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108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     108-35

======================================================================



 
                   BACK TO WORK INCENTIVE ACT OF 2003

                                _______
                                

 March 13, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Boehner, from the Committee on Education and the Workforce, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 444]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 444) to amend the Workforce Investment 
Act of 1998 to establish a Personal Reemployment Accounts grant 
program to assist Americans in returning to work, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE

  This Act may be cited as the ``Back to Work Incentive Act of 2003''.

SEC. 2. GRANTS TO SUPPORT PERSONAL REEMPLOYMENT ACCOUNTS.

  Subtitle B of title I of the Workforce Investment Act of 1998 (29 
U.S.C. 2811 et seq.) is amended by inserting after chapter 5 the 
following new chapter:

              ``CHAPTER 5A--PERSONAL REEMPLOYMENT ACCOUNTS

``SEC. 135A. PURPOSES.

  ``The purposes of this chapter are to provide for the establishment 
of personal reemployment accounts for certain individuals identified as 
likely to exhaust their unemployment compensation in order to--
          ``(1) accelerate the reemployment of such individuals;
          ``(2) promote the retention in employment of such 
        individuals; and
          ``(3) provide such individuals with enhanced flexibility, 
        choice, and control in obtaining intensive reemployment, 
        training, and supportive services.

``SEC. 135B. DEFINITION.

  ``In this chapter, the term `State' means each of the several States 
of the United States, the District of Columbia, the Commonwealth of 
Puerto Rico, and the United States Virgin Islands.

``SEC. 135C. GRANTS TO STATES.

  ``(a) Grants.--The Secretary shall--
          ``(1) reserve \2/10\ of 1 percent of the amount appropriated 
        under section 137(d) for use under section 135I; and
          ``(2) use the remainder of the amount appropriated under 
        section 137(d) to make allotments in accordance with subsection 
        (b).
  ``(b) Allotment Among States.--
          ``(1) In general.--From the amount made available under 
        subsection (a)(2), the Secretary shall allot to each State an 
        amount that is proportionate to the relative number of 
        unemployed individuals in the State as compared to the total 
        number of unemployed individuals in all States in order to 
        provide assistance for eligible individuals in accordance with 
        this chapter.
          ``(2) Small state minimum allotment.--The Secretary shall 
        ensure that--
                  ``(A) each State (other than the United States Virgin 
                Islands) shall receive an allotment under paragraph (1) 
                that is not less than \3/10\ of 1 percent of the amount 
                made available under subsection (a)(2) for the fiscal 
                year; and
                  ``(B) the United States Virgin Islands shall receive 
                an allotment under paragraph (1) that is not less than 
                \1/10\ of 1 percent of the amount made available under 
                subsection (a)(2) for the fiscal year.
  ``(c) Availability.--Notwithstanding section 189(g)(1), amounts made 
available under subsection (a) to carry out this chapter shall be 
available for obligation and expenditure beginning on the date of the 
enactment of the Back to Work Incentive Act of 2003.

``SEC. 135D. WITHIN STATE ALLOCATION.

  ``(a) Allocation.--Of the amount allotted to a State under section 
135C--
          ``(1) not more than 2 percent of the amount may be reserved 
        by the Governor of the State to enhance the system of worker 
        profiling described in section 303(j) of the Social Security 
        Act and to establish and operate a data management system, as 
        necessary, and carry out other appropriate activities to 
        implement this chapter;
          ``(2) 5 percent of the amount shall be allocated by the State 
        to local areas in accordance with the formula described in 
        subsection (b) for start-up costs and other operating costs 
        related to the provision of assistance under this chapter; and
          ``(3) the remainder of the amount shall be provided to local 
        areas consistent with the methods and procedures described in 
        section 135G(a)(4) for the establishment of personal 
        reemployment accounts described in section 135E for eligible 
        individuals in such local areas.
  ``(b) Formula.--A State shall allocate funds to local areas in the 
State under subsection (a)(2) in an amount that is proportionate to the 
relative number of unemployed individuals in the local area as compared 
to the total number of unemployed individuals in the State.
  ``(c) Availability.--Notwithstanding section 189(g)(2), amounts 
allotted to a State under section 135C, and amounts subsequently 
provided to a local area under this section, shall be available for 
obligation and expenditure only for the 3-year period beginning on the 
date of the enactment of the Back to Work Incentive Act of 2003.

``SEC. 135E. PERSONAL REEMPLOYMENT ACCOUNTS.

  ``(a) Accounts.--
          ``(1) In general.--Funds provided to a local area under 
        section 135D shall be used to provide eligible individuals with 
        personal reemployment accounts to be used in accordance with 
        section 135F. An eligible individual may receive only one 
        personal reemployment account.
          ``(2) Amount.--The State shall establish the amount of a 
        personal reemployment account, which shall be uniform 
        throughout the State, and shall not exceed $3,000.
  ``(b) Eligible Individuals.--
          ``(1) In general.--Each State shall establish eligibility 
        criteria for individuals for personal reemployment accounts in 
        accordance with this subsection.
          ``(2) Eligibility criteria requirements.--
                  ``(A) In general.--Subject to subparagraph (B), an 
                individual shall be eligible to receive assistance 
                under this chapter if, beginning after the date of 
                enactment of the Back to Work Incentive Act of 2003, 
                the individual--
                          ``(i) is identified by the State pursuant to 
                        section 303(j)(1) of the Social Security Act as 
                        likely to exhaust regular unemployment 
                        compensation and in need of job search 
                        assistance to make a successful transition to 
                        new employment or an individual's unemployment 
                        can be attributed in substantial part to unfair 
                        competition from Federal Prison Industries, 
                        Inc.;
                          ``(ii) is receiving regular unemployment 
                        compensation under any State or Federal 
                        unemployment compensation program administered 
                        by the State; and
                          ``(iii) is eligible for not less than 20 
                        weeks of regular unemployment compensation 
                        described in clause (ii).
                  ``(B) Additional eligibility and priority criteria.--
                A State may establish criteria that is in addition to 
                the criteria described in subparagraph (A) for the 
                eligibility of individuals to receive assistance under 
                this chapter. A State may also establish criteria for 
                priority in the provision of assistance to such 
                eligible individuals under this chapter.
          ``(3) Transition rule.--
                  ``(A) Previously identified as likely to exhaust 
                unemployment compensation.--
                          ``(i) In general.--At the option of the 
                        State, and subject to clause (ii), an 
                        individual may be eligible to receive 
                        assistance under this chapter if the 
                        individual--
                                  ``(I) during the 13-week period 
                                ending the week prior to the date of 
                                the enactment of the Back to Work 
                                Incentive Act of 2003, was identified 
                                by the State pursuant to section 
                                303(j)(1) of the Social Security Act as 
                                likely to exhaust regular unemployment 
                                compensation and in need of job search 
                                assistance to make a successful 
                                transition to new employment; and
                                  ``(II) otherwise meets the 
                                requirements of clauses (ii) and (iii) 
                                of paragraph (2)(A).
                          ``(ii) Additional eligibility and priority 
                        criteria.--A State may establish criteria that 
                        is in addition to the criteria described in 
                        clause (i) for the eligibility of individuals 
                        to receive assistance under this chapter. A 
                        State may also establish criteria for priority 
                        in the provision of assistance to such eligible 
                        individuals under this chapter.
                  ``(B) Previously exhausted unemployment 
                compensation.--At the option of the State, an 
                individual may be eligible to receive assistance under 
                this chapter if the individual--
                          ``(i) during the 26-week period ending the 
                        week prior to the date of the enactment of the 
                        Back to Work Incentive Act of 2003, exhausted 
                        all rights to any unemployment compensation; 
                        and
                          ``(ii)(I) is enrolled in training and needs 
                        additional support to complete such training, 
                        with a priority of service to be provided to 
                        such individuals who are training for shortage 
                        occupations or high-growth industries; or
                          ``(II) is separated from employment in an 
                        industry or occupation that has experienced 
                        declining employment, or no longer provides any 
                        employment, in the local labor market during 
                        the two-year period ending on the date of the 
                        determination of eligibility of the individual 
                        under this subparagraph.
          ``(4) No individual entitlement.--Nothing in this chapter 
        shall be construed to entitle any individual to receive a 
        personal reemployment account.
  ``(c) Local Administration.--
          ``(1) Information and attestation.--Prior to the 
        establishment of a personal reemployment account for an 
        eligible individual under this chapter, the local board, 
        through the one-stop delivery system, shall ensure that the 
        individual--
                  ``(A) is informed of the requirements applicable to 
                the personal reemployment account, including the 
                allowable uses of funds from the account, the 
                limitations on access to services described under 
                section 135F(a)(3)(C) and a description of such 
                services, and the conditions for receiving a 
                reemployment bonus;
                  ``(B) has the option to develop a personal 
                reemployment plan which will identify the employment 
                goals and appropriate combination of services selected 
                by the individual to achieve the employment goals; and
                  ``(C) signs an attestation that the individual has 
                been given the option to develop a personal 
                reemployment plan in accordance with subparagraph (B), 
                will comply with the requirements relating to the 
                personal reemployment accounts under this chapter, and 
                will reimburse the account or, if the account has been 
                terminated, the program under this chapter, for any 
                amounts expended from the account that are not 
                allowable.
          ``(2) Periodic interviews.--If a recipient exhausts his or 
        her rights to any unemployment compensation, and the recipient 
        has a remaining balance in his or her personal reemployment 
        account, the one-stop delivery system shall conduct periodic 
        interviews with the recipient to assist the recipient in 
        meeting his or her individual employment goals.

``SEC. 135F. USE OF FUNDS.

