To amend the Social Security Act to expand the availability of health care coverage for working individuals with disabilities, to establish a Ticket to Work and Self-Sufficiency Program in the Social Security Administration to provide such individuals with meaningful opportunities to work, and for other purposes.

January 28, 1999

Mr. JEFFORDS (for himself, Mr. KENNEDY, Mr. ROTH, Mr. MOYNIHAN, Mr. CHAFEE, Mr. GRASSLEY, Mr. HATCH, Mr. MURKOWSKI, Mr. BREAUX, Mr. GRAHAM, Mr. KERREY, Mr. ROBB, Mr. ROCKEFELLER, Mr. BINGAMAN, Mrs. BOXER, Mr. CLELAND, Ms. COLLINS, Mr. DASCHLE, Mr. DEWINE, Mr. DODD, Mr. DURBIN, Mr. ENZI, Mrs. FEINSTEIN, Mr. GRAMS, Mr. HARKIN, Mr. HOLLINGS, Mr. HUTCHINSON, Mr. INOUYE, Mr. JOHNSON, Mr. KERRY, Ms. MIKULSKI, Mrs. MURRAY, Mr. REED, Mr. REID, Mr. SARBANES, Ms. SNOWE, Mr. STEVENS, Mr. TORRICELLI, and Mr. WELLSTONE) introduced the following bill; which was read twice and referred to the Committee on Finance

To amend the Social Security Act to expand the availability of health care coverage for working individuals with disabilities, to establish a Ticket to Work and Self-Sufficiency Program in the Social Security Administration to provide such individuals with meaningful opportunities to work, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Work Incentives Improvement Act of 1999'.

(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings and purposes.

TITLE I--EXPANDED AVAILABILITY OF HEALTH CARE SERVICES

Sec. 101. Expanding State options under medicaid for workers with disabilities.

Sec. 102. Continuation of medicare coverage for working individuals with disabilities.

Sec. 103. Grants to develop and establish State infrastructures to support working individuals with disabilities.

Sec. 104. Demonstration of coverage of workers with potentially severe disabilities.

TITLE II--TICKET TO WORK AND SELF-SUFFICIENCY AND RELATED PROVISIONS

Subtitle A--Ticket to Work and Self-Sufficiency

Sec. 201. Establishment of the Ticket to Work and Self-Sufficiency Program.

Sec. 202. Work Incentives Advisory Panel.

Subtitle B--Elimination of Work Disincentives

Sec. 211. Prohibition on using work activity as a basis for review of an individual's disabled status.

Sec. 212. Expedited eligibility determinations for applications of former long-term beneficiaries that completed an extended period of eligibility.

Subtitle C--Work Incentives Planning, Assistance, and Outreach

Sec. 221. Work incentives outreach program.

Sec. 222. State grants for work incentives assistance to disabled beneficiaries.

TITLE III--DEMONSTRATION PROJECTS AND STUDIES

Sec. 301. Extension of disability insurance program demonstration project authority.

Sec. 302. Demonstration projects providing for reductions in disability insurance benefits based on earnings.

Sec. 303. Sense of Congress regarding additional demonstration projects.

Sec. 304. Studies and reports.

TITLE IV--TECHNICAL AMENDMENTS

Sec. 401. Technical amendments relating to drug addicts and alcoholics.

Sec. 402. Treatment of prisoners.

Sec. 403. Revocation by members of the clergy of exemption from Social Security coverage.

Sec. 404. Additional technical amendment relating to cooperative research or demonstration projects under titles II and XVI.

Sec. 405. Authorization for State to permit annual wage reports.

SEC. 2. FINDINGS AND PURPOSES.

(a) FINDINGS- Congress makes the following findings:

(1) Health care is important to all Americans.

(2) Health care is particularly important to individuals with disabilities and special health care needs who often cannot afford the insurance available to them through the private market, are uninsurable by the plans available in the private sector, and are at great risk of incurring very high and economically devastating health care costs.

(3) Americans with significant disabilities often are unable to obtain health care insurance that provides coverage of the services and supports that enable them to live independently and enter or rejoin the workforce. Personal assistance services (such as attendant services, personal assistance with transportation to and from work, reader services, job coaches, and related assistance) remove many of the barriers between significant disability and work. Coverage for such services, as well as for prescription drugs, durable medical equipment, and basic health care are powerful and proven tools for individuals with significant disabilities to obtain and retain employment.

(4) For individuals with disabilities, the fear of losing health care and related services is one of the greatest barriers keeping the individuals from maximizing their employment, earning potential, and independence.

(5) Individuals with disabilities who are beneficiaries under title II or XVI of the Social Security Act (42 U.S.C. 401 et seq., 1381 et seq.) risk losing medicare or medicaid coverage that is linked to their cash benefits, a risk that is an equal, or greater, work disincentive than the loss of cash benefits associated with working.

(6) Currently, less than 1/2 of 1 percent of social security disability insurance and supplemental security income beneficiaries cease to receive benefits as a result of employment.

(7) Beneficiaries have cited the lack of adequate employment training and placement services as an additional barrier to employment.

(8) If an additional 1/2 of 1 percent of the current social security disability insurance (DI) and supplemental security income (SSI) recipients were to cease receiving benefits as a result of employment, the savings to the Social Security Trust Funds in cash assistance would total $3,500,000,000 over the worklife of the individuals.

(b) PURPOSES- The purposes of this Act are as follows:

(1) To provide health care and employment preparation and placement services to individuals with disabilities that will enable those individuals to reduce their dependency on cash benefit programs.

(2) To encourage States to adopt the option of allowing individuals with disabilities to purchase medicaid coverage that is necessary to enable such individuals to maintain employment.

(3) To provide individuals with disabilities the option of maintaining medicare coverage while working.

(4) To establish a return to work ticket program that will allow individuals with disabilities to seek the services necessary to obtain and retain employment and reduce their dependency on cash benefit programs.

TITLE I--EXPANDED AVAILABILITY OF HEALTH CARE SERVICES

SEC. 101. EXPANDING STATE OPTIONS UNDER MEDICAID FOR WORKERS WITH DISABILITIES.

(a) STATE OPTION TO ELIMINATE INCOME, ASSETS, AND RESOURCE LIMITATIONS FOR WORKERS WITH DISABILITIES BUYING INTO MEDICAID- Section 1902(a)(10)(A)(ii) of the Social Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended--

(1) in subclause (XIII), by striking `or' at the end;

(2) in subclause (XIV), by adding `or' at the end; and

(3) by adding at the end the following:

`(XV) who, but for earnings in excess of the limit established under section 1905(q)(2)(B), and subject to limitations on assets, resources, or unearned income that may be set by the State, would be considered to be receiving supplemental security income (subject, notwithstanding section 1916, to payment of premiums or other cost-sharing charges (set on a sliding scale based on income that the State may determine and that may require an individual with income that exceeds 250 percent of the income official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size involved to pay an amount equal to 100 percent of the premium cost for providing medical assistance to the individual), so long as any such premiums or other cost-sharing charges are the same as any premiums or other cost-sharing charges imposed for individuals described in subclause (XVI));'.

(b) STATE OPTION TO EXPAND OPPORTUNITIES FOR WORKERS WITH DISABILITIES TO BUY INTO MEDICAID-

(1) ELIGIBILITY- Section 1902(a)(10)(A)(ii) of the Social Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by subsection (a), is amended--

(A) in subclause (XIV), by striking `or' at the end;

(B) in subclause (XV), by adding `or' at the end; and

(C) by adding at the end the following:

`(XVI) who are working individuals with disabilities described in section 1905(v) (subject, notwithstanding section 1916, to payment of premiums or other cost-sharing charges (set on a sliding scale based on income) that the State may determine so long as any such premiums or other cost-sharing charges are the same as any premiums or other cost-sharing charges imposed for individuals described in subclause (XV)), but only if the State provides medical assistance to individuals described in subclause (XV);'.

(2) DEFINITION OF WORKING INDIVIDUALS WITH DISABILITIES- Section 1905 of the Social Security Act (42 U.S.C. 1396d) is amended by adding at the end the following:

`(v)(1) The term `working individuals with disabilities' means individuals ages 16 through 64 who--

`(A) by reason of medical improvement, cease to be eligible for benefits under section 223(d) or 1614(a)(3) at the time of a regularly scheduled continuing disability review but who continue to have a severe medically determinable impairment; and

`(B) are employed.

`(2) An individual is considered to be `employed' if the individual--

`(A) is earning at least the applicable minimum wage requirement under section 6 of the Fair Labor Standards Act (29 U.S.C. 206) and working at least 40 hours per month; or

`(B) is engaged in a work effort that meets substantial and reasonable threshold criteria for hours of work, wages, or other measures, as defined by the State and approved by the Secretary.'.

(3) CONFORMING AMENDMENT- Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) is amended in the matter preceding paragraph (1)--

(A) in clause (x), by striking `or' at the end;

(B) in clause (xi), by adding `or' at the end; and

(C) by inserting after clause (xi), the following:

`(xii) individuals described in subsection (v),'.

(c) PROHIBITION AGAINST SUPPLANTATION OF STATE FUNDS; MAINTENANCE OF EFFORT REQUIREMENT; CONDITION FOR APPROVAL OF STATE PLAN AMENDMENT-

(1) NO SUPPLANTATION OF STATE FUNDS- Federal funds paid to a State for medical assistance provided to an individual described in subclause (XV) or (XVI) of section 1902(a)(10)(A)(ii) of the Social Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) must be used to supplement but not supplant the level of State funds expended as of October 1, 1998 for programs to enable working individuals with disabilities to work.

(2) MAINTENANCE OF EFFORT- With respect to a fiscal year quarter, no Federal funds may be paid to a State for medical assistance provided to an individual described in subclause (XV) or (XVI) of section 1902(a)(10)(A)(ii) of the Social Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) for such fiscal year quarter if the Secretary of Health and Human Services determines that the total of the State expenditures for programs to enable working individuals with disabilities to work for the preceding fiscal year quarter is less than the total of such expenditures for the same fiscal year quarter of the preceding fiscal year.

(3) CONDITION FOR APPROVAL OF STATE PLAN AMENDMENTS- No State plan amendment that proposes to provide medical assistance to an individual described in subclause (XV) or (XVI) of section 1902(a)(10)(A)(ii) of the Social Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) may be approved unless the chief executive officer of the State certifies to the Secretary of Health and Human Services that the plan, as so amended, will satisfy the requirements of paragraphs (1) and (2) of this subsection.

(d) EFFECTIVE DATE-

(1) IN GENERAL- The amendments made by this section shall apply on and after October 1, 1999.

(2) EXTENSION OF EFFECTIVE DATE FOR STATE LAW AMENDMENT- In the case of a State plan under title XIX of the Social Security Act which the Secretary of Health and Human Services determines requires State legislation in order for the plan to meet the additional requirements imposed by the amendments made by this section, the State plan shall not be regarded as failing to comply with the requirements of this section solely on the basis of its failure to meet these additional requirements before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of the session is considered to be a separate regular session of the State legislature.

SEC. 102. CONTINUATION OF MEDICARE COVERAGE FOR WORKING INDIVIDUALS WITH DISABILITIES.

(a) CONTINUATION OF COVERAGE- Section 1818A of the Social Security Act (42 U.S.C. 1395i-2a) is amended by adding at the end the following:

`(e)(1) During the 10-year period beginning with the first month that begins after the date of enactment of this subsection, this section shall apply--

`(A) in subsection (a), by inserting--

`(i) in paragraph (2)(C), `on or after the date of enactment of the Work Incentives Improvement Act of 1999' after `ends'; and

`(ii) `without being subject to a premium' before the period; and

`(B) without regard to subsections (c)(2)(D) and (d).

