H.R. 4278 (103rd): Social Security Domestic Employment Reform Act of 1994

103rd Congress, 1993–1994. Text as of Apr 21, 1994 (Introduced).

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HR 4278 IH

103d CONGRESS

2d Session

H. R. 4278

To make improvements in the old-age, survivors, and disability insurance program under title II of the Social Security Act.

IN THE HOUSE OF REPRESENTATIVES

April 21, 1994

Mr. JACOBS (for himself, Mrs. KENNELLY, Mr. BUNNING, Mr. HOUGHTON, and Mrs. MEEK) introduced the following bill; which was referred to the Committee on Ways and Means


A BILL

To make improvements in the old-age, survivors, and disability insurance program under title II of the Social Security Act.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ‘Social Security Act Amendments of 1994’.

SEC. 2. SIMPLIFICATION OF EMPLOYMENT TAXES ON DOMESTIC SERVICES.

    (a) Coordination of Collection of Domestic Service Employment With Collection of Income Taxes-

      (1) IN GENERAL- Chapter 25 of the Internal Revenue Code of 1986 (relating to general provisions relating to employment taxes) is amended by adding at the end thereof the following new section:

‘SEC. 3510. COORDINATION OF COLLECTION OF DOMESTIC SERVICE EMPLOYMENT TAXES WITH COLLECTION OF INCOME TAXES.

    ‘(a) GENERAL RULE- Except as otherwise provided in this section--

      ‘(1) returns with respect to domestic service employment taxes shall be made on a calendar year basis,

      ‘(2) any such return for any calendar year shall be filed on or before the 15th day of the fourth month following the close of the employer’s taxable year which begins in such calendar year, and

      ‘(3) no requirement to make deposits (or to pay installments under section 6157) shall apply with respect to such taxes.

    ‘(b) Domestic Service Employment Taxes Subject to Estimated Tax Provisions-

      ‘(1) IN GENERAL- Solely for purposes of section 6654, domestic service employment taxes imposed with respect to any calendar year shall be treated as a tax imposed by chapter 2 for the taxable year of the employer which begins in such calendar year.

      ‘(2) ANNUALIZATION- Under regulations prescribed by the Secretary, appropriate adjustments shall be made in the application of section 6654(d)(2) in respect of the amount treated as tax under paragraph (1).

      ‘(3) TRANSITIONAL RULE- For purposes of applying section 6654 to a taxable year beginning in 1994, the amount referred to in clause (ii) of section 6654(d)(1)(B) shall be increased by 90 percent of the amount treated as tax under paragraph (1) for such taxable year.

    ‘(c) DOMESTIC SERVICE EMPLOYMENT TAXES- For purposes of this section, the term ‘domestic service employment taxes’ means--

      ‘(1) any taxes imposed by chapter 21 or 23 on remuneration paid for domestic service in a private home of the employer, and

      ‘(2) any amount withheld from such remuneration pursuant to an agreement under section 3402(p).

    For purposes of this subsection, the term ‘domestic service in a private home of the employer’ does not include service described in section 3121(g)(5).

    ‘(d) EXCEPTION WHERE EMPLOYER LIABLE FOR OTHER EMPLOYMENT TAXES- To the extent provided in regulations prescribed by the Secretary, this section shall not apply to any employer for any calendar year if such employer is liable for any tax under this subtitle with respect to remuneration for services other than domestic service in a private home of the employer.

    ‘(e) GENERAL REGULATORY AUTHORITY- The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section. Such regulations may treat domestic service employment taxes as taxes imposed by chapter 1 for purposes of coordinating the assessment and collection of such employment taxes with the assessment and collection of domestic employers’ income taxes.

    ‘(f) Authority To Enter Into Agreements To Collect State Unemployment Taxes-

      ‘(1) IN GENERAL- The Secretary is hereby authorized to enter into an agreement with any State to collect, as the agent of such State, such State’s unemployment taxes imposed on remuneration paid for domestic service in a private home of the employer. Any taxes to be collected by the Secretary pursuant to such an agreement shall be treated as domestic service employment taxes for purposes of this section.

      ‘(2) TRANSFERS TO STATE ACCOUNT- Any amount collected under an agreement referred to in paragraph (1) shall be transferred by the Secretary to the account of the State in the Unemployment Trust Fund.

      ‘(3) SUBTITLE F MADE APPLICABLE- For purposes of subtitle F, any amount required to be collected under an agreement under paragraph (1) shall be treated as a tax imposed by chapter 23.

      ‘(4) STATE- For purposes of this subsection, the term ‘State’ has the meaning given such term by section 3306(j)(1).’

