Senate Bill No. 471
(By Senators Manchin, Oliverio, Craigo, Sharpe,

Schoonover, Wiedebusch and Bailey)
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[Introduced February 20, 1995; referred to the Committee
on Health and Human Resources; and then to the Committee on Finance.]
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A BILL to amend chapter thirty-one of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article five-a, relating to the "wagefare" act; definitions; declarations of intent and purpose; governor and department of health and human resources to work together to obtain exemptions from federal statutes to implement program; wagefare advisory board; wagefare implementation councils; wagefare program special fund; duties of department of health and human resources; implementation of program; payments of benefits; approval required for cash in lieu of food stamps; evaluation of wagefare program; appointment of board; and establishment of council to take place sixty days from effective date.

Be it enacted by the Legislature of West Virginia:
That chapter thirty-one of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article five-a, to read as follows:
ARTICLE 5A. WAGEFARE.
§31-5A-1. Definitions.
The following terms mean as follows:
(a) "Board" means the wagefare advisory board;
(b) "Department" means the department of health and human resources; and
(c) "Wagefare" or "program" means the wagefare program.
§31-5A-2. Declarations of legislative intent and purpose.
(a) In establishing and implementing a pilot program to be known as the wagefare program, it is the intent of the Legislature to promote greater economic self-sufficiency among West Virginia families and workers by:
(1) Increasing the employability of unemployed and underemployed West Virginians through on-the-job training;
(2) Invigorating the public-private work force partnership through development of jobs with both private for-profit and public employers; and
(3) Insuring that program participants through their employment development plans have opportunities to improve work skills, education and employability and establish recent work histories with work site training, mentoring, individual education accounts and provisions of necessary support service benefits that include child care, workers' compensation, job placement and a guarantee that participation in the wagefare program does not result in reduction of net income to participants.
(b) The wagefare program is created as a three-year pilot program in which residents in participating counties in the state of West Virginia shall, in lieu of receiving coupons under the food stamp program and payments from the aid to dependent children program, be provided jobs and paid in a way that promotes self-sufficiency and encourages unemployed West Virginians to improve their position in the work force. Recipients of unemployment insurance in the pilot counties also shall be offered employment under the program.
§31-5A-3. Governor and department of health and human resources

to work together to obtain exemption.

(a) The governor and the department of health and human resources shall work diligently to obtain all exemptions and waivers from and amendments to federal statutes, rules and regulations necessary to implement the program at the earliest possible date.
(b) Upon obtaining all such exemptions, waivers and amendments the department of health and human resources, with the advice of the wagefare advisory board, shall adopt such changes to current rules as may be required to implement the program.
(c) The department, with the advice of the board, shall amend the state plans for the aid to dependent children program, the job opportunities and basic skills program and the food stamp program to incorporate the programs into the wagefare program for the pilot counties, and shall obtain federal approval of plan amendments.
(d) The department, with the advice of the board, shall obtain any exemptions and waivers from federal statutes and regulations necessary to qualify the program as a federally approved demonstration project under section 1115 (42 U.S.C. 1315) of the Social Security Act and section seventeen (7 U.S.C. 2026) of the Food Stamp Act.
(e) The purpose of this section is to facilitate implementation of the program at the earliest possible date and with maximum federal financial participation. Therefore, the department is directed to expedite the acquisition of federal waiver and amendment approvals, and the adoption of necessary statutory amendments in close and continuous coordination with appropriate federal officials, and to prepare and submit completely and in a timely manner all forms and data required by those officials. The department, with the advice of the board, is authorized to make such changes to the program as are necessary to achieve federal waiver approval. Any changes should be, in the judgment of the director of the department of health and human resources, the fewest necessary to achieve federal approval for the program. The changes must maintain the intent and purpose of the program, as set forth in section four of this article. If changes to the program required to gain waiver approval would be too extensive to maintain the purpose and intent of the program, the department, with the advice of the board, shall seek the amendments to federal statutes that are required for implementation of the program.
(f) Any county may opt to participate in the pilot program with a majority of the county's county commission voting to do so.
§31-5A-4. Wagefare advisory board; members; terms; and annual

reports.

