House Report 114-418 - TREATMENT OF CERTAIN PAYMENTS IN EUGENICS COMPENSATION ACT

[House Report 114-418]
[From the U.S. Government Publishing Office]

114th Congress } { Report
HOUSE OF REPRESENTATIVES
2nd Session } { 114-418

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TREATMENT OF CERTAIN PAYMENTS IN EUGENICS COMPENSATION ACT

_______

February 9, 2016.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Chaffetz, from the Committee on Oversight and Government Reform,
submitted the following

R E P O R T

[To accompany S. 1698]

[Including cost estimate of the Congressional Budget Office]

The Committee on Oversight and Government Reform, to whom
was referred the bill (S. 1698) to exclude payments from State
eugenics compensation programs from consideration in
determining eligibility for, or the amount of, Federal public
benefits, having considered the same, reports favorably thereon
without amendment and recommends that the bill do pass.

CONTENTS

Page
Committee Statement and Views.................................... 2
Section-by-Section............................................... 3
Committee Consideration.......................................... 3
Roll Call Votes.................................................. 3
Application of Law to the Legislative Branch..................... 3
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 4
Statement of General Performance Goals and Objectives............ 4
Duplication of Federal Programs.................................. 4
Disclosure of Directed Rule Makings.............................. 4
Federal Advisory Committee Act................................... 4
Unfunded Mandate Statement....................................... 4
Earmark Identification........................................... 4
Committee Estimate............................................... 4
Budget Authority and Congressional Budget Office Cost Estimate... 5

Committee Statement and Views

PURPOSE AND SUMMARY

S. 1698, the Treatment of Certain Payments in Eugenics
Compensation Act of 2015, exempts payments made under a State
eugenics compensation program from being considered income or
resources in determining the eligibility for, or amount of, any
federal public benefit. The exemption would allow elderly
victims of state eugenics programs, many of whom are poor, to
receive compensation for their states' actions against them
without losing eligibility for needed federal benefits as a
result of the temporary increase in income from this one-time
award.

BACKGROUND AND NEED FOR LEGISLATION

In the early part of the 20th century, 32 states had some
form of eugenics program. Forced sterilization of individuals
considered to be unfit for reproduction was a prominent part of
those programs.\1\ States targeted the mentally handicapped, as
well as poor teenagers from large families, people with
epilepsy, young rape victims, and people deemed ``feeble-
minded'' by dubious early versions of IQ tests.\2\
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\1\Kim Severson, Thousands Sterilized, a State Weighs Restitution,
N.Y. Times, (Dec. 9, 2011), http://www.nytimes.com/2011/12/10/us/
redress-weighed-for-forced-sterilizations-in-north-carolina.html.
\2\Id.
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Two states with particularly aggressive eugenics programs
were North Carolina and Virginia.\3\ North Carolina even
granted social workers the power to designate people for
sterilization.\4\
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\3\Id.
\4\Id.
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Virginia and North Carolina have both enacted programs to
provide compensation to victims of their sterilization
programs. North Carolina's program awards approximately $20,000
to each victim, with a possible increase to $45,000 if no
further victims are identified.\5\ Virginia's program awards
$25,000 to each living victim.\6\
---------------------------------------------------------------------------
\5\Thom Tillis, Sen Thom Tillis: State eugenics program victims
deserve fair compensation, USA Today, (Sept. 9, 2015), http://
www.usatoday.com/story/opinion/2015/09/03/north-carolina-eugenics-
victims-compensation-column/31423907/.
\6\Id.
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Without a change in current federal law, these compensation
payments would count against the victim's eligibility for
federal benefits like Medicaid, Supplemental Security Income,
and Supplemental Nutrition Assistance.\7\
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\7\Id.
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This legislation would exempt the compensation payments
from the victim's income for purposes of calculating federal
benefits payments. Such treatment would honor the intent of the
compensation programs to help make right this vast historical
wrong. The legislation would also comport with the ordinary
treatment of compensation payments for physical injuries, which
are generally not included in gross income for the purpose of
determining eligibility for federal benefits.\8\
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\8\See, e.g., 26 U.S.C. 104(a) (2012) (exempting damages or
worker's compensation payments from gross income when either is
compensating for physical injuries.)
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LEGISLATIVE HISTORY

S. 1698, the Treatment of Certain Payments in Eugenics
Compensation Act of 2015, was introduced on June 25, 2015, by
Senator Thom Tillis (R-NC) and passed the Senate by unanimous
consent on November 30, 2015. Upon receipt in the House, the
bill was referred to the Committee on Oversight and Government
Reform. On December 9, 2015, the Committee ordered S. 1698
favorably reported by voice vote. Congressman Patrick McHenry
(R-NC) is the author of companion legislation (H.R. 2949) in
the House.