  ``(a) Allowable Activities.--
          ``(1) In general.--Subject to the requirements contained in 
        paragraphs (2) and (3), a recipient may use amounts in a 
        personal reemployment account to purchase one or more of the 
        following:
                  ``(A) Intensive services, including those types of 
                services specified in section 134(d)(3)(C).
                  ``(B) Training services, including those types of 
                services specified in section 134(d)(4)(D).
                  ``(C) Supportive services, except for needs-related 
                payments.
                  ``(D) Assistance to purchase or lease an automobile, 
                if such assistance is necessary to allow the recipient 
                to accept a bona fide offer of employment for which 
                there is a reasonable expectation of long-term 
                duration.
          ``(2) Delivery of services.--The following requirements 
        relating to delivery of services shall apply to the program 
        under this chapter:
                  ``(A) Recipients may use funds from the personal 
                reemployment account to purchase the services described 
                in paragraph (1) through the one-stop delivery system 
                on a fee-for-service basis, or through other providers, 
                consistent with safeguards described in the State and 
                local plans under section 135G.
                  ``(B) The local board, through the one-stop delivery 
                system, may pay costs for such services directly on 
                behalf of the recipient, through a voucher system, or 
                by reimbursement to the recipient upon receipt of 
                appropriate cost documentation, consistent with 
                safeguards described in the State plan under section 
                135G.
                  ``(C) Each local board, through the one-stop delivery 
                system, shall make available to recipients information 
                on training providers specified in section 
                134(d)(4)(F)(ii), information available to the one-stop 
                delivery system on providers of the intensive and 
                supportive services described in paragraph (1), and 
                information relating to occupations in demand in the 
                local area.
          ``(3) Limitations.--The following limitations shall apply 
        with respect to personal reemployment accounts under this 
        chapter:
                  ``(A)(i) Amounts in a personal reemployment account 
                may be used for up to one year from the date of the 
                establishment of the account.
                  ``(ii) No personal reemployment account may be 
                established beginning 2 years after the date of the 
                enactment of the Back to Work Incentive Act of 2003.
                  ``(B) Each recipient shall submit cost documentation 
                as required by the one-stop delivery system.
                  ``(C) For the 1-year period following the 
                establishment of the account, recipients may not 
                receive intensive, supportive, or training services 
                funded under this title except on a fee-for-services 
                basis as specified in paragraph (2)(A).
                  ``(D) Amounts in a personal reemployment account 
                shall be nontransferable.
  ``(b) Income Support.--A State may authorize recipients determined 
eligible under section 135E(b)(3)(B) to withdraw amounts from the 
personal reemployment account on a weekly basis for purposes of income 
support in amounts up to the average weekly amount of unemployment 
compensation that the individual received prior to his or her 
exhaustion of rights to unemployment compensation if the individual is 
engaged in job search, intensive services, or training that is expected 
to lead to employment.
  ``(c) Reemployment Bonus.--
          ``(1) In general.--Subject to paragraph (2)--
                  ``(A) if a recipient determined eligible under 
                section 135E(b)(2) obtains full-time employment before 
                the end of the 13th week of unemployment for which 
                unemployment compensation is paid, the balance of his 
                or her personal reemployment account shall be provided 
                directly to the recipient in cash; and
                  ``(B) if a recipient determined eligible under 
                section 135E(b)(3) obtains full-time employment before 
                the end of the 13th week after the date on which the 
                account is established, the balance of his or her 
                personal reemployment account shall be provided 
                directly to the recipient in cash.
          ``(2) Limitations.--The following limitations shall apply 
        with respect to a recipient described in paragraph (1):
                  ``(A) 60 percent of the remaining personal 
                reemployment account balance shall be paid to the 
                recipient at the time of reemployment.
                  ``(B) 40 percent of the remaining personal 
                reemployment account balance shall be paid to the 
                recipient after 26 weeks of employment retention.
          ``(3) Exception regarding subsequent unemployment.--If a 
        recipient described in paragraph (1) subsequently becomes 
        unemployed due to a lack of work after receiving the portion of 
        the reemployment bonus specified under paragraph (2)(A), the 
        individual may use the amount remaining in the personal 
        reemployment account for the purposes described in subsection 
        (a) but may not be eligible for additional cash payments under 
        this subsection.

``SEC. 135G. STATE AND LOCAL PLANS.

  ``(a) State Plan.--In order for a State to receive an allotment under 
section 135C, the Governor of the State shall submit to the Secretary a 
plan for approval that includes a description of how the State intends 
to carry out the personal reemployment accounts authorized under this 
chapter, including--
          ``(1) the criteria and methods to be used for determining 
        eligibility for the personal reemployment accounts, including 
        whether the State intends to include the optional categories 
        described in section 135E(b)(3), and the additional criteria 
        and priority for service that the State intends to apply, if 
        any, pursuant to section 135E(b)(2)(B);
          ``(2) the methods or procedures, developed in consultation 
        with local boards and chief elected officials, to be used to 
        provide eligible individuals information relating to services 
        and providers, and safeguards, developed in consultation with 
        such boards and officials, to ensure that funds from the 
        personal reemployment accounts are used for purposes authorized 
        under this chapter and to ensure the quality and integrity of 
        services and providers, consistent with the purpose of 
        providing such individuals with enhanced flexibility, choice, 
        and control in obtaining intensive reemployment, training, and 
        supportive services.
          ``(3) how the State will coordinate the activities carried 
        out under this chapter with the employment and training 
        activities carried out under section 134 and other activities 
        carried out by each local board through the one-stop delivery 
        system in the State; and
          ``(4) the methods and procedures for providing funds to local 
        areas under section 135D(a)(3).
  ``(b) Local Plan.--In order for a local area to receive an allocation 
under section 135D, the local board, in partnership with the chief 
elected official for the local area involved, shall submit to the 
Governor a plan for approval that includes a description of how the 
local board intends to carry out the personal reemployment accounts, 
consistent with the requirements of this chapter and with the State 
plan established under subsection (a), including--
          ``(1) a description of how the local board will coordinate 
        the activities carried out under this chapter with the 
        employment and training activities carried out in the local 
        area under section 134; and
          ``(2) a description of the methods or procedures to be used 
        to provide eligible individuals information relating to the 
        jobs that are available in the local area in high demand 
        occupations and information on services and providers, and the 
        safeguards the local area will initiate to ensure that funds 
        from the personal reemployment accounts are used for purposes 
        authorized under this chapter and to ensure the quality and 
        integrity of services and providers, consistent with the 
        purpose of providing such individuals with enhanced 
        flexibility, choice, and control in obtaining intensive 
        reemployment, training, and supportive services, and consistent 
        with the State plan.
  ``(c) State Plan Submission and Approval.--A State plan submitted to 
the Secretary under subsection (a) by a Governor shall be considered to 
be approved by the Secretary at the end of the 30-day period beginning 
on the date the Secretary receives the plan, unless the Secretary makes 
a written determination during such period that the plan is incomplete 
or otherwise inconsistent with the provisions of this chapter.

``SEC. 135H. PROGRAM INFORMATION.

  ``The Secretary may require from States the collection and reporting 
on such financial, performance, and other program-related information 
as the Secretary determines is appropriate to carry out this chapter, 
including the evaluation described in section 135I.

``SEC. 135I. EVALUATION.

  ``(a) Evaluation.--From the amount made available under section 
135C(a)(1), the Secretary, pursuant to the authority provided under 
section 172, shall, directly or through grants, contracts, or 
cooperative agreements with appropriate entities, conduct an evaluation 
of the activities carried out under this chapter.
  ``(b) Conduct of Evaluation.--The evaluation shall examine the 
effectiveness of such activities in achieving the purposes described in 
section 135A and such other purposes as the Secretary determines are 
appropriate.
  ``(c) Report.--The report to Congress under section 172(e) relating 
to the results of the evaluations required under section 172 shall 
include the recommendation of the Secretary with respect to the use of 
personal reemployment accounts as a mechanism to assist individuals in 
obtaining and retaining employment.''.

SEC. 3. ADMINISTRATION.

  Section 117(d) of the Workforce Investment Act of 1998 (29 U.S.C. 
2832(d)) is amended--
          (1) in paragraph (3)(B)(i)(I), by striking ``sections 128 and 
        133'' and inserting ``sections 128, 133, and 135D''; and
          (2) in paragraph (4), by inserting ``, activities authorized 
        under section 135F'' after ``section 134''.

SEC. 4. DELIVERY OF SERVICES.

  Section 134(c)(1) of the Workforce Investment Act of 1998 (29 U.S.C. 
2864(c)(1)) is amended--
          (1) in subparagraph (D), by striking ``and'' at the end;
          (2) in subparagraph (E), by striking the period at the end 
        and inserting ``; and''; and
          (3) by adding at the end the following:
                  ``(F) shall provide access to personal reemployment 
                accounts in accordance to section 135E.''.

SEC. 5. AUTHORIZATION OF APPROPRIATION.

  Section 137 of the Workforce Investment Act of 1998 (29 U.S.C. 2872) 
is amended by adding at the end the following:
  ``(d) Personal Reemployment Accounts.--
          ``(1) In general.--There is authorized to be appropriated 
        $3,600,000,000 for fiscal year 2003 to carry out chapter 5A.
          ``(2) Availability.--Amounts appropriated pursuant to the 
        authorization of appropriations under paragraph (1) to carry 
        out section 135I are authorized to remain available until 
        expended.''.

SEC. 6. CONFORMING AMENDMENT.

  The table of contents for the Workforce Investment Act of 1998 is 
amended by inserting after the items relating to chapter 5 of subtitle 
B of title I the following new items:

              ``Chapter 5A--Personal Reemployment Accounts

``Sec. 135A. Purposes.
``Sec. 135B. Definition.
``Sec. 135C. Grants to States.
``Sec. 135D. Within State allocation.
``Sec. 135E. Personal reemployment accounts.
``Sec. 135F. Use of funds.
``Sec. 135G. State and local plans.
``Sec. 135H. Program information.
``Sec. 135I. Evaluation.''.

                                Purpose

    H.R. 444, the Back to Work Incentive Act of 2003, 
authorizes new grants within the Workforce Investment Act (WIA) 
to create personal reemployment accounts, or ``Back to Work 
accounts,'' to assist unemployed individuals in returning to 
work. The bill offers an innovative new approach for assisting 
workers. The program aims to accelerate reemployment and 
increase job retention of individuals likely to exhaust their 
unemployment compensation benefits, while providing such 
individuals with enhanced flexibility, choice, and control in 
obtaining reemployment services and training. An eligible 
individual will have the option to accept a Back to Work 
account or access services through the current WIA one stop 
delivery system.

                            Committee Action


                        FULL COMMITTEE HEARINGS

    On Wednesday, February 12, 2003, the Committee on Education 
and the Workforce held a hearing in Washington, D.C., on ``Back 
to Work: the Administration's Plan for Economic Recovery and 
the Workforce Investment Act.'' The purpose of the hearing was 
to learn about the administration's proposal to speed the 
country's economic recovery, a component of which includes Back 
to Work accounts, that provides assistance to help unemployed 
Americans who are struggling to return to work. The Honorable 
Elaine Chao, Secretary of Labor, U.S. Department of Labor, 
Washington, D.C., testified before the Committee on the first 
panel about the benefits of the Back to Work accounts. Mr. 
Kenneth Mayfield, President, National Association of Counties, 
Washington, D.C. and Dr. Lawrence Mishel, President, Economic 
Policy Institute, Washington, D.C. testified before the 
Committee on the second panel.
    On Tuesday, February 18, 2003, the Committee on Education 
and the Workforce held a field hearing in Las Vegas, Nevada on 
``H.R. 444, the Back to Work Incentive Act.'' The purpose of 
the hearing was to examine and discuss the Back to Work 
Incentive Act, which reflects the administration's plan to 
create Back to Work accounts to help unemployed individuals 
return to work quickly. Ms. Myla Florence, Director, Nevada 
Department of Employment, Training, and Rehabilitation, Carson 
City, Nevada; Mr. Ardell Galbreth, Deputy Board Manager, 
Southern Nevada Workforce Investment Board, Las Vegas, Nevada; 
Mr. Robert Brewer, Chair, Southern Nevada Workforce Investment 
Board, Las Vegas, Nevada; and, Ms. Debi Lindemenn, Employment 
Specialist Supervisor, Department of Employment, Training, and 
Rehabilitation, North Las Vegas, Nevada testified before the 
Committee at the field hearing.