(a) The wagefare advisory board is established to advise the department in the direction and administration of the program. The board consists of nine members, five to be appointed by the governor and, two to be appointed by the speaker of the House of Delegates and two to be appointed by the president of the Senate. Members shall serve three-year terms.
(b) The board shall meet monthly with the director of the department of health and human resources.
(c) The board shall report annually to the governor and the Legislature on the status and progress of the program. A chairperson to be selected among the members of the board shall have the additional duty to work with and coordinate the local councils created in this article.
§31-5A-5. Wagefare implementation councils.
A wagefare implementation council shall be established in each pilot county to assist the wagefare advisory board and the department of health and human resources in the administration of the wagefare program and to allow local flexibility in dealing with the particular needs of each pilot county. Each council shall be primarily responsible for recruiting and encouraging participation of employment providers in the county. Each council shall be composed of seven members who shall be appointed by the county commissioners in each pilot county. Council members shall be residents of the pilot county in which they are appointed and shall serve three-year terms. At least two members shall be current or former recipients of the aid to dependent children program and the food stamp program.
§31-5A-6. Wagefare program special fund.
(a) There is created a wagefare program special fund, separate and distinct from the general revenue fund. All moneys in the fund are continuously appropriated for and shall be used exclusively to meet the necessary expenditures of the program, including program wage reimbursements to participating employers, aid to dependent children cash grants, food stamp allotments, wagefare payments and employment-related day care payments to eligible residents of the pilot counties and administrative costs directly associated with the operation of the program. At the end of the three-year pilot program, expenditures from the fund shall not exceed accruals to the fund. No less than quarterly, the department shall meet with the board to review the cost effectiveness of the program and shall take any necessary action to modify or suspend the program to maintain cost neutrality.
(b) The individual education account is established in the wagefare program special fund in order to improve the position of wagefare participants in the workforce by increasing their access to continuing education. Employer contributions to the account as provided for in this article shall be used to pay for further education as set forth in this article.
(c) All funds appropriated for expenditure by or apportioned to the department for operation of the aid to dependent children program, the job opportunities and basic skills program, the food stamp program and employment-related day care in the pilot counties shall accrue to the fund.
(d) The fund shall be held and administered by the state treasurer. All income earned on moneys in the fund shall be credited to and deposited in the fund to the extent permitted by state and federal law.
(e) There is hereby created the wagefare unemployment wage fund. The fund shall consist of moneys collected or received by the department of health and human resources pursuant to this article.
The wagefare unemployment wage fund shall be held and administered by the state treasurer.
