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108th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 108-35
======================================================================
BACK TO WORK INCENTIVE ACT OF 2003
_______
March 13, 2003.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Boehner, from the Committee on Education and the Workforce,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 444]
[Including cost estimate of the Congressional Budget Office]
The Committee on Education and the Workforce, to whom was
referred the bill (H.R. 444) to amend the Workforce Investment
Act of 1998 to establish a Personal Reemployment Accounts grant
program to assist Americans in returning to work, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE
This Act may be cited as the ``Back to Work Incentive Act of 2003''.
SEC. 2. GRANTS TO SUPPORT PERSONAL REEMPLOYMENT ACCOUNTS.
Subtitle B of title I of the Workforce Investment Act of 1998 (29
U.S.C. 2811 et seq.) is amended by inserting after chapter 5 the
following new chapter:
``CHAPTER 5A--PERSONAL REEMPLOYMENT ACCOUNTS
``SEC. 135A. PURPOSES.
``The purposes of this chapter are to provide for the establishment
of personal reemployment accounts for certain individuals identified as
likely to exhaust their unemployment compensation in order to--
``(1) accelerate the reemployment of such individuals;
``(2) promote the retention in employment of such
individuals; and
``(3) provide such individuals with enhanced flexibility,
choice, and control in obtaining intensive reemployment,
training, and supportive services.
``SEC. 135B. DEFINITION.
``In this chapter, the term `State' means each of the several States
of the United States, the District of Columbia, the Commonwealth of
Puerto Rico, and the United States Virgin Islands.
``SEC. 135C. GRANTS TO STATES.
``(a) Grants.--The Secretary shall--
``(1) reserve \2/10\ of 1 percent of the amount appropriated
under section 137(d) for use under section 135I; and
``(2) use the remainder of the amount appropriated under
section 137(d) to make allotments in accordance with subsection
(b).
``(b) Allotment Among States.--
``(1) In general.--From the amount made available under
subsection (a)(2), the Secretary shall allot to each State an
amount that is proportionate to the relative number of
unemployed individuals in the State as compared to the total
number of unemployed individuals in all States in order to
provide assistance for eligible individuals in accordance with
this chapter.
``(2) Small state minimum allotment.--The Secretary shall
ensure that--
``(A) each State (other than the United States Virgin
Islands) shall receive an allotment under paragraph (1)
that is not less than \3/10\ of 1 percent of the amount
made available under subsection (a)(2) for the fiscal
year; and
``(B) the United States Virgin Islands shall receive
an allotment under paragraph (1) that is not less than
\1/10\ of 1 percent of the amount made available under
subsection (a)(2) for the fiscal year.
``(c) Availability.--Notwithstanding section 189(g)(1), amounts made
available under subsection (a) to carry out this chapter shall be
available for obligation and expenditure beginning on the date of the
enactment of the Back to Work Incentive Act of 2003.
``SEC. 135D. WITHIN STATE ALLOCATION.
``(a) Allocation.--Of the amount allotted to a State under section
135C--
``(1) not more than 2 percent of the amount may be reserved
by the Governor of the State to enhance the system of worker
profiling described in section 303(j) of the Social Security
Act and to establish and operate a data management system, as
necessary, and carry out other appropriate activities to
implement this chapter;
``(2) 5 percent of the amount shall be allocated by the State
to local areas in accordance with the formula described in
subsection (b) for start-up costs and other operating costs
related to the provision of assistance under this chapter; and
``(3) the remainder of the amount shall be provided to local
areas consistent with the methods and procedures described in
section 135G(a)(4) for the establishment of personal
reemployment accounts described in section 135E for eligible
individuals in such local areas.
``(b) Formula.--A State shall allocate funds to local areas in the
State under subsection (a)(2) in an amount that is proportionate to the
relative number of unemployed individuals in the local area as compared
to the total number of unemployed individuals in the State.
``(c) Availability.--Notwithstanding section 189(g)(2), amounts
allotted to a State under section 135C, and amounts subsequently
provided to a local area under this section, shall be available for
obligation and expenditure only for the 3-year period beginning on the
date of the enactment of the Back to Work Incentive Act of 2003.
``SEC. 135E. PERSONAL REEMPLOYMENT ACCOUNTS.
``(a) Accounts.--
``(1) In general.--Funds provided to a local area under
section 135D shall be used to provide eligible individuals with
personal reemployment accounts to be used in accordance with
section 135F. An eligible individual may receive only one
personal reemployment account.
``(2) Amount.--The State shall establish the amount of a
personal reemployment account, which shall be uniform
throughout the State, and shall not exceed $3,000.
``(b) Eligible Individuals.--
``(1) In general.--Each State shall establish eligibility
criteria for individuals for personal reemployment accounts in
accordance with this subsection.
``(2) Eligibility criteria requirements.--
``(A) In general.--Subject to subparagraph (B), an
individual shall be eligible to receive assistance
under this chapter if, beginning after the date of
enactment of the Back to Work Incentive Act of 2003,
the individual--
``(i) is identified by the State pursuant to
section 303(j)(1) of the Social Security Act as
likely to exhaust regular unemployment
compensation and in need of job search
assistance to make a successful transition to
new employment or an individual's unemployment
can be attributed in substantial part to unfair
competition from Federal Prison Industries,
Inc.;
``(ii) is receiving regular unemployment
compensation under any State or Federal
unemployment compensation program administered
by the State; and
``(iii) is eligible for not less than 20
weeks of regular unemployment compensation
described in clause (ii).
``(B) Additional eligibility and priority criteria.--
A State may establish criteria that is in addition to
the criteria described in subparagraph (A) for the
eligibility of individuals to receive assistance under
this chapter. A State may also establish criteria for
priority in the provision of assistance to such
eligible individuals under this chapter.
``(3) Transition rule.--
``(A) Previously identified as likely to exhaust
unemployment compensation.--
``(i) In general.--At the option of the
State, and subject to clause (ii), an
individual may be eligible to receive
assistance under this chapter if the
individual--
``(I) during the 13-week period
ending the week prior to the date of
the enactment of the Back to Work
Incentive Act of 2003, was identified
by the State pursuant to section
303(j)(1) of the Social Security Act as
likely to exhaust regular unemployment
compensation and in need of job search
assistance to make a successful
transition to new employment; and
``(II) otherwise meets the
requirements of clauses (ii) and (iii)
of paragraph (2)(A).
``(ii) Additional eligibility and priority
criteria.--A State may establish criteria that
is in addition to the criteria described in
clause (i) for the eligibility of individuals
to receive assistance under this chapter. A
State may also establish criteria for priority
in the provision of assistance to such eligible
individuals under this chapter.
``(B) Previously exhausted unemployment
compensation.--At the option of the State, an
individual may be eligible to receive assistance under
this chapter if the individual--
``(i) during the 26-week period ending the
week prior to the date of the enactment of the
Back to Work Incentive Act of 2003, exhausted
all rights to any unemployment compensation;
and
``(ii)(I) is enrolled in training and needs
additional support to complete such training,
with a priority of service to be provided to
such individuals who are training for shortage
occupations or high-growth industries; or
``(II) is separated from employment in an
industry or occupation that has experienced
declining employment, or no longer provides any
employment, in the local labor market during
the two-year period ending on the date of the
determination of eligibility of the individual
under this subparagraph.
``(4) No individual entitlement.--Nothing in this chapter
shall be construed to entitle any individual to receive a
personal reemployment account.
``(c) Local Administration.--
``(1) Information and attestation.--Prior to the
establishment of a personal reemployment account for an
eligible individual under this chapter, the local board,
through the one-stop delivery system, shall ensure that the
individual--
``(A) is informed of the requirements applicable to
the personal reemployment account, including the
allowable uses of funds from the account, the
limitations on access to services described under
section 135F(a)(3)(C) and a description of such
services, and the conditions for receiving a
reemployment bonus;
``(B) has the option to develop a personal
reemployment plan which will identify the employment
goals and appropriate combination of services selected
by the individual to achieve the employment goals; and
``(C) signs an attestation that the individual has
been given the option to develop a personal
reemployment plan in accordance with subparagraph (B),
will comply with the requirements relating to the
personal reemployment accounts under this chapter, and
will reimburse the account or, if the account has been
terminated, the program under this chapter, for any
amounts expended from the account that are not
allowable.
``(2) Periodic interviews.--If a recipient exhausts his or
her rights to any unemployment compensation, and the recipient
has a remaining balance in his or her personal reemployment
account, the one-stop delivery system shall conduct periodic
interviews with the recipient to assist the recipient in
meeting his or her individual employment goals.
``SEC. 135F. USE OF FUNDS.
``(a) Allowable Activities.--
``(1) In general.--Subject to the requirements contained in
paragraphs (2) and (3), a recipient may use amounts in a
personal reemployment account to purchase one or more of the
following:
``(A) Intensive services, including those types of
services specified in section 134(d)(3)(C).
``(B) Training services, including those types of
services specified in section 134(d)(4)(D).
``(C) Supportive services, except for needs-related
payments.
``(D) Assistance to purchase or lease an automobile,
if such assistance is necessary to allow the recipient
to accept a bona fide offer of employment for which
there is a reasonable expectation of long-term
duration.
``(2) Delivery of services.--The following requirements
relating to delivery of services shall apply to the program
under this chapter:
``(A) Recipients may use funds from the personal
reemployment account to purchase the services described
in paragraph (1) through the one-stop delivery system
on a fee-for-service basis, or through other providers,
consistent with safeguards described in the State and
local plans under section 135G.
``(B) The local board, through the one-stop delivery
system, may pay costs for such services directly on
behalf of the recipient, through a voucher system, or
by reimbursement to the recipient upon receipt of
appropriate cost documentation, consistent with
safeguards described in the State plan under section
135G.
``(C) Each local board, through the one-stop delivery
system, shall make available to recipients information
on training providers specified in section
134(d)(4)(F)(ii), information available to the one-stop
delivery system on providers of the intensive and
supportive services described in paragraph (1), and
information relating to occupations in demand in the
local area.
``(3) Limitations.--The following limitations shall apply
with respect to personal reemployment accounts under this
chapter:
``(A)(i) Amounts in a personal reemployment account
may be used for up to one year from the date of the
establishment of the account.
``(ii) No personal reemployment account may be
established beginning 2 years after the date of the
enactment of the Back to Work Incentive Act of 2003.