`(2) Any individual who, as of the date of enactment of this subsection is enrolled in the medicare program under this section and would, without regard to paragraph (1), otherwise satisfy the eligibility requirements for enrollment set forth in subsection (a) shall be deemed to satisfy the requirement of subsection (a)(2)(C) of that section after the application of paragraph (1)(A)(i) for purposes of not being subject to a premium for enrollment in the medicare program under this section.

`(3) Notwithstanding paragraph (1), paragraph (1) shall continue to apply after the termination of the 10-year period described in that paragraph in the case of any individual who is enrolled in the medicare program under this section for the month that ends such 10-year period.'.

(b) GAO REPORT- Not later than 8 years after the date of enactment of this Act, the Comptroller General of the United States shall submit a report to Congress that--

(1) examines the effectiveness and cost of section 1818A of the Social Security Act (42 U.S.C. 1395i-2a) as amended by subsection (a); and

(2) recommends whether that section should continue to be applied, as so amended, beyond the 10-year period described in subsection (e) of that section.

SEC. 103. GRANTS TO DEVELOP AND ESTABLISH STATE INFRASTRUCTURES TO SUPPORT WORKING INDIVIDUALS WITH DISABILITIES.

(a) ESTABLISHMENT-

(1) IN GENERAL- The Secretary of Health and Human Services (in this section referred to as the `Secretary') shall award grants described in subsection (b) to States to support the design, establishment, and operation of State infrastructures that provide items and services to support working individuals with disabilities. A State may submit an application for a grant authorized under this section at such time, in such manner, and containing such information as the Secretary may determine.

(2) DEFINITION OF STATE- In this section, the term `State' means each of the 50 States, the District of Columbia, Puerto Rico, Guam, the United States Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands.

(b) GRANTS FOR INFRASTRUCTURE AND OUTREACH-

(1) IN GENERAL- Out of the funds appropriated under subsection (e), the Secretary shall award grants to States to--

(A) support the establishment, implementation, and operation of the State infrastructures described in subsection (a); and

(B) conduct outreach campaigns regarding the existence of such infrastructures.

(2) ELIGIBILITY FOR GRANTS-

(A) IN GENERAL- No State may receive a grant under this subsection unless--

(i) the State has an approved amendment to the State plan under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) that--

(I) provides medical assistance under such plan to individuals described in section 1902(a)(10)(A)(ii)(XV) of the Social Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)(XV)); or

(II) provides medical assistance under such plan to individuals described in subclauses (XV) and (XVI) of section 1902(a)(10)(A)(ii) of the Social Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)); and

(ii) the State demonstrates to the satisfaction of the Secretary that the State makes personal assistance services available under the State plan under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) to the extent necessary to enable individuals described in subclause (I) or (II) of clause (i) to remain employed (as determined under section 1905(v)(2) of the Social Security Act (42 U.S.C. 1396d(v)(2)).

(B) DEFINITION OF PERSONAL ASSISTANCE SERVICES- In this paragraph, the term `personal assistance services' means a range of services, provided by 1 or more persons, designed to assist an individual with a disability to perform daily activities on and off the job that the individual would typically perform if the individual did not have a disability. Such services shall be designed to increase the individual's control in life and ability to perform everyday activities on or off the job.

(3) DETERMINATION OF AWARDS-

(A) IN GENERAL- Subject to subparagraph (B), the Secretary shall determine a formula for awarding grants to States under this section that provides special consideration to States that provide medical assistance under title XIX of the Social Security Act to individuals described in section 1902(a)(10)(A)(ii)(XVI) of that Act (42 U.S.C. 1396a(a)(10)(A)(ii)(XVI)).

(B) AWARD LIMITS-

(i) MINIMUM AWARDS- No State that submits an approved application for funding under this section shall receive a grant for a fiscal year that is less than $500,000.

(ii) MAXIMUM AWARDS- No State that submits an approved application for funding under this section shall receive a grant for a fiscal year that exceeds 15 percent of the total expenditures by the State (including the reimbursed Federal share of such expenditures) for medical assistance for individuals eligible under subclause (XV) or (XVI) of section 1902(a)(10)(A)(ii), whichever is greater, as estimated by the State and approved by the Secretary.

(c) AVAILABILITY OF FUNDS-

(1) FUNDS ALLOCATED TO STATES- Funds allocated to a State under a grant made under this section for a fiscal year shall remain available until expended.

(2) FUNDS NOT ALLOCATED TO STATES- Funds not allocated to States in the fiscal year for which they are appropriated shall remain available in succeeding fiscal years for allocation by the Secretary using the allocation formula established by the Secretary under subsection (c)(3)(A).

(d) ANNUAL REPORT- A State that receives a grant under this section shall submit an annual report to the Secretary on the use of funds provided under the grant. Each report shall include the percentage increase in the number of title II disability beneficiaries, as defined in section 1148(k)(3) of the Social Security Act (as amended by section 201) in the State, and title XVI disability beneficiaries, as defined in section 1148(k)(4) of the Social Security Act (as so amended) in the State who return to work.

(e) APPROPRIATION- Out of any funds in the Treasury not otherwise appropriated, there is authorized to be appropriated and there is appropriated to make grants under this section--

(1) for fiscal year 2000, $20,000,000;

(2) for fiscal year 2001, $25,000,000;

(3) for fiscal year 2002, $30,000,000;

(4) for fiscal year 2003, $35,000,000;

(5) for fiscal year 2004, $40,000,000; and

(6) for fiscal years 2005 through 2010, the amount appropriated for the preceding fiscal year increased by the percentage increase (if any) in the Consumer Price Index for All Urban Consumers (United States city average) for the preceding fiscal year.

(f) RECOMMENDATION- Not later than October 1, 2009, the Secretary of Health and Human Services, in consultation with the Work Incentives Advisory Panel established under section 202, shall submit a recommendation to the Committee on Commerce and the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate regarding whether the grant program established under this section should be continued after fiscal year 2010.

SEC. 104. DEMONSTRATION OF COVERAGE OF WORKERS WITH POTENTIALLY SEVERE DISABILITIES.

(a) STATE APPLICATION- A State may apply to the Secretary of Health and Human Services (in this section referred to as the `Secretary') for approval of a demonstration project (in this section referred to as a `demonstration project') under which up to a specified maximum number of individuals who are workers with a potentially severe disability (as defined in subsection (b)(1)) are provided medical assistance equal to that provided under section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) to individuals described in section 1902(a)(10)(A)(ii)(XV) of that Act (42 U.S.C. 1396a(a)(10)(A)(ii)(XV)).

(b) WORKER WITH A POTENTIALLY SEVERE DISABILITY DEFINED- For purposes of this section--

(1) IN GENERAL- The term `worker with a potentially severe disability' means, with respect to a demonstration project, an individual who--

(A) is at least 16, but less than 65, years of age;

(B) has a specific physical or mental impairment that, as defined by the State under the demonstration project, is reasonably expected, but for the receipt of items and services described in section 1905(a) of the Social Security Act, to become blind or disabled (as defined under section 1614(a) of the Social Security Act); and

(C) is employed (as defined in paragraph (2)).

(2) DEFINITION OF EMPLOYED- An individual is considered to be `employed' if the individual--

(A) is earning at least the applicable minimum wage requirement under section 6 of the Fair Labor Standards Act (29 U.S.C. 206) and working at least 40 hours per month; or

(B) is engaged in a work effort that meets substantial and reasonable threshold criteria for hours of work, wages, or other measures, as defined under the demonstration project and approved by the Secretary.

(c) APPROVAL OF DEMONSTRATION PROJECTS-

(1) IN GENERAL- Subject to paragraph (3), the Secretary shall approve applications under subsection (a) that meet the requirements of paragraph (2) and such additional terms and conditions as the Secretary may require. The Secretary may waive the requirement of section 1902(a)(1) of the Social Security Act (42 U.S.C. 1396a(a)(1)) to allow for sub-State demonstrations.

(2) TERMS AND CONDITIONS OF DEMONSTRATION PROJECTS- The Secretary may not approve a demonstration project under this section unless the State provides assurances satisfactory to the Secretary that the following conditions are or will be met:

(A) ELECTION OF OPTIONAL CATEGORY- The State has elected to provide coverage under its plan under title XIX of the Social Security Act of individuals described in section 1902(a)(10)(A)(ii)(XV) of the Social Security Act.

(B) MAINTENANCE OF STATE EFFORT- Federal funds paid to a State pursuant to this section must be used to supplement, but not supplant, the level of State funds expended for workers with potentially severe disabilities under programs in effect for such individuals at the time the demonstration project is approved under this section.

(C) INDEPENDENT EVALUATION- The State provides for an independent evaluation of the project.

(3) LIMITATIONS ON FEDERAL FUNDING-

(A) APPROPRIATION- Out of any funds in the Treasury not otherwise appropriated, there is authorized to be appropriated and there is appropriated to carry out this section--

(i) for fiscal year 2000, $70,000,000;

(ii) for fiscal year 2001, $73,000,000;

(iii) for fiscal year 2002, $77,000,000; and

(iv) for fiscal year 2003, $80,000,000.

(B) LIMITATION ON PAYMENTS- In no case may--

(i) the aggregate amount of payment made by the Secretary to States under this section exceed $300,000,000; or

(ii) payment be provided by the Secretary for a fiscal year after fiscal year 2005.

(C) FUNDS ALLOCATED TO STATES- The Secretary shall allocate funds to States based on their applications and the availability of funds. Funds allocated to a State under a grant made under this section for a fiscal year shall remain available until expended.

(D) FUNDS NOT ALLOCATED TO STATES- Funds not allocated to States in the fiscal year for which they are appropriated shall remain available in succeeding fiscal years for allocation by the Secretary using the allocation formula established under this section.

(E) PAYMENTS TO STATES- Subject to the succeeding provisions of this section, the Secretary shall pay to each State with a demonstration project approved under this section, from its allocation under subparagraph (C), an amount for each quarter equal to the Federal medical assistance percentage (as defined in section 1905(b) of the Social Security Act (42 U.S.C. 1395d(b)) of expenditures in the quarter for medical assistance provided to workers with a potentially severe disability.

(d) STATE DEFINED- In this section, the term `State' has the meaning given such term for purposes of title XIX of the Social Security Act.

TITLE II--TICKET TO WORK AND SELF-SUFFICIENCY AND RELATED PROVISIONS

Subtitle A--Ticket to Work and Self-Sufficiency

SEC. 201. ESTABLISHMENT OF THE TICKET TO WORK AND SELF-SUFFICIENCY PROGRAM.

(a) IN GENERAL- Part A of title XI of the Social Security Act (42 U.S.C. 1301 et seq.) is amended by adding after section 1147 (as added by section 8 of the Noncitizen Benefit Clarification and Other Technical Amendments Act of 1998 (Public Law 105-306; 112 Stat. 2928)) the following:

`TICKET TO WORK AND SELF-SUFFICIENCY PROGRAM

`SEC. 1148. (a) IN GENERAL- The Commissioner shall establish a Ticket to Work and Self-Sufficiency Program, under which a disabled beneficiary may use a ticket to work and self-sufficiency issued by the Commissioner in accordance with this section to obtain employment services, vocational rehabilitation services, or other support services from an employment network which is of the beneficiary's choice and which is willing to provide such services to the beneficiary.

`(b) TICKET SYSTEM-

`(1) DISTRIBUTION OF TICKETS- The Commissioner may issue a ticket to work and self-sufficiency to disabled beneficiaries for participation in the Program.

`(2) ASSIGNMENT OF TICKETS- A disabled beneficiary holding a ticket to work and self-sufficiency may assign the ticket to any employment network of the beneficiary's choice which is serving under the Program and is willing to accept the assignment.

