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

======================================================================
 
       TREATMENT OF CERTAIN PAYMENTS IN EUGENICS COMPENSATION ACT

                                _______
                                

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

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 1698]

      [Including cost estimate of the Congressional Budget Office]

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

                                CONTENTS

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

                     Committee Statement and Views


                          PURPOSE AND SUMMARY

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

                  BACKGROUND AND NEED FOR LEGISLATION

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

                          LEGISLATIVE HISTORY

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

                           Section-by-Section


Section 1. Short title

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

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

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

                        Committee Consideration

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

                            Roll Call Votes

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

              Application of Law to the Legislative Branch

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

  Statement of Oversight Findings and Recommendations of the Committee

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

         Statement of General Performance Goals and Objectives

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

                    Duplication of Federal Programs

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

                  Disclosure of Directed Rule Makings

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

                     Federal Advisory Committee Act

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

                       Unfunded Mandate Statement

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

                         Earmark Identification

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

                           Committee Estimate

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

     Budget Authority and Congressional Budget Office Cost Estimate

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

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

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

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, in millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2016   2017   2018   2019   2020   2021   2022   2023   2024   2025  2016-2020  2016-2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING
 
Estimated Budget Authority..................................      2      2      *      *      *      *      *      *      *      *         5          5
Estimated Outlays...........................................      2      2      *      *      *      *      *      *      *      *         5          5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * = Less than $500,000.

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

    CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR S. 1698, AS ORDERED REPORTED BY THE HOUSE OVERSIGHT AND GOVERNMENT REFORM COMMITTEE ON DECEMBER 9, 2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, in millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2016   2017   2018   2019   2020   2021   2022   2023   2024   2025  2016-2020  2016-2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  NET INCREASE OR DECREASE (-) IN THE ON-BUDGET DEFICIT
 
Statutory Pay-As-You-Go Impact..............................      2      2      0      0      0      0      0      0      0      0        5          5
--------------------------------------------------------------------------------------------------------------------------------------------------------

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

                                  [all]