``(B) Each recipient shall submit cost documentation
as required by the one-stop delivery system.
``(C) For the 1-year period following the
establishment of the account, recipients may not
receive intensive, supportive, or training services
funded under this title except on a fee-for-services
basis as specified in paragraph (2)(A).
``(D) Amounts in a personal reemployment account
shall be nontransferable.
``(b) Income Support.--A State may authorize recipients determined
eligible under section 135E(b)(3)(B) to withdraw amounts from the
personal reemployment account on a weekly basis for purposes of income
support in amounts up to the average weekly amount of unemployment
compensation that the individual received prior to his or her
exhaustion of rights to unemployment compensation if the individual is
engaged in job search, intensive services, or training that is expected
to lead to employment.
``(c) Reemployment Bonus.--
``(1) In general.--Subject to paragraph (2)--
``(A) if a recipient determined eligible under
section 135E(b)(2) obtains full-time employment before
the end of the 13th week of unemployment for which
unemployment compensation is paid, the balance of his
or her personal reemployment account shall be provided
directly to the recipient in cash; and
``(B) if a recipient determined eligible under
section 135E(b)(3) obtains full-time employment before
the end of the 13th week after the date on which the
account is established, the balance of his or her
personal reemployment account shall be provided
directly to the recipient in cash.
``(2) Limitations.--The following limitations shall apply
with respect to a recipient described in paragraph (1):
``(A) 60 percent of the remaining personal
reemployment account balance shall be paid to the
recipient at the time of reemployment.
``(B) 40 percent of the remaining personal
reemployment account balance shall be paid to the
recipient after 26 weeks of employment retention.
``(3) Exception regarding subsequent unemployment.--If a
recipient described in paragraph (1) subsequently becomes
unemployed due to a lack of work after receiving the portion of
the reemployment bonus specified under paragraph (2)(A), the
individual may use the amount remaining in the personal
reemployment account for the purposes described in subsection
(a) but may not be eligible for additional cash payments under
this subsection.
``SEC. 135G. STATE AND LOCAL PLANS.
``(a) State Plan.--In order for a State to receive an allotment under
section 135C, the Governor of the State shall submit to the Secretary a
plan for approval that includes a description of how the State intends
to carry out the personal reemployment accounts authorized under this
chapter, including--
``(1) the criteria and methods to be used for determining
eligibility for the personal reemployment accounts, including
whether the State intends to include the optional categories
described in section 135E(b)(3), and the additional criteria
and priority for service that the State intends to apply, if
any, pursuant to section 135E(b)(2)(B);
``(2) the methods or procedures, developed in consultation
with local boards and chief elected officials, to be used to
provide eligible individuals information relating to services
and providers, and safeguards, developed in consultation with
such boards and officials, to ensure that funds from the
personal reemployment accounts are used for purposes authorized
under this chapter and to ensure the quality and integrity of
services and providers, consistent with the purpose of
providing such individuals with enhanced flexibility, choice,
and control in obtaining intensive reemployment, training, and
supportive services.
``(3) how the State will coordinate the activities carried
out under this chapter with the employment and training
activities carried out under section 134 and other activities
carried out by each local board through the one-stop delivery
system in the State; and
``(4) the methods and procedures for providing funds to local
areas under section 135D(a)(3).
``(b) Local Plan.--In order for a local area to receive an allocation
under section 135D, the local board, in partnership with the chief
elected official for the local area involved, shall submit to the
Governor a plan for approval that includes a description of how the
local board intends to carry out the personal reemployment accounts,
consistent with the requirements of this chapter and with the State
plan established under subsection (a), including--
``(1) a description of how the local board will coordinate
the activities carried out under this chapter with the
employment and training activities carried out in the local
area under section 134; and
``(2) a description of the methods or procedures to be used
to provide eligible individuals information relating to the
jobs that are available in the local area in high demand
occupations and information on services and providers, and the
safeguards the local area will initiate to ensure that funds
from the personal reemployment accounts are used for purposes
authorized under this chapter and to ensure the quality and
integrity of services and providers, consistent with the
purpose of providing such individuals with enhanced
flexibility, choice, and control in obtaining intensive
reemployment, training, and supportive services, and consistent
with the State plan.
``(c) State Plan Submission and Approval.--A State plan submitted to
the Secretary under subsection (a) by a Governor shall be considered to
be approved by the Secretary at the end of the 30-day period beginning
on the date the Secretary receives the plan, unless the Secretary makes
a written determination during such period that the plan is incomplete
or otherwise inconsistent with the provisions of this chapter.
``SEC. 135H. PROGRAM INFORMATION.
``The Secretary may require from States the collection and reporting
on such financial, performance, and other program-related information
as the Secretary determines is appropriate to carry out this chapter,
including the evaluation described in section 135I.
``SEC. 135I. EVALUATION.
``(a) Evaluation.--From the amount made available under section
135C(a)(1), the Secretary, pursuant to the authority provided under
section 172, shall, directly or through grants, contracts, or
cooperative agreements with appropriate entities, conduct an evaluation
of the activities carried out under this chapter.
``(b) Conduct of Evaluation.--The evaluation shall examine the
effectiveness of such activities in achieving the purposes described in
section 135A and such other purposes as the Secretary determines are
appropriate.
``(c) Report.--The report to Congress under section 172(e) relating
to the results of the evaluations required under section 172 shall
include the recommendation of the Secretary with respect to the use of
personal reemployment accounts as a mechanism to assist individuals in
obtaining and retaining employment.''.
SEC. 3. ADMINISTRATION.
Section 117(d) of the Workforce Investment Act of 1998 (29 U.S.C.
2832(d)) is amended--
(1) in paragraph (3)(B)(i)(I), by striking ``sections 128 and
133'' and inserting ``sections 128, 133, and 135D''; and
(2) in paragraph (4), by inserting ``, activities authorized
under section 135F'' after ``section 134''.
SEC. 4. DELIVERY OF SERVICES.
Section 134(c)(1) of the Workforce Investment Act of 1998 (29 U.S.C.
2864(c)(1)) is amended--
(1) in subparagraph (D), by striking ``and'' at the end;
(2) in subparagraph (E), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following:
``(F) shall provide access to personal reemployment
accounts in accordance to section 135E.''.
SEC. 5. AUTHORIZATION OF APPROPRIATION.
Section 137 of the Workforce Investment Act of 1998 (29 U.S.C. 2872)
is amended by adding at the end the following:
``(d) Personal Reemployment Accounts.--
``(1) In general.--There is authorized to be appropriated
$3,600,000,000 for fiscal year 2003 to carry out chapter 5A.
``(2) Availability.--Amounts appropriated pursuant to the
authorization of appropriations under paragraph (1) to carry
out section 135I are authorized to remain available until
expended.''.
SEC. 6. CONFORMING AMENDMENT.
The table of contents for the Workforce Investment Act of 1998 is
amended by inserting after the items relating to chapter 5 of subtitle
B of title I the following new items:
``Chapter 5A--Personal Reemployment Accounts
``Sec. 135A. Purposes.
``Sec. 135B. Definition.
``Sec. 135C. Grants to States.
``Sec. 135D. Within State allocation.
``Sec. 135E. Personal reemployment accounts.
``Sec. 135F. Use of funds.
``Sec. 135G. State and local plans.
``Sec. 135H. Program information.
``Sec. 135I. Evaluation.''.
Purpose
H.R. 444, the Back to Work Incentive Act of 2003,
authorizes new grants within the Workforce Investment Act (WIA)
to create personal reemployment accounts, or ``Back to Work
accounts,'' to assist unemployed individuals in returning to
work. The bill offers an innovative new approach for assisting
workers. The program aims to accelerate reemployment and
increase job retention of individuals likely to exhaust their
unemployment compensation benefits, while providing such
individuals with enhanced flexibility, choice, and control in
obtaining reemployment services and training. An eligible
individual will have the option to accept a Back to Work
account or access services through the current WIA one stop
delivery system.
Committee Action
FULL COMMITTEE HEARINGS
On Wednesday, February 12, 2003, the Committee on Education
and the Workforce held a hearing in Washington, D.C., on ``Back
to Work: the Administration's Plan for Economic Recovery and
the Workforce Investment Act.'' The purpose of the hearing was
to learn about the administration's proposal to speed the
country's economic recovery, a component of which includes Back
to Work accounts, that provides assistance to help unemployed
Americans who are struggling to return to work. The Honorable
Elaine Chao, Secretary of Labor, U.S. Department of Labor,
Washington, D.C., testified before the Committee on the first
panel about the benefits of the Back to Work accounts. Mr.
Kenneth Mayfield, President, National Association of Counties,
Washington, D.C. and Dr. Lawrence Mishel, President, Economic
Policy Institute, Washington, D.C. testified before the
Committee on the second panel.
On Tuesday, February 18, 2003, the Committee on Education
and the Workforce held a field hearing in Las Vegas, Nevada on
``H.R. 444, the Back to Work Incentive Act.'' The purpose of
the hearing was to examine and discuss the Back to Work
Incentive Act, which reflects the administration's plan to
create Back to Work accounts to help unemployed individuals
return to work quickly. Ms. Myla Florence, Director, Nevada
Department of Employment, Training, and Rehabilitation, Carson
City, Nevada; Mr. Ardell Galbreth, Deputy Board Manager,
Southern Nevada Workforce Investment Board, Las Vegas, Nevada;
Mr. Robert Brewer, Chair, Southern Nevada Workforce Investment
Board, Las Vegas, Nevada; and, Ms. Debi Lindemenn, Employment
Specialist Supervisor, Department of Employment, Training, and
Rehabilitation, North Las Vegas, Nevada testified before the
Committee at the field hearing.
LEGISLATIVE ACTION
On January 29, 2003, Representatives Jon Porter (R-NV) and
Buck McKeon (R-CA) introduced H.R. 444, the Back to Work
Incentive Act, a bill to amend the Workforce Investment Act of
1998 to establish a Personal Reemployment Accounts grant
program to assist Americans in returning to work.