Section-by-Section

Section 1. Short title

Designates the short title of the bill as the ``Treatment
of Certain Payments in Eugenics Compensation Act''.

Section 2. Exclusion of payments from State eugenics compensation
programs from consideration in determining eligibility for, or
the amount of, Federal public benefits

Excludes payments made under a State eugenics compensation
program from being considered income or resources in
determining eligibility or amount of any federal public
benefit.
Defines ``Federal public benefit'' as any benefit for which
payments or assistance is provided to an individual, household,
or family unit by the federal government. Retirement, welfare,
health, disability, housing, postsecondary education, food
assistance, and unemployment benefits are specifically
enumerated, as are grants, contracts, loans, professional
licenses, or commercial licenses provided by an agency of the
United States.
Defines ``State eugenics compensation program'' as a
program established by state law intended to compensate
individuals who were sterilized under the authority of the
State.

Committee Consideration

On December 9, 2015, the Committee met in open session and
ordered reported favorably the bill, S. 1698, by unanimous
consent, a quorum being present.

Roll Call Votes

There were no recorded votes during Full Committee
consideration of S. 1698.

Application of Law to the Legislative Branch

Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch where the bill relates to the terms and conditions of
employment or access to public services and accommodations.
This bill establishes the treatment of State eugenics
compensation payments for federal benefit purposes. As such
this bill does not relate to employment or access to public
services and accommodations.

Statement of Oversight Findings and Recommendations of the Committee

In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report.

Statement of General Performance Goals and Objectives

In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goal or objective of this bill is to honor the intent of the
States in compensating the victims of State eugenics programs
without jeopardizing the victims' access to federal benefits.

Duplication of Federal Programs

No provision of this bill establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.

Disclosure of Directed Rule Makings

The Committee estimates that enacting this bill does not
direct the completion of any specific rule makings within the
meaning of 5 U.S.C. 551.

Federal Advisory Committee Act

The Committee finds that the legislation does not establish
or authorize the establishment of an advisory committee within
the definition of 5 U.S.C. App., Section 5(b).

Unfunded Mandate Statement

Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandates Reform Act, P.L. 104-4) requires a statement as to
whether the provisions of the report include unfunded mandates.
In compliance with this requirement the Committee has received
a letter from the Congressional Budget Office included herein.

Earmark Identification

This bill does not include any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.

Committee Estimate

Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
this bill. However, clause 3(d)(2)(B) of that rule provides
that this requirement does not apply when the Committee has
included in its report a timely submitted cost estimate of the
bill prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974.

Budget Authority and Congressional Budget Office Cost Estimate

With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause (3)(c)(3) of rule XIII of the Rules
of the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following cost estimate for this bill from the Director of
the Congressional Budget Office:

S. 1698--Treatment of Certain Payments in Eugenics Compensation Act

Summary: S. 1698 would exclude payments made under a state
eugenics compensation program from being considered as income
or resources in determining eligibility for, or the amount of,
any federal benefit. Those state programs are intended to
compensate those who had been involuntarily sterilized under
state authority when such sterilization programs were active in
the United States.
S. 1698 would affect federal spending by allowing a small
number of people to receive Medicaid and Supplemental Security
Income (SSI) during the period when they would otherwise be
ineligible for those programs because of the income they
received from the state programs. CBO estimates that enacting
S. 1698 would increase direct spending by $5 million over the
2016-2025 period.
S. 1698 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Pay-as-you-go procedures apply because enacting the
legislation would affect direct spending. Enacting the bill
would not affect revenues.
CBO estimates that enacting the legislation would not
increase net direct spending or on-budget deficits by more than
$5 billion in one or more of the four consecutive 10-year
periods beginning in 2026.
Estimated cost to the Federal Government: The estimated
budgetary effect of S. 1698 is shown in the following table.
The costs of this legislation fall within budget functions 550
(health) and 600 (income security). For this estimate, CBO
assumes that S. 1698 will be enacted early in calendar year
2016.