`(3) TICKET TERMS- A ticket issued under paragraph (1) shall consist of a document which evidences the Commissioner's agreement to pay (as provided in paragraph (4)) an employment network, which is serving under the Program and to which such ticket is assigned by the beneficiary, for such employment services, vocational rehabilitation services, and other support services as the employment network may provide to the beneficiary.

`(4) PAYMENTS TO EMPLOYMENT NETWORKS- The Commissioner shall pay an employment network under the Program in accordance with the outcome payment system under subsection (h)(2) or under the outcome-milestone payment system under subsection (h)(3) (whichever is elected pursuant to subsection (h)(1)). An employment network may not request or receive compensation for such services from the beneficiary.

`(c) STATE PARTICIPATION-

`(1) IN GENERAL- Each State agency administering or supervising the administration of the State plan approved under title I of the Rehabilitation Act of 1973 may elect to participate in the Program as an employment network with respect to a disabled beneficiary. If the State agency does elect to participate in the Program, the State agency also shall elect to be paid under the outcome payment system or the outcome-milestone payment system in accordance with subsection (h)(1). With respect to a disabled beneficiary that the State agency does not elect to have participate in the Program, the State agency shall be paid for services provided to that beneficiary under the system for payment applicable under section 222(d) and subsections (d) and (e) of section 1615. The Commissioner shall provide for periodic opportunities for exercising such elections (and revocations).

`(2) EFFECT OF PARTICIPATION BY STATE AGENCY-

`(A) STATE AGENCIES PARTICIPATING- In any case in which a State agency described in paragraph (1) elects under that paragraph to participate in the Program, the employment services, vocational rehabilitation services, and other support services which, upon assignment of tickets to work and self-sufficiency, are provided to disabled beneficiaries by the State agency acting as an employment network shall be governed by plans for vocational rehabilitation services approved under title I of the Rehabilitation Act of 1973.

`(B) STATE AGENCIES ADMINISTERING MATERNAL AND CHILD HEALTH SERVICES PROGRAMS- Subparagraph (A) shall not apply with respect to any State agency administering a program under title V of this Act.

`(3) SPECIAL REQUIREMENTS APPLICABLE TO CROSS-REFERRAL TO CERTAIN STATE AGENCIES-

`(A) IN GENERAL- In any case in which an employment network has been assigned a ticket to work and self-sufficiency by a disabled beneficiary, no State agency shall be deemed required, under this section, title I of the Workforce Investment Act of 1998, title I of

the Rehabilitation Act of 1973, or a State plan approved under such title, to accept any referral of such disabled beneficiary from such employment network unless such employment network and such State agency have entered into a written agreement that meets the requirements of subparagraph (B). Any beneficiary who has assigned a ticket to work and self-sufficiency to an employment network that has not entered into such a written agreement with such a State agency may not access vocational rehabilitation services under title I of the Rehabilitation Act of 1973 until such time as the beneficiary is reassigned to a State vocational rehabilitation agency by the Program Manager.

`(B) TERMS OF AGREEMENT- An agreement required by subparagraph (A) shall specify, in accordance with regulations prescribed pursuant to subparagraph (C)--

`(i) the extent (if any) to which the employment network holding the ticket will provide to the State agency--

`(I) reimbursement for costs incurred in providing services described in subparagraph (A) to the disabled beneficiary; and

`(II) other amounts from payments made by the Commissioner to the employment network pursuant to subsection (h); and

`(ii) any other conditions that may be required by such regulations.

`(C) REGULATIONS- The Commissioner and the Secretary of Education shall jointly prescribe regulations specifying the terms of agreements required by subparagraph (A) and otherwise necessary to carry out the provisions of this paragraph.

`(D) PENALTY- No payment may be made to an employment network pursuant to subsection (h) in connection with services provided to any disabled beneficiary if such employment network makes referrals described in subparagraph (A) in violation of the terms of the agreement required under subparagraph (A) or without having entered into such an agreement.

`(d) RESPONSIBILITIES OF THE COMMISSIONER-

`(1) SELECTION AND QUALIFICATIONS OF PROGRAM MANAGERS- The Commissioner shall enter into agreements with 1 or more organizations in the private or public sector for service as a program manager to assist the Commissioner in administering the Program. Any such program manager shall be selected by means of a competitive bidding process, from among organizations in the private or public sector with available expertise and experience in the field of vocational rehabilitation and employment services.

`(2) TENURE, RENEWAL, AND EARLY TERMINATION- Each agreement entered into under paragraph (1) shall provide for early termination upon failure to meet performance standards which shall be specified in the agreement and which shall be weighted to take into account any performance in prior terms. Such performance standards shall include--

`(A) measures for ease of access by beneficiaries to services; and

`(B) measures for determining the extent to which failures in obtaining services for beneficiaries fall within acceptable parameters, as determined by the Commissioner.

`(3) PRECLUSION FROM DIRECT PARTICIPATION IN DELIVERY OF SERVICES IN OWN SERVICE AREA- Agreements under paragraph (1) shall preclude--

`(A) direct participation by a program manager in the delivery of employment services, vocational rehabilitation services, or other support services to beneficiaries in the service area covered by the program manager's agreement; and

`(B) the holding by a program manager of a financial interest in an employment network or service provider which provides services in a geographic area covered under the program manager's agreement.

`(4) SELECTION OF EMPLOYMENT NETWORKS-

`(A) IN GENERAL- The Commissioner shall select and enter into agreements with employment networks for service under the Program. Such employment networks shall be in addition to State agencies serving as employment networks pursuant to elections under subsection (c).

`(B) ALTERNATE PARTICIPANTS- In any State where the Program is being implemented, the Commissioner shall enter into an agreement with any alternate participant that is operating under the authority of section 222(d)(2) in the State as of the date of enactment of this section and chooses to serve as an employment network under the Program.

`(5) TERMINATION OF AGREEMENTS WITH EMPLOYMENT NETWORKS- The Commissioner shall terminate agreements with employment networks for inadequate performance, as determined by the Commissioner.

`(6) QUALITY ASSURANCE- The Commissioner shall provide for such periodic reviews as are necessary to provide for effective quality assurance in the provision of services by employment networks. The Commissioner shall solicit and consider the views of consumers and the program manager under which the employment networks serve and shall consult with providers of services to develop performance measurements. The Commissioner shall ensure that the results of the periodic reviews are made available to beneficiaries who are prospective service recipients as they select employment networks. The Commissioner shall ensure that the periodic surveys of beneficiaries receiving services under the Program are designed to measure customer service satisfaction.

`(7) DISPUTE RESOLUTION- The Commissioner shall provide for a mechanism for resolving disputes between beneficiaries and employment networks, between program managers and employment networks, and between program managers and providers of services. The Commissioner shall afford a party to such a dispute a reasonable opportunity for a full and fair review of the matter in dispute.

`(e) PROGRAM MANAGERS-

`(1) IN GENERAL- A program manager shall conduct tasks appropriate to assist the Commissioner in carrying out the Commissioner's duties in administering the Program.

`(2) RECRUITMENT OF EMPLOYMENT NETWORKS- A program manager shall recruit, and recommend for selection by the Commissioner, employment networks for service under the Program. The program manager shall carry out such recruitment and provide such recommendations, and shall monitor all employment networks serving in the Program in the geographic area covered under the program manager's agreement, to the extent necessary and appropriate to ensure that adequate choices of services are made available to beneficiaries. Employment networks may serve under the Program only pursuant to an agreement entered into with the Commissioner under the Program incorporating the applicable provisions of this section and regulations thereunder, and the program manager shall provide and maintain assurances to the Commissioner that payment by the Commissioner to employment networks pursuant to this section is warranted based on compliance by such employment networks with the terms of such agreement and this section. The program manager shall not impose numerical limits on the number of employment networks to be recommended pursuant to this paragraph.

`(3) FACILITATION OF ACCESS BY BENEFICIARIES TO EMPLOYMENT NETWORKS- A program manager shall facilitate access by beneficiaries to employment networks. The program manager shall ensure that each beneficiary is allowed changes in employment networks for good cause, as determined by the Commissioner, without being deemed to have rejected services under the Program. The program manager shall establish and maintain lists of employment networks available to beneficiaries and shall make such lists generally available to the public. The program manager shall ensure that all information provided to disabled beneficiaries pursuant to this paragraph is provided in accessible formats.

`(4) ENSURING AVAILABILITY OF ADEQUATE SERVICES- The program manager shall ensure that employment services, vocational rehabilitation services, and other support services are provided to beneficiaries throughout the geographic area covered under the program manager's agreement, including rural areas.

`(5) REASONABLE ACCESS TO SERVICES- The program manager shall take such measures as are necessary to ensure that sufficient employment networks are available and that each beneficiary receiving services under the Program has reasonable access to employment services, vocational rehabilitation services, and other support services. Services provided under the Program may include case management, work incentives planning, supported employment, career planning, career plan development, vocational assessment, job training, placement, followup services, and such other services as may be specified by the Commissioner under the Program. The program manager shall ensure that such services are available in each service area.

`(f) EMPLOYMENT NETWORKS-

`(1) QUALIFICATIONS FOR EMPLOYMENT NETWORKS-

`(A) IN GENERAL- Each employment network serving under the Program shall consist of an agency or instrumentality of a State (or a political subdivision thereof) or a private entity that assumes responsibility for the coordination and delivery of services under the Program to individuals assigning to the employment network tickets to work and self-sufficiency issued under subsection (b).

`(B) ONE-STOP DELIVERY SYSTEMS- An employment network serving under the Program may consist of a one-stop delivery system established under subtitle B of title I of the Workforce Investment Act of 1998.

`(C) COMPLIANCE WITH SELECTION CRITERIA- No employment network may serve under the Program unless it meets and maintains compliance with both general selection criteria (such as professional and educational

qualifications (where applicable)) and specific selection criteria (such as substantial expertise and experience in providing relevant employment services and supports).

`(D) SINGLE OR ASSOCIATED PROVIDERS ALLOWED- An employment network shall consist of either a single provider of such services or of an association of such providers organized so as to combine their resources into a single entity. An employment network may meet the requirements of subsection (e)(4) by providing services directly, or by entering into agreements with other individuals or entities providing appropriate employment services, vocational rehabilitation services, or other support services.

`(2) REQUIREMENTS RELATING TO PROVISION OF SERVICES- Each employment network serving under the Program shall be required under the terms of its agreement with the Commissioner to--

`(A) serve prescribed service areas; and

`(B) take such measures as are necessary to ensure that employment services, vocational rehabilitation services, and other support services provided under the Program by, or under agreements entered into with, the employment network are provided under appropriate individual work plans meeting the requirements of subsection (g).

`(3) ANNUAL FINANCIAL REPORTING- Each employment network shall meet financial reporting requirements as prescribed by the Commissioner.

`(4) PERIODIC OUTCOMES REPORTING- Each employment network shall prepare periodic reports, on at least an annual basis, itemizing for the covered period specific outcomes achieved with respect to specific services provided by the employment network. Such reports shall conform to a national model prescribed under this section. Each employment network shall provide a copy of the latest report issued by the employment network pursuant to this paragraph to each beneficiary upon enrollment under the Program for services to be received through such employment network. Upon issuance of each report to each beneficiary, a copy of the report shall be maintained in the files of the employment network. The program manager shall ensure that copies of all such reports issued under this paragraph are made available to the public under reasonable terms.