On February 26, 2003, the Subcommittee on 21st Century
Competitiveness considered H.R. 444 in legislative session and
reported it favorably, as amended, to the Committee on
Education and the Workforce by a vote of 15-12. The
Subcommittee considered two amendments:
The Subcommittee adopted, by voice vote, a
substitute amendment offered by Representative Buck McKeon (R-
CA). Specifically, the substitute amendment adopted by the
Subcommittee: (1) makes clear that the Back to Work accounts
would be administered through the local one-stop delivery
system under the direction of the local workforce investment
boards; (2) requires local boards to submit a plan to the
State, consistent with the State plan, in order to receive an
allocation to administer the accounts; (3) requires States and
local areas, through their respective plans, to specify
safeguards to ensure the quality and integrity of services and
providers, consistent with the purpose of providing flexibility
and choice to individuals; (4) requires the individual
accepting a Back to Work account to attest that he or she was
given the option to develop a personal reemployment plan; and
(5) allows States to make eligible individuals who have
exhausted their unemployment compensation benefits within the
previous 180 days, instead of the 90 day limit in the original
bill.
The Subcommittee rejected, by a vote of 11-13, a
substitute amendment offered by Representatives Dale Kildee (D-
MI) and David Wu (D-OR). The amendment would have struck all
language after the enacting clause and inserted language that
allocates funds to each State to provide emergency employment
accounts to eligible individuals. The funds in these accounts
would be used in the same manner as that of unemployment
compensation benefits.
On March 5, 2003, the Committee on Education and the
Workforce considered H.R. 444 in legislative session and
reported it favorably, as amended, to the House of
Representatives by a vote of 23-22, with one member voting
present. The Committee considered 8 amendments and adopted the
following two amendments:
The Committee adopted, by voice vote, a substitute
amendment offered by Representative Buck McKeon (R-CA).
Specifically, the substitute amendment adopted by the
Committee: (1) changes the calculation of the ``look-back''
period for eligibility determinations from days to weeks to be
consistent with the terminology used in the unemployment
compensation program; (2) clarifies that the 40 percent
retention bonus is provided after 26 weeks of employment
retention; and (3) makes other technical improvements.
The Committee also adopted, by voice vote, an
amendment offered by Representative Pete Hoekstra (R-MI), which
makes those individuals whose unemployment can be attributed in
substantial part to unfair competition from Federal Prison
Industries, Inc., eligible to receive Back to Work accounts,
subject to state criteria and prioritization.
The Committee also considered an amendment offered by
Representative Denise Majette (D-GA). The Committee discussion
was positive and the amendment was withdrawn. This amendment
would have specified that intensive services must be provided
through the one-stop delivery system, and that a provider of
training services must meet the requirements of section
122(a)(2) of the Workforce Investment Act.
Summary
H.R. 444, the Back to Work Incentive Act of 2003, amends
the Workforce Investment Act of 1998 (WIA) to create Chapter
5A, which authorizes a Personal Reemployment Accounts grant
program to assist unemployed Americans in returning to work.
The legislation represents a key component of President Bush's
economic stimulus package that provides $3.6 billion to create
Back to Work accounts to help unemployed individuals struggling
to return to the workforce and retain satisfactory, long-term
employment.
ELIGIBILITY
H.R. 444 provides eligible individuals with the option to
accept a Back to Work account or access services currently
available through the one-stop delivery system provided under
the current WIA system. States determine the amount of the
accounts up to $3,000. States are required to establish
eligibility criteria; however, at a minimum, an individual must
be receiving unemployment compensation, be identified by the
State as likely to exhaust his or her unemployment benefits,
and be eligible for at least 20 weeks of unemployment
compensation. States may further make eligible individuals who
have exhausted unemployment compensation within 26 weeks prior
to enactment so long as the individual is enrolled in training
or is separated from employment in an industry or occupation
that is declining or no longer functioning in the local labor
market. States may establish additional eligibility criteria or
priorities in the provision of assistance.
Back to Work accounts may be established for up to two
years from the date of enactment, and funds may be expended for
up to three years. An individual is eligible to receive an
account only once during the duration of the program, and
individuals are prohibited from receiving intensive,
supportive, or training services, unless purchased using
account funds, for one year subsequent to the establishment of
the account. The bill provides that there is no individual
entitlement to a Back to Work account. The one-stop delivery
system must inform the eligible individual, prior to the
receipt of an account, of the requirements and limitations for
the use of the account.
USES OF FUNDS
H.R. 444 provides that eligible individuals will have the
option to develop a personal reemployment plan for the purpose
of developing employment goals and identifying appropriate
services selected by individuals to achieve their employment
goals. Back to Work accounts may be used to purchase various
intensive, training, or supportive services including, but not
limited to, career counseling, case management, occupational
skill assessments, childcare, and transportation. The
reemployment account funds may be used to purchase services
either through a one-stop delivery system or on a fee-for-
service basis through other providers. The cost of services may
be paid by a one-stop delivery system directly on behalf of
recipients, through a voucher system, or by reimbursement
directly to the individual provided appropriate expense
documentation is submitted. Furthermore, any individual
receiving funds through a Back to Work account must sign an
attestation that he or she will comply with the Back to Work
account requirements. In addition, States may allow individuals
who had exhausted unemployment compensation benefits to
withdraw funds for income support if engaged in a legitimate
job search, training, or intensive services expected to lead to
employment.
REEMPLOYMENT BONUS
The bill provides for individuals to be paid in cash the
balance of the Back to Work account if employed by the 13th
week for which unemployment compensation is paid. Sixty percent
of the remaining balance of the account will be paid at the
time of employment, and forty percent of the account will be
paid after six months of job retention. If an individual
becomes unemployed before six months at no fault of his or her
own, the individual may utilize the balance of the account for
permissible services within the same year that the account
remains in effect.
PROGRAM REPORTING AND EVALUATION
H.R. 444 provides that the Secretary of Labor may require
States to report financial, performance, and other germane
program information. The Secretary shall report to Congress
concerning such findings reported by States.
STATE PLAN
The bill requires States to submit program plans to the
Secretary of Labor in order to receive funds under the program.
Such information shall include the criteria and methods used
for determining eligibility for Back to Work accounts; methods
or procedures used to provide eligible individuals with service
information; and, safeguards to ensure that funds are used in
an appropriate, authorized manner, consistent with the program
and activity coordination provided through the one stop
delivery system. A state plan submitted to the Secretary shall
be approved at the end of the 30-day period beginning on the
day the Secretary receives the plan, unless the Secretary makes
a written determination that the plan is incomplete or
inconsistent with the requirements of the Act.
LOCAL ADMINISTRATION
Local areas must submit a plan, similar to the State plan,
to the Governor for approval in order to receive a grant to
administer the Back to Work accounts. The plan must contain a
description of how the local area will coordinate assistance
under this program with other assistance provided through WIA,
methods or procedures to be used to provide eligible
individuals with information relating to jobs that are
available in the local area in high demand occupations and
information on services and providers, and the safeguards the
local area will initiate to ensure that funds are used for
authorized purposes and to ensure the quality of services and
providers. The local plan must be consistent with the State
plan.
FUNDING
Consistent with the President's economic stimulus package,
the bill authorizes $3.6 billion for the creation of Back to
Work accounts. Funds will be distributed on a percentage basis
according to the number of unemployed persons in each state.
States may reserve up to 2 percent of funds to be used for
administrative purposes. Local areas will receive 5 percent of
a state's funds to be used for start-up purposes. Funds have
been reserved for the Secretary of Labor to perform requisite
evaluations of State performance, financial, and other related
information.
EFFECTIVE DATE
The Back to Work Incentive Act of 2003 shall be effective
immediately upon appropriation.
Committee Views
To aid the country's economic recovery, on January 7, 2003,
President George W. Bush proposed a growth and jobs plan to
strengthen the American economy. The President's economic
agenda has three main goals: to encourage consumer spending
that will continue to boost the economic recovery, to promote
investment by individuals and businesses that will lead to
economic growth and job creation, and to deliver critical help
to unemployed citizens.
Taxpayers, businesses, and unemployed workers all would
benefit upon enactment of the President's plan. For example,
under the President's proposal to speed up tax relief, 92
million taxpayers would receive, on average, a tax cut of
$1,083 in 2003. According to a projection by the Council of
Economic Advisors, the President's plan will help the economy
to create 2.1 million jobs over the next three years.
However, while the economy is improving, unemployment rates
remain unacceptably high. The national unemployment rate at the
end of December 2002 was six percent. Consequently, President
Bush also has proposed innovative new assistance to help
unemployed Americans find work. As we work to encourage long-
term growth in the economy, we must not forget the men and
women struggling today. To provide new opportunities for
unemployed workers, the President proposed creating new
personal reemployment accounts, or ``Back to Work'' accounts,
to help such individuals find new jobs and, if necessary,
acquire the skills needed to obtain and keep those jobs.
H.R. 444, the Back to Work Incentive Act of 2003,
implements the President's plan to assist up to 1.2 million
unemployed workers as they seek to return to the workplace,
while providing new flexibility and individual choice in
accessing services.
During the Committee's hearing in Las Vegas, Nevada, the
Committee heard from state and local leaders about the
practical benefits of the measure in helping the unemployed. As
Robert Brewer, Chairman of the Southern Nevada Workforce
Investment Board, stated, ``This proposed initiative has great
potential for providing our most vulnerable dislocated workers
with additional resources that will help them secure new,
gainful employment. It is an appropriate effort to assist the
over 2 million workers who have lost their jobs over the last
two years.''
Business leaders also support H.R. 444, as they look for
entry level and skilled workers to fill open positions. R.
Bruce Josten, Executive Vice President for Government Affairs
for the U.S. Chamber of Commerce, wrote Chairman John Boehner
on March 4, 2003 to ``express our support for H.R. 444 . . .
Personal reemployment accounts promise to be an efficient and
effective new tool for local One Stop Career centers and the
individuals they serve.''
H.R. 444 creates a new Chapter 5A within Title I of the
Workforce Investment Act of 1998 (WIA) to provide for the
establishment of personal reemployment accounts for individuals
identified as likely to exhaust their unemployment
compensation.
GRANTS TO STATES
From funds appropriated to administer this chapter, the
Secretary shall reserve \2/10\ of one percent to conduct an
evaluation of the program. The remainder of the funds shall be
provided to states for the administration of Back to Work
accounts. Each state shall receive an allotment that is
proportionate to the relative number of unemployed individuals
in the state as compared to the total number of unemployed
individuals in all states. At a minimum, a state shall receive
an allotment of at least \3/10\ of one percent of the funds
available to states. The Committee notes that this small state
minimum is consistent with the minimum provided under other
funding streams of WIA. In addition, the United States Virgin
Islands shall receive not less than \1/10\ of one percent of
the funds allotted to states. The Virgin Islands is the only
outlying area to receive an allotment under H.R. 444, since no
other outlying areas operate an unemployment insurance program.