All income earned on moneys in the wagefare unemployment wage fund invested by the state treasurer shall accrue to the fund. Any balance in the fund shall not lapse at any time. All moneys in the fund are appropriated continuously to the department of health and human resources for the payment of wages and wage-related expenses of participants in the wagefare program who were otherwise eligible to receive unemployment insurance benefits. Such payments shall be made in the form of a reimbursement to the department, which shall be the central disbursement point for all employer-related financial transactions under the provisions of this article.
(f) Notwithstanding the rates of contribution in article five, chapter twenty-one-a, et.seq., for wages paid during calendar year one thousand nine hundred ninety-six, the rate assigned each employer subject to provisions contained in this article shall be determined in accordance with the schedule as set forth in this article as follows:
Fund Adequacy Percentage Ratio I D
200% and Over
Contribution Rate Cumulative Payroll Limits
(Percentage of Total Taxable Payroll)
0.00% 0.00% but less than 15.00%
0.06% 15.00% but less than 20.00%
0.16% 20.00% but less than 25.00%
0.26% 25.00% but less than 30.00%
0.36%30.00% but less than 35.00%
0.48% 35.00% but less than 40.00%
0.56% 40.00% but less than 45.00%
0.66% 45.00% but less than 50.00%
0.76% 50.00% but less than 55.00%
0.88% 55.00% but less than 60.00%
0.96% 60.00% but less than 65.00%
1.06% 65.00% but less than 69.00%
1.16% 69.00% but less than 73.00%
1.26% 73.00% but less than 77.00%
1.36%77.00% but less than 80.00%
1.46% 80.00% but less than 83.00%
1.56% 83.00% but less than 86.00%
1.66% 86.00% but less than 89.00%
1.76% 89.00% but less than 91.00%
1.86% 91.00% but less than 93.00%
1.96% 93.00% but less than 95.00%
2.06% 95.00% but less than 96.00%
2.16% 96.00% but less than 96.90%
2.26% 96.90% but less than 97.70%
2.36%97.70% but less than 98.40%
2.46% 98.40% but less than 98.90%
2.56% 98.90% but less than 99.30%
2.76% 99.30% but less than 99.54%
2.98% 99.54% but less than 99.63%
4.39% 99.80%
but less than 99.92%
5.40% 99.92% to 100.00%
(g) All moneys shall be paid and collected in the same manner and at the same time as unemployment compensation contributions, unless the commissioner of the bureau of employment programs in conjunction with the secretary of the department of health and human resources prescribes otherwise. After deduction of the actual shared costs of the department in collecting the amounts under this subsection, all such moneys shall be paid into the wagefare unemployment wage fund, which shall be separate and distinct from the general revenue fund. Moneys due pursuant to this section but not received by the department for payment into the wagefare unemployment wage fund by the thirtieth day of June, one thousand nine hundred ninety-six, shall be paid into the unemployment compensation trust fund.
(h) The department is authorized to continue to make reimbursements as necessary from the wagefare unemployment wage fund for a period not to exceed six months following the end of the three-year pilot program authorized under this article. Any unexpended and unobligated moneys remaining in the wagefare unemployment wage fund six months following the end of the three-year pilot program are appropriated and transferred to the unemployment compensation trust fund on that date.
(i) All payments by participating employers to the department for specially skilled program participants as provided for in this article shall accrue to the fund.
(j) In administering the fund, and consistent with other provisions of the program and to the extent permitted by federal law , the department shall maximize the use of federal grants and apportionments of the aid to dependent children program, the job opportunities and basic skills program, the food stamp program and employment-related day care.
(k) To the extent that additional moneys may be obtained for the program from sources other than state tax revenues, the additional moneys shall be appropriated to the fund.
§31-5A-6. Duties of department of health and human resources;