`(g) INDIVIDUAL WORK PLANS-

`(1) REQUIREMENTS- Each employment network shall--

`(A) take such measures as are necessary to ensure that employment services, vocational rehabilitation services, and other support services provided under the Program by, or under agreements entered into with, the employment network are provided under appropriate individual work plans that meet the requirements of subparagraph (C);

`(B) develop and implement each such individual work plan in partnership with each beneficiary receiving such services in a manner that affords the beneficiary the opportunity to exercise informed choice in selecting an employment goal and specific services needed to achieve that employment goal;

`(C) ensure that each individual work plan includes at least--

`(i) a statement of the vocational goal developed with the beneficiary;

`(ii) a statement of the services and supports that have been deemed necessary for the beneficiary to accomplish that goal;

`(iii) a statement of any terms and conditions related to the provision of such services and supports; and

`(iv) a statement of understanding regarding the beneficiary's rights under the Program (such as the right to retrieve the ticket to work and self-sufficiency if the beneficiary is dissatisfied with the services being provided by the employment network) and remedies available to the individual, including information on the availability of advocacy services and assistance in resolving disputes through the State grant program authorized under section 1150;

`(D) provide a beneficiary the opportunity to amend the individual work plan if a change in circumstances necessitates a change in the plan; and

`(E) make each beneficiary's individual work plan available to the beneficiary in, as appropriate, an accessible format chosen by the beneficiary.

`(2) EFFECTIVE UPON WRITTEN APPROVAL- A beneficiary's individual work plan shall take effect

upon written approval by the beneficiary or a representative of the beneficiary and a representative of the employment network that, in providing such written approval, acknowledges assignment of the beneficiary's ticket to work and self-sufficiency.

`(h) EMPLOYMENT NETWORK PAYMENT SYSTEMS-

`(1) ELECTION OF PAYMENT SYSTEM BY EMPLOYMENT NETWORKS-

`(A) IN GENERAL- The Program shall provide for payment authorized by the Commissioner to employment networks under either an outcome payment system or an outcome-milestone payment system. Each employment network shall elect which payment system will be utilized by the employment network, and, for such period of time as such election remains in effect, the payment system so elected shall be utilized exclusively in connection with such employment network (except as provided in subparagraph (B)).

`(B) NO CHANGE IN METHOD OF PAYMENT FOR BENEFICIARIES WITH TICKETS ALREADY ASSIGNED TO THE EMPLOYMENT NETWORKS- Any election of a payment system by an employment network that would result in a change in the method of payment to the employment network for services provided to a beneficiary who is receiving services from the employment network at the time of the election shall not be effective with respect to payment for services provided to that beneficiary and the method of payment previously selected shall continue to apply with respect to such services.

`(2) OUTCOME PAYMENT SYSTEM-

`(A) IN GENERAL- The outcome payment system shall consist of a payment structure governing employment networks electing such system under paragraph (1)(A) which meets the requirements of this paragraph.

`(B) PAYMENTS MADE DURING OUTCOME PAYMENT PERIOD- The outcome payment system shall provide for a schedule of payments to an employment network in connection with each individual who is a beneficiary for each month during the individual's outcome payment period for which benefits (described in paragraphs (3) and (4) of subsection (k)) are not payable to such individual because of work or earnings.

`(C) COMPUTATION OF PAYMENTS TO EMPLOYMENT NETWORK- The payment schedule of the outcome payment system shall be designed so that--

`(i) the payment for each of the 60 months during the outcome payment period for which benefits (described in paragraphs (3) and (4) of subsection (k)) are not payable is equal to a fixed percentage of the payment calculation base for the calendar year in which such month occurs; and

`(ii) such fixed percentage is set at a percentage which does not exceed 40 percent.

`(3) OUTCOME-MILESTONE PAYMENT SYSTEM-

`(A) IN GENERAL- The outcome-milestone payment system shall consist of a payment structure governing employment networks electing such system under paragraph (1)(A) which meets the requirements of this paragraph.

`(B) EARLY PAYMENTS UPON ATTAINMENT OF MILESTONES IN ADVANCE OF OUTCOME PAYMENT PERIODS- The outcome-milestone payment system shall provide for 1 or more milestones with respect to beneficiaries receiving services from an employment network under the Program that are directed toward the goal of permanent employment. Such milestones shall form a part of a payment structure that provides, in addition to payments made during outcome payment periods, payments made prior to outcome payment periods in amounts based on the attainment of such milestones.

`(C) LIMITATION ON TOTAL PAYMENTS TO EMPLOYMENT NETWORK- The payment schedule of the outcome-milestone payment system shall be designed so that the total of the payments to the employment network with respect to each beneficiary is less than, on a net present value basis (using an interest rate determined by the Commissioner that appropriately reflects the cost of funds faced by providers), the total amount to which payments to the employment network with respect to the beneficiary would be limited if the employment network were paid under the outcome payment system.

`(4) DEFINITIONS- In this subsection:

`(A) PAYMENT CALCULATION BASE- The term `payment calculation base' means, for any calendar year--

`(i) in connection with a title II disability beneficiary, the average disability insurance benefit payable under section 223 for all beneficiaries for months during the preceding calendar year; and

`(ii) in connection with a title XVI disability beneficiary (who is not concurrently a title II disability beneficiary), the average payment of supplemental security income benefits based on disability payable under title XVI (excluding State supplementation) for months during the preceding calendar year to all beneficiaries who have attained age 18 but have not attained age 65.

`(B) OUTCOME PAYMENT PERIOD- The term `outcome payment period' means, in connection with any individual who had assigned a ticket to work and self-sufficiency to an employment network under the Program, a period--

`(i) beginning with the first month, ending after the date on which such ticket was assigned to the employment network, for which benefits (described in paragraphs (3) and (4) of subsection (k)) are not payable to such individual by reason of engagement in substantial gainful activity or by reason of earnings from work activity; and

`(ii) ending with the 60th month (consecutive or otherwise), ending after such date, for which such benefits are not payable to such individual by reason of engagement in substantial gainful activity or by reason of earnings from work activity.

`(5) PERIODIC REVIEW AND ALTERATIONS OF PRESCRIBED SCHEDULES-

`(A) PERCENTAGES AND PERIODS- The Commissioner shall periodically review the percentage specified in paragraph (2)(C), the total payments permissible under paragraph (3)(C), and the period of time specified in paragraph (4)(B) to determine whether such percentages, such permissible payments, and such period provide an adequate incentive for employment networks to assist beneficiaries to enter the workforce, while providing for appropriate economies. The Commissioner may alter such percentage, such total permissible payments, or such period of time to the extent that the Commissioner determines, on the basis of the Commissioner's review under this paragraph, that such an alteration would better provide the incentive and economies described in the preceding sentence.

`(B) NUMBER AND AMOUNTS OF MILESTONE PAYMENTS- The Commissioner shall periodically review the number and amounts of milestone payments established by the Commissioner pursuant to this section to determine whether they provide an adequate incentive for employment networks to assist beneficiaries to enter the workforce, taking into account information provided to the Commissioner by program managers, the Work Incentives Advisory Panel established under section 202 of the Work Incentives Improvement Act of 1999, and other reliable sources. The Commissioner may from time to time alter the number and amounts of milestone payments initially established by the Commissioner pursuant to this section to the extent that the Commissioner determines that such an alteration would allow an adequate incentive for employment networks to assist beneficiaries to enter the workforce. Such alteration shall be based on information provided to the Commissioner by program managers, the Work Incentives Advisory Panel established under section 202 of the Work Incentives Improvement Act of 1999, or other reliable sources.

`(i) SUSPENSION OF DISABILITY REVIEWS- During any period for which an individual is using, as defined by the Commissioner, a ticket to work and self-sufficiency issued under this section, the Commissioner (and any applicable State agency) may not initiate a continuing disability review or other review under section 221 of whether the individual is or is not under a disability or a review under title XVI similar to any such review under section 221.

`(j) ALLOCATION OF COSTS-

`(1) PAYMENTS TO EMPLOYMENT NETWORKS- Payments to employment networks (including State agencies that elect to participate in the Program as an employment network) shall be made from the Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance

Trust Fund, as appropriate, in the case of ticketed title II disability beneficiaries who return to work, or from the appropriation made available for making supplemental security income payments under title XVI, in the case of title XVI disability beneficiaries who return to work. With respect to ticketed beneficiaries who concurrently are entitled to benefits under title II and eligible for payments under title XVI who return to work, the Commissioner shall allocate the cost of payments to employment networks to which the tickets of such beneficiaries have been assigned among such Trust Funds and appropriation, as appropriate.

`(2) ADMINISTRATIVE EXPENSES- The costs of administering this section (other than payments to employment networks) shall be paid from amounts made available for the administration of title II and amounts made available for the administration of title XVI, and shall be allocated among those amounts as appropriate.

`(k) DEFINITIONS- In this section:

`(1) COMMISSIONER- The term `Commissioner' means the Commissioner of Social Security.

`(2) DISABLED BENEFICIARY- The term `disabled beneficiary' means a title II disability beneficiary or a title XVI disability beneficiary.

`(3) TITLE II DISABILITY BENEFICIARY- The term `title II disability beneficiary' means an individual entitled to disability insurance benefits under section 223 or to monthly insurance benefits under section 202 based on such individual's disability (as defined in section 223(d)). An individual is a title II disability beneficiary for each month for which such individual is entitled to such benefits.

`(4) TITLE XVI DISABILITY BENEFICIARY- The term `title XVI disability beneficiary' means an individual eligible for supplemental security income benefits under title XVI on the basis of blindness (within the meaning of section 1614(a)(2)) or disability (within the meaning of section 1614(a)(3)). An individual is a title XVI disability beneficiary for each month for which such individual is eligible for such benefits.

`(5) SUPPLEMENTAL SECURITY INCOME BENEFIT UNDER TITLE XVI- The term `supplemental security income benefit under title XVI' means a cash benefit under section 1611 or 1619(a), and does not include a State supplementary payment, administered federally or otherwise.

`(l) REGULATIONS- Not later than 1 year after the date of enactment of this section, the Commissioner shall prescribe such regulations as are necessary to carry out the provisions of this section.

`(m) SUNSET OF PROGRAM- The Program established under this section shall terminate on September 30, 2004.'.

(b) CONFORMING AMENDMENTS-

(1) AMENDMENTS TO TITLE II-

(A) Section 221(i) of the Social Security Act (42 U.S.C. 421(i)) is amended by adding at the end the following:

`(5) For suspension of reviews under this subsection in the case of an individual using a ticket to work and self-sufficiency, see section 1148(i).'.

(B) Section 222(a) of the Social Security Act (42 U.S.C. 422(a)) is repealed.

(C) Section 222(b) of the Social Security Act (42 U.S.C. 422(b)) is repealed.

(D) Section 225(b)(1) of the Social Security Act (42 U.S.C. 425(b)(1)) is amended by striking `a program of vocational rehabilitation services' and inserting `a program consisting of the Ticket to Work and Self-Sufficiency Program under section 1148 or another program of vocational rehabilitation services, employment services, or other support services'.

(2) AMENDMENTS TO TITLE XVI-

(A) Section 1615(a) of the Social Security Act (42 U.S.C. 1382d(a)) is amended to read as follows:

`SEC. 1615. (a) In the case of any blind or disabled individual who--

`(1) has not attained age 16, and

`(2) with respect to whom benefits are paid under this title,

the Commissioner of Social Security shall make provision for referral of such individual to the appropriate State agency administering the State program under title V.'.

(B) Section 1615(c) of the Social Security Act (42 U.S.C. 1382d(c)) is repealed.

(C) Section 1631(a)(6)(A) of the Social Security Act (42 U.S.C. 1383(a)(6)(A)) is amended by striking `a program of vocational rehabilitation services' and inserting `a program consisting of the Ticket to Work and Self-Sufficiency Program under section 1148 or another program of vocational rehabilitation services, employment services, or other support services'.