From the funds allotted to a state, a Governor may reserve
up to two percent of the funds to establish and operate a data
management system necessary to provide assistance to
individuals eligible for Back to Work accounts and to enhance
the worker profiling system required under unemployment
insurance law. The Committee encourages the Secretary to work
with states to ensure that these funds may be combined with
other state administrative funds available under WIA to pay for
start-up or operational costs necessary under this new chapter.
The state shall allocate five percent of its funding
available under this chapter to local workforce investment
areas for start-up and operating costs related to the provision
of assistance of Back to Work accounts. The within-state
allocation to local areas shall be proportionate to the
relative number of unemployed individuals in the local area as
compared to the total number of unemployed individuals in the
state. The remainder of the funds shall be provided to local
areas for the establishment of Back to Work accounts. The
Committee intends for states to create mechanisms for local
areas to draw-down funds from the state to provide an account
to each individual determined to be eligible for such an
account.
Although other funding streams provided through WIA are
available to states on a program year basis of July 1-June 30,
amounts available to state and local areas under this chapter
shall be available for the creation of accounts for two years
after the date of enactment of H.R. 444. The Committee notes
that the funds must become available immediately for the
creation of Back to Work accounts so as to provide assistance
to unemployed workers as soon as possible. Funds to create new
accounts are available only for two years because Back to Work
accounts are intended to respond to the extraordinary
circumstances created by current levels of high unemployment,
and not to be a permanent new program. H.R. 444 requires the
Secretary to conduct a rigorous evaluation of the new
assistance provided to workers under this chapter and report
the findings to Congress. Lessons learned through this
temporary assistance may be incorporated in the future into the
broader assistance provided through WIA.
BACK TO WORK ACCOUNTS
H.R. 444 requires states to establish the amount of a Back
to Work account, but the amount must be uniform statewide and
cannot exceed $3,000. The Committee anticipates that the funds
provided through this act will allow states to serve at least
1.2 million unemployed workers. U.S. Labor Secretary Elaine
Chao (the Secretary) testified before the Committee on February
12, 2003 that $3,000 is the average amount that local areas
spend on an individual to help obtain employment. The $3,000
maximum is a reasonable level that allows choice of a wide
array of reemployment services while maximizing the number of
individuals who can be served with the available funding for
the new program.
States establish eligibility criteria for the accounts and
may establish criteria for the priority in the provision of
assistance to such eligible individuals. However, at a minimum,
to be eligible an individual must be receiving regular
unemployment compensation and be eligible for at least 20 week
of such compensation. Under current law, when individuals apply
for unemployment compensation benefits, states profile such
individuals to determine whether they are likely to exhaust
their benefits. To do this, the state identifies permanently
separated workers who are not expecting recall to their
previous employers and then determines whether such workers are
likely to be long-term benefit recipients. Criteria often used
when making this determination include education, job tenure,
changes in employment in the previous industry or occupation,
and the local unemployment rate. Variables for age, gender, and
race are prohibited by civil rights laws. States will use this
profiling system to determine those most likely to benefit from
this new assistance. To be eligible for a Back to Work account,
an unemployed person also must be identified as likely to
exhaust regular unemployment compensation and in need of job
search assistance to make a successful transition to new
employment or be an individual whose unemployment can be
attributed in substantial part to unfair competition from
Federal Prison Industries, Inc.
Currently such profiled individuals are referred to the
one-stop career center system created under WIA for
reemployment assistance. Therefore, the Back to Work accounts
will be administered efficiently through the easily accessible
one-stop delivery system where the unemployed already seek
assistance in obtaining employment.
This assistance is in addition to unemployment benefits
payments if the eligible individual has not exhausted such
benefits. However, instead of only providing temporary income
support, as the unemployment compensation system does, H.R. 444
provides services designed exclusively to help someone to
return to work.
During Committee consideration, the Committee clarified the
role of the local workforce investment boards to ensure that
local leadership will direct the implementation of this
assistance. The Committee believes that connections to and
integration with the local workforce investment systems already
in place will ensure assistance reaches those in need as
quickly as possible. A letter from the United States Conference
of Mayors, the National Association of Workforce Boards, and
the National Association of Counties sent on February 24, 2003
to Subcommittee Chairman McKeon confirms this, as they
collectively asserted, ``We believe the prospects for quick
implementation to be strong if the initiative is linked closely
to the current infrastructure established under WIA.''
States may also make individuals who were similarly
profiled within the 13 week period ending the week prior to the
week of enactment eligible for assistance, as long as such
individuals also are eligible for at least 20 weeks of regular
unemployment compensation. In addition, to address the needs of
individuals who already may have exhausted all unemployment
compensation benefits, states may make individuals who have
exhausted such benefits within 26 weeks prior to the date of
enactment eligible for a Back to Work account if such
individuals are enrolled in training and need additional
support to complete the training or if the individuals are
separated from employment in an industry or occupation that has
experienced declining enrollment in the local labor market.
H.R. 444 specifies that there is no individual entitlement
to a Back to Work account.
USE OF FUNDS
An account holder may use the Back to Work account to
purchase intensive services, supportive services, training, or
an automobile if a car is necessary to allow the recipient to
accept a bona fide offer of employment for which there is a
reasonable expectation of long-term duration. Examples of
intensive services include one-on-one career counseling and
short-term prevocational classes. Supportive services include
child care, transportation assistance, housing assistance, and
relocation assistance.
Recipients have full flexibility to use their Back to Work
accounts to tailor a package of reemployment services that best
meets their needs and helps them to get a job of their choice.
As such, recipients may use the account funds to purchase such
services through the one-stop delivery system on a fee-for-
service basis or through other providers, consistent with
safeguards described in state and local plans.
Under WIA currently, individuals only may access training
through providers included on an eligible training provider
list developed by the state. The list of available providers is
based on past performance. However, the current eligible
training provider list is not comprehensive. Many high-quality
training providers, particularly community colleges, currently
do not participate in the WIA system because of burdensome
reporting requirements. As a result, the needs of all
individuals may not be addressed through the current system.
The Committee will address the issues associated with accessing
training under WIA during reauthorization of that law. Until
that time it is important to allow recipients of Back to Work
accounts maximum flexibility in choosing appropriate service
providers, especially since these individuals are those
struggling to return to work.
The local board, through the one-stop delivery system, may
pay for the costs for such services directly on behalf of the
recipient, through a voucher system, or by reimbursement to the
recipient upon receipt of appropriate cost documentation.
Certain limitations on the use of the accounts apply.
Recipients may use the Back to Work accounts for up to one year
from the date of the establishment of the account, and for the
one-year period following the establishment of the account
recipients may only receive intensive, supportive or training
services provided through the one-stop delivery system on a
fee-for-service basis using the account funds. Also, amounts in
the Back to Work account are nontransferable.
The Committee wants to ensure eligible individuals have the
opportunity to make an informed choice when selecting to accept
a Back to Work account. Consequently, before becoming a
recipient of an account, the local workforce investment board,
through the one-stop delivery system, shall ensure that the
individual is informed of the requirements applicable to the
Back to Work account, the limitations on access to services, a
description of the allowable services, and the conditions for
receiving a reemployment bonus. An eligible individual must
sign an attestation that he or she will comply with the
requirements relating to the Back to Work accounts and will
reimburse the account or one-stop delivery system for any
amounts expended that are not allowable.
In addition, the Committee intends for eligible individuals
to have access to the expertise of the professional career
counselors available through the one-stop delivery system. H.R.
444 requires the local workforce investment boards, through the
one-stop delivery system, to provide an eligible individual the
option to create a reemployment plan that will identify the
employment goals and appropriate combination of services
selected by the individual to achieve the employment goals. In
addition, in order to receive an account, an individual must
attest in writing that he or she was given the option to create
such a plan before accepting the account.
The Committee believes that it is important for individuals
to be aware of the options they have as they pursue employment,
including the jobs that are in demand in the local areas. As a
result, H.R. 444 requires each local board, through the one-
stop delivery system, to make available to recipients
information on training providers that are on the eligible
training provider list, information available to the one-stop
delivery system on providers of intensive and supportive
services, and information relating to occupations in demand in
the local area. In addition, H.R. 444 requires each local area
to specify in its plan how such information will be provided to
recipients.
No individual will be required to accept a Back to Work
account. If an individual needs training that costs more than
$3,000, the individual will have the choice to refuse the Back
to Work account and access training through the current WIA
system.
However, a wide variety of training services can be
purchased for under $3,000. Examples of training services that
can be purchase for $3,000 or less include Information
Technology certifications (including Microsoft Systems),
courses to become a licensed realtor, courses to become a
certified financial planner, preparation classes for other
certifications or exams, training to become a licensed
insurance planner, plus numerous courses of training available
through community colleges. The Committee notes that a two-year
associates' degree from a public community college costs $2594
(based on the national average in 1998, the latest available
information).
The added flexibility available through the use of the
account will allow some recipients to customize a package of
services that may not be readily available in all local areas.
For example, while all local areas are to provide information
on supportive services in the area, paying for such services is
optional now. Therefore, if an individual previously received
child care through an employer and now needs child care
assistance in order to look for new employment, he or she could
use the account to pay for child care. In addition, if he or
she did not meet the current prioritization for training in the
local area, the recipient still could choose immediately to use
the funds for training.
Even if a recipient expends the funds in the account, he or
she will have access at all times to core services available at
the one-stop career centers. These services include job search
and placement assistance, information on available providers of
services, initial career counseling, and access to a variety of
labor market information.
H.R. 444 rewards individuals who find jobs quickly.
Recipients will be able to keep the balance of the account as a
cash reemployment bonus if they become reemployed in full-time
employment within 13 weeks. To encourage workers to stay on the
job longer, the remaining balance will be paid in two
installments--60 percent at the time of employment, and the
remaining 40 percent after six months job retention. The sooner
one gets a job, the larger the employment bonus will be.
If an individual becomes unemployed again before the second
portion of the bonus is provided, he or she may use the amount
remaining in the Back to Work account for reemployment services
but may not receive any additional cash payments.