implementation of program; payments of benefits.

(a) The department of health and human resources shall adopt by a rule a method to determine which employers, including public and private sector employers, within this state may have the opportunity to utilize program participants. The department shall give priority in assigning program participants to those employers located in the six pilot counties set forth in this article. No employer is required to participate in the wagefare program. In the event that there are unassigned participants whom no employer desires to utilize, they may be assigned to work for a public agency.
No business or organization primarily engaged in activities which are political or religious in nature may employ any person under the authority of the wagefare program: Provided, That nothing may prohibit the employment of an individual or individuals by a religious or political business or organization under the authority of the wagefare program in the event the employment offered does not involve religious or political activities.
Any charitable organization, as the term is defined by chapter twenty-nine, article nineteen, section two of this code shall also be eligible to employ persons under the authority of the wagefare program.
(b) The maximum number of program participants that any employer is authorized to receive at any one time shall not exceed ten percent of the total number of the employer's employees. However, each employer may receive one participant. The director of the department of health and human resources may waive the limit in special circumstances.
(c) The department by rule may:
(1) Establish criteria for excluding employers from participation for failure to abide by program requirements or other demonstrated unwillingness to comply with the stated intent of the program.
(2) Provide that employers that have shown a pattern of terminating participants prior to the completion of training or of not offering unsubsidized employment to participants who have successfully completed training with that employer shall be ineligible to receive additional participants.
(d) The department shall insure that jobs made available to program participants shall:
(1) Not require work in excess of forty hours per week;
(2) Be in conformity with section 3304(a)(5) of the Federal Unemployment Tax Act;
(3) Not be used to displace regular employees nor to fill unfilled positions previously established; and
(4) Not pay a wage that is substantially less than the wage paid for similar jobs in the local economy with appropriate adjustments for experience and training.
(e) Individuals eligible for the program shall be limited to pilot county residents who are:
(1) Adults and caretaker relatives who are receiving aid to dependent children benefits;
(2) Adult food stamp program recipients except as described in subsection (g), subdivision four of this section;
(3) Unemployment compensation recipients; and
(4) Unemployed noncaretaker parents of children who are receiving aid to dependent children benefits.
(f) Individuals desiring work through the program shall contact the nearest office of the department of health and human resources serving the pilot county in which they reside if they are aid to dependent children program or food stamp program applicants or recipients. Unemployment compensation applicants or recipients may gain access to the program through the nearest office of the division of employment security.
With input from the participant, case workers shall prepare an employment development plan designed to assist the participant in removing barriers to employment, acquiring work skills and obtaining unsubsidized employment. The case worker shall periodically review the employment development plan and assess participant progress in accordance with rules for the wagefare program.
With the assistance of the local council and the wagefare advisory board, the department shall develop a job inventory of sufficient size to accommodate all of the participants who desire to work in the program. In consultation with the participant, the department shall try to match the profile of a participant with the needs of an employer when assigning a participant to work with the employer.
Either the employer or the participant may terminate the assignment by contacting the appropriate department office. In such event, the department shall reassess the needs of the participant and assign the participant to another wagefare placement or another wagefare program component and, at the employer's request, provide the employer with another participant.
The department shall pay placement and barrier removal payments from the wagefare program special fund as necessary to enable participation in wagefare.
If after six months in a placement, a participant has not been hired for an unsubsidized position, the employer shall allow the worker to undertake eight hours of job search per week. Participating employers shall consider such time as hours worked for the purposes of paying wages.
If after nine months in a placement, a participant has not been hired for an unsubsidized position, the placement shall be terminated, and the case worker shall reassess the participant's employment development plan.
The department shall accept eligible volunteers into the program prior to mandating program participation by eligible persons.
Assignment of participants to available jobs shall be made on the basis of a preference schedule developed by the department with priority given to employing nonworking parents of children receiving aid to dependent children, food stamp recipients or unemployment compensation recipients, in that order.
(g) Program jobs shall not be offered to the following groups, irrespective of the priority referred to in this section:
(1) Teenage custodial parents working to receive their general education development certificate or high school diploma;
(2) Persons determined to require substance abuse treatment prior to job placement;
(3) Persons determined to be permanently or temporarily incapacitated and persons who are primary caregivers to such persons;
(4) Food stamp applicants or recipients who are employed full-time or are food stamp eligible college students enrolled full-time in an institution of higher education or enrolled half-time in an institution of higher education and working at least twenty hours per week;
