benefits will be reinstated to individuals 
     who are released from an institution to which they were 
     committed pursuant to an insanity verdict, so long as the 
     institution ceases to meet the individual's basic living 
     needs; and
       (4) provide that an individual is not to be treated as 
     confined to a prison or other penal institution during any 
     month throughout which he or she resides outside such 
     institution at no expense (other than the cost of monitoring) 
     to the institution or the penal system (or, if the penal 
     system has transferred jurisdiction over the individual to 
     another agency, at no expense to the institution, the penal 
     system, or that agency).
       The fourth modification addresses an issue that has arisen 
     because of the development of highly sophisticated electronic 
     surveillance technology. Relying on such technology, courts 
     and prisons are confining growing numbers of individuals to 
     their homes, where they can now be effectively monitored. 
     SSA's policy response to this practice is two-fold: In cases 
     where an individual is confined to home by court order, the 
     agency will resume payment of monthly benefits. However, in 
     cases where an individual is confined to home without such an 
     order (e.g., because of crowding in a prison), SSA continues 
     to suspend benefits.
       The conferees disagree with SSA's policy in the second 
     instance. The conferees believe that payments should be 
     resumed for any month in which a prisoner resides outside a 
     correctional facility at no expense (other than the cost of 
     monitoring) to the penal system.


    4. additional debt collection procedures (sec. 3 of the senate 
                               amendment)

     Present law
       The Omnibus Budget Reconciliation Act of 1990 permits the 
     Social Security Administration to collect overpaid Social 
     Security benefits from former beneficiaries by reducing these 
     individual's Federal tax refunds when other efforts to 
     collect the overpayment have failed.
       In addition, certain debt collection procedures are 
     available for use by most Federal agencies. Those include 
     provisions enabling Federal agencies to recover debts owed to 
     them by offsetting other Federal payments to which the debtor 
     may be entitled (called ``administrative offset''); to report 
     delinquent debtors to credit reporting agencies; and to 
     contract with private debt collection agencies to recover 
     delinquent debt. The Social Security Administration (SSA) is 
     prohibited from using these three debt collection procedures.
     House bill
       No provision.
     Senate amendment
       SSA would be authorized to use three procedures that are 
     available to other Federal agencies: administrative offset, 
     reporting delinquent debtors to credit reporting agencies, 
     and contracting with private debt collection agencies.
       These procedures would be available for use only for the 
     purpose of recovering any delinquent amount owned by former 
     Social Security beneficiaries who were paid benefits not due. 
     The term ``delinquent amount'' is defined to mean an amount 
     (1) in excess of the correct amount of payment under title II 
     of the Social Security Act, (2) paid to a person after the 
     person has attained age 18, and (3) determined by the 
     Secretary, under regulations, to be otherwise unrecoverable.
       Effective date.--The provision would apply to collection 
     activities begun on or after the date of enactment and before 
     October 1, 1999.
     Conference agreement
       The conference agreement follows the Senate amendment.


5. nursing homes required to report admissions of ssi recipients (sec. 
                       5 of the senate amendment)

     Present law
       Supplemental Security Income recipients, or their 
     representative payees, are required to report to the Social 
     Security Administration any change in the recipient's status 
     (e.g., income, resources, living arrangements) that may 
     affect the amount of benefits to which the recipient is 
     entitled. Generally, when an SSI recipient enters a nursing 
     home for an extended period, and payment for the recipient's 
     care is being provided by Medicaid, the amount of the 
     recipient's SSI benefit is reduced to no more than $30 per 
     month, beginning with the first full month of residence. 
     Because nursing home admissions are not always reported 
     promptly to SSA, some SSI recipients receive more benefits 
     than they are entitled to receive in the months following 
     their admission.
     House bill
       No provision.
     Senate amendment
       Nursing home administrators would be required to report to 
     SSA the administration of any SSI recipient within two weeks 
     of the recipient's admission, so that SSA can make timely 
     adjustment in the amount of the recipient's SSI benefit.
       Effective date.--The provision is effective for admissions 
     to nursing homes occurring on or after October 1, 1995.
     Conference agreement
       The conference agreement follows the Senate amendment.
     Sam Gibbons,
     Dan Rostenkowski,
     J.J. Pickle,
     Andrew Jacobs, Jr.,
     Harold Ford,
     Bill Archer,
     Jim Bunning,
     Rick Santorum,
                                Managers on the Part of the House.

     Daniel Patrick Moynihan,
     Max Baucus,
     John Breaux,
     Bob Packwood,
     Bob Dole,
                               Managers on the Part of the Senate.
  Mr. GIBBONS. Mr. Speaker, I call up the conference report on the bill 
(H.R. 4278) to make improvements in the old-age, survivors, and 
disability insurance program under title II of the Social Security Act, 
and ask unanimous consent for its immediate consideration.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore (Mr. Rowland). Is there objection to the 
request of the gentleman from Florida?
  There was no objection.
  Mr. GIBBONS. Mr. Speaker, I ask unanimous consent that the conference 
report be considered as read, and that any points of order against the 
conference report or its consideration be waived.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Florida?
  There was no objection.
  The SPEAKER pro tempore. The gentleman from Florida [Mr. Gibbons] 
will be recognized for 30 minutes, and the gentleman from Kentucky [Mr. 
Bunning] will be recognized for 30 minutes.
  The Chair recognizes the gentleman from Florida [Mr. Gibbons].
  Mr. GIBBONS. Mr. Speaker, I yield myself such time as I may consume. 
I do not intend to take up that much time.
  Mr. Speaker, this is a good conference report. The chairman of the 
subcommittee who handled this legislation is here to go over the fine 
points and details of it.
  Mr. Speaker, I ask that I be permitted to yield the balance of my 
time to the gentleman from Indiana [Mr. Jacobs], chairman of the 
subcommittee, who handled this legislation, and that he be permitted to 
yield such time as he sees fit.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Florida?
  There was no objection.

                          ____________________