Past experiments with cash reemployment bonuses have proven
to be effective in reducing individuals' weeks of unemployment
compensation benefits while not compromising the quality of
jobs and have been cost effective to the government.
Between 1984 and 1989, four reemployment bonus experiments
were conducted on unemployment insurance recipients in
Illinois, New Jersey, Washington, and Pennsylvania. When
Secretary Chao appeared before the Committee in February, she
testified that the Department of Labor's evaluations of the
reemployment bonuses in these states showed that such a bonus
motivated the recipients to become reemployed, reduced the
duration of unemployment compensation benefits by approximately
one week, and resulted in new jobs comparable in earnings to
those obtained by workers who were not eligible for the bonus.
An additional evaluation in Illinois showed that bonuses did
not lead to lower earnings at the worker's next job.
The final report on the Pennsylvania Reemployment Bonus
Demonstration, prepared for the Department of Labor by
Mathematica Policy Research, Inc. and published in September
1991, expands on these assertions. According to the report,
``There is no evidence that the bonus offers prompted claimants
to take less desirable jobs in an effort to qualify for the
bonus . . . , the first post-unemployment jobs held by bonus-
eligible claimants were similar to their pre-unemployment jobs
in many respects, including their weekly wage rate.''
In addition, the Committee believes that labor market
attachment helps individuals advance in the workplace, and
taking a job may lead to promotions and new career
opportunities. Being reemployed quickly is important to
maintaining skills and work habits, and builds self-esteem.
Staff of the W.E. Upjohn Institute for Employment Research
recently reviewed available research on the impact of
reemployment bonuses. The staff working paper, published in
January 2003, suggests that targeting those most likely to
exhaust their unemployment compensation benefits could be the
most cost effective mechanism for providing reemployment
bonuses. H.R. 444 targets those that have been so profiled.
Another likely benefit of the reemployment bonuses is a
reduction in the duration of unemployment compensation benefits
for those eligible for a bonus. According to Walter A. Corson
and Robert G. Spiegelman of the Upjohn Institute, who published
a book titled ``Reemployment Bonuses in the Unemployment
Insurance System'' in 2001, studies have found that, ``the
availability of unemployment benefits led to voluntary and
unproductive reduction in work effort, thereby leading to
unnecessarily high costs to the UI system.'' (page 1) R. Glenn
Hubbard, Chairman of the Council of Economic Advisors,
corroborated this statement when he testified before the Joint
Economic Committee of Congress on February, 26, 2003 when he
stated, ``One advantage of these (personal reemployment)
accounts compared to traditional unemployment insurance is that
traditional insurance encourages workers to wait until their
insurance runs out before finding a new job.'' Mr. Hubbard
presented evidence that reemployment spikes when benefits
expire, whether regular or extended benefits.
The savings to the unemployment insurance system due to
rapid reemployment could be significant. Myla Florence,
director of the Nevada Department of Employment, Training and
Rehabilitation testified at the Committee's hearing in Las
Vegas that, ``Currently, Nevada's average benefit amount is
$232.29 per week and the average duration for an individual to
receive benefits is 15.5 weeks. Through the support and
incentives provided in H.R. 444, if we shorten the duration by
even one week, Nevada's trust fund could save approximately
$8.4 million.''
The Committee estimates that, if one million individuals
likely to exhaust their regular unemployment compensation
benefits were to become employed within thirteen weeks in order
to obtain a reemployment bonus, the savings to the unemployment
insurance system would be approximately $3.4 billion. (The
national average unemployment compensation benefit is $260 per
week. The savings estimate is based on reducing such benefits
from 26 weeks to just less than 13 weeks.)
In addition to the reduced cost to the unemployment
insurance system, the Committee believes another benefit to
society overall is the increased contribution that wage earners
make as taxpayers.
STATE AND LOCAL PLANS
In order for a state to receive funding under this chapter,
the Governor of a state must submit to the Secretary a plan for
approval that includes (1) the criteria and methods to be used
for determining eligibility for Back to Work accounts; (2) the
methods and procedures, developed in consultation with local
boards and chief elected officials, to be used to provide
eligible individuals information relating to services and
providers; (3) safeguards, also developed in consultation with
local areas, to ensure that funds from the Back to Work
accounts will be used for purposes authorized and to ensure the
quality and integrity of services and providers, consistent
with the purpose of providing such individuals with enhanced
flexibility, choice, and control in obtaining services; and,
(4) how the state will coordinate the activities provided under
this chapter with the other employment and training activities
provided through WIA. The plan shall be considered approved
within 30 days of receipt by the Secretary, unless the
Secretary makes a written determination that the plan is
incomplete or inconsistent with the requirements of the Act.
Local boards, in partnership with the chief elected
official for the local area, shall submit to the Governor a
plan for approval that includes a description of the how the
local board intends to carry out the Back to Work accounts,
consistent with the state plan. The local plan must contain (1)
a description on how the local area will coordinate assistance
under this chapter with other assistance provided through WIA;
(2) a description of the methods or procedures to be used to
provide eligible individuals information relating to jobs that
are available in the local area in high demand occupations and
information on services and providers; (3) the safeguards the
local area will initiate to ensure that funds from the Back to
Work accounts will be used for purposes authorized and to
ensure the quality and integrity of services and providers,
consistentwith the purpose of providing such individuals with
enhanced flexibility, choice, and control in obtaining such services.
The Committee intends that safeguards specified through the
state and local plans will provide accountability for the use
of federal funds spent through Back to Work accounts and enable
recipients to select appropriate service providers. Through
these safeguards, the state and local areas will be able to
guard against the use of funds for ``fly-by-night'' providers
that otherwise may try to entice recipients into using their
services. The provisions are intended to maintain individual
flexibility and choice while ensuring program integrity.
Requiring both state and local plans further reinforces
that both states and local workforce investment areas have
significant roles to play in the delivery of workforce
development services. Local plans will ensure that services are
integrated at the local level with the one-stop delivery
system.
PROGRAM INFORMATION
The Secretary may require from states the collection and
reporting on such financial, performance, and other program-
related information as the Secretary determines appropriate to
carry out this chapter. The Committee anticipates that the
Secretary will work with states to establish appropriate
tracking mechanisms so that information will be readily
available regarding use of funds and results achieved. Such
information will be essential for conducting an evaluation of
the assistance. The Committee expects the Secretary to work
with states to minimize any administrative burden.
EVALUATION
H.R. 444 requires the Secretary to conduct an evaluation of
the Back to Work accounts. The evaluation will examine the cost
effectiveness of the accounts in achieving the purposes of the
new chapter and other purposes as determined by the Secretary.
The Secretary shall report the results to Congress, including
the recommendation of the Secretary with respect to the use of
Back to Work accounts as a mechanism to assist individuals in
obtaining and retaining employment. The Committee anticipates
using the results of the evaluation to determine whether to
continue such assistance in the future.
ADMINISTRATION AND DELIVERY OF SERVICES
H.R. 444 makes the local chief elected official the local
grant recipient for Back to Work account funds, consistent with
other WIA funding streams. In addition, the bill specifies that
the local one-stop delivery system shall provide access to Back
to Work accounts. These provisions are consistent with the
Committee's goal of ensuring that the locally directed one-stop
delivery remains the center of the nation's workforce
development system.
FUNDING
H.R. 444 authorizes $3.6 billion for fiscal year 2003 to
create Back to Work accounts and carry out this new chapter.
The Committee intends that these funds will be used to
serve at least 1.2 million unemployed individuals. This number
is consistent with the number of unemployment insurance
recipients who were profiled and referred to one-stop career
centers for services last year. In fiscal year 2002, the
average monthly total of unemployed individuals was 8 million.
However, this number includes people who were unemployed in two
broad categories, job losers and job leavers. The economy is
dynamic and employment continues to churn. Many people choose
to leave employment. Back to Work accounts are directed toward
the category of individuals who have lost their jobs through no
fault of their own. In fiscal year 2002, 8.7 million
unemployment insurance claimants were profiled. However, 1.2
million of these individuals were profiled as likely to exhaust
benefits and referred to one-stop career centers for services
as a condition for continuing receipt of unemployment
compensation benefits. H.R. 444 will assist these individuals
as they are referred to the one-stop centers.
The Committee expects that as the economy improves fewer
individuals will be profiled and referred for services. This
will make funds available for individuals who already have
exhausted their unemployment insurance benefits.
During her testimony in Las Vegas, Myla Florence expressed
another benefit of the new funds available for Back to Work
accounts, which is the ability of the one-stops to serve more
clients who may not be eligible for these new accounts. She
stated, ``While the personal reemployment accounts would not be
available to all claimants, we believe the heightened interest
in such a program would connect more of the unemployed to the
Nevada JobConnect system and the resources it can provide.''
The Committee notes that in the last program year WIA
resources served 1.27 million adults and dislocated workers.
This is in addition to the individuals referred through the
profiling system. By helping 1.2 million workers with Back to
Work accounts, WIA funds will be able to serve a significant
number of additional individuals. Between the two options,
millions of job seekers who desire new or better employment
will be served.
Section-by-Section Analysis
Section 1. Establishes the short title of the act to be the
``Back to Work Incentive Act of 2003.''
Section 2. Amends Subtitle B of title I of the Workforce
Investment Act of 1998 (WIA) by inserting an additional chapter
immediately following chapter 5. This new chapter will be
titled ``Chapter 5A--Personal Reemployment Accounts.'' The new
chapter includes the following new sections:
Section 135A. Establishes that the purpose of this
chapter is to form personal reemployment accounts.
Section 135B. Defines ``State'' as any state in the
Union, and includes the District of Columbia, Puerto
Rico, and the U.S. Virgin Islands.
Section 135C. Authorizes grants to states
proportionate to the number of unemployed individuals
in a state relative to the total number of unemployed
individuals in all states in order to provide
assistance under this chapter.
Section 135D. Specifies within state allocations of
funds for operational costs and the establishment of
Back to Work accounts.
Section 135E. Creates Back to Work accounts for
eligible individuals. Stipulates that accounts shall
not exceed $3,000 per person, specifies eligibility
criteria, and requires information be provided to
eligible individuals and an attestation from such
individuals before receiving an account.
Section 135F. Specifies uses of funds, including
allowable activities to be purchased with Back to Work
accounts and the mechanisms for the delivery of
services. Authorizes reemployment bonuses.
Section 135G. Requires state and local plans in order
for a state and local area to receive funds provided
for Back to Work accounts.