(5) Aid to dependent children recipients who have not completed both a life skills class and requirements for a general education development certificate or high school diploma, except when approved programs to provide life skills and a general education development certificate are provided to the participant at the worksite;
(6) Teenage persons who have not received a general education development certificate or high school diploma;
(7) Food stamp recipients in the pilot counties who are eligible for supplemental security income benefits or other ongoing state or federal maintenance benefits based on age or disability;
(8) Persons for whom suitable child care arrangements are necessary but not available; and
(9) Person for whom transportation is not available, persons who live in remote areas or persons who would be required to commute for more than one hour each way, in accordance with wagefare program rules.
(h) Unemployment compensation recipients may be referred to available work through the workfare program if the qualifying base year wages used to establish the claim do not exceed ten thousand dollars. If referred, unemployment compensation recipients shall be referred to the workfare program in accordance with the job referral process used to refer applicants to available work. When a program job is offered to an unemployment compensation recipient and the job is refused, the division of employment security shall investigate the refusal and identify and decide all issues arising therefrom, including suspension of benefits, in accordance with the provisions of article six-a, chapter twenty-one-a of this code.
(i) Aid to dependent children and food stamp benefits shall be suspended at the end of the calendar month in which an employer makes the first wage payment to a participant who is a custodial parent in a family that receives aid to dependent children or to any adult member of a household receiving food stamps. Failure of the participant to cooperate with the requirements of the wagefare program shall result in the participant's removal from the program and the removal of the needs of the adult or adults from the grant in accordance with program rules. Rules governing sanctions, hearings or conciliations for participants in the program shall be made by the director of the department of health and human resources.
(j) Employers shall pay all participating individuals at least an hourly rate no less than the federal minimum wage.
Sick leave, holiday and vacation absences shall conform to the individual employer's rules for new employees.
Group health insurance benefits shall be provided by the employer to program participants if, and to the extent that, state or federal law requires the employer to provide such benefits.
All persons participating in the workfare program shall be considered to be temporary employees of the individual employer providing the work and shall be entitled only to benefits required by state or federal law.
Employers shall provide workers' compensation coverage for each workfare participant.
In the event that the net monthly full-time wage paid to a participant would be less than the level of income from the aid to dependent children program and the food stamp benefit amount equivalent that the participant would otherwise receive, the department shall determine and pay a supplemental payment as necessary to provide the participant with that level of net income. The department by rule shall adopt an equivalency scale to be adjusted for household size and other factors. The purpose of this equivalency scale is to insure that participants are not economically disadvantaged, in terms of net income, by accepting a job under the program. The department shall determine and pay in advance supplemental payments to participants on a monthly basis as necessary to insure equivalent net program wages. Participants shall be compensated only for time worked.
(k) In addition to, and not in lieu of the payments provided for under subsection (j) of this section, participants shall be entitled to retain the full child support payments collected by the department.
(l) After the participant has participated in the wagefare program for thirty days, in addition to the participant wage, the employer shall pay one dollar for each participant hour worked into the participant's individual education account. Contributions to such an account shall be tax deferred or tax exempt to the extent permitted by federal and state law. This contribution shall not be reimbursed by the wagefare plus program special fund except as follows:
If the employer hires a participant in an unsubsidized position for at least thirty days, the wagefare program special fund shall reimburse one half of the employers contribution to the individual education account to the employer.
(m) Any participant for whom an individual education account contribution is made shall be eligible for access to education benefits from that participant's individual education account at any time after the participant has left the wagefare program and has held a full-time, unsubsidized job for at least thirty days.
(n) When any participant has qualified for use of that participant's individual education account, an amount equal to that participant's individual education account balance shall be transferred to a fund to be administered by the chancellor or community colleges pursuant to his or her duties as set forth in section one, article four, chapter eighteen-b for that participant's use. Only one individual education account shall be created for any participant. Each account shall be administered by the chancellor of community colleges and shall be used for continuing education and training in any of the state's community colleges or institutions of higher education for the participant and the participant's immediate family.
(o) Program participants who are eligible for federally and state funded medical assistance at the time they enter the program shall remain eligible as long as they continue to participate in the program. In conformity with existing state employment-related day care program regulations, child day care shall be provided for all program participants who require it.
(p) Wagefare program employers shall:
(1) Endeavor to make wagefare program placements positive learning and training experiences;