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By fiscal year, in millions of dollars--
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2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2016-2020 2016-2025
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CHANGES IN DIRECT SPENDING

Estimated Budget Authority.................................. 2 2 * * * * * * * * 5 5
Estimated Outlays........................................... 2 2 * * * * * * * * 5 5
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Note: * = Less than $500,000.

Basis of estimate: S. 1698 would exclude payments made
under a state eugenics compensation program from being
considered as income or resources in determining eligibility
for, or the amount of, any federal benefit. CBO estimates that
S. 1698 would affect spending for Medicaid and SSI (the effect
on other federal programs would be negligible). Under current
law, any eugenics compensation received by an individual would
be counted as income in the month it was received and as
resources thereafter for purposes of determining eligibility
for Medicaid and SSI. S. 1698 would allow individuals who
receive compensation, almost all of whom are poor and many of
whom are developmentally disabled, to remain eligible for SSI
and Medicaid despite receiving eugenics compensation.
In the absence of S. 1698, eugenics compensation recipients
would lose eligibility for both programs because the
compensation would exceed income eligibility thresholds for the
program as well as resource eligibility levels beyond the month
of receipt. Many of the individuals receiving compensation are
believed to be in nursing homes or receiving other forms of
expensive long term care services. CBO expects that recipients
will spend down the compensation funds quickly by paying for
their care and that, on average, recipients will lose
eligibility for about one year under current law. Therefore,
spending for SSI and Medicaid would be expected to increase by
the cost of benefits for about one year for each person
compensated if S. 1698 was enacted.
S. 1698 would affect individuals primarily in two states,
North Carolina and Virginia. Based on information from several
private sources involved in supporting those who had been
involuntarily sterilized by state eugenics programs and from
the North Carolina Office of Justice for Sterilization Victims,
CBO estimates that S. 1698 would affect a very small number of
people in those states. Because North Carolina's program ended
in the early 1970s and Virginia's ended just after World War
II, most of the people who had been sterilized have passed away
or are very elderly and difficult to locate. The North Carolina
program has identified fewer than 250 people who qualify for
payments under its program and Virginia has identified fewer
than 20 people who qualify. In addition, those two state
programs fixed the level of compensation such that recipients
would only receive a share of a $10 million funding pool in
North Carolina or receive $25,000 each in Virginia.
Additional states that once had eugenics programs could
establish similar compensation laws, but CBO estimates that
fewer than half of those states will do so. CBO projects that
the number of individuals that eventually would be identified
and compensated in those states would be similar to the small
number of people identified in Virginia, since the other state
programs also ended just after World War II. Therefore, CBO
estimates that the costs for any additional compensation
programs would be minimal. In total, CBO estimates that
enacting S. 1698 would increase direct spending by $5 million
over the 2016-2025 period.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table. The
legislation would not affect revenues.

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR S. 1698, AS ORDERED REPORTED BY THE HOUSE OVERSIGHT AND GOVERNMENT REFORM COMMITTEE ON DECEMBER 9, 2015
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By fiscal year, in millions of dollars--
-------------------------------------------------------------------------------------------
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2016-2020 2016-2025
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NET INCREASE OR DECREASE (-) IN THE ON-BUDGET DEFICIT

Statutory Pay-As-You-Go Impact.............................. 2 2 0 0 0 0 0 0 0 0 5 5
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Increase in long term direct spending and deficits: CBO
estimates that enacting S. 1698 would not increase net direct
spending or on-budget deficits by more than $5 billion in any
of the four consecutive 10-year periods beginning in 2026.
Intergovernmental and private-sector impact: S. 1698
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments.
Estimate prepared by: Federal costs: Rob Stewart; Impact on
state, local, and tribal governments: J'Nell Blanco Suchy;
Impact on the private sector: Paige Piper-Bach.
Estimate approved by: Holly Harvey, Deputy Assistant
Director for Budget Analysis.

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