(D) Section 1633(c) of the Social Security Act (42 U.S.C. 1383b(c)) is amended--

(i) by inserting `(1)' after `(c)'; and

(ii) by adding at the end the following:

`(2) For suspension of continuing disability reviews and other reviews under this title similar to reviews under section 221 in the case of an individual using a ticket to work and self-sufficiency, see section 1148(i).'.

(c) EFFECTIVE DATE- Subject to subsection (d), the amendments made by subsections (a) and (b) shall take effect with the first month following 1 year after the date of enactment of this Act.

(d) GRADUATED IMPLEMENTATION OF PROGRAM-

(1) IN GENERAL- Not later than 1 year after the date of enactment of this Act, the Commissioner of Social Security shall commence implementation of the amendments made by this section (other than paragraphs (1)(C) and (2)(B) of subsection (b)) in graduated phases at phase-in sites selected by the Commissioner. Such phase-in sites shall be selected so as to ensure, prior to full implementation of the Ticket to Work and Self-Sufficiency Program, the

development and refinement of referral processes, payment systems, computer linkages, management information systems, and administrative processes necessary to provide for full implementation of such amendments. Subsection (c) shall apply with respect to paragraphs (1)(C) and (2)(B) of subsection (b) without regard to this subsection.

(2) REQUIREMENTS- Implementation of the Program at each phase-in site shall be carried out on a wide enough scale to permit a thorough evaluation of the alternative methods under consideration, so as to ensure that the most efficacious methods are determined and in place for full implementation of the Program on a timely basis.

(3) FULL IMPLEMENTATION- The Commissioner shall ensure that the ability to provide tickets and services to individuals under the Program exists in every State as soon as practicable on or after the effective date specified in subsection (c) but not later than 3 years after such date.

(4) ONGOING EVALUATION OF PROGRAM-

(A) IN GENERAL- The Commissioner shall design and conduct a series of evaluations to assess the cost-effectiveness of activities carried out under this section and the amendments made thereby, as well as the effects of this section and the amendments made thereby on work outcomes for beneficiaries receiving tickets to work and self-sufficiency under the Program.

(B) CONSULTATION- The Commissioner shall design and carry out the series of evaluations after receiving relevant advice from experts in the fields of disability, vocational rehabilitation, and program evaluation and individuals using tickets to work and self-sufficiency under the Program and consulting with the Work Incentives Advisory Panel established under section 202, the Comptroller General of the United States, other agencies of the Federal Government, and private organizations with appropriate expertise.

(C) METHODOLOGY-

(i) IMPLEMENTATION- The Commissioner, in consultation with the Work Incentives Advisory Panel established under section 202, shall ensure that plans for evaluations and data collection methods under the Program are appropriately designed to obtain detailed employment information.

(ii) SPECIFIC MATTERS TO BE ADDRESSED- Each such evaluation shall address (but is not limited to)--

(I) the annual cost (including net cost) of the Program and the annual cost (including net cost) that would have been incurred in the absence of the Program;

(II) the determinants of return to work, including the characteristics of beneficiaries in receipt of tickets under the Program;

(III) the types of employment services, vocational rehabilitation services, and other support services furnished to beneficiaries in receipt of tickets under the Program who return to work and to those who do not return to work;

(IV) the duration of employment services, vocational rehabilitation services, and other support services furnished to beneficiaries in receipt of tickets under the Program who return to work and the duration of such services furnished to those who do not return to work and the cost to employment networks of furnishing such services;

(V) the employment outcomes, including wages, occupations, benefits, and hours worked, of beneficiaries who return to work after receiving tickets under the Program and those who return to work without receiving such tickets;

(VI) the characteristics of providers whose services are provided within an employment network under the Program;

(VII) the extent (if any) to which employment networks display a greater willingness to provide services to beneficiaries with a range of disabilities;

(VIII) the characteristics (including employment outcomes) of those beneficiaries who receive services under the outcome payment system and of those beneficiaries who receive

services under the outcome-milestone payment system;

(IX) measures of satisfaction among beneficiaries in receipt of tickets under the Program; and

(X) reasons for (including comments solicited from beneficiaries regarding) their choice not to use their tickets or their inability to return to work despite the use of their tickets.

(D) PERIODIC EVALUATION REPORTS- Following the close of the third and fifth fiscal years ending after the effective date under subsection (c), and prior to the close of the seventh fiscal year ending after such date, the Commissioner shall transmit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report containing the Commissioner's evaluation of the progress of activities conducted under the provisions of this section and the amendments made thereby. Each such report shall set forth the Commissioner's evaluation of the extent to which the Program has been successful and the Commissioner's conclusions on whether or how the Program should be modified. Each such report shall include such data, findings, materials, and recommendations as the Commissioner may consider appropriate.

(5) EXTENT OF STATE'S RIGHT OF FIRST REFUSAL IN ADVANCE OF FULL IMPLEMENTATION OF AMENDMENTS IN SUCH STATE-

(A) IN GENERAL- In the case of any State in which the amendments made by subsection (a) have not been fully implemented pursuant to this subsection, the Commissioner shall determine by regulation the extent to which--

(i) the requirement under section 222(a) of the Social Security Act for prompt referrals to a State agency, and

(ii) the authority of the Commissioner under section 222(d)(2) of the Social Security Act to provide vocational rehabilitation services in such State by agreement or contract with other public or private agencies, organizations, institutions, or individuals,

shall apply in such State.

(B) EXISTING AGREEMENTS- Nothing in subparagraph (A) or the amendments made by subsection (a) shall be construed to limit, impede, or otherwise affect any agreement entered into pursuant to section 222(d)(2) of the Social Security Act before the date of enactment of this Act with respect to services provided pursuant to such agreement to beneficiaries receiving services under such agreement as of such date, except with respect to services (if any) to be provided after 3 years after the effective date provided in subsection (c).

(e) SPECIFIC REGULATIONS REQUIRED-

(1) IN GENERAL- The Commissioner of Social Security shall prescribe such regulations as are necessary to implement the amendments made by this section.

(2) SPECIFIC MATTERS TO BE INCLUDED IN REGULATIONS- The matters which shall be addressed in such regulations shall include--

(A) the form and manner in which tickets to work and self-sufficiency may be distributed to beneficiaries pursuant to section 1148(b)(1) of the Social Security Act;

(B) the format and wording of such tickets, which shall incorporate by reference any contractual terms governing service by employment networks under the Program;

(C) the form and manner in which State agencies may elect participation in the Ticket to Work and Self-Sufficiency Program (and revoke such an election) pursuant to section 1148(c)(1) of the Social Security Act and provision for periodic opportunities for exercising such elections (and revocations);

(D) the status of State agencies under section 1148(c)(1) at the time that State agencies exercise elections (and revocations) under that section;

(E) the terms of agreements to be entered into with program managers pursuant to section 1148(d) of the Social Security Act, including--

(i) the terms by which program managers are precluded from direct participation in the delivery of services pursuant to section 1148(d)(3) of the Social Security Act;

(ii) standards which must be met by quality assurance measures referred to in paragraph (6) of section 1148(d) and methods of recruitment of employment networks utilized pursuant to paragraph (2) of section 1148(e); and

(iii) the format under which dispute resolution will operate under section 1148(d)(7);

(F) the terms of agreements to be entered into with employment networks pursuant to section 1148(d)(4) of the Social Security Act, including--

(i) the manner in which service areas are specified pursuant to section 1148(f)(2)(A) of the Social Security Act;

(ii) the general selection criteria and the specific selection criteria which are applicable to employment networks under section 1148(f)(1)(C) of the Social Security Act in selecting service providers;

(iii) specific requirements relating to annual financial reporting by employment networks pursuant to section 1148(f)(3) of the Social Security Act; and

(iv) the national model to which periodic outcomes reporting by employment networks must conform under section 1148(f)(4) of the Social Security Act;

(G) standards which must be met by individual work plans pursuant to section 1148(g) of the Social Security Act;

(H) standards which must be met by payment systems required under section 1148(h) of the Social Security Act, including--

(i) the form and manner in which elections by employment networks of payment systems are to be exercised pursuant to section 1148(h)(1)(A);

(ii) the terms which must be met by an outcome payment system under section 1148(h)(2);

(iii) the terms which must be met by an outcome-milestone payment system under section 1148(h)(3);

(iv) any revision of the percentage specified in paragraph (2)(C) of section 1148(h) of the Social Security Act or the period of time specified in paragraph (4)(B) of such section 1148(h); and

(v) annual oversight procedures for such systems; and

(I) procedures for effective oversight of the Program by the Commissioner of Social Security, including periodic reviews and reporting requirements.

SEC. 202. WORK INCENTIVES ADVISORY PANEL.

(a) ESTABLISHMENT- There is established within the Social Security Administration a panel to be known as the `Work Incentives Advisory Panel' (in this section referred to as the `Panel').

(b) DUTIES OF PANEL- It shall be the duty of the Panel to--

(1) advise the Secretary of Health and Human Services, the Secretary of Labor, the Secretary of Education, and the Commissioner of Social Security on issues related to work incentives programs, planning, and assistance for individuals with disabilities, including work incentive provisions under titles II, XI, XVI, XVIII, and XIX of the Social Security Act (42 U.S.C. 401 et seq., 1301 et seq., 1381 et seq., 1395 et seq., 1396 et seq.); and

(2) with respect to the Ticket to Work and Self-Sufficiency Program established under section 1148 of the Social Security Act--

(A) advise the Commissioner of Social Security with respect to establishing phase-in sites for such Program and fully implementing the Program thereafter, the refinement of access of disabled beneficiaries to employment networks, payment systems, and management information systems, and advise the Commissioner whether such measures are being taken to the extent necessary to ensure the success of the Program;

(B) advise the Commissioner regarding the most effective designs for research and demonstration projects associated with the Program or conducted pursuant to section 302;

(C) advise the Commissioner on the development of performance measurements relating to quality assurance under section 1148(d)(6) of the Social Security Act; and

(D) furnish progress reports on the Program to the Commissioner and each House of Congress.

(c) MEMBERSHIP-

(1) NUMBER AND APPOINTMENT- The Panel shall be composed of 12 members appointed by the Commissioner of Social Security in consultation with the Speaker of the House of Representatives, the Minority Leader of the House of Representatives, the Majority Leader of the Senate, and the Minority Leader of the Senate.

(2) REPRESENTATION- All members appointed to the Panel shall have experience or expert knowledge in the fields of, or related to, work incentive programs, employment services, vocational rehabilitation services, health care services, and other support services for individuals with disabilities. At least 7 members of the Panel shall be individuals with disabilities or representatives of individuals with disabilities, except that, of those 7 members, at least 5 members shall be current or former title II disability beneficiaries or title XVI disability beneficiaries (as such terms are defined in section 1148(k) of the Social Security Act (as added by section 201(a) of this Act)).

(3) TERMS-

(A) IN GENERAL- Each member shall be appointed for a term of 4 years (or, if less, for the remaining life of the Panel), except as provided in subparagraphs (B) and (C). The initial members shall be appointed not later than 90 days after the date of enactment of this Act.

(B) TERMS OF INITIAL APPOINTEES- As designated by the Commissioner at the time of appointment, of the members first appointed--

(i) 6 of the members appointed under paragraph (1) shall be appointed for a term of 2 years, and

(ii) 6 of the members appointed under paragraph (1) shall be appointed for a term of 4 years.

(C) VACANCIES- Any member appointed to fill a vacancy occurring before the expiration of the term for which the member's predecessor was appointed shall be appointed only for the remainder of that term. A member may serve after the expiration of that member's term until a successor has taken office. A vacancy in the Panel shall be filled in the manner in which the original appointment was made.