      (2) CLERICAL AMENDMENT- The table of sections for chapter 25 of such Code is amended by adding at the end thereof the following:

‘Sec. 3510. Coordination of collection of domestic service employment taxes with collection of income taxes.’

      (3) EFFECTIVE DATE- The amendments made by this subsection shall apply to remuneration paid in calendar years beginning after December 31, 1994.

      (4) EXPANDED INFORMATION TO EMPLOYERS- The Secretary of the Treasury or his delegate shall prepare and make available information on the Federal tax obligations of employers with respect to employees performing domestic service in a private home of the employer. Such information shall also include a statement that such employers may have obligations with respect to such employees under State laws relating to unemployment insurance and workers compensation.

    (b) THRESHOLD REQUIREMENT FOR SOCIAL SECURITY TAXES-

      (1) AMENDMENTS OF INTERNAL REVENUE CODE-

        (A) Subparagraph (B) of section 3121(a)(7) of the Internal Revenue Code of 1986 (defining wages) is amended to read as follows:

        ‘(B) cash remuneration paid by an employer in any calendar year to an employee for domestic service in a private home of the employer (within the meaning of subsection (y)), if the cash remuneration paid in such year by the employer to the employee for such service is less than the applicable dollar threshold (as defined in subsection (y)) for such year;’.

        (B) Section 3121 of such Code is amended by adding at the end thereof the following new subsection:

    ‘(y) DOMESTIC SERVICE IN A PRIVATE HOME- For purposes of subsection (a)(7)(B)--

      ‘(1) EXCLUSION FOR CERTAIN FARM SERVICE- The term ‘domestic service in a private home of the employer’ does not include service described in subsection (g)(5).

      ‘(2) APPLICABLE DOLLAR THRESHOLD- The term ‘applicable dollar threshold’ means $1,250. In the case of calendar years after 1995, the Secretary of Health and Human Services shall adjust such $1,250 amount at the same time and in the same manner as under section 215(a)(1)(B)(ii) of the Social Security Act with respect to the amounts referred to in section 215(a)(1)(B)(i) of such Act, except that, for purposes of this paragraph, 1993 shall be substituted for the calendar year referred to in section 215(a)(1)(B)(ii)(II) of such Act. If the amount determined under the preceding sentence is not a multiple of $50, such amount shall be rounded to the nearest multiple of $50.’

        (C) The second sentence of section 3102(a) of such Code is amended--

          (i) by striking ‘calendar quarter’ each place it appears and inserting ‘calendar year’, and

          (ii) by striking ‘$50’ and inserting ‘the applicable dollar threshold (as defined in section 3121(y)(2)) for such year’.

      (2) AMENDMENT OF SOCIAL SECURITY ACT- Subparagraph (B) of section 209(a)(6) of the Social Security Act (42 U.S.C. 409(a)(6)(B)) is amended to read as follows:

      ‘(B) Cash remuneration paid by an employer in any calendar year to an employee for domestic service in a private home of the employer, if the cash remuneration paid in such year by the employer to the employee for such service is less than the applicable dollar threshold (as defined in section 3121(y)(2) of the Internal Revenue Code of 1986) for such year. As used in this subparagraph, the term ‘domestic service in a private home of the employer’ does not include service described in section 210(f)(5).’

      (3) EFFECTIVE DATE- The amendments made by this subsection shall apply to remuneration paid in calendar years beginning after December 31, 1994.

      (4) RELIEF FROM LIABILITY FOR CERTAIN UNDERPAYMENT AMOUNTS-

        (A) IN GENERAL- On and after the date of the enactment of this Act, an underpayment to which this paragraph applies (and any penalty, addition to tax, and interest with respect to such underpayment) shall not be assessed (or, if assessed, shall not be collected).

        (B) UNDERPAYMENTS TO WHICH PARAGRAPH APPLIES- This paragraph shall apply to an underpayment to the extent of the amount thereof which would not be an underpayment if--

          (i) the amendments made by paragraph (1) had applied to calendar years 1993 and 1994, and

          (ii)(I) the applicable dollar threshold for calendar year 1993 were $1,150, and

          (II) the applicable dollar threshold for calendar year 1994 were $1,200.

SEC. 3. ALLOCATIONS TO FEDERAL DISABILITY INSURANCE TRUST FUND.

    (a) ALLOCATION WITH RESPECT TO WAGES- Section 201(b)(1) of the Social Security Act (42 U.S.C. 401(b)(1)) is amended by striking ‘(O) 1.20 per centum’ and all that follows through ‘December 31, 1999, and so reported,’ and inserting ‘(O) 1.20 per centum of the wages (as so defined) paid after December 31, 1989, and before January 1, 1994, and so reported, (P) 1.88 per centum of the wages (as so defined) paid after December 31, 1993, and before January 1, 2000, and so reported, and (Q) 1.80 per centum of the wages (as so defined) paid after December 31, 1999, and so reported,’.