                           LEGISLATIVE ACTION

    On January 29, 2003, Representatives Jon Porter (R-NV) and 
Buck McKeon (R-CA) introduced H.R. 444, the Back to Work 
Incentive Act, a bill to amend the Workforce Investment Act of 
1998 to establish a Personal Reemployment Accounts grant 
program to assist Americans in returning to work.
    On February 26, 2003, the Subcommittee on 21st Century 
Competitiveness considered H.R. 444 in legislative session and 
reported it favorably, as amended, to the Committee on 
Education and the Workforce by a vote of 15-12. The 
Subcommittee considered two amendments:
     The Subcommittee adopted, by voice vote, a 
substitute amendment offered by Representative Buck McKeon (R-
CA). Specifically, the substitute amendment adopted by the 
Subcommittee: (1) makes clear that the Back to Work accounts 
would be administered through the local one-stop delivery 
system under the direction of the local workforce investment 
boards; (2) requires local boards to submit a plan to the 
State, consistent with the State plan, in order to receive an 
allocation to administer the accounts; (3) requires States and 
local areas, through their respective plans, to specify 
safeguards to ensure the quality and integrity of services and 
providers, consistent with the purpose of providing flexibility 
and choice to individuals; (4) requires the individual 
accepting a Back to Work account to attest that he or she was 
given the option to develop a personal reemployment plan; and 
(5) allows States to make eligible individuals who have 
exhausted their unemployment compensation benefits within the 
previous 180 days, instead of the 90 day limit in the original 
bill.
     The Subcommittee rejected, by a vote of 11-13, a 
substitute amendment offered by Representatives Dale Kildee (D-
MI) and David Wu (D-OR). The amendment would have struck all 
language after the enacting clause and inserted language that 
allocates funds to each State to provide emergency employment 
accounts to eligible individuals. The funds in these accounts 
would be used in the same manner as that of unemployment 
compensation benefits.
    On March 5, 2003, the Committee on Education and the 
Workforce considered H.R. 444 in legislative session and 
reported it favorably, as amended, to the House of 
Representatives by a vote of 23-22, with one member voting 
present. The Committee considered 8 amendments and adopted the 
following two amendments:
     The Committee adopted, by voice vote, a substitute 
amendment offered by Representative Buck McKeon (R-CA). 
Specifically, the substitute amendment adopted by the 
Committee: (1) changes the calculation of the ``look-back'' 
period for eligibility determinations from days to weeks to be 
consistent with the terminology used in the unemployment 
compensation program; (2) clarifies that the 40 percent 
retention bonus is provided after 26 weeks of employment 
retention; and (3) makes other technical improvements.
     The Committee also adopted, by voice vote, an 
amendment offered by Representative Pete Hoekstra (R-MI), which 
makes those individuals whose unemployment can be attributed in 
substantial part to unfair competition from Federal Prison 
Industries, Inc., eligible to receive Back to Work accounts, 
subject to state criteria and prioritization.
    The Committee also considered an amendment offered by 
Representative Denise Majette (D-GA). The Committee discussion 
was positive and the amendment was withdrawn. This amendment 
would have specified that intensive services must be provided 
through the one-stop delivery system, and that a provider of 
training services must meet the requirements of section 
122(a)(2) of the Workforce Investment Act.

                                Summary

    H.R. 444, the Back to Work Incentive Act of 2003, amends 
the Workforce Investment Act of 1998 (WIA) to create Chapter 
5A, which authorizes a Personal Reemployment Accounts grant 
program to assist unemployed Americans in returning to work. 
The legislation represents a key component of President Bush's 
economic stimulus package that provides $3.6 billion to create 
Back to Work accounts to help unemployed individuals struggling 
to return to the workforce and retain satisfactory, long-term 
employment.

                              ELIGIBILITY

    H.R. 444 provides eligible individuals with the option to 
accept a Back to Work account or access services currently 
available through the one-stop delivery system provided under 
the current WIA system. States determine the amount of the 
accounts up to $3,000. States are required to establish 
eligibility criteria; however, at a minimum, an individual must 
be receiving unemployment compensation, be identified by the 
State as likely to exhaust his or her unemployment benefits, 
and be eligible for at least 20 weeks of unemployment 
compensation. States may further make eligible individuals who 
have exhausted unemployment compensation within 26 weeks prior 
to enactment so long as the individual is enrolled in training 
or is separated from employment in an industry or occupation 
that is declining or no longer functioning in the local labor 
market. States may establish additional eligibility criteria or 
priorities in the provision of assistance.
    Back to Work accounts may be established for up to two 
years from the date of enactment, and funds may be expended for 
up to three years. An individual is eligible to receive an 
account only once during the duration of the program, and 
individuals are prohibited from receiving intensive, 
supportive, or training services, unless purchased using 
account funds, for one year subsequent to the establishment of 
the account. The bill provides that there is no individual 
entitlement to a Back to Work account. The one-stop delivery 
system must inform the eligible individual, prior to the 
receipt of an account, of the requirements and limitations for 
the use of the account.

                             USES OF FUNDS

    H.R. 444 provides that eligible individuals will have the 
option to develop a personal reemployment plan for the purpose 
of developing employment goals and identifying appropriate 
services selected by individuals to achieve their employment 
goals. Back to Work accounts may be used to purchase various 
intensive, training, or supportive services including, but not 
limited to, career counseling, case management, occupational 
skill assessments, childcare, and transportation. The 
reemployment account funds may be used to purchase services 
either through a one-stop delivery system or on a fee-for-
service basis through other providers. The cost of services may 
be paid by a one-stop delivery system directly on behalf of 
recipients, through a voucher system, or by reimbursement 
directly to the individual provided appropriate expense 
documentation is submitted. Furthermore, any individual 
receiving funds through a Back to Work account must sign an 
attestation that he or she will comply with the Back to Work 
account requirements. In addition, States may allow individuals 
who had exhausted unemployment compensation benefits to 
withdraw funds for income support if engaged in a legitimate 
job search, training, or intensive services expected to lead to 
employment.

                           REEMPLOYMENT BONUS

    The bill provides for individuals to be paid in cash the 
balance of the Back to Work account if employed by the 13th 
week for which unemployment compensation is paid. Sixty percent 
of the remaining balance of the account will be paid at the 
time of employment, and forty percent of the account will be 
paid after six months of job retention. If an individual 
becomes unemployed before six months at no fault of his or her 
own, the individual may utilize the balance of the account for 
permissible services within the same year that the account 
remains in effect.

                    PROGRAM REPORTING AND EVALUATION

    H.R. 444 provides that the Secretary of Labor may require 
States to report financial, performance, and other germane 
program information. The Secretary shall report to Congress 
concerning such findings reported by States.

                               STATE PLAN

    The bill requires States to submit program plans to the 
Secretary of Labor in order to receive funds under the program. 
Such information shall include the criteria and methods used 
for determining eligibility for Back to Work accounts; methods 
or procedures used to provide eligible individuals with service 
information; and, safeguards to ensure that funds are used in 
an appropriate, authorized manner, consistent with the program 
and activity coordination provided through the one stop 
delivery system. A state plan submitted to the Secretary shall 
be approved at the end of the 30-day period beginning on the 
day the Secretary receives the plan, unless the Secretary makes 
a written determination that the plan is incomplete or 
inconsistent with the requirements of the Act.

                          LOCAL ADMINISTRATION

    Local areas must submit a plan, similar to the State plan, 
to the Governor for approval in order to receive a grant to 
administer the Back to Work accounts. The plan must contain a 
description of how the local area will coordinate assistance 
under this program with other assistance provided through WIA, 
methods or procedures to be used to provide eligible 
individuals with information relating to jobs that are 
available in the local area in high demand occupations and 
information on services and providers, and the safeguards the 
local area will initiate to ensure that funds are used for 
authorized purposes and to ensure the quality of services and 
providers. The local plan must be consistent with the State 
plan.

                                FUNDING

    Consistent with the President's economic stimulus package, 
the bill authorizes $3.6 billion for the creation of Back to 
Work accounts. Funds will be distributed on a percentage basis 
according to the number of unemployed persons in each state. 
States may reserve up to 2 percent of funds to be used for 
administrative purposes. Local areas will receive 5 percent of 
a state's funds to be used for start-up purposes. Funds have 
been reserved for the Secretary of Labor to perform requisite 
evaluations of State performance, financial, and other related 
information.

                             EFFECTIVE DATE

    The Back to Work Incentive Act of 2003 shall be effective 
immediately upon appropriation.

                            Committee Views

    To aid the country's economic recovery, on January 7, 2003, 
President George W. Bush proposed a growth and jobs plan to 
strengthen the American economy. The President's economic 
agenda has three main goals: to encourage consumer spending 
that will continue to boost the economic recovery, to promote 
investment by individuals and businesses that will lead to 
economic growth and job creation, and to deliver critical help 
to unemployed citizens.
    Taxpayers, businesses, and unemployed workers all would 
benefit upon enactment of the President's plan. For example, 
under the President's proposal to speed up tax relief, 92 
million taxpayers would receive, on average, a tax cut of 
$1,083 in 2003. According to a projection by the Council of 
Economic Advisors, the President's plan will help the economy 
to create 2.1 million jobs over the next three years.
    However, while the economy is improving, unemployment rates 
remain unacceptably high. The national unemployment rate at the 
end of December 2002 was six percent. Consequently, President 
Bush also has proposed innovative new assistance to help 
unemployed Americans find work. As we work to encourage long-
term growth in the economy, we must not forget the men and 
women struggling today. To provide new opportunities for 
unemployed workers, the President proposed creating new 
personal reemployment accounts, or ``Back to Work'' accounts, 
to help such individuals find new jobs and, if necessary, 
acquire the skills needed to obtain and keep those jobs.
    H.R. 444, the Back to Work Incentive Act of 2003, 
implements the President's plan to assist up to 1.2 million 
unemployed workers as they seek to return to the workplace, 
while providing new flexibility and individual choice in 
accessing services.
    During the Committee's hearing in Las Vegas, Nevada, the 
Committee heard from state and local leaders about the 
practical benefits of the measure in helping the unemployed. As 
Robert Brewer, Chairman of the Southern Nevada Workforce 
Investment Board, stated, ``This proposed initiative has great 
potential for providing our most vulnerable dislocated workers 
with additional resources that will help them secure new, 
gainful employment. It is an appropriate effort to assist the 
over 2 million workers who have lost their jobs over the last 
two years.''
    Business leaders also support H.R. 444, as they look for 
entry level and skilled workers to fill open positions. R. 
Bruce Josten, Executive Vice President for Government Affairs 
for the U.S. Chamber of Commerce, wrote Chairman John Boehner 
on March 4, 2003 to ``express our support for H.R. 444 . . . 
Personal reemployment accounts promise to be an efficient and 
effective new tool for local One Stop Career centers and the 
individuals they serve.''
    H.R. 444 creates a new Chapter 5A within Title I of the 
Workforce Investment Act of 1998 (WIA) to provide for the 
establishment of personal reemployment accounts for individuals 
identified as likely to exhaust their unemployment 
compensation.