(4) BASIC PAY- Members shall each be paid at a rate, and in a manner, that is consistent with guidelines established under section 7 of the Federal Advisory Committee Act (5 U.S.C. App.).

(5) TRAVEL EXPENSES- Each member shall receive travel expenses, including per diem in lieu of subsistence, in accordance with sections 5702 and 5703 of title 5, United States Code.

(6) QUORUM- Eight members of the Panel shall constitute a quorum but a lesser number may hold hearings.

(7) CHAIRPERSON- The Chairperson of the Panel shall be designated by the Commissioner. The term of office of the Chairperson shall be 4 years.

(8) MEETINGS- The Panel shall meet at least quarterly and at other times at the call of the Chairperson or a majority of its members.

(d) DIRECTOR AND STAFF OF PANEL; EXPERTS AND CONSULTANTS-

(1) DIRECTOR- The Panel shall have a Director who shall be appointed by the Commissioner and paid at a rate, and in a manner, that is consistent with guidelines established under section 7 of the Federal Advisory Committee Act (5 U.S.C. App.).

(2) STAFF- Subject to rules prescribed by the Commissioner, the Director may appoint and fix the pay of additional personnel as the Director considers appropriate.

(3) EXPERTS AND CONSULTANTS- Subject to rules prescribed by the Commissioner, the Director may procure temporary and intermittent services under section 3109(b) of title 5, United States Code.

(4) STAFF OF FEDERAL AGENCIES- Upon request of the Panel, the head of any Federal department or agency may detail, on a reimbursable basis, any of the personnel of that department or agency to the Panel to assist it in carrying out its duties under this section.

(e) POWERS OF PANEL-

(1) HEARINGS AND SESSIONS- The Panel may, for the purpose of carrying out its duties under this section, hold such hearings, sit and act at such times and places, and take such testimony and evidence as the Panel considers appropriate.

(2) POWERS OF MEMBERS AND AGENTS- Any member or agent of the Panel may, if authorized by the Panel, take any action which the Panel is authorized to take by this section.

(3) MAILS- The Panel may use the United States mails in the same manner and under the same conditions as other departments and agencies of the United States.

(f) REPORTS-

(1) INTERIM REPORTS- The Panel shall submit to the President and Congress interim reports at least annually.

(2) FINAL REPORT- The Panel shall transmit a final report to the President and Congress not later than 8 years after the date of enactment of this Act. The final report shall contain a detailed statement of the findings and conclusions of the Panel, together with its recommendations for legislation and administrative actions which the Panel considers appropriate.

(g) TERMINATION- The Panel shall terminate 30 days after the date of the submission of its final report under subsection (f)(2).

(h) ALLOCATION OF COSTS- The costs of carrying out this section shall be paid from amounts made available for the administration of title II of the Social Security Act (42 U.S.C. 401 et seq.) and amounts made available for the administration of title XVI of that Act (42 U.S.C. 1381 et seq.), and shall be allocated among those amounts as appropriate.

Subtitle B--Elimination of Work Disincentives

SEC. 211. PROHIBITION ON USING WORK ACTIVITY AS A BASIS FOR REVIEW OF AN INDIVIDUAL'S DISABLED STATUS.

Section 221 of the Social Security Act (42 U.S.C. 421) is amended by adding at the end the following:

`(m)(1) In any case where an individual entitled to disability insurance benefits under section 223 or to monthly insurance benefits under section 202 based on such individual's disability (as defined in section 223(d)) has received such benefits for at least 24 months--

`(A) no continuing disability review conducted by the Commissioner may be scheduled for the individual solely as a result of the individual's work activity;

`(B) no work activity engaged in by the individual may be used as evidence that the individual is no longer disabled; and

`(C) no cessation of work activity by the individual may give rise to a presumption that the individual is unable to engage in work.

`(2) An individual to which paragraph (1) applies shall continue to be subject to--

`(A) continuing disability reviews on a regularly scheduled basis that is not triggered by work; and

`(B) termination of benefits under this title in the event that the individual has earnings that exceed the level of earnings established by the Commissioner to represent substantial gainful activity.'.

SEC. 212. EXPEDITED ELIGIBILITY DETERMINATIONS FOR APPLICATIONS OF FORMER LONG-TERM BENEFICIARIES THAT COMPLETED AN EXTENDED PERIOD OF ELIGIBILITY.

Section 223 of the Social Security Act (42 U.S.C. 423) is amended by adding at the end the following:

`Expedited Eligibility Determinations for Applications of Former Long-Term Beneficiaries That Completed an Extended Period of Eligibility

`(j) The Commissioner of Social Security shall establish a process for providing an expedited eligibility determination in the case of an application for disability insurance benefits under this section, or for monthly insurance benefits under section 202 based on another individual's disability, that is filed by an individual that previously--

`(1) received such benefits for at least 24 months; and

`(2) engaged in substantial gainful activity during the 36-month period following the end of a trial work period under section 222(c).'.

Subtitle C--Work Incentives Planning, Assistance, and Outreach

SEC. 221. WORK INCENTIVES OUTREACH PROGRAM.

Part A of title XI of the Social Security Act (42 U.S.C. 1301 et seq.), as amended by section 201, is amended by adding after section 1148 the following:

`WORK INCENTIVES OUTREACH PROGRAM

`SEC. 1149. (a) ESTABLISHMENT-

`(1) IN GENERAL- The Commissioner, in consultation with the Work Incentives Advisory Panel established under section 202 of the Work Incentives Improvement Act of 1999, shall establish a community-based work incentives planning and assistance program for the purpose of disseminating accurate information to disabled beneficiaries on work incentives programs and issues related to such programs.

`(2) GRANTS, COOPERATIVE AGREEMENTS, CONTRACTS, AND OUTREACH- Under the program established under this section, the Commissioner shall--

`(A) establish a competitive program of grants, cooperative agreements, or contracts to provide benefits planning and assistance, including information on the availability of protection and advocacy services, to disabled beneficiaries, including individuals participating in the Ticket to Work and Self-Sufficiency Program established under section 1148, the program established under section 1619, and other programs that are designed to encourage disabled beneficiaries to work;

`(B) conduct directly, or through grants, cooperative agreements, or contracts, ongoing outreach efforts to disabled beneficiaries (and to the families of such beneficiaries) who are potentially eligible to participate in Federal or State work incentive programs that are designed to assist disabled beneficiaries to work, including--

`(i) preparing and disseminating information explaining such programs; and

`(ii) working in cooperation with other Federal, State, and private agencies and nonprofit organizations that serve disabled beneficiaries, and with agencies and organizations that focus on vocational rehabilitation and work-related training and counseling;

`(C) establish a corps of trained, accessible, and responsive work incentives specialists within the Social Security Administration who will specialize in disability work incentives under titles II and XVI for the purpose of disseminating accurate information with respect to inquiries and issues relating to work incentives to--

`(i) disabled beneficiaries;

`(ii) benefit applicants under titles II and XVI; and

`(iii) individuals or entities awarded grants under subparagraphs (A) or (B); and

`(D) provide--

`(i) training for the work incentive specialists and the individuals providing planning assistance described in subparagraph (C); and

`(ii) technical assistance to organizations and entities that are designed to encourage disabled beneficiaries to return to work.

`(3) COORDINATION WITH OTHER PROGRAMS- The responsibilities of the Commissioner established under this section shall be coordinated with other public and private programs that provide information and assistance regarding rehabilitation services and independent living supports and benefits planning for disabled beneficiaries including the program under section 1619, the plans for achieving self-support program (PASS), and any other Federal or State work incentives programs that are designed to assist disabled beneficiaries, including educational agencies that provide information and assistance regarding rehabilitation, school-to-work programs, transition services (as defined in, and provided in accordance with, the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.)), and other services.

`(b) CONDITIONS-

`(1) SELECTION OF ENTITIES-

`(A) APPLICATION- An entity shall submit an application for a grant, cooperative agreement, or contract to provide benefits planning and assistance to the Commissioner at such time, in such manner, and containing such information as the Commissioner may determine is necessary to meet the requirements of this section.

`(B) STATEWIDENESS- The Commissioner shall ensure that the planning, assistance, and information described in paragraph (2) shall be available on a statewide basis.

`(C) ELIGIBILITY OF STATES AND PRIVATE ORGANIZATIONS-

`(i) IN GENERAL- The Commissioner may award a grant, cooperative agreement, or contract under this section to a State or a private agency or organization (other than Social Security Administration Field Offices and the State agency administering the State medicaid program under title XIX, including any agency or entity described in clause (ii), that the Commissioner determines is qualified to provide the planning, assistance, and information described in paragraph (2)).

`(ii) AGENCIES AND ENTITIES DESCRIBED- The agencies and entities described in this clause are the following:

`(I) Any public or private agency or organization (including Centers for Independent Living established under title VII of the Rehabilitation Act of 1973, protection and advocacy organizations, client assistance programs established in accordance with section 112 of the Rehabilitation Act of 1973, and State Developmental Disabilities Councils established in accordance with section 124 of the Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C. 6024)) that the Commissioner determines satisfies the requirements of this section.

`(II) The State agency administering the State program funded under part A of title IV.

`(D) EXCLUSION FOR CONFLICT OF INTEREST- The Commissioner may not award a grant, cooperative agreement, or contract under this section to any entity that the Commissioner determines would have a conflict of interest if the entity were to receive a grant, cooperative agreement, or contract under this section.

`(2) SERVICES PROVIDED- A recipient of a grant, cooperative agreement, or contract to provide benefits planning and assistance shall select individuals who will act as planners and provide information, guidance, and planning to disabled beneficiaries on the--

`(A) availability and interrelation of any Federal or State work incentives programs designed to assist disabled beneficiaries that the individual may be eligible to participate in;

`(B) adequacy of any health benefits coverage that may be offered by an employer of the individual and the extent to which other health benefits coverage may be available to the individual; and

`(C) availability of protection and advocacy services for disabled beneficiaries and how to access such services.

`(3) AMOUNT OF GRANTS, COOPERATIVE AGREEMENTS, OR CONTRACTS-

`(A) BASED ON POPULATION OF DISABLED BENEFICIARIES- Subject to subparagraph (B), the Commissioner shall award a grant, cooperative agreement, or contract under this section to an entity based on the percentage of the population of the State where the entity is located who are disabled beneficiaries.

`(B) LIMITATIONS-

`(i) PER GRANT- No entity shall receive a grant, cooperative agreement, or contract under this section for a fiscal year that is less than $50,000 or more than $300,000.

`(ii) TOTAL AMOUNT FOR ALL GRANTS, COOPERATIVE AGREEMENTS, AND CONTRACTS- The total amount of all grants, cooperative agreements, and contracts awarded under this section for a fiscal year may not exceed $23,000,000.

`(4) ALLOCATION OF COSTS- The costs of carrying out this section shall be paid from amounts made available for the administration of title II and amounts made available for the administration of title XVI, and shall be allocated among those amounts as appropriate.

`(c) DEFINITIONS- In this section:

`(1) COMMISSIONER- The term `Commissioner' means the Commissioner of Social Security.

`(2) DISABLED BENEFICIARY- The term `disabled beneficiary' has the meaning given that term in section 1148(k)(2).'.

SEC. 222. STATE GRANTS FOR WORK INCENTIVES ASSISTANCE TO DISABLED BENEFICIARIES.

Part A of title XI of the Social Security Act (42 U.S.C. 1301 et seq.), as amended by section 221, is amended by adding after section 1149 the following:

`STATE GRANTS FOR WORK INCENTIVES ASSISTANCE TO DISABLED BENEFICIARIES

`SEC. 1150. (a) IN GENERAL- Subject to subsection (c), the Commissioner may make payments in each State to the protection and advocacy system established pursuant to part C of title I of the Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C. 6041 et seq.) for the purpose of providing services to disabled beneficiaries.