Section 135H. Permits the Secretary to require states
to provide financial, performance, and other program
related data.
Section 135I. Requires the Secretary to evaluate the
effectiveness of Back to Work accounts and report the
findings to Congress.
Section 3. Amends section 117(d) of WIA to make the local
chief elected official the local grant recipient for Back to
Work account funds, consistent with other WIA funding streams.
Section 4. Amends section 134(c)(1) of WIA to specify that
the local one-stop delivery system shall provide access to Back
to Work accounts.
Section 5. Amends Section 137 of WIA to authorize $3.6
billion to be appropriated for fiscal year 2003 to carry out
chapter 5A.
Section 6. Amends WIA by making changes in the table of
contents to reflect the changes made by the ``Back To Work
Incentive Act of 2003''.
Explanation of Amendments
The Amendment in the Nature of a Substitute is explained in
the body of this report.
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. The purpose of H.R. 444 is to authorize new grants
within the Workforce Investment Act (WIA) to create personal
reemployment accounts, or ``Back to Work accounts,'' to assist
unemployed individuals in returning to work. The bill does not
prevent legislative branch employees from receiving the
benefits of this legislation.
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 of
whether the provisions of the reported bill include unfunded
mandates. H.R. 444 amends the Workforce Investment Act. As
such, the bill does not contain any unfunded mandates.
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 body of this report.
New Budget Authority and Congressional Budget Office Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the House of Representatives and section 308(a) of the
Congressional Budget Act of 1974 and with respect to
requirements of 3(c)(3) of rule XIII of the House of
Representatives and section 402 of the Congressional Budget Act
of 1974, the Committee has received the following cost estimate
for H.R. 444 from the Director of the Congressional Budget
Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 11, 2003.
Hon. John A. Boehner,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 444, the Back to
Work Incentive Act of 2003.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Christina
Hawley Sadoti (for federal costs), Greg Waring (for the state
and local impact), and Ralph Smith (for the private-sector
impact).
Sincerely,
Douglas Holtz-Eakin,
Director.
Enclosure.
H.R. 444--Back to Work Incentive Act of 2003
Summary: H.R. 444 would amend the Workforce Investment Act
of 1998 (WIA) to create a grant program to help states create
``personal reemployment accounts'' for individuals who are
likely to exhaust their unemployment compensation. This bill
would authorize the appropriation of $3.6 billion for fiscal
year 2003. Assuming appropriation of the authorized amount, CBO
estimates that enactment of this bill would increase spending
by $3.6 billion over the 2004-2005 period.
H.R. 444 contains no intergovernmental or private-sector
mandates, as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 444 is shown in the following table.
The cost of this legislation falls within budget function 500
(education, training, employment, and social services). For the
purposes of this estimate, CBO assumes H.R. 444 will be enacted
by the beginning of July 2003.
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------
2003 2004 2005 2006 2007 2008
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Reemployment Accounts:
Authorization Level................................... 3,600 0 0 0 0 0
Estimated Outlays..................................... 0 2,700 900 0 0 0
----------------------------------------------------------------------------------------------------------------
Basis of the estimate: H.R. 444 would authorize the
appropriation of $3.6 billion in fiscal year 2003 for states to
establish personal reemployment accounts for certain
individuals who are likely to exhaust their unemployment
benefits. These individuals could receive up to $3,000 that
could be used to assist with job training expenses or other
employment-related needs, such as child care or transportation
expenses. If the individual becomes employed within a certain
period of time, he or she may be eligible to keep the unspent
amount as a bonus. At state option, these funds may be used as
cash assistance for individuals who have exhausted their right
to unemployment compensation. For this estimate, CBO assumes
that the authorized amount will be appropriate sometime this
summer. The first grants to states would likely occur in fiscal
year 2004.
Intergovernmental and private-sector impact: H.R. 444
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments. States that submit plans for the personal
reemployment accounts program would receive grants from the
Department of Labor for enhancing worker profiling systems and
funding and operating the individual accounts. Any cost to
states from participating in the program would be incurred
voluntarily.
Estimated prepared by: Federal Costs: Christina Hawley
Sadoti; Impact on State, Local, and Tribal Governments: Greg
Waring; and Impact on the Private Sector: Ralph Smith.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Statement of General Performance Goals and Objectives
In accordance with Clause (3)(c) of House rule XIII, the
goal of H.R. 444 is to provide grants within the Workforce
Investment Act (WIA) to create personal reemployment accounts,
or ``Back to Work accounts,'' to assist unemployed individuals
in returning to work. The Committee expects the Department of
Labor to comply with H.R. 444 and implement the changes to the
law in accordance with the changes.
Constitutional Authority Statement
Under clause 3(d)(1) of rule XIII of the Rules of the House
of Representatives, the Committee must include a statement
citing the specific powers granted to Congress in the
Constitution to enact the law proposed by H.R. 444. The
Committee believes that the amendments made by this bill, which
authorize appropriations for the Workforce Investment Act, are
within Congress' authority under Article I, section 8, clause 1
of the Constitution.
Committee Estimate
Clauses 3(d)(2) 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
H.R. 444. However, clause 3(d)(3)(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.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
WORKFORCE INVESTMENT ACT OF 1998
* * * * * * *
Sec. 1. Short title; table of contents.
TITLE I--WORKFORCE INVESTMENT SYSTEMS
* * * * * * *
Subtitle B--Statewide and Local Workforce Investment Systems
Sec. 106. Purpose.
Chapter 1--State Provisions
Sec. 111. State workforce investment boards.
* * * * * * *
Chapter 5A--Personal Reemployment Accounts
Sec. 135A. Purposes.
Sec. 135B. Definition.
Sec. 135C. Grants to States.
Sec. 135D. Within State allocation.
Sec. 135E. Personal reemployment accounts.
Sec. 135F. Use of funds.
Sec. 135G. State and local plans.
Sec. 135H. Program information.
Sec. 135I. Evaluation.
* * * * * * *
TITLE I--WORKFORCE INVESTMENT SYSTEMS
* * * * * * *
Subtitle B--Statewide and Local Workforce Investment Systems
* * * * * * *
CHAPTER 2--LOCAL PROVISIONS
* * * * * * *
SEC. 117. LOCAL WORKFORCE INVESTMENT BOARDS.
(a) * * *
* * * * * * *
(d) Functions of Local Board.--The functions of the local
board shall include the following:
(1) * * *
* * * * * * *
(3) Budget and administration.--
(A) * * *
(B) Administration.--
(i) Grant recipient.--
(I) In general.--The chief
elected official in a local
area shall serve as the local
grant recipient for, and shall
be liable for any misuse of,
the grant funds allocated to
the local area under [sections
128 and 133] sections 128, 133,
and 135D, unless the chief
elected official reaches an
agreement with the Governor for
the Governor to act as the
local grant recipient and bear
such liability.
* * * * * * *
(4) Program oversight.--The local board, in
partnership with the chief elected official, shall
conduct oversight with respect to local programs of
youth activities authorized under section 129, local
employment and training activities authorized under
section 134, activities authorized under section 135F,
and the one-stop delivery system in the local area.
* * * * * * *
CHAPTER 5--ADULT AND DISLOCATED WORKER EMPLOYMENT AND TRAINING
ACTIVITIES
* * * * * * *
SEC. 134. USE OF FUNDS FOR EMPLOYMENT AND TRAINING ACTIVITIES.
(a) * * *
* * * * * * *
(c) Establishment of One-Stop Delivery System.--
(1) In general.--There shall be established in a
State that receives an allotment under section 132(b) a
one-stop delivery system, which--
(A) * * *
* * * * * * *
(D) shall provide access to programs and
activities carried out by one-stop partners and
described in section 121(b); [and]
(E) shall provide access to the information
described in section 15 of the Wagner-Peyser
Act and all job search, placement, recruitment,
and other labor exchange services authorized
under the Wagner-Peyser Act (29 U.S.C. 49 et
seq.)[.]; and
(F) shall provide access to personal
reemployment accounts in accordance to section
135E.
* * * * * * *
CHAPTER 5A--PERSONAL REEMPLOYMENT ACCOUNTS
SEC. 135A. PURPOSES.
The purposes of this chapter are to provide for the
establishment of personal reemployment accounts for certain
individuals identified as likely to exhaust their unemployment
compensation in order to--
(1) accelerate the reemployment of such individuals;
(2) promote the retention in employment of such
individuals; and
(3) provide such individuals with enhanced
flexibility, choice, and control in obtaining intensive
reemployment, training, and supportive services.
SEC. 135B. DEFINITION.
In this chapter, the term ``State'' means each of the several
States of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, and the United States Virgin
Islands.
SEC. 135C. GRANTS TO STATES.
(a) Grants.--The Secretary shall--
(1) reserve \2/10\ of 1 percent of the amount
appropriated under section 137(d) for use under section
135I; and
(2) use the remainder of the amount appropriated
under section 137(d) to make allotments in accordance
with subsection (b).
(b) Allotment Among States.--
(1) In general.--From the amount made available under
subsection (a)(2), the Secretary shall allot to each
State an amount that is proportionate to the relative
number of unemployed individuals in the State as
compared to the total number of unemployed individuals
in all States in order to provide assistance for
eligible individuals in accordance with this chapter.
(2) Small state minimum allotment.--The Secretary
shall ensure that--
(A) each State (other than the United States
Virgin Islands) shall receive an allotment
under paragraph (1) that is not less than \3/
10\ of 1 percent of the amount made available
under subsection (a)(2) for the fiscal year;
and
(B) the United States Virgin Islands shall
receive an allotment under paragraph (1) that
is not less than \1/10\ of 1 percent of the
amount made available under subsection (a)(2)
for the fiscal year.
(c) Availability.--Notwithstanding section 189(g)(1), amounts
made available under subsection (a) to carry out this chapter
shall be available for obligation and expenditure beginning on
the date of the enactment of the Back to Work Incentive Act of
2003.
SEC. 135D. WITHIN STATE ALLOCATION.
(a) Allocation.--Of the amount allotted to a State under
section 135C--
(1) not more than 2 percent of the amount may be
reserved by the Governor of the State to enhance the
system of worker profiling described in section 303(j)
of the Social Security Act and to establish and operate
a data management system, as necessary, and carry out
other appropriate activities to implement this chapter;
(2) 5 percent of the amount shall be allocated by the
State to local areas in accordance with the formula
described in subsection (b) for start-up costs and
other operating costs related to the provision of
assistance under this chapter; and
(3) the remainder of the amount shall be provided to
local areas consistent with the methods and procedures
described in section 135G(a)(4) for the establishment
of personal reemployment accounts described in section
135E for eligible individuals in such local areas.