    (b) ALLOCATION WITH RESPECT TO SELF-EMPLOYMENT INCOME- Section 201(b)(2) of such Act (42 U.S.C. 401(b)(2)) is amended striking ‘(O) 1.20 per centum’ and all that follows through ‘December 31, 1999,’ and inserting ‘(O) 1.20 per centum of the amount of self-employment income (as so defined) so reported for any taxable year beginning after December 31, 1989, and before January 1, 1994, (P) 1.88 per centum of the amount of self-employment income (as so defined) so reported for any taxable year beginning after December 31, 1993, and before January 1, 2000, and (Q) 1.80 per centum of the amount of self-employment income (as so defined) so reported for any taxable year beginning after December 31, 1999,’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply with respect to wages paid after December 31, 1993, and self-employment income for taxable years beginning after such date.

    (d) STUDY ON RISING COSTS OF DISABILITY BENEFITS-

      (1) IN GENERAL- As soon as practicable after the date of the enactment of this Act, the Secretary of Health and Human Services shall conduct a comprehensive study of the reasons for rising costs payable from the Federal Disability Insurance Trust Fund.

      (2) MATTERS TO BE INCLUDED IN STUDY- In conducting the study under this subsection, the Secretary shall--

        (A) determine the relative importance of the following factors in increasing the costs payable from the Trust Fund:

          (i) increased numbers of applications for benefits;

          (ii) higher rates of benefit allowances; and

          (iii) decreased rates of benefit terminations; and

        (B) identify, to the extent possible, underlying social, economic, demographic, programmatic, and other trends responsible for changes in disability benefit applications, allowances, and terminations.

      (3) REPORT- Not later than December 31, 1995, the Secretary shall transmit a report to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate setting forth the results of the study conducted under this subsection, together with any recommendations for legislative changes which the Secretary determines appropriate.

SEC. 4. NONPAYMENT OF BENEFITS TO INCARCERATED INDIVIDUALS AND INDIVIDUALS CONFINED IN CRIMINAL CASES PURSUANT TO CONVICTION OR BY COURT ORDER BASED ON FINDINGS OF INSANITY.

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

      (1) in the heading, by inserting ‘and Certain Other Inmates of Publicly Funded Institutions’ after ‘Prisoners’;

      (2) in paragraph (1) by striking ‘during which such individual’ and inserting ‘during which such individual--’, and by striking ‘is confined’ and all that follows and inserting the following:

      ‘(A) is confined in a jail, prison, or other penal institution or correctional facility pursuant to his conviction of an offense punishable by imprisonment for more than 1 year (regardless of the actual sentence imposed), or

      ‘(B) is confined by court order in an institution at public expense in connection with--

        ‘(i) a verdict that the individual is guilty but insane, with respect to an offense punishable by imprisonment for more than 1 year,

        ‘(ii) a verdict that the individual is not guilty of such an offense by reason of insanity,

        ‘(iii) a finding that such individual is incompetent to stand trial under an allegation of such an offense, or

        ‘(iv) a similar verdict or finding with respect to such an offense based on similar factors (such as a mental disease, a mental defect, or mental incompetence),

      and, for purposes of this subparagraph, an individual so confined shall be treated as remaining so confined until he or she is unconditionally released from the care and supervision of such institution and such institution ceases to meet the individual’s basic living needs.’; and

      (3) in paragraph (3), by striking ‘any individual’ and all that follows and inserting ‘any individual who is confined as described in paragraph (1) if the confinement is under the jurisdiction of such agency and the Secretary requires such information to carry out the provisions of this section.’.

    (b) Conforming Amendments-

      (1) Section 226 of such Act (42 U.S.C. 426) is amended by adding at the end the following new subsection:

    ‘(i) The requirements of subsections (a)(2) and (b)(2) shall not be treated as met with respect to any individual for any month if a monthly benefit to which such individual is entitled under section 202 or 223 for such month is not payable under section 202(x).’.

      (2) Section 226A of such Act (42 U.S.C. 426-1) is amended by adding at the end the following new subsection:

    ‘(d) The requirements of subsection (a)(1) shall not be treated as met with respect to any individual for any month if a monthly benefit to which such individual is entitled under section 202 or 223 for such month is not payable under section 202(x).’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply with respect to benefits for months commencing after 90 days after the date of the enactment of this Act and with respect to items and services provided after such 90-day period.