`(b) SERVICES PROVIDED-

`(1) IN GENERAL- Subject to paragraph (2), services provided to disabled beneficiaries pursuant to a payment made under this section may include--

`(A) information and advice about obtaining vocational rehabilitation and employment services; and

`(B) advocacy or other services that a disabled beneficiary may need to secure or regain gainful employment.

`(c) APPLICATION- In order to receive payments under this section, a protection and advocacy system shall submit an application to the Commissioner, at such time, in such form and manner, and accompanied by such information and assurances as the Commissioner may require.

`(d) AMOUNT OF PAYMENTS-

`(1) IN GENERAL- Subject to the amount appropriated for a fiscal year for making payments under this section, a protection and advocacy system shall not be paid an amount that is less than--

`(A) in the case of a protection and advocacy system located in a State (including the District of Columbia and Puerto Rico) other than Guam, American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands, the greater of--

`(i) $100,000; or

`(ii) 1/3 of 1 percent of the amount available for payments under this section; and

`(B) in the case of a protection and advocacy system located in Guam, American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands, $50,000.

`(2) INFLATION ADJUSTMENT- For each fiscal year in which the total amount appropriated to carry out this section exceeds the total amount appropriated to carry out this section in the preceding fiscal year, the Commissioner shall increase each minimum payment under subparagraphs (A) and (B) of paragraph (1) by a percentage equal to the percentage increase in the total amount appropriated to carry out this section between the preceding fiscal year and the fiscal year involved.

`(e) ANNUAL REPORT- Each protection and advocacy system that receives a payment under this section shall submit an annual report to the Commissioner and the Work Incentives Advisory Panel established under section 202 of the Work Incentives Improvement Act of 1999 on the services provided to individuals by the system.

`(f) FUNDING-

`(1) ALLOCATION OF PAYMENTS- Payments under this section shall be made from amounts made available for the administration of title II and amounts made available for the administration of title XVI, and shall be allocated among those amounts as appropriate.

`(2) CARRYOVER- Any amounts allotted for payment to a protection and advocacy system under this section for a fiscal year shall remain available for payment to or on behalf of the protection and advocacy system until the end of the succeeding fiscal year.

`(g) DEFINITIONS- In this section:

`(1) COMMISSIONER- The term `Commissioner' means the Commissioner of Social Security.

`(2) DISABLED BENEFICIARY- The term `disabled beneficiary' has the meaning given that term in section 1148(k)(2).

`(3) PROTECTION AND ADVOCACY SYSTEM- The term `protection and advocacy system' means a protection and advocacy system established pursuant to part C of title I of the Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C. 6041 et seq.).'.

TITLE III--DEMONSTRATION PROJECTS AND STUDIES

SEC. 301. EXTENSION OF DISABILITY INSURANCE PROGRAM DEMONSTRATION PROJECT AUTHORITY.

Section 505 of the Social Security Disability Amendments of 1980 (42 U.S.C. 1310 note) is amended--

(1) in subsection (a)(1)--

(A) by striking `and (B)' and inserting `, (B)';

(B) by inserting `, and (C) implementing sliding scale benefit offsets using variations in the amount of the offset as a proportion of earned income, the duration of the offset period, and the method of determining the amount of income earned by the beneficiaries, and using state-of-the-art information technology and electronic funds transfer technology to streamline the reporting of data and the implementation of the offsets, and developing and making available to beneficiaries, their families, guardians, and advocates, through the Internet information regarding work incentives and assistance for beneficiaries to make informed decisions regarding work,' after `rehabilitation),'; and

(C) by adding at the end the following: `The Commissioner may expand the scope of any such demonstration project to include any group of applicants for benefits under such program with impairments which may reasonably be presumed to be disabling for purposes of such demonstration project, and may limit any such demonstration project to any such group of applicants, subject to the terms of such demonstration project which shall define the extent of any such presumption.';

(2) in subsection (a)(3), by striking `June 10, 1996' and inserting `June 10, 2001';

(3) in subsection (a)(4), by inserting `and on or before October 1, 2000,' after `1995,'; and

(4) in subsection (c), by striking `October 1, 1996' and inserting `October 1, 2002'.

SEC. 302. DEMONSTRATION PROJECTS PROVIDING FOR REDUCTIONS IN DISABILITY INSURANCE BENEFITS BASED ON EARNINGS.

(a) AUTHORITY- The Commissioner of Social Security shall conduct demonstration projects for the purpose of evaluating, through the collection of data, a program for title II disability beneficiaries (as defined in section 1148(k)(3) of the Social Security Act) under which each $1 of benefits payable under section 223, or under section 202 based on the beneficiary's disability, is reduced for each $2 of such beneficiary's earnings that is above a level to be determined by the Commissioner. Such projects shall be conducted at a number of localities which the Commissioner shall determine is sufficient to adequately evaluate the appropriateness of national implementation of such a program. Such projects shall identify reductions in Federal expenditures that may result from the permanent implementation of such a program.

(b) SCOPE AND SCALE AND MATTERS TO BE DETERMINED-

(1) IN GENERAL- The demonstration projects developed under subsection (a) shall be of sufficient duration, shall be of sufficient scope, and shall be carried out on a wide enough scale to permit a thorough evaluation of the project to determine--

(A) the effects, if any, of induced entry into the project and reduced exit from the project;

(B) the extent, if any, to which the project being tested is affected by whether it is in operation in a locality within an area under the administration of the Ticket to Work and Self-Sufficiency Program established under section 1148 of the Social Security Act; and

(C) the savings that accrue to the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, and other Federal programs under the project being tested.

The Commissioner shall take into account advice provided by the Work Incentives Advisory Panel pursuant to section 202(b)(2)(B).

(2) ADDITIONAL MATTERS- The Commissioner shall also determine with respect to each project--

(A) the annual cost (including net cost) of the project and the annual cost (including net cost) that would have been incurred in the absence of the project;

(B) the determinants of return to work, including the characteristics of the beneficiaries who participate in the project; and

(C) the employment outcomes, including wages, occupations, benefits, and hours worked, of beneficiaries who return to work as a result of participation in the project.

The Commissioner may include within the matters evaluated under the project the merits of trial work periods and periods of extended eligibility.

(c) WAIVERS- The Commissioner may waive compliance with the benefit provisions of title II of the Social Security Act, and the Secretary of Health and Human Services may waive compliance with the benefit requirements of title XVIII of that Act, insofar as is necessary for a thorough evaluation of the alternative methods under

consideration. No such project shall be actually placed in operation unless at least 90 days prior thereto a written report, prepared for purposes of notification and information only and containing a full and complete description thereof, has been transmitted by the Commissioner to the Committee on Ways and Means of the House of Representatives and to the Committee on Finance of the Senate. Periodic reports on the progress of such projects shall be submitted by the Commissioner to such committees. When appropriate, such reports shall include detailed recommendations for changes in administration or law, or both, to carry out the objectives stated in subsection (a).

(d) INTERIM REPORTS- Not later than 2 years after the date of enactment of this Act, and annually thereafter, the Commissioner of Social Security shall submit to Congress an interim report on the progress of the demonstration projects carried out under this subsection together with any related data and materials which the Commissioner of Social Security may consider appropriate.

(e) FINAL REPORT- The Commissioner of Social Security shall submit to Congress a final report with respect to all demonstration projects carried out under this section not later than 1 year after their completion.

(f) EXPENDITURES- Expenditures made for demonstration projects under this section shall be made from the Federal Disability Insurance Trust Fund and the Federal Old-Age and Survivors Insurance Trust Fund, as determined appropriate by the Commissioner of Social Security, and from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund, as determined appropriate by the Secretary of Health and Human Services, to the extent provided in advance in appropriation Acts.

SEC. 303. SENSE OF CONGRESS REGARDING ADDITIONAL DEMONSTRATION PROJECTS.

It is the sense of Congress that the Commissioner of Social Security and the Secretary of Health and Human Services should establish additional demonstration projects to assist individuals with disabilities to engage in work.

SEC. 304. STUDIES AND REPORTS.

(a) STUDY BY GENERAL ACCOUNTING OFFICE OF EXISTING DISABILITY-RELATED EMPLOYMENT INCENTIVES-

(1) STUDY- As soon as practicable after the date of enactment of this Act, the Comptroller General of the United States shall undertake a study to assess existing tax credits and other disability-related employment incentives under the Americans with Disabilities Act of 1990 and other Federal laws. In such study, the Comptroller General shall specifically address the extent to which such credits and other incentives would encourage employers to hire and retain individuals with disabilities.

(2) REPORT- Not later than 3 years after the date of enactment of this Act, the Comptroller General shall transmit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a written report presenting the results of the Comptroller General's study conducted pursuant to this subsection, together with such recommendations for legislative or administrative changes as the Comptroller General determines are appropriate.

(b) STUDY BY GENERAL ACCOUNTING OFFICE OF EXISTING COORDINATION OF THE DI AND SSI PROGRAMS AS THEY RELATE TO INDIVIDUALS ENTERING OR LEAVING CONCURRENT ENTITLEMENT-

(1) STUDY- As soon as practicable after the date of enactment of this Act, the Comptroller General of the United States shall undertake a study to evaluate the coordination under current law of the disability insurance program under title II of the Social Security Act and the supplemental security income program under title XVI of that Act, as such programs relate to individuals entering or leaving concurrent entitlement under such programs. In such study, the Comptroller General shall specifically address the effectiveness of work incentives under such programs with respect to such individuals and the effectiveness of coverage of such individuals under titles XVIII and XIX of the Social Security Act.

(2) REPORT- Not later than 3 years after the date of enactment of this Act, the Comptroller General shall transmit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a written report presenting the results of the Comptroller General's study conducted pursuant to this subsection, together with such recommendations for legislative or administrative changes as the Comptroller General determines are appropriate.

(c) STUDY BY GENERAL ACCOUNTING OFFICE OF THE IMPACT OF THE SUBSTANTIAL GAINFUL ACTIVITY LIMIT ON RETURN TO WORK-

(1) STUDY- As soon as practicable after the date of enactment of this Act, the Comptroller General of the United States shall undertake a study of the substantial gainful activity level applicable as of that date to recipients of benefits under section 223 of the Social Security Act (42 U.S.C. 423) and under section 202 of that Act (42 U.S.C. 402) on the basis of a recipient having a disability, and the effect of such level as a disincentive for those recipients to return to work. In the study, the Comptroller General also shall address the merits of increasing the substantial gainful activity level applicable to such recipients of benefits and the rationale for not yearly indexing that level to inflation.

(2) REPORT- Not later than 2 years after the date of enactment of this Act, the Comptroller General shall transmit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a written report presenting the results of the Comptroller General's study conducted pursuant to this subsection, together with such recommendations for legislative or administrative changes as the Comptroller General determines are appropriate.

TITLE IV--TECHNICAL AMENDMENTS

SEC. 401. TECHNICAL AMENDMENTS RELATING TO DRUG ADDICTS AND ALCOHOLICS.

(a) CLARIFICATION RELATING TO THE EFFECTIVE DATE OF THE DENIAL OF SOCIAL SECURITY DISABILITY BENEFITS TO DRUG ADDICTS AND ALCOHOLICS- Section 105(a)(5) of the Contract with America Advancement Act of 1996 (Public Law 104-121; 110 Stat. 853) is amended--

(1) in subparagraph (A), by striking `by the Commissioner of Social Security' and `by the Commissioner'; and

(2) by adding at the end the following:

`(D) For purposes of this paragraph, an individual's claim, with respect to benefits under title II of the Social Security Act based on disability, which has been denied in whole before the date of enactment of this Act, may not be considered to be finally adjudicated before such date if, on or after such date--

`(i) there is pending a request for either administrative or judicial review with respect to such claim, or

`(ii) there is pending, with respect to such claim, a readjudication by the Commissioner of Social Security pursuant to relief in a class action or implementation by the Commissioner of a court remand order.