(b) Formula.--A State shall allocate funds to local areas in
the State under subsection (a)(2) in an amount that is
proportionate to the relative number of unemployed individuals
in the local area as compared to the total number of unemployed
individuals in the State.
(c) Availability.--Notwithstanding section 189(g)(2), amounts
allotted to a State under section 135C, and amounts
subsequently provided to a local area under this section, shall
be available for obligation and expenditure only for the 3-year
period beginning on the date of the enactment of the Back to
Work Incentive Act of 2003.
SEC. 135E. PERSONAL REEMPLOYMENT ACCOUNTS.
(a) Accounts.--
(1) In general.--Funds provided to a local area under
section 135D shall be used to provide eligible
individuals with personal reemployment accounts to be
used in accordance with section 135F. An eligible
individual may receive only one personal reemployment
account.
(2) Amount.--The State shall establish the amount of
a personal reemployment account, which shall be uniform
throughout the State, and shall not exceed $3,000.
(b) Eligible Individuals.--
(1) In general.--Each State shall establish
eligibility criteria for individuals for personal
reemployment accounts in accordance with this
subsection.
(2) Eligibility criteria requirements.--
(A) In general.--Subject to subparagraph (B),
an individual shall be eligible to receive
assistance under this chapter if, beginning
after the date of enactment of the Back to Work
Incentive Act of 2003, the individual--
(i) is identified by the State
pursuant to section 303(j)(1) of the
Social Security Act as likely to
exhaust regular unemployment
compensation and in need of job search
assistance to make a successful
transition to new employment or an
individual's unemployment can be
attributed in substantial part to
unfair competition from Federal Prison
Industries, Inc.;
(ii) is receiving regular
unemployment compensation under any
State or Federal unemployment
compensation program administered by
the State; and
(iii) is eligible for not less than
20 weeks of regular unemployment
compensation described in clause (ii).
(B) Additional eligibility and priority
criteria.--A State may establish criteria that
is in addition to the criteria described in
subparagraph (A) for the eligibility of
individuals to receive assistance under this
chapter. A State may also establish criteria
for priority in the provision of assistance to
such eligible individuals under this chapter.
(3) Transition rule.--
(A) Previously identified as likely to
exhaust unemployment compensation.--
(i) In general.--At the option of the
State, and subject to clause (ii), an
individual may be eligible to receive
assistance under this chapter if the
individual--
(I) during the 13-week period
ending the week prior to the
date of the enactment of the
Back to Work Incentive Act of
2003, was identified by the
State pursuant to section
303(j)(1) of the Social
Security Act as likely to
exhaust regular unemployment
compensation and in need of job
search assistance to make a
successful transition to new
employment; and
(II) otherwise meets the
requirements of clauses (ii)
and (iii) of paragraph (2)(A).
(ii) Additional eligibility and
priority criteria.--A State may
establish criteria that is in addition
to the criteria described in clause (i)
for the eligibility of individuals to
receive assistance under this chapter.
A State may also establish criteria for
priority in the provision of assistance
to such eligible individuals under this
chapter.
(B) Previously exhausted unemployment
compensation.--At the option of the State, an
individual may be eligible to receive
assistance under this chapter if the
individual--
(i) during the 26-week period ending
the week prior to the date of the
enactment of the Back to Work Incentive
Act of 2003, exhausted all rights to
any unemployment compensation; and
(ii)(I) is enrolled in training and
needs additional support to complete
such training, with a priority of
service to be provided to such
individuals who are training for
shortage occupations or high-growth
industries; or
(II) is separated from employment in
an industry or occupation that has
experienced declining employment, or no
longer provides any employment, in the
local labor market during the two-year
period ending on the date of the
determination of eligibility of the
individual under this subparagraph.
(4) No individual entitlement.--Nothing in this
chapter shall be construed to entitle any individual to
receive a personal reemployment account.
(c) Local Administration.--
(1) Information and attestation.--Prior to the
establishment of a personal reemployment account for an
eligible individual under this chapter, the local
board, through the one-stop delivery system, shall
ensure that the individual--
(A) is informed of the requirements
applicable to the personal reemployment
account, including the allowable uses of funds
from the account, the limitations on access to
services described under section 135F(a)(3)(C)
and a description of such services, and the
conditions for receiving a reemployment bonus;
(B) has the option to develop a personal
reemployment plan which will identify the
employment goals and appropriate combination of
services selected by the individual to achieve
the employment goals; and
(C) signs an attestation that the individual
has been given the option to develop a personal
reemployment plan in accordance with
subparagraph (B), will comply with the
requirements relating to the personal
reemployment accounts under this chapter, and
will reimburse the account or, if the account
has been terminated, the program under this
chapter, for any amounts expended from the
account that are not allowable.
(2) Periodic interviews.--If a recipient exhausts his
or her rights to any unemployment compensation, and the
recipient has a remaining balance in his or her
personal reemployment account, the one-stop delivery
system shall conduct periodic interviews with the
recipient to assist the recipient in meeting his or her
individual employment goals.
SEC. 135F. USE OF FUNDS.
(a) Allowable Activities.--
(1) In general.--Subject to the requirements
contained in paragraphs (2) and (3), a recipient may
use amounts in a personal reemployment account to
purchase one or more of the following:
(A) Intensive services, including those types
of services specified in section 134(d)(3)(C).
(B) Training services, including those types
of services specified in section 134(d)(4)(D).
(C) Supportive services, except for needs-
related payments.
(D) Assistance to purchase or lease an
automobile, if such assistance is necessary to
allow the recipient to accept a bona fide offer
of employment for which there is a reasonable
expectation of long-term duration.
(2) Delivery of services.--The following requirements
relating to delivery of services shall apply to the
program under this chapter:
(A) Recipients may use funds from the
personal reemployment account to purchase the
services described in paragraph (1) through the
one-stop delivery system on a fee-for-service
basis, or through other providers, consistent
with safeguards described in the State and
local plans under section 135G.
(B) The local board, through the one-stop
delivery system, may pay costs for such
services directly on behalf of the recipient,
through a voucher system, or by reimbursement
to the recipient upon receipt of appropriate
cost documentation, consistent with safeguards
described in the State plan under section 135G.
(C) Each local board, through the one-stop
delivery system, shall make available to
recipients information on training providers
specified in section 134(d)(4)(F)(ii),
information available to the one-stop delivery
system on providers of the intensive and
supportive services described in paragraph (1),
and information relating to occupations in
demand in the local area.
(3) Limitations.--The following limitations shall
apply with respect to personal reemployment accounts
under this chapter:
(A)(i) Amounts in a personal reemployment
account may be used for up to one year from the
date of the establishment of the account.
(ii) No personal reemployment account may be
established beginning 2 years after the date of
the enactment of the Back to Work Incentive Act
of 2003.
(B) Each recipient shall submit cost
documentation as required by the one-stop
delivery system.
(C) For the 1-year period following the
establishment of the account, recipients may
not receive intensive, supportive, or training
services funded under this title except on a
fee-for-services basis as specified in
paragraph (2)(A).
(D) Amounts in a personal reemployment
account shall be nontransferable.
(b) Income Support.--A State may authorize recipients
determined eligible under section 135E(b)(3)(B) to withdraw
amounts from the personal reemployment account on a weekly
basis for purposes of income support in amounts up to the
average weekly amount of unemployment compensation that the
individual received prior to his or her exhaustion of rights to
unemployment compensation if the individual is engaged in job
search, intensive services, or training that is expected to
lead to employment.
(c) Reemployment Bonus.--
(1) In general.--Subject to paragraph (2)--
(A) if a recipient determined eligible under
section 135E(b)(2) obtains full-time employment
before the end of the 13th week of unemployment
for which unemployment compensation is paid,
the balance of his or her personal reemployment
account shall be provided directly to the
recipient in cash; and
(B) if a recipient determined eligible under
section 135E(b)(3) obtains full-time employment
before the end of the 13th week after the date
on which the account is established, the
balance of his or her personal reemployment
account shall be provided directly to the
recipient in cash.
(2) Limitations.--The following limitations shall
apply with respect to a recipient described in
paragraph (1):
(A) 60 percent of the remaining personal
reemployment account balance shall be paid to
the recipient at the time of reemployment.
(B) 40 percent of the remaining personal
reemployment account balance shall be paid to
the recipient after 26 weeks of employment
retention.
(3) Exception regarding subsequent unemployment.--If
a recipient described in paragraph (1) subsequently
becomes unemployed due to a lack of work after
receiving the portion of the reemployment bonus
specified under paragraph (2)(A), the individual may
use the amount remaining in the personal reemployment
account for the purposes described in subsection (a)
but may not be eligible for additional cash payments
under this subsection.
SEC. 135G. STATE AND LOCAL PLANS.
(a) State Plan.--In order for a State to receive an allotment
under section 135C, the Governor of the State shall submit to
the Secretary a plan for approval that includes a description
of how the State intends to carry out the personal reemployment
accounts authorized under this chapter, including--
(1) the criteria and methods to be used for
determining eligibility for the personal reemployment
accounts, including whether the State intends to
include the optional categories described in section
135E(b)(3), and the additional criteria and priority
for service that the State intends to apply, if any,
pursuant to section 135E(b)(2)(B);
(2) the methods or procedures, developed in
consultation with local boards and chief elected
officials, to be used to provide eligible individuals
information relating to services and providers, and
safeguards, developed in consultation with such boards
and officials, to ensure that funds from the personal
reemployment accounts are used for purposes authorized
under this chapter and to ensure the quality and
integrity of services and providers, consistent with
the purpose of providing such individuals with enhanced
flexibility, choice, and control in obtaining intensive
reemployment, training, and supportive services.
(3) how the State will coordinate the activities
carried out under this chapter with the employment and
training activities carried out under section 134 and
other activities carried out by each local board
through the one-stop delivery system in the State; and
(4) the methods and procedures for providing funds to
local areas under section 135D(a)(3).
