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[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1333 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                S. 1333

  To provide for the treatment and temporary financing of short-time 
                         compensation programs.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              July 6, 2011

  Mr. Reed (for himself, Mr. Harkin, Mrs. Murray, Mr. Whitehouse, Mr. 
 Brown of Ohio, Mr. Schumer, Mr. Leahy, Mr. Casey, and Mr. Blumenthal) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL

 
  To provide for the treatment and temporary financing of short-time 
                         compensation programs.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Layoff Prevention 
Act of 2011''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Treatment of short-time compensation programs.
Sec. 3. Temporary financing of short-time compensation payments in 
                            States with programs in law.
Sec. 4. Temporary financing of short-time compensation agreements.
Sec. 5. Grants for short-time compensation programs.
Sec. 6. Assistance and guidance in implementing programs.
Sec. 7. Reports.

SEC. 2. TREATMENT OF SHORT-TIME COMPENSATION PROGRAMS.

    (a) Definition.--
            (1) In general.--Section 3306 of the Internal Revenue Code 
        of 1986 (26 U.S.C. 3306) is amended by adding at the end the 
        following new subsection:
    ``(v) Short-Time Compensation Program.--For purposes of this 
chapter, the term `