`(E) Notwithstanding the provisions of this paragraph, with respect to any individual for whom the Commissioner of Social Security does not perform the entitlement redetermination before the date prescribed in subparagraph (C), the Commissioner shall perform such entitlement redetermination in lieu of a continuing disability review whenever the Commissioner determines that the individual's entitlement is subject to redetermination based on the preceding provisions of this paragraph, and the provisions of section 223(f) of the Social Security Act shall not apply to such redetermination.'.

(b) CORRECTION TO EFFECTIVE DATE OF PROVISIONS CONCERNING REPRESENTATIVE PAYEES AND TREATMENT REFERRALS OF SOCIAL SECURITY BENEFICIARIES WHO ARE DRUG ADDICTS AND ALCOHOLICS- Section 105(a)(5)(B) of the Contract with America Advancement Act of 1996 (42 U.S.C. 405 note) is amended to read as follows:

`(B) The amendments made by paragraphs (2) and (3) shall take effect on July 1, 1996, with respect to any individual--

`(i) whose claim for benefits is finally adjudicated on or after the date of enactment of this Act; or

`(ii) whose entitlement to benefits is based on an entitlement redetermination made pursuant to subparagraph (C).'.

(c) EFFECTIVE DATES- The amendments made by this section shall take effect as if included in the enactment of section 105 of the Contract with America Advancement Act of 1996 (Public Law 104-121; 110 Stat. 852 et seq.).

SEC. 402. TREATMENT OF PRISONERS.

(a) IMPLEMENTATION OF PROHIBITION AGAINST PAYMENT OF TITLE II BENEFITS TO PRISONERS-

(1) IN GENERAL- Section 202(x)(3) of the Social Security Act (42 U.S.C. 402(x)(3)) is amended--

(A) by inserting `(A)' after `(3)'; and

(B) by adding at the end the following:

`(B)(i) The Commissioner shall enter into an agreement under this subparagraph with any interested State or local institution comprising a jail, prison, penal institution, or correctional facility, or comprising any other institution a purpose of which is to confine individuals as described in paragraph (1)(A)(ii). Under such agreement--

`(I) the institution shall provide to the Commissioner, on a monthly basis and in a manner specified by the Commissioner, the names, Social Security account numbers, dates of birth, confinement commencement dates, and, to the extent available to the institution, such other identifying information concerning the individuals confined in the institution as the Commissioner may require for the purpose of carrying out paragraph (1); and

`(II) the Commissioner shall pay to the institution, with respect to information described in subclause (I) concerning each individual who is confined therein as described in paragraph (1)(A), who receives a benefit under this title for the month preceding the first month of such confinement, and whose benefit under this title is determined by the Commissioner to be not payable by reason of confinement based on the information provided by the institution, $400 (subject to reduction under clause

(ii)) if the institution furnishes the information to the Commissioner within 30 days after the date such individual's confinement in such institution begins, or $200 (subject to reduction under clause (ii)) if the institution furnishes the information after 30 days after such date but within 90 days after such date.

`(ii) The dollar amounts specified in clause (i)(II) shall be reduced by 50 percent if the Commissioner is also required to make a payment to the institution with respect to the same individual under an agreement entered into under section 1611(e)(1)(I).

`(iii) The provisions of section 552a of title 5, United States Code, shall not apply to any agreement entered into under clause (i) or to information exchanged pursuant to such agreement.

`(iv) There is authorized to be transferred from the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, as appropriate, such sums as may be necessary to enable the Commissioner to make payments to institutions required by clause (i)(II).

`(v) The Commissioner is authorized to provide, on a reimbursable basis, information obtained pursuant to agreements entered into under clause (i) to any agency administering a Federal or federally assisted cash, food, or medical assistance program for eligibility purposes.'.

(2) EFFECTIVE DATE- The amendments made by this subsection shall apply to individuals whose period of confinement in an institution commences on or after the first day of the fourth month beginning after the month in which this Act is enacted.

(b) ELIMINATION OF TITLE II REQUIREMENT THAT CONFINEMENT STEM FROM CRIME PUNISHABLE BY IMPRISONMENT FOR MORE THAN 1 YEAR-

(1) IN GENERAL- Section 202(x)(1)(A) of the Social Security Act (42 U.S.C. 402(x)(1)(A)) is amended--

(A) in the matter preceding clause (i), by striking `during' and inserting `throughout';

(B) in clause (i), by striking `an offense punishable by imprisonment for more than 1 year (regardless of the actual sentence imposed)' and inserting `a criminal offense'; and

(C) in clause (ii)(I), by striking `an offense punishable by imprisonment for more than 1 year' and inserting `a criminal offense'.

(2) EFFECTIVE DATE- The amendments made by this subsection shall apply to individuals whose period of confinement in an institution commences on or after the first day of the fourth month beginning after the month in which this Act is enacted.

(c) CONFORMING TITLE XVI AMENDMENTS-

(1) FIFTY PERCENT REDUCTION IN TITLE XVI PAYMENT IN CASE INVOLVING COMPARABLE TITLE II PAYMENT- Section 1611(e)(1)(I) of the Social Security Act (42 U.S.C. 1382(e)(1)(I)) is amended--

(A) in clause (i)(II), by inserting `(subject to reduction under clause (ii))' after `$400' and after `$200';

(B) by redesignating clauses (ii) and (iii) as clauses (iii) and (iv), respectively; and

(C) by inserting after clause (i) the following:

`(ii) The dollar amounts specified in clause (i)(II) shall be reduced by 50 percent if the Commissioner is also required to make a payment to the institution with respect to the same individual under an agreement entered into under section 202(x)(3)(B).'.

(2) EXPANSION OF CATEGORIES OF INSTITUTIONS ELIGIBLE TO ENTER INTO AGREEMENTS WITH THE COMMISSIONER- Section 1611(e)(1)(I)(i) of the Social Security Act (42 U.S.C. 1382(e)(1)(I)(i)) is amended in the matter preceding subclause (I) by striking `institution' and all that follows through `section 202(x)(1)(A),' and inserting `institution comprising a jail, prison, penal institution, or correctional facility, or with any other interested State or local institution a purpose of which is to confine individuals as described in section 202(x)(1)(A)(ii),'.

(3) EFFECTIVE DATE- The amendments made by this subsection shall take effect as if included in the enactment of section 203(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104-193; 110 Stat. 2186). The reference to section 202(x)(1)(A)(ii) of the Social Security Act in section 1611(e)(1)(I)(i) of the Social Security Act as amended by paragraph (2) shall be deemed a reference to such section 202(x)(1)(A)(ii) as amended by subsection (b)(1)(C).

(d) CONTINUED DENIAL OF BENEFITS TO SEX OFFENDERS REMAINING CONFINED TO PUBLIC INSTITUTIONS UPON COMPLETION OF PRISON TERM-

(1) IN GENERAL- Section 202(x)(1)(A) of the Social Security Act (42 U.S.C. 402(x)(1)(A)) is amended--

(A) in clause (i), by striking `or' at the end;

(B) in clause (ii)(IV), by striking the period and inserting `, or'; and

(C) by adding at the end the following:

`(iii) immediately upon completion of confinement as described in clause (i) pursuant to conviction of a criminal offense an element of which is sexual activity, is confined by court order in an institution at public expense pursuant to a finding that the individual is a sexually dangerous person or a sexual predator or a similar finding.'.

(2) CONFORMING AMENDMENT- Section 202(x)(1)(B)(ii) of the Social Security Act (42 U.S.C. 402(x)(1)(B)(ii)) is amended by striking `clause (ii)' and inserting `clauses (ii) and (iii)'.

(3) EFFECTIVE DATE- The amendments made by this subsection shall apply with respect to benefits for months ending after the date of enactment of this Act.

SEC 403. REVOCATION BY MEMBERS OF THE CLERGY OF EXEMPTION FROM SOCIAL SECURITY COVERAGE.

(a) IN GENERAL- Notwithstanding section 1402(e)(4) of the Internal Revenue Code of 1986, any exemption which has been received under section 1402(e)(1) of such Code by a duly ordained, commissioned, or licensed minister of a church, a member of a religious order, or a Christian Science practitioner, and which is effective for the taxable year in which this Act is enacted, may be revoked by filing an application therefore (in such form and manner, and with such official, as may be prescribed in regulations made under chapter 2 of such Code), if such application is filed no later than the due date of the Federal income tax return (including any extension thereof) for the applicant's second taxable year beginning after December 31, 1999. Any such revocation shall be effective (for purposes of chapter 2 of the Internal Revenue Code of 1986 and title II of the Social Security Act), as specified in the application, either with respect to the applicant's first taxable year beginning after December 31, 1999, or with respect to the applicant's second taxable year beginning after such date, and for all succeeding taxable years; and the applicant for any such revocation may not thereafter again file application for an exemption under such section 1402(e)(1). If the application is filed after the due date of the applicant's Federal income tax return for a taxable year and is effective with respect to that taxable year, it shall include or be accompanied by payment in full of an amount equal to the total of the taxes that would have been imposed by section 1401 of the Internal Revenue Code of 1986 with respect to all of the applicant's income derived in that taxable year which would have constituted net earnings from self-employment for purposes of chapter 2 of such Code (notwithstanding paragraph (4) or (5) of section 1402(c) of such Code) except for the exemption under section 1402(e)(1) of such Code.

(b) EFFECTIVE DATE- Subsection (a) shall apply with respect to service performed (to the extent specified in such subsection) in taxable years beginning after December 31, 1999, and with respect to monthly insurance benefits payable under title II of the Social Security Act on the basis of the wages and self-employment income of any individual for months in or after the calendar year in which such individual's application for revocation (as described in such subsection) is effective (and lump-sum death payments payable under such title on the basis of such wages and self-employment income in the case of deaths occurring in or after such calendar year).

SEC. 404. ADDITIONAL TECHNICAL AMENDMENT RELATING TO COOPERATIVE RESEARCH OR DEMONSTRATION PROJECTS UNDER TITLES II AND XVI.

(a) IN GENERAL- Section 1110(a)(3) of the Social Security Act (42 U.S.C. 1310(a)(3)) is amended by striking `title XVI' and inserting `title II or XVI'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect as if included in the enactment of the Social Security Independence and Program Improvements Act of 1994 (Public Law 103-296; 108 Stat. 1464).

SEC. 405. AUTHORIZATION FOR STATE TO PERMIT ANNUAL WAGE REPORTS.

(a) IN GENERAL- Section 1137(a)(3) of the Social Security Act (42 U.S.C. 1320b-7(a)(3)) is amended by inserting before the semicolon the following: `, and except that in the case of wage reports with respect to domestic service employment, a State may permit employers (as so defined) that make returns with respect to such employment on a calendar year basis pursuant to section 3510 of the Internal Revenue Code of 1986 to make such reports on an annual basis'.

(b) TECHNICAL AMENDMENTS- Section 1137(a)(3) of the Social Security Act (42 U.S.C. 1320b-7(a)(3)) is amended--

(1) by striking `(as defined in section 453A(a)(2)(B)(iii))'; and

(2) by inserting `(as defined in section 453A(a)(2)(B))' after `employers' .

(c) EFFECTIVE DATE- The amendments made by this section shall apply to wage reports required to be submitted on and after the date of enactment of this Act.