(2) Maintain health, safety and working conditions at or above levels generally acceptable in the industry and no less than that of comparable jobs of the employer;
(3) Provide on-the-job training to the degree necessary for the participants to perform their duties;
(4) Recruit volunteer mentors from among their regular employees to assist the participants in becoming oriented to work and the workplace; and
(5) Sign an agreement for each placement outlining the specific job offered to the participant and agreeing to abide by all requirements of the program, including the requirement that the program not supplant existing jobs. All agreements shall include provisions noting the employer's responsibility to repay reimbursements in the event the employer violates program rules.
(q) Program participant wages shall be subject to federal and state income taxes, social security taxes and unemployment compensation contributions which shall be withheld and paid in accordance with state and federal law. Supplemental payments made pursuant to subsection (j) of this section shall not be subject to state income taxes and, to the extent allowed by federal law, shall not be subject to federal income taxes and social security taxes.
(r) The department shall reimburse employers for the employer share of social security, unemployment compensation contributions and workers' compensation premiums paid on behalf of program participants, as well as the minimum wage earnings paid to program participants by the employer from the wagefare program special fund.
(s) If the department finds that an employer has violated any of the rules of the wagefare program the department:
(1) Shall withhold any amounts due to employers under subsection (r) of this section;
(2) May seek repayment of any amounts paid to employers under subsection (r) of this section.
§31-5A-7. Approval required for cash in lieu of food stamps.
If approval is obtained from the federal government during the three-year pilot program established in this article, the department of health and human resources may distribute food stamp program benefits to any eligible person in the six pilot counties in the form of cash rather than coupons.
§31-5A-8. Evaluation of wagefare program.
(a) Six months prior to the completion date of the three-year test period of the pilot program, the department shall submit a written report to the Legislature and the governor containing a full and complete analysis of the program. The report shall include recommendations from the department and the wagefare advisory board regarding appropriate revisions to the program and the potential for its permanent implementation for the entire state.
(b) The evaluation of the program shall be conducted by an independent evaluator using a combination of group comparison, survey and individualized event and attitude recording techniques. Performance in attaining program goals in each pilot county shall be matched against performance using the traditional welfare and employment characteristics. In addition, the composite performance of the six pilot counties shall be compared to the rest of the state. The evaluation shall include measurements of whether program participation has improved the quality of life of program participants. In addition, as a part of the evaluation of the wagefare program, the commissioner of commerce pursuant to his duties as chairman of the economic development authority pursuant to the provisions of section five, article fifteen, chapter thirty-one of this code shall determine whether the program has displaced unsubsidized employment opportunities that would otherwise have been available and whether the program has had any discernible impact on the economies or wage levels in individual pilot counties.
(c) The target goals for the program are to reduce the wagefare program eligible aid to dependent children, food stamp and unemployment compensation caseloads in the pilot counties by fifty percent by the end of the third year of the pilot program, and to reduce the costs associated with these caseloads by twenty-five percent over the three-year pilot period.
(d) Twelve months after the beginning of the wagefare program, the department shall present to the Legislature a report on the cost neutrality projections of the program. If it appears that the program is not likely to achieve cost neutrality over the course of the three-year pilot period, the department shall also present a plan for the early termination of the program.
§31-5A-9. Sunset provision.
In the event that the department of health and human resources is not able to obtain the necessary exemptions, waivers or amendments referred to in section three of this article prior to the first day of January, one thousand nine hundred ninety-eight, this article is repealed on that date and shall have no further force or effect. Any unexpended and unobligated moneys remaining in the wagefare unemployment wage fund on that date are appropriated and transferred to the unemployment compensation fund on that date.
§31-5A-10. Appointment of board and establishment of council

to take place in sixty days of effective date of this article.

The appointment of the members of the wagefare advisory board and the establishment of the council shall occur within sixty days after the effective date of this article.

NOTE: The purpose of this bill is to create the "Wagefare" program designed to employ persons in lieu of allowing them to continue to receive public assistance. The bill sets the program up on a pilot project basis with six participating counties while allowing other counties to opt into the program. The program encourages the governor and the director of the department of health and human resources to work together to obtain exemptions from federal statutory requirements that would hamper the program. It further creates an advisory board to advise the governor in implementing the program. The bill also contains the following: Wagefare implementation councils that are set up to assist implementation on the local levels; a wagefare program special fund; a plan for the payment of benefits; cash to be paid in lieu of food stamps for persons who obtain work through workfare; evaluation procedure for determining efficiency of the program; and, a sunset provision.

This section is new; therefore, strike-throughs and underscoring have been omitted.