                            GRANTS TO STATES

    From funds appropriated to administer this chapter, the 
Secretary shall reserve \2/10\ of one percent to conduct an 
evaluation of the program. The remainder of the funds shall be 
provided to states for the administration of Back to Work 
accounts. Each state shall receive an allotment that is 
proportionate to the relative number of unemployed individuals 
in the state as compared to the total number of unemployed 
individuals in all states. At a minimum, a state shall receive 
an allotment of at least \3/10\ of one percent of the funds 
available to states. The Committee notes that this small state 
minimum is consistent with the minimum provided under other 
funding streams of WIA. In addition, the United States Virgin 
Islands shall receive not less than \1/10\ of one percent of 
the funds allotted to states. The Virgin Islands is the only 
outlying area to receive an allotment under H.R. 444, since no 
other outlying areas operate an unemployment insurance program.
    From the funds allotted to a state, a Governor may reserve 
up to two percent of the funds to establish and operate a data 
management system necessary to provide assistance to 
individuals eligible for Back to Work accounts and to enhance 
the worker profiling system required under unemployment 
insurance law. The Committee encourages the Secretary to work 
with states to ensure that these funds may be combined with 
other state administrative funds available under WIA to pay for 
start-up or operational costs necessary under this new chapter.
    The state shall allocate five percent of its funding 
available under this chapter to local workforce investment 
areas for start-up and operating costs related to the provision 
of assistance of Back to Work accounts. The within-state 
allocation to local areas shall be proportionate to the 
relative number of unemployed individuals in the local area as 
compared to the total number of unemployed individuals in the 
state. The remainder of the funds shall be provided to local 
areas for the establishment of Back to Work accounts. The 
Committee intends for states to create mechanisms for local 
areas to draw-down funds from the state to provide an account 
to each individual determined to be eligible for such an 
account.
    Although other funding streams provided through WIA are 
available to states on a program year basis of July 1-June 30, 
amounts available to state and local areas under this chapter 
shall be available for the creation of accounts for two years 
after the date of enactment of H.R. 444. The Committee notes 
that the funds must become available immediately for the 
creation of Back to Work accounts so as to provide assistance 
to unemployed workers as soon as possible. Funds to create new 
accounts are available only for two years because Back to Work 
accounts are intended to respond to the extraordinary 
circumstances created by current levels of high unemployment, 
and not to be a permanent new program. H.R. 444 requires the 
Secretary to conduct a rigorous evaluation of the new 
assistance provided to workers under this chapter and report 
the findings to Congress. Lessons learned through this 
temporary assistance may be incorporated in the future into the 
broader assistance provided through WIA.

                         BACK TO WORK ACCOUNTS

    H.R. 444 requires states to establish the amount of a Back 
to Work account, but the amount must be uniform statewide and 
cannot exceed $3,000. The Committee anticipates that the funds 
provided through this act will allow states to serve at least 
1.2 million unemployed workers. U.S. Labor Secretary Elaine 
Chao (the Secretary) testified before the Committee on February 
12, 2003 that $3,000 is the average amount that local areas 
spend on an individual to help obtain employment. The $3,000 
maximum is a reasonable level that allows choice of a wide 
array of reemployment services while maximizing the number of 
individuals who can be served with the available funding for 
the new program.
    States establish eligibility criteria for the accounts and 
may establish criteria for the priority in the provision of 
assistance to such eligible individuals. However, at a minimum, 
to be eligible an individual must be receiving regular 
unemployment compensation and be eligible for at least 20 week 
of such compensation. Under current law, when individuals apply 
for unemployment compensation benefits, states profile such 
individuals to determine whether they are likely to exhaust 
their benefits. To do this, the state identifies permanently 
separated workers who are not expecting recall to their 
previous employers and then determines whether such workers are 
likely to be long-term benefit recipients. Criteria often used 
when making this determination include education, job tenure, 
changes in employment in the previous industry or occupation, 
and the local unemployment rate. Variables for age, gender, and 
race are prohibited by civil rights laws. States will use this 
profiling system to determine those most likely to benefit from 
this new assistance. To be eligible for a Back to Work account, 
an unemployed person also must be identified as likely to 
exhaust regular unemployment compensation and in need of job 
search assistance to make a successful transition to new 
employment or be an individual whose unemployment can be 
attributed in substantial part to unfair competition from 
Federal Prison Industries, Inc.
    Currently such profiled individuals are referred to the 
one-stop career center system created under WIA for 
reemployment assistance. Therefore, the Back to Work accounts 
will be administered efficiently through the easily accessible 
one-stop delivery system where the unemployed already seek 
assistance in obtaining employment.
    This assistance is in addition to unemployment benefits 
payments if the eligible individual has not exhausted such 
benefits. However, instead of only providing temporary income 
support, as the unemployment compensation system does, H.R. 444 
provides services designed exclusively to help someone to 
return to work.
    During Committee consideration, the Committee clarified the 
role of the local workforce investment boards to ensure that 
local leadership will direct the implementation of this 
assistance. The Committee believes that connections to and 
integration with the local workforce investment systems already 
in place will ensure assistance reaches those in need as 
quickly as possible. A letter from the United States Conference 
of Mayors, the National Association of Workforce Boards, and 
the National Association of Counties sent on February 24, 2003 
to Subcommittee Chairman McKeon confirms this, as they 
collectively asserted, ``We believe the prospects for quick 
implementation to be strong if the initiative is linked closely 
to the current infrastructure established under WIA.''
    States may also make individuals who were similarly 
profiled within the 13 week period ending the week prior to the 
week of enactment eligible for assistance, as long as such 
individuals also are eligible for at least 20 weeks of regular 
unemployment compensation. In addition, to address the needs of 
individuals who already may have exhausted all unemployment 
compensation benefits, states may make individuals who have 
exhausted such benefits within 26 weeks prior to the date of 
enactment eligible for a Back to Work account if such 
individuals are enrolled in training and need additional 
support to complete the training or if the individuals are 
separated from employment in an industry or occupation that has 
experienced declining enrollment in the local labor market.
    H.R. 444 specifies that there is no individual entitlement 
to a Back to Work account.

                              USE OF FUNDS

    An account holder may use the Back to Work account to 
purchase intensive services, supportive services, training, or 
an automobile if a car is necessary to allow the recipient to 
accept a bona fide offer of employment for which there is a 
reasonable expectation of long-term duration. Examples of 
intensive services include one-on-one career counseling and 
short-term prevocational classes. Supportive services include 
child care, transportation assistance, housing assistance, and 
relocation assistance.
    Recipients have full flexibility to use their Back to Work 
accounts to tailor a package of reemployment services that best 
meets their needs and helps them to get a job of their choice. 
As such, recipients may use the account funds to purchase such 
services through the one-stop delivery system on a fee-for-
service basis or through other providers, consistent with 
safeguards described in state and local plans.
    Under WIA currently, individuals only may access training 
through providers included on an eligible training provider 
list developed by the state. The list of available providers is 
based on past performance. However, the current eligible 
training provider list is not comprehensive. Many high-quality 
training providers, particularly community colleges, currently 
do not participate in the WIA system because of burdensome 
reporting requirements. As a result, the needs of all 
individuals may not be addressed through the current system. 
The Committee will address the issues associated with accessing 
training under WIA during reauthorization of that law. Until 
that time it is important to allow recipients of Back to Work 
accounts maximum flexibility in choosing appropriate service 
providers, especially since these individuals are those 
struggling to return to work.
    The local board, through the one-stop delivery system, may 
pay for the costs for such services directly on behalf of the 
recipient, through a voucher system, or by reimbursement to the 
recipient upon receipt of appropriate cost documentation.
    Certain limitations on the use of the accounts apply. 
Recipients may use the Back to Work accounts for up to one year 
from the date of the establishment of the account, and for the 
one-year period following the establishment of the account 
recipients may only receive intensive, supportive or training 
services provided through the one-stop delivery system on a 
fee-for-service basis using the account funds. Also, amounts in 
the Back to Work account are nontransferable.
    The Committee wants to ensure eligible individuals have the 
opportunity to make an informed choice when selecting to accept 
a Back to Work account. Consequently, before becoming a 
recipient of an account, the local workforce investment board, 
through the one-stop delivery system, shall ensure that the 
individual is informed of the requirements applicable to the 
Back to Work account, the limitations on access to services, a 
description of the allowable services, and the conditions for 
receiving a reemployment bonus. An eligible individual must 
sign an attestation that he or she will comply with the 
requirements relating to the Back to Work accounts and will 
reimburse the account or one-stop delivery system for any 
amounts expended that are not allowable.
    In addition, the Committee intends for eligible individuals 
to have access to the expertise of the professional career 
counselors available through the one-stop delivery system. H.R. 
444 requires the local workforce investment boards, through the 
one-stop delivery system, to provide an eligible individual the 
option to create a reemployment plan that will identify the 
employment goals and appropriate combination of services 
selected by the individual to achieve the employment goals. In 
addition, in order to receive an account, an individual must 
attest in writing that he or she was given the option to create 
such a plan before accepting the account.
    The Committee believes that it is important for individuals 
to be aware of the options they have as they pursue employment, 
including the jobs that are in demand in the local areas. As a 
result, H.R. 444 requires each local board, through the one-
stop delivery system, to make available to recipients 
information on training providers that are on the eligible 
training provider list, information available to the one-stop 
delivery system on providers of intensive and supportive 
services, and information relating to occupations in demand in 
the local area. In addition, H.R. 444 requires each local area 
to specify in its plan how such information will be provided to 
recipients.
    No individual will be required to accept a Back to Work 
account. If an individual needs training that costs more than 
$3,000, the individual will have the choice to refuse the Back 
to Work account and access training through the current WIA 
system.
    However, a wide variety of training services can be 
purchased for under $3,000. Examples of training services that 
can be purchase for $3,000 or less include Information 
Technology certifications (including Microsoft Systems), 
courses to become a licensed realtor, courses to become a 
certified financial planner, preparation classes for other 
certifications or exams, training to become a licensed 
insurance planner, plus numerous courses of training available 
through community colleges. The Committee notes that a two-year 
associates' degree from a public community college costs $2594 
(based on the national average in 1998, the latest available 
information).
    The added flexibility available through the use of the 
account will allow some recipients to customize a package of 
services that may not be readily available in all local areas. 
For example, while all local areas are to provide information 
on supportive services in the area, paying for such services is 
optional now. Therefore, if an individual previously received 
child care through an employer and now needs child care 
assistance in order to look for new employment, he or she could 
use the account to pay for child care. In addition, if he or 
she did not meet the current prioritization for training in the 
local area, the recipient still could choose immediately to use 
the funds for training.
    Even if a recipient expends the funds in the account, he or 
she will have access at all times to core services available at 
the one-stop career centers. These services include job search 
and placement assistance, information on available providers of 
services, initial career counseling, and access to a variety of 
labor market information.
    H.R. 444 rewards individuals who find jobs quickly. 
Recipients will be able to keep the balance of the account as a 
cash reemployment bonus if they become reemployed in full-time 
employment within 13 weeks. To encourage workers to stay on the 
job longer, the remaining balance will be paid in two 
installments--60 percent at the time of employment, and the 
remaining 40 percent after six months job retention. The sooner 
one gets a job, the larger the employment bonus will be.
    If an individual becomes unemployed again before the second 
portion of the bonus is provided, he or she may use the amount 
remaining in the Back to Work account for reemployment services 
but may not receive any additional cash payments.
    Past experiments with cash reemployment bonuses have proven 
to be effective in reducing individuals' weeks of unemployment 
compensation benefits while not compromising the quality of 
jobs and have been cost effective to the government.
    Between 1984 and 1989, four reemployment bonus experiments 
were conducted on unemployment insurance recipients in 
Illinois, New Jersey, Washington, and Pennsylvania. When 
Secretary Chao appeared before the Committee in February, she 
testified that the Department of Labor's evaluations of the 
reemployment bonuses in these states showed that such a bonus 
motivated the recipients to become reemployed, reduced the 
duration of unemployment compensation benefits by approximately 
one week, and resulted in new jobs comparable in earnings to 
those obtained by workers who were not eligible for the bonus. 
An additional evaluation in Illinois showed that bonuses did 
not lead to lower earnings at the worker's next job.
    The final report on the Pennsylvania Reemployment Bonus 
Demonstration, prepared for the Department of Labor by 
Mathematica Policy Research, Inc. and published in September 
1991, expands on these assertions. According to the report, 
``There is no evidence that the bonus offers prompted claimants 
to take less desirable jobs in an effort to qualify for the 
bonus . . . , the first post-unemployment jobs held by bonus-
eligible claimants were similar to their pre-unemployment jobs 
in many respects, including their weekly wage rate.''
    In addition, the Committee believes that labor market 
attachment helps individuals advance in the workplace, and 
taking a job may lead to promotions and new career 
opportunities. Being reemployed quickly is important to 
maintaining skills and work habits, and builds self-esteem.
    Staff of the W.E. Upjohn Institute for Employment Research 
recently reviewed available research on the impact of 
reemployment bonuses. The staff working paper, published in 
January 2003, suggests that targeting those most likely to 
exhaust their unemployment compensation benefits could be the 
most cost effective mechanism for providing reemployment 
bonuses. H.R. 444 targets those that have been so profiled.
    Another likely benefit of the reemployment bonuses is a 
reduction in the duration of unemployment compensation benefits 
for those eligible for a bonus. According to Walter A. Corson 
and Robert G. Spiegelman of the Upjohn Institute, who published 
a book titled ``Reemployment Bonuses in the Unemployment 
Insurance System'' in 2001, studies have found that, ``the 
availability of unemployment benefits led to voluntary and 
unproductive reduction in work effort, thereby leading to 
unnecessarily high costs to the UI system.'' (page 1) R. Glenn 
Hubbard, Chairman of the Council of Economic Advisors, 
corroborated this statement when he testified before the Joint 
Economic Committee of Congress on February, 26, 2003 when he 
stated, ``One advantage of these (personal reemployment) 
accounts compared to traditional unemployment insurance is that 
traditional insurance encourages workers to wait until their 
insurance runs out before finding a new job.'' Mr. Hubbard 
presented evidence that reemployment spikes when benefits 
expire, whether regular or extended benefits.
    The savings to the unemployment insurance system due to 
rapid reemployment could be significant. Myla Florence, 
director of the Nevada Department of Employment, Training and 
Rehabilitation testified at the Committee's hearing in Las 
Vegas that, ``Currently, Nevada's average benefit amount is 
$232.29 per week and the average duration for an individual to 
receive benefits is 15.5 weeks. Through the support and 
incentives provided in H.R. 444, if we shorten the duration by 
even one week, Nevada's trust fund could save approximately 
$8.4 million.''
    The Committee estimates that, if one million individuals 
likely to exhaust their regular unemployment compensation 
benefits were to become employed within thirteen weeks in order 
to obtain a reemployment bonus, the savings to the unemployment 
insurance system would be approximately $3.4 billion. (The 
national average unemployment compensation benefit is $260 per 
week. The savings estimate is based on reducing such benefits 
from 26 weeks to just less than 13 weeks.)
    In addition to the reduced cost to the unemployment 
insurance system, the Committee believes another benefit to 
society overall is the increased contribution that wage earners 
make as taxpayers.