(b) Local Plan.--In order for a local area to receive an
allocation under section 135D, the local board, in partnership
with the chief elected official for the local area involved,
shall submit to the Governor a plan for approval that includes
a description of how the local board intends to carry out the
personal reemployment accounts, consistent with the
requirements of this chapter and with the State plan
established under subsection (a), including--
(1) a description of how the local board will
coordinate the activities carried out under this
chapter with the employment and training activities
carried out in the local area under section 134; and
(2) a description of the methods or procedures to be
used to provide eligible individuals information
relating to the jobs that are available in the local
area in high demand occupations and information on
services and providers, and the safeguards the local
area will initiate to ensure that funds from the
personal reemployment accounts are used for purposes
authorized under this chapter and to ensure the quality
and integrity of services and providers, consistent
with the purpose of providing such individuals with
enhanced flexibility, choice, and control in obtaining
intensive reemployment, training, and supportive
services, and consistent with the State plan.
(c) State Plan Submission and Approval.--A State plan
submitted to the Secretary under subsection (a) by a Governor
shall be considered to be approved by the Secretary at the end
of the 30-day period beginning on the date the Secretary
receives the plan, unless the Secretary makes a written
determination during such period that the plan is incomplete or
otherwise inconsistent with the provisions of this chapter.
SEC. 135H. PROGRAM INFORMATION.
The Secretary may require from States the collection and
reporting on such financial, performance, and other program-
related information as the Secretary determines is appropriate
to carry out this chapter, including the evaluation described
in section 135I.
SEC. 135I. EVALUATION.
(a) Evaluation.--From the amount made available under section
135C(a)(1), the Secretary, pursuant to the authority provided
under section 172, shall, directly or through grants,
contracts, or cooperative agreements with appropriate entities,
conduct an evaluation of the activities carried out under this
chapter.
(b) Conduct of Evaluation.--The evaluation shall examine the
effectiveness of such activities in achieving the purposes
described in section 135A and such other purposes as the
Secretary determines are appropriate.
(c) Report.--The report to Congress under section 172(e)
relating to the results of the evaluations required under
section 172 shall include the recommendation of the Secretary
with respect to the use of personal reemployment accounts as a
mechanism to assist individuals in obtaining and retaining
employment.
* * * * * * *
CHAPTER 6--GENERAL PROVISIONS
* * * * * * *
SEC. 137. AUTHORIZATION OF APPROPRIATIONS.
(a) * * *
* * * * * * *
(d) Personal Reemployment Accounts.--
(1) In general.--There is authorized to be
appropriated $3,600,000,000 for fiscal year 2003 to
carry out chapter 5A.
(2) Availability.--Amounts appropriated pursuant to
the authorization of appropriations under paragraph (1)
to carry out section 135I are authorized to remain
available until expended.
* * * * * * *
MINORITY VIEWS
H.R. 444--Personal Reemployment Accounts Failing to Create Jobs and
Undermining Unemployment for America's Workers
INTRODUCTION
Unemployment--and a lack of jobs--continues to cripple the
American economy. Due to the Bush Administration's failed
economic policies and mismangement of the federal budget, we
are experiencing some of the highest unemployment rates, and
lowest levels of consumer confidence in a decade. More than 8.3
million individuals are out of work, and by one estimate, there
are three workers for every available job. At the same time,
over 1.2 million unemployed Americans who have exhausted their
federal unemployment benefits are looking to Congress for
urgent relief.
H.R. 444 fails to provide the nation's most vulnerable
workers urgently needed assistance, and undermines key
provisions of the existing Workforce Investment Act.
The centerpiece of this bill involves the luring of
financially strapped unemployed workers out of more intensive
job training with a ``buy out'' that could be as little as $500
or less. This is a cynical trap for workers who must choose
between training or additional financial support for their
family. By contrast, extending unemployment benefits provides
that urgently needed family support, with no draconian cap on
job training services. H.R. 444 would require the unemployed to
pay for otherwise free job counseling and training services and
ban them from the system if they accept a PRA.
H.R. 444 would undermine our workforce training and
unemployment insurance systems. This bill not only ignores
those families who need the help the most, it blows a hole in
virtually every accountability contained in our job training
programs. H.R. 444 would provide little if any oversight over
program dollars spent at fly-by-night training providers. State
certification requirements under the current WIA system would
be all but removed with the PRAs--opening the door for
financial abuse with no means to correct or even measure the
potential abuses. Congress just revamped the job training
system in 1998 to provide a comprehensive universal system of
job assistance services, yet the Majority would circumvent
their own system to create a new parallel program.
This bill also fails to provide relief quickly. The
Congressional Budget Office says funds for this program would
not even reach workers until next year--and one out of four
eligible families would not be helped until fiscal year 2005.
An unemployment insurance extension can provide help to workers
in a matter of weeks, not months or years--and would provide
urgently needed short-term economic stimulus.
Rather than preparing for another extension of unemployment
insurance that will be needed in the late spring, H.R. 444
seeks to utilize precious resources to provide assistance to
the smallest fraction of the unemployed. This legislation is
part of a strategy to undermine and cut funding tothe
unemployment and job-training systems and head-off another federal
unemployment benefit extension that would provide assistance to those
who desperately need it.
This legislation bars those who accept Personal Re-
employment Accounts from receiving counseling and training
services at a one-stop employment center for one year once the
funds within the account are exhausted. Unemployed workers
currently receive an average of $5,000 (and as high as $10,000)
worth of training services under our current WIA system, and
yet many of them are unable to find a sustainable job due to
the jobless stagnation of the economy. H.R. 444 would cut
millions of unemployed workers off from access to needed job
training or retraining programs.
In addition, the infrastructure that would be required to
administer the PRAs in the base bill would take several months,
if not a year to set up, limiting what immediate help we can
provide the unemployed. In its budget submission, the Bush
Administration claimed that funds could be made available to
workers in the current fiscal year. As noted above, the
Congressional Budget Office repudiated this assertion, and has
estimated that funds for this program would not even reach
workers until next year--and one out of four eligible families
would not be helped until fiscal year 2005.\1\
---------------------------------------------------------------------------
\1\ Congressional Budget Office, An Analysis of the President's
Budgetary Proposals for Fiscal Year 2004, March 2003.
---------------------------------------------------------------------------
Those that advocate for PRAs also imply that there are
plenty of jobs for unemployed workers to accept. In reality,
the economy has lost 2.5 million jobs since the current
downturn in March of 2001. In addition, there are presently 3
unemployed workers competing for each current job opening.
Finally, PRAs would become the nation's first multi-billion
program for which coverage of the nation's civil rights laws
are in jeopardy. According to the Congressional Research
Service, H.R. 444 ``appears to beg the question of whether
private providers of reemployment services . . . are subject to
federal non-discrimination requirements.'' \2\ Under federal
law, providers are not subject to certain civil rights laws
unless they are considered ``recipients'' of federal financial
aid. Because H.R. 444 employs a voucher scheme to provide
benefits, CRS has questioned whether ``providers'' under the
bill are technically ``recipients.'' Failure to have the full
force and effect of the nation's anti-discrimination laws apply
to a multi-billion dollar federal program would be a shameful
retreat of the nation's commitment to civil rights.
---------------------------------------------------------------------------
\2\ Memorandum from Charles V. Dale, Legislative Attorney, American
Law Division, Congressional Research Service, March 3, 2003.
---------------------------------------------------------------------------
AMENDMENTS
Representative Kildee sought to address H.R. 444's major
shortcomings by offering an amendment that would use the bill's
funding to provide for immediate and future extended federal
unemployment benefits and reverse harmful cuts to job training
programs in the last 2 years. The last extension of
unemployment benefits signed into law in January provided
extended benefits to some, but not all of the nation's
unemployed. The Administration and theCongressional Republican
leadership chose not to cover 1.2 million workers who had previously
exhausted their unemployment benefits.
This amendment directly responded to the real needs of the
American workforce by providing funds to extend unemployment
benefits to the estimated 1.2 million workers who have
exhausted their Federal unemployment benefits and are still
unable to find work. In addition, this amendment would provide
funds to extend unemployment benefits to September when the
current extension expires at the end of May and authorize an
additional $650 million in funding to offset recent cuts to our
nation's job training programs. Unfortunately, this amendment
was defeated on a party line vote.
Representative Payne offered an amendment to make clear
that federal anti-discrimination laws apply to the bill's job
training providers, but the amendment was rejected on a party
line vote.
Representative Wu offered an amendment that would have
allowed local workforce boards to determine the actual amount
of each PRA and struck the one-year prohibition on One-stop
services to those receiving PRAs. This amendment pointed out
two critical flaws in the Republican legislation. First, the
base bill allows States to set the actual amount of each PRA.
While the Majority has advertised this bill as providing $3,000
in assistance to each unemployed individual, PRA recipients are
more likely to receive substantially less, possibly as little
as $500. The Administration estimates that PRAs could serve up
to 1.2 million unemployed workers, however, almost 4 million
would be eligible forcing Governors to either cut the number of
workers covered or cut the amount of PRAs. Second, individuals
who accept PRAs are barred from receiving services at the one-
stop centers for one year, except on a fee for service basis.
This freezes out unemployed workers from the very training and
services they need to secure employment. This amendment was
defeated by voice vote.
Representative Majette offered and withdrew an amendment
that would have prevented fraud by requiring providers of
training services to meet the eligibility requirements under
WIA.
Representative McCollum offered an amendment to make
workers injured by unfair economic competition from Turkey to
be eligible for PRAs. This amendment was defeated by voice
vote.
CONCLUSION
H.R. 444 fails to address the most significant needs of the
unemployed. Extending unemployment benefits, coupled with the
assistance that unemployed workers can receive through one-stop
service centers, will provide workers with the means to achieve
high paying jobs. We need to address the needs of our
unemployed now, while they are struggling to pay their mortgage
and put food on the table for their families. The bill fails to
address these concerns and squanders resources better used to
provide immediate help to unemployed workers.
George Miller,
Betty McCollum,
Donald M. Payne,
Ed Case,
Tim Ryan,
John F. Tierney,
Carolyn McCarthy,
Susan Davis,
Dennis J. Kucinich,
Ron Kind,
Raul M. Grijalva,
David Wu,
Chris Van Hollen,
Robert E. Andrews,
Danny K. Davis,
Lynn Woolsey,
Timothy Bishop,
Dale E. Kildee,
Major R. Owens,
Rush Holt,
Ruben Hinojosa.