                         STATE AND LOCAL PLANS

    In order for a state to receive funding under this chapter, 
the Governor of a state must submit to the Secretary a plan for 
approval that includes (1) the criteria and methods to be used 
for determining eligibility for Back to Work accounts; (2) the 
methods and procedures, developed in consultation with local 
boards and chief elected officials, to be used to provide 
eligible individuals information relating to services and 
providers; (3) safeguards, also developed in consultation with 
local areas, to ensure that funds from the Back to Work 
accounts will be used for purposes authorized and to ensure the 
quality and integrity of services and providers, consistent 
with the purpose of providing such individuals with enhanced 
flexibility, choice, and control in obtaining services; and, 
(4) how the state will coordinate the activities provided under 
this chapter with the other employment and training activities 
provided through WIA. The plan shall be considered approved 
within 30 days of receipt by the Secretary, unless the 
Secretary makes a written determination that the plan is 
incomplete or inconsistent with the requirements of the Act.
    Local boards, in partnership with the chief elected 
official for the local area, shall submit to the Governor a 
plan for approval that includes a description of the how the 
local board intends to carry out the Back to Work accounts, 
consistent with the state plan. The local plan must contain (1) 
a description on how the local area will coordinate assistance 
under this chapter with other assistance provided through WIA; 
(2) a description of the methods or procedures to be used to 
provide eligible individuals information relating to jobs that 
are available in the local area in high demand occupations and 
information on services and providers; (3) the safeguards the 
local area will initiate to ensure that funds from the Back to 
Work accounts will be used for purposes authorized and to 
ensure the quality and integrity of services and providers, 
consistentwith the purpose of providing such individuals with 
enhanced flexibility, choice, and control in obtaining such services.
    The Committee intends that safeguards specified through the 
state and local plans will provide accountability for the use 
of federal funds spent through Back to Work accounts and enable 
recipients to select appropriate service providers. Through 
these safeguards, the state and local areas will be able to 
guard against the use of funds for ``fly-by-night'' providers 
that otherwise may try to entice recipients into using their 
services. The provisions are intended to maintain individual 
flexibility and choice while ensuring program integrity.
    Requiring both state and local plans further reinforces 
that both states and local workforce investment areas have 
significant roles to play in the delivery of workforce 
development services. Local plans will ensure that services are 
integrated at the local level with the one-stop delivery 
system.

                          PROGRAM INFORMATION

    The Secretary may require from states the collection and 
reporting on such financial, performance, and other program-
related information as the Secretary determines appropriate to 
carry out this chapter. The Committee anticipates that the 
Secretary will work with states to establish appropriate 
tracking mechanisms so that information will be readily 
available regarding use of funds and results achieved. Such 
information will be essential for conducting an evaluation of 
the assistance. The Committee expects the Secretary to work 
with states to minimize any administrative burden.

                               EVALUATION

    H.R. 444 requires the Secretary to conduct an evaluation of 
the Back to Work accounts. The evaluation will examine the cost 
effectiveness of the accounts in achieving the purposes of the 
new chapter and other purposes as determined by the Secretary. 
The Secretary shall report the results to Congress, including 
the recommendation of the Secretary with respect to the use of 
Back to Work accounts as a mechanism to assist individuals in 
obtaining and retaining employment. The Committee anticipates 
using the results of the evaluation to determine whether to 
continue such assistance in the future.

                ADMINISTRATION AND DELIVERY OF SERVICES

    H.R. 444 makes the local chief elected official the local 
grant recipient for Back to Work account funds, consistent with 
other WIA funding streams. In addition, the bill specifies that 
the local one-stop delivery system shall provide access to Back 
to Work accounts. These provisions are consistent with the 
Committee's goal of ensuring that the locally directed one-stop 
delivery remains the center of the nation's workforce 
development system.

                                FUNDING

    H.R. 444 authorizes $3.6 billion for fiscal year 2003 to 
create Back to Work accounts and carry out this new chapter.
    The Committee intends that these funds will be used to 
serve at least 1.2 million unemployed individuals. This number 
is consistent with the number of unemployment insurance 
recipients who were profiled and referred to one-stop career 
centers for services last year. In fiscal year 2002, the 
average monthly total of unemployed individuals was 8 million. 
However, this number includes people who were unemployed in two 
broad categories, job losers and job leavers. The economy is 
dynamic and employment continues to churn. Many people choose 
to leave employment. Back to Work accounts are directed toward 
the category of individuals who have lost their jobs through no 
fault of their own. In fiscal year 2002, 8.7 million 
unemployment insurance claimants were profiled. However, 1.2 
million of these individuals were profiled as likely to exhaust 
benefits and referred to one-stop career centers for services 
as a condition for continuing receipt of unemployment 
compensation benefits. H.R. 444 will assist these individuals 
as they are referred to the one-stop centers.
    The Committee expects that as the economy improves fewer 
individuals will be profiled and referred for services. This 
will make funds available for individuals who already have 
exhausted their unemployment insurance benefits.
    During her testimony in Las Vegas, Myla Florence expressed 
another benefit of the new funds available for Back to Work 
accounts, which is the ability of the one-stops to serve more 
clients who may not be eligible for these new accounts. She 
stated, ``While the personal reemployment accounts would not be 
available to all claimants, we believe the heightened interest 
in such a program would connect more of the unemployed to the 
Nevada JobConnect system and the resources it can provide.''
    The Committee notes that in the last program year WIA 
resources served 1.27 million adults and dislocated workers. 
This is in addition to the individuals referred through the 
profiling system. By helping 1.2 million workers with Back to 
Work accounts, WIA funds will be able to serve a significant 
number of additional individuals. Between the two options, 
millions of job seekers who desire new or better employment 
will be served.

                      Section-by-Section Analysis

    Section 1. Establishes the short title of the act to be the 
``Back to Work Incentive Act of 2003.''
    Section 2. Amends Subtitle B of title I of the Workforce 
Investment Act of 1998 (WIA) by inserting an additional chapter 
immediately following chapter 5. This new chapter will be 
titled ``Chapter 5A--Personal Reemployment Accounts.'' The new 
chapter includes the following new sections:
          Section 135A. Establishes that the purpose of this 
        chapter is to form personal reemployment accounts.
          Section 135B. Defines ``State'' as any state in the 
        Union, and includes the District of Columbia, Puerto 
        Rico, and the U.S. Virgin Islands.
          Section 135C. Authorizes grants to states 
        proportionate to the number of unemployed individuals 
        in a state relative to the total number of unemployed 
        individuals in all states in order to provide 
        assistance under this chapter.
          Section 135D. Specifies within state allocations of 
        funds for operational costs and the establishment of 
        Back to Work accounts.
          Section 135E. Creates Back to Work accounts for 
        eligible individuals. Stipulates that accounts shall 
        not exceed $3,000 per person, specifies eligibility 
        criteria, and requires information be provided to 
        eligible individuals and an attestation from such 
        individuals before receiving an account.
          Section 135F. Specifies uses of funds, including 
        allowable activities to be purchased with Back to Work 
        accounts and the mechanisms for the delivery of 
        services. Authorizes reemployment bonuses.
          Section 135G. Requires state and local plans in order 
        for a state and local area to receive funds provided 
        for Back to Work accounts.
          Section 135H. Permits the Secretary to require states 
        to provide financial, performance, and other program 
        related data.
          Section 135I. Requires the Secretary to evaluate the 
        effectiveness of Back to Work accounts and report the 
        findings to Congress.
    Section 3. Amends section 117(d) of WIA to make the local 
chief elected official the local grant recipient for Back to 
Work account funds, consistent with other WIA funding streams.
    Section 4. Amends section 134(c)(1) of WIA to specify that 
the local one-stop delivery system shall provide access to Back 
to Work accounts.
    Section 5. Amends Section 137 of WIA to authorize $3.6 
billion to be appropriated for fiscal year 2003 to carry out 
chapter 5A.
    Section 6. Amends WIA by making changes in the table of 
contents to reflect the changes made by the ``Back To Work 
Incentive Act of 2003''.

                       Explanation of Amendments

    The Amendment in the Nature of a Substitute is explained in 
the body of this report.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. The purpose of H.R. 444 is to authorize new grants 
within the Workforce Investment Act (WIA) to create personal 
reemployment accounts, or ``Back to Work accounts,'' to assist 
unemployed individuals in returning to work. The bill does not 
prevent legislative branch employees from receiving the 
benefits of this legislation.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement of 
whether the provisions of the reported bill include unfunded 
mandates. H.R. 444 amends the Workforce Investment Act. As 
such, the bill does not contain any unfunded mandates.


  Statement of Oversight Findings and Recommendations of the Committee

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

   New Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974 and with respect to 
requirements of 3(c)(3) of rule XIII of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 444 from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 11, 2003.
Hon. John A. Boehner,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 444, the Back to 
Work Incentive Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Christina 
Hawley Sadoti (for federal costs), Greg Waring (for the state 
and local impact), and Ralph Smith (for the private-sector 
impact).
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 444--Back to Work Incentive Act of 2003

    Summary: H.R. 444 would amend the Workforce Investment Act 
of 1998 (WIA) to create a grant program to help states create 
``personal reemployment accounts'' for individuals who are 
likely to exhaust their unemployment compensation. This bill 
would authorize the appropriation of $3.6 billion for fiscal 
year 2003. Assuming appropriation of the authorized amount, CBO 
estimates that enactment of this bill would increase spending 
by $3.6 billion over the 2004-2005 period.
    H.R. 444 contains no intergovernmental or private-sector 
mandates, as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 444 is shown in the following table. 
The cost of this legislation falls within budget function 500 
(education, training, employment, and social services). For the 
purposes of this estimate, CBO assumes H.R. 444 will be enacted 
by the beginning of July 2003.

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              2003     2004     2005     2006     2007     2008
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Reemployment Accounts:
    Authorization Level...................................    3,600        0        0        0        0        0
    Estimated Outlays.....................................        0    2,700      900        0        0        0
----------------------------------------------------------------------------------------------------------------

    Basis of the estimate: H.R. 444 would authorize the 
appropriation of $3.6 billion in fiscal year 2003 for states to 
establish personal reemployment accounts for certain 
individuals who are likely to exhaust their unemployment 
benefits. These individuals could receive up to $3,000 that 
could be used to assist with job training expenses or other 
employment-related needs, such as child care or transportation 
expenses. If the individual becomes employed within a certain 
period of time, he or she may be eligible to keep the unspent 
amount as a bonus. At state option, these funds may be used as 
cash assistance for individuals who have exhausted their right 
to unemployment compensation. For this estimate, CBO assumes 
that the authorized amount will be appropriate sometime this 
summer. The first grants to states would likely occur in fiscal 
year 2004.
    Intergovernmental and private-sector impact: H.R. 444 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. States that submit plans for the personal 
reemployment accounts program would receive grants from the 
Department of Labor for enhancing worker profiling systems and 
funding and operating the individual accounts. Any cost to 
states from participating in the program would be incurred 
voluntarily.
    Estimated prepared by: Federal Costs: Christina Hawley 
Sadoti; Impact on State, Local, and Tribal Governments: Greg 
Waring; and Impact on the Private Sector: Ralph Smith.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

         Statement of General Performance Goals and Objectives

    In accordance with Clause (3)(c) of House rule XIII, the 
goal of H.R. 444 is to provide grants within the Workforce 
Investment Act (WIA) to create personal reemployment accounts, 
or ``Back to Work accounts,'' to assist unemployed individuals 
in returning to work. The Committee expects the Department of 
Labor to comply with H.R. 444 and implement the changes to the 
law in accordance with the changes.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress in the 
Constitution to enact the law proposed by H.R. 444. The 
Committee believes that the amendments made by this bill, which 
authorize appropriations for the Workforce Investment Act, are 
within Congress' authority under Article I, section 8, clause 1 
of the Constitution.

                           Committee Estimate

    Clauses 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 444. However, clause 3(d)(3)(B) of that rule provides that 
this requirement does not apply when the Committee has included 
in its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

WORKFORCE INVESTMENT ACT OF 1998

           *       *       *       *       *       *       *


Sec. 1. Short title; table of contents.

                  TITLE I--WORKFORCE INVESTMENT SYSTEMS

     * * * * * * *

      Subtitle B--Statewide and Local Workforce Investment Systems

Sec. 106. Purpose.

                       Chapter 1--State Provisions

Sec. 111. State workforce investment boards.
     * * * * * * *

               Chapter 5A--Personal Reemployment Accounts

Sec. 135A. Purposes.
Sec. 135B. Definition.
Sec. 135C. Grants to States.
Sec. 135D. Within State allocation.
Sec. 135E. Personal reemployment accounts.
Sec. 135F. Use of funds.
Sec. 135G. State and local plans.
Sec. 135H. Program information.
Sec. 135I. Evaluation.
     * * * * * * *

TITLE I--WORKFORCE INVESTMENT SYSTEMS

           *       *       *       *       *       *       *


Subtitle B--Statewide and Local Workforce Investment Systems

           *       *       *       *       *       *       *


CHAPTER 2--LOCAL PROVISIONS

           *       *       *       *       *       *       *


SEC. 117. LOCAL WORKFORCE INVESTMENT BOARDS.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Functions of Local Board.--The functions of the local 
board shall include the following:
          (1) * * *

           *       *       *       *       *       *       *

          (3) Budget and administration.--
                  (A) * * *
                  (B) Administration.--
                          (i) Grant recipient.--
                                  (I) In general.--The chief 
                                elected official in a local 
                                area shall serve as the local 
                                grant recipient for, and shall 
                                be liable for any misuse of, 
                                the grant funds allocated to 
                                the local area under [sections 
                                128 and 133] sections 128, 133, 
                                and 135D, unless the chief 
                                elected official reaches an 
                                agreement with the Governor for 
                                the Governor to act as the 
                                local grant recipient and bear 
                                such liability.

           *       *       *       *       *       *       *

          (4) Program oversight.--The local board, in 
        partnership with the chief elected official, shall 
        conduct oversight with respect to local programs of 
        youth activities authorized under section 129, local 
        employment and training activities authorized under 
        section 134, activities authorized under section 135F, 
        and the one-stop delivery system in the local area.

           *       *       *       *       *       *       *


    CHAPTER 5--ADULT AND DISLOCATED WORKER EMPLOYMENT AND TRAINING 
ACTIVITIES

           *       *       *       *       *       *       *


SEC. 134. USE OF FUNDS FOR EMPLOYMENT AND TRAINING ACTIVITIES.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Establishment of One-Stop Delivery System.--
          (1) In general.--There shall be established in a 
        State that receives an allotment under section 132(b) a 
        one-stop delivery system, which--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) shall provide access to programs and 
                activities carried out by one-stop partners and 
                described in section 121(b); [and]
                  (E) shall provide access to the information 
                described in section 15 of the Wagner-Peyser 
                Act and all job search, placement, recruitment, 
                and other labor exchange services authorized 
                under the Wagner-Peyser Act (29 U.S.C. 49 et 
                seq.)[.]; and
                  (F) shall provide access to personal 
                reemployment accounts in accordance to section 
                135E.

           *       *       *       *       *       *       *


               CHAPTER 5A--PERSONAL REEMPLOYMENT ACCOUNTS

SEC. 135A. PURPOSES.

  The purposes of this chapter are to provide for the 
establishment of personal reemployment accounts for certain 
individuals identified as likely to exhaust their unemployment 
compensation in order to--
          (1) accelerate the reemployment of such individuals;
          (2) promote the retention in employment of such 
        individuals; and
          (3) provide such individuals with enhanced 
        flexibility, choice, and control in obtaining intensive 
        reemployment, training, and supportive services.

SEC. 135B. DEFINITION.

  In this chapter, the term ``State'' means each of the several 
States of the United States, the District of Columbia, the 
Commonwealth of Puerto Rico, and the United States Virgin 
Islands.

SEC. 135C. GRANTS TO STATES.

  (a) Grants.--The Secretary shall--
          (1) reserve \2/10\ of 1 percent of the amount 
        appropriated under section 137(d) for use under section 
        135I; and
          (2) use the remainder of the amount appropriated 
        under section 137(d) to make allotments in accordance 
        with subsection (b).
  (b) Allotment Among States.--
          (1) In general.--From the amount made available under 
        subsection (a)(2), the Secretary shall allot to each 
        State an amount that is proportionate to the relative 
        number of unemployed individuals in the State as 
        compared to the total number of unemployed individuals 
        in all States in order to provide assistance for 
        eligible individuals in accordance with this chapter.
          (2) Small state minimum allotment.--The Secretary 
        shall ensure that--
                  (A) each State (other than the United States 
                Virgin Islands) shall receive an allotment 
                under paragraph (1) that is not less than \3/
                10\ of 1 percent of the amount made available 
                under subsection (a)(2) for the fiscal year; 
                and
                  (B) the United States Virgin Islands shall 
                receive an allotment under paragraph (1) that 
                is not less than \1/10\ of 1 percent of the 
                amount made available under subsection (a)(2) 
                for the fiscal year.
  (c) Availability.--Notwithstanding section 189(g)(1), amounts 
made available under subsection (a) to carry out this chapter 
shall be available for obligation and expenditure beginning on 
the date of the enactment of the Back to Work Incentive Act of 
2003.

SEC. 135D. WITHIN STATE ALLOCATION.

  (a) Allocation.--Of the amount allotted to a State under 
section 135C--
          (1) not more than 2 percent of the amount may be 
        reserved by the Governor of the State to enhance the 
        system of worker profiling described in section 303(j) 
        of the Social Security Act and to establish and operate 
        a data management system, as necessary, and carry out 
        other appropriate activities to implement this chapter;
          (2) 5 percent of the amount shall be allocated by the 
        State to local areas in accordance with the formula 
        described in subsection (b) for start-up costs and 
        other operating costs related to the provision of 
        assistance under this chapter; and
          (3) the remainder of the amount shall be provided to 
        local areas consistent with the methods and procedures 
        described in section 135G(a)(4) for the establishment 
        of personal reemployment accounts described in section 
        135E for eligible individuals in such local areas.
  (b) Formula.--A State shall allocate funds to local areas in 
the State under subsection (a)(2) in an amount that is 
proportionate to the relative number of unemployed individuals 
in the local area as compared to the total number of unemployed 
individuals in the State.
  (c) Availability.--Notwithstanding section 189(g)(2), amounts 
allotted to a State under section 135C, and amounts 
subsequently provided to a local area under this section, shall 
be available for obligation and expenditure only for the 3-year 
period beginning on the date of the enactment of the Back to 
Work Incentive Act of 2003.

SEC. 135E. PERSONAL REEMPLOYMENT ACCOUNTS.

  (a) Accounts.--
          (1) In general.--Funds provided to a local area under 
        section 135D shall be used to provide eligible 
        individuals with personal reemployment accounts to be 
        used in accordance with section 135F. An eligible 
        individual may receive only one personal reemployment 
        account.
          (2) Amount.--The State shall establish the amount of 
        a personal reemployment account, which shall be uniform 
        throughout the State, and shall not exceed $3,000.
  (b) Eligible Individuals.--
          (1) In general.--Each State shall establish 
        eligibility criteria for individuals for personal 
        reemployment accounts in accordance with this 
        subsection.
          (2) Eligibility criteria requirements.--
                  (A) In general.--Subject to subparagraph (B), 
                an individual shall be eligible to receive 
                assistance under this chapter if, beginning 
                after the date of enactment of the Back to Work 
                Incentive Act of 2003, the individual--
                          (i) is identified by the State 
                        pursuant to section 303(j)(1) of the 
                        Social Security Act as likely to 
                        exhaust regular unemployment 
                        compensation and in need of job search 
                        assistance to make a successful 
                        transition to new employment or an 
                        individual's unemployment can be 
                        attributed in substantial part to 
                        unfair competition from Federal Prison 
                        Industries, Inc.;
                          (ii) is receiving regular 
                        unemployment compensation under any 
                        State or Federal unemployment 
                        compensation program administered by 
                        the State; and
                          (iii) is eligible for not less than 
                        20 weeks of regular unemployment 
                        compensation described in clause (ii).
                  (B) Additional eligibility and priority 
                criteria.--A State may establish criteria that 
                is in addition to the criteria described in 
                subparagraph (A) for the eligibility of 
                individuals to receive assistance under this 
                chapter. A State may also establish criteria 
                for priority in the provision of assistance to 
                such eligible individuals under this chapter.
          (3) Transition rule.--
                  (A) Previously identified as likely to 
                exhaust unemployment compensation.--
                          (i) In general.--At the option of the 
                        State, and subject to clause (ii), an 
                        individual may be eligible to receive 
                        assistance under this chapter if the 
                        individual--
                                  (I) during the 13-week period 
                                ending the week prior to the 
                                date of the enactment of the 
                                Back to Work Incentive Act of 
                                2003, was identified by the 
                                State pursuant to section 
                                303(j)(1) of the Social 
                                Security Act as likely to 
                                exhaust regular unemployment 
                                compensation and in need of job 
                                search assistance to make a 
                                successful transition to new 
                                employment; and
                                  (II) otherwise meets the 
                                requirements of clauses (ii) 
                                and (iii) of paragraph (2)(A).
                          (ii) Additional eligibility and 
                        priority criteria.--A State may 
                        establish criteria that is in addition 
                        to the criteria described in clause (i) 
                        for the eligibility of individuals to 
                        receive assistance under this chapter. 
                        A State may also establish criteria for 
                        priority in the provision of assistance 
                        to such eligible individuals under this 
                        chapter.
                  (B) Previously exhausted unemployment 
                compensation.--At the option of the State, an 
                individual may be eligible to receive 
                assistance under this chapter if the 
                individual--
                          (i) during the 26-week period ending 
                        the week prior to the date of the 
                        enactment of the Back to Work Incentive 
                        Act of 2003, exhausted all rights to 
                        any unemployment compensation; and
                          (ii)(I) is enrolled in training and 
                        needs additional support to complete 
                        such training, with a priority of 
                        service to be provided to such 
                        individuals who are training for 
                        shortage occupations or high-growth 
                        industries; or
                          (II) is separated from employment in 
                        an industry or occupation that has 
                        experienced declining employment, or no 
                        longer provides any employment, in the 
                        local labor market during the two-year 
                        period ending on the date of the 
                        determination of eligibility of the 
                        individual under this subparagraph.
          (4) No individual entitlement.--Nothing in this 
        chapter shall be construed to entitle any individual to 
        receive a personal reemployment account.
  (c) Local Administration.--
          (1) Information and attestation.--Prior to the 
        establishment of a personal reemployment account for an 
        eligible individual under this chapter, the local 
        board, through the one-stop delivery system, shall 
        ensure that the individual--
                  (A) is informed of the requirements 
                applicable to the personal reemployment 
                account, including the allowable uses of funds 
                from the account, the limitations on access to 
                services described under section 135F(a)(3)(C) 
                and a description of such services, and the 
                conditions for receiving a reemployment bonus;
                  (B) has the option to develop a personal 
                reemployment plan which will identify the 
                employment goals and appropriate combination of 
                services selected by the individual to achieve 
                the employment goals; and
                  (C) signs an attestation that the individual 
                has been given the option to develop a personal 
                reemployment plan in accordance with 
                subparagraph (B), will comply with the 
                requirements relating to the personal 
                reemployment accounts under this chapter, and 
                will reimburse the account or, if the account 
                has been terminated, the program under this 
                chapter, for any amounts expended from the 
                account that are not allowable.
          (2) Periodic interviews.--If a recipient exhausts his 
        or her rights to any unemployment compensation, and the 
        recipient has a remaining balance in his or her 
        personal reemployment account, the one-stop delivery 
        system shall conduct periodic interviews with the 
        recipient to assist the recipient in meeting his or her 
        individual employment goals.

SEC. 135F. USE OF FUNDS.

  (a) Allowable Activities.--
          (1) In general.--Subject to the requirements 
        contained in paragraphs (2) and (3), a recipient may 
        use amounts in a personal reemployment account to 
        purchase one or more of the following:
                  (A) Intensive services, including those types 
                of services specified in section 134(d)(3)(C).
                  (B) Training services, including those types 
                of services specified in section 134(d)(4)(D).
                  (C) Supportive services, except for needs-
                related payments.
                  (D) Assistance to purchase or lease an 
                automobile, if such assistance is necessary to 
                allow the recipient to accept a bona fide offer 
                of employment for which there is a reasonable 
                expectation of long-term duration.
          (2) Delivery of services.--The following requirements 
        relating to delivery of services shall apply to the 
        program under this chapter:
                  (A) Recipients may use funds from the 
                personal reemployment account to purchase the 
                services described in paragraph (1) through the 
                one-stop delivery system on a fee-for-service 
                basis, or through other providers, consistent 
                with safeguards described in the State and 
                local plans under section 135G.
                  (B) The local board, through the one-stop 
                delivery system, may pay costs for such 
                services directly on behalf of the recipient, 
                through a voucher system, or by reimbursement 
                to the recipient upon receipt of appropriate 
                cost documentation, consistent with safeguards 
                described in the State plan under section 135G.
                  (C) Each local board, through the one-stop 
                delivery system, shall make available to 
                recipients information on training providers 
                specified in section 134(d)(4)(F)(ii), 
                information available to the one-stop delivery 
                system on providers of the intensive and 
                supportive services described in paragraph (1), 
                and information relating to occupations in 
                demand in the local area.
          (3) Limitations.--The following limitations shall 
        apply with respect to personal reemployment accounts 
        under this chapter:
                  (A)(i) Amounts in a personal reemployment 
                account may be used for up to one year from the 
                date of the establishment of the account.
                  (ii) No personal reemployment account may be 
                established beginning 2 years after the date of 
                the enactment of the Back to Work Incentive Act 
                of 2003.
                  (B) Each recipient shall submit cost 
                documentation as required by the one-stop 
                delivery system.
                  (C) For the 1-year period following the 
                establishment of the account, recipients may 
                not receive intensive, supportive, or training 
                services funded under this title except on a 
                fee-for-services basis as specified in 
                paragraph (2)(A).
                  (D) Amounts in a personal reemployment 
                account shall be nontransferable.
  (b) Income Support.--A State may authorize recipients 
determined eligible under section 135E(b)(3)(B) to withdraw 
amounts from the personal reemployment account on a weekly 
basis for purposes of income support in amounts up to the 
average weekly amount of unemployment compensation that the 
individual received prior to his or her exhaustion of rights to 
unemployment compensation if the individual is engaged in job 
search, intensive services, or training that is expected to 
lead to employment.
  (c) Reemployment Bonus.--
          (1) In general.--Subject to paragraph (2)--
                  (A) if a recipient determined eligible under 
                section 135E(b)(2) obtains full-time employment 
                before the end of the 13th week of unemployment 
                for which unemployment compensation is paid, 
                the balance of his or her personal reemployment 
                account shall be provided directly to the 
                recipient in cash; and
                  (B) if a recipient determined eligible under 
                section 135E(b)(3) obtains full-time employment 
                before the end of the 13th week after the date 
                on which the account is established, the 
                balance of his or her personal reemployment 
                account shall be provided directly to the 
                recipient in cash.
          (2) Limitations.--The following limitations shall 
        apply with respect to a recipient described in 
        paragraph (1):
                  (A) 60 percent of the remaining personal 
                reemployment account balance shall be paid to 
                the recipient at the time of reemployment.
                  (B) 40 percent of the remaining personal 
                reemployment account balance shall be paid to 
                the recipient after 26 weeks of employment 
                retention.
          (3) Exception regarding subsequent unemployment.--If 
        a recipient described in paragraph (1) subsequently 
        becomes unemployed due to a lack of work after 
        receiving the portion of the reemployment bonus 
        specified under paragraph (2)(A), the individual may 
        use the amount remaining in the personal reemployment 
        account for the purposes described in subsection (a) 
        but may not be eligible for additional cash payments 
        under this subsection.

SEC. 135G. STATE AND LOCAL PLANS.

  (a) State Plan.--In order for a State to receive an allotment 
under section 135C, the Governor of the State shall submit to 
the Secretary a plan for approval that includes a description 
of how the State intends to carry out the personal reemployment 
accounts authorized under this chapter, including--
          (1) the criteria and methods to be used for 
        determining eligibility for the personal reemployment 
        accounts, including whether the State intends to 
        include the optional categories described in section 
        135E(b)(3), and the additional criteria and priority 
        for service that the State intends to apply, if any, 
        pursuant to section 135E(b)(2)(B);
          (2) the methods or procedures, developed in 
        consultation with local boards and chief elected 
        officials, to be used to provide eligible individuals 
        information relating to services and providers, and 
        safeguards, developed in consultation with such boards 
        and officials, to ensure that funds from the personal 
        reemployment accounts are used for purposes authorized 
        under this chapter and to ensure the quality and 
        integrity of services and providers, consistent with 
        the purpose of providing such individuals with enhanced 
        flexibility, choice, and control in obtaining intensive 
        reemployment, training, and supportive services.
          (3) how the State will coordinate the activities 
        carried out under this chapter with the employment and 
        training activities carried out under section 134 and 
        other activities carried out by each local board 
        through the one-stop delivery system in the State; and
          (4) the methods and procedures for providing funds to 
        local areas under section 135D(a)(3).
  (b) Local Plan.--In order for a local area to receive an 
allocation under section 135D, the local board, in partnership 
with the chief elected official for the local area involved, 
shall submit to the Governor a plan for approval that includes 
a description of how the local board intends to carry out the 
personal reemployment accounts, consistent with the 
requirements of this chapter and with the State plan 
established under subsection (a), including--
          (1) a description of how the local board will 
        coordinate the activities carried out under this 
        chapter with the employment and training activities 
        carried out in the local area under section 134; and
          (2) a description of the methods or procedures to be 
        used to provide eligible individuals information 
        relating to the jobs that are available in the local 
        area in high demand occupations and information on 
        services and providers, and the safeguards the local 
        area will initiate to ensure that funds from the 
        personal reemployment accounts are used for purposes 
        authorized under this chapter and to ensure the quality 
        and integrity of services and providers, consistent 
        with the purpose of providing such individuals with 
        enhanced flexibility, choice, and control in obtaining 
        intensive reemployment, training, and supportive 
        services, and consistent with the State plan.
  (c) State Plan Submission and Approval.--A State plan 
submitted to the Secretary under subsection (a) by a Governor 
shall be considered to be approved by the Secretary at the end 
of the 30-day period beginning on the date the Secretary 
receives the plan, unless the Secretary makes a written 
determination during such period that the plan is incomplete or 
otherwise inconsistent with the provisions of this chapter.

SEC. 135H. PROGRAM INFORMATION.

  The Secretary may require from States the collection and 
reporting on such financial, performance, and other program-
related information as the Secretary determines is appropriate 
to carry out this chapter, including the evaluation described 
in section 135I.

SEC. 135I. EVALUATION.

  (a) Evaluation.--From the amount made available under section 
135C(a)(1), the Secretary, pursuant to the authority provided 
under section 172, shall, directly or through grants, 
contracts, or cooperative agreements with appropriate entities, 
conduct an evaluation of the activities carried out under this 
chapter.
  (b) Conduct of Evaluation.--The evaluation shall examine the 
effectiveness of such activities in achieving the purposes 
described in section 135A and such other purposes as the 
Secretary determines are appropriate.
  (c) Report.--The report to Congress under section 172(e) 
relating to the results of the evaluations required under 
section 172 shall include the recommendation of the Secretary 
with respect to the use of personal reemployment accounts as a 
mechanism to assist individuals in obtaining and retaining 
employment.

           *       *       *       *       *       *       *


CHAPTER 6--GENERAL PROVISIONS

           *       *       *       *       *       *       *


SEC. 137. AUTHORIZATION OF APPROPRIATIONS.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Personal Reemployment Accounts.--
          (1) In general.--There is authorized to be 
        appropriated $3,600,000,000 for fiscal year 2003 to 
        carry out chapter 5A.
          (2) Availability.--Amounts appropriated pursuant to 
        the authorization of appropriations under paragraph (1) 
        to carry out section 135I are authorized to remain 
        available until expended.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

  H.R. 444--Personal Reemployment Accounts Failing to Create Jobs and 
             Undermining Unemployment for America's Workers

                              INTRODUCTION

    Unemployment--and a lack of jobs--continues to cripple the 
American economy. Due to the Bush Administration's failed 
economic policies and mismangement of the federal budget, we 
are experiencing some of the highest unemployment rates, and 
lowest levels of consumer confidence in a decade. More than 8.3 
million individuals are out of work, and by one estimate, there 
are three workers for every available job. At the same time, 
over 1.2 million unemployed Americans who have exhausted their 
federal unemployment benefits are looking to Congress for 
urgent relief.
    H.R. 444 fails to provide the nation's most vulnerable 
workers urgently needed assistance, and undermines key 
provisions of the existing Workforce Investment Act.
    The centerpiece of this bill involves the luring of 
financially strapped unemployed workers out of more intensive 
job training with a ``buy out'' that could be as little as $500 
or less. This is a cynical trap for workers who must choose 
between training or additional financial support for their 
family. By contrast, extending unemployment benefits provides 
that urgently needed family support, with no draconian cap on 
job training services. H.R. 444 would require the unemployed to 
pay for otherwise free job counseling and training services and 
ban them from the system if they accept a PRA.
    H.R. 444 would undermine our workforce training and 
unemployment insurance systems. This bill not only ignores 
those families who need the help the most, it blows a hole in 
virtually every accountability contained in our job training 
programs. H.R. 444 would provide little if any oversight over 
program dollars spent at fly-by-night training providers. State 
certification requirements under the current WIA system would 
be all but removed with the PRAs--opening the door for 
financial abuse with no means to correct or even measure the 
potential abuses. Congress just revamped the job training 
system in 1998 to provide a comprehensive universal system of 
job assistance services, yet the Majority would circumvent 
their own system to create a new parallel program.
    This bill also fails to provide relief quickly. The 
Congressional Budget Office says funds for this program would 
not even reach workers until next year--and one out of four 
eligible families would not be helped until fiscal year 2005. 
An unemployment insurance extension can provide help to workers 
in a matter of weeks, not months or years--and would provide 
urgently needed short-term economic stimulus.
    Rather than preparing for another extension of unemployment 
insurance that will be needed in the late spring, H.R. 444 
seeks to utilize precious resources to provide assistance to 
the smallest fraction of the unemployed. This legislation is 
part of a strategy to undermine and cut funding tothe 
unemployment and job-training systems and head-off another federal 
unemployment benefit extension that would provide assistance to those 
who desperately need it.
    This legislation bars those who accept Personal Re-
employment Accounts from receiving counseling and training 
services at a one-stop employment center for one year once the 
funds within the account are exhausted. Unemployed workers 
currently receive an average of $5,000 (and as high as $10,000) 
worth of training services under our current WIA system, and 
yet many of them are unable to find a sustainable job due to 
the jobless stagnation of the economy. H.R. 444 would cut 
millions of unemployed workers off from access to needed job 
training or retraining programs.
    In addition, the infrastructure that would be required to 
administer the PRAs in the base bill would take several months, 
if not a year to set up, limiting what immediate help we can 
provide the unemployed. In its budget submission, the Bush 
Administration claimed that funds could be made available to 
workers in the current fiscal year. As noted above, the 
Congressional Budget Office repudiated this assertion, and has 
estimated that funds for this program would not even reach 
workers until next year--and one out of four eligible families 
would not be helped until fiscal year 2005.\1\
---------------------------------------------------------------------------
    \1\ Congressional Budget Office, An Analysis of the President's 
Budgetary Proposals for Fiscal Year 2004, March 2003.
---------------------------------------------------------------------------
    Those that advocate for PRAs also imply that there are 
plenty of jobs for unemployed workers to accept. In reality, 
the economy has lost 2.5 million jobs since the current 
downturn in March of 2001. In addition, there are presently 3 
unemployed workers competing for each current job opening.
    Finally, PRAs would become the nation's first multi-billion 
program for which coverage of the nation's civil rights laws 
are in jeopardy. According to the Congressional Research 
Service, H.R. 444 ``appears to beg the question of whether 
private providers of reemployment services . . . are subject to 
federal non-discrimination requirements.'' \2\ Under federal 
law, providers are not subject to certain civil rights laws 
unless they are considered ``recipients'' of federal financial 
aid. Because H.R. 444 employs a voucher scheme to provide 
benefits, CRS has questioned whether ``providers'' under the 
bill are technically ``recipients.'' Failure to have the full 
force and effect of the nation's anti-discrimination laws apply 
to a multi-billion dollar federal program would be a shameful 
retreat of the nation's commitment to civil rights.
---------------------------------------------------------------------------
    \2\ Memorandum from Charles V. Dale, Legislative Attorney, American 
Law Division, Congressional Research Service, March 3, 2003.
---------------------------------------------------------------------------

                               AMENDMENTS

    Representative Kildee sought to address H.R. 444's major 
shortcomings by offering an amendment that would use the bill's 
funding to provide for immediate and future extended federal 
unemployment benefits and reverse harmful cuts to job training 
programs in the last 2 years. The last extension of 
unemployment benefits signed into law in January provided 
extended benefits to some, but not all of the nation's 
unemployed. The Administration and theCongressional Republican 
leadership chose not to cover 1.2 million workers who had previously 
exhausted their unemployment benefits.
    This amendment directly responded to the real needs of the 
American workforce by providing funds to extend unemployment 
benefits to the estimated 1.2 million workers who have 
exhausted their Federal unemployment benefits and are still 
unable to find work. In addition, this amendment would provide 
funds to extend unemployment benefits to September when the 
current extension expires at the end of May and authorize an 
additional $650 million in funding to offset recent cuts to our 
nation's job training programs. Unfortunately, this amendment 
was defeated on a party line vote.
    Representative Payne offered an amendment to make clear 
that federal anti-discrimination laws apply to the bill's job 
training providers, but the amendment was rejected on a party 
line vote.
    Representative Wu offered an amendment that would have 
allowed local workforce boards to determine the actual amount 
of each PRA and struck the one-year prohibition on One-stop 
services to those receiving PRAs. This amendment pointed out 
two critical flaws in the Republican legislation. First, the 
base bill allows States to set the actual amount of each PRA. 
While the Majority has advertised this bill as providing $3,000 
in assistance to each unemployed individual, PRA recipients are 
more likely to receive substantially less, possibly as little 
as $500. The Administration estimates that PRAs could serve up 
to 1.2 million unemployed workers, however, almost 4 million 
would be eligible forcing Governors to either cut the number of 
workers covered or cut the amount of PRAs. Second, individuals 
who accept PRAs are barred from receiving services at the one-
stop centers for one year, except on a fee for service basis. 
This freezes out unemployed workers from the very training and 
services they need to secure employment. This amendment was 
defeated by voice vote.
    Representative Majette offered and withdrew an amendment 
that would have prevented fraud by requiring providers of 
training services to meet the eligibility requirements under 
WIA.
    Representative McCollum offered an amendment to make 
workers injured by unfair economic competition from Turkey to 
be eligible for PRAs. This amendment was defeated by voice 
vote.

                               CONCLUSION

    H.R. 444 fails to address the most significant needs of the 
unemployed. Extending unemployment benefits, coupled with the 
assistance that unemployed workers can receive through one-stop 
service centers, will provide workers with the means to achieve 
high paying jobs. We need to address the needs of our 
unemployed now, while they are struggling to pay their mortgage 
and put food on the table for their families. The bill fails to 
address these concerns and squanders resources better used to 
provide immediate help to unemployed workers.

                                   George Miller,
                                   Betty McCollum,
                                   Donald M. Payne,
                                   Ed Case,
                                   Tim Ryan,
                                   John F. Tierney,
                                   Carolyn McCarthy,
                                   Susan Davis,
                                   Dennis J. Kucinich,
                                   Ron Kind,
                                   Raul M. Grijalva,
                                   David Wu,
                                   Chris Van Hollen,
                                   Robert E. Andrews,
                                   Danny K. Davis,
                                   Lynn Woolsey,
                                   Timothy Bishop,
                                   Dale E. Kildee,
                                   Major R. Owens,
                                   Rush Holt,
                                   Ruben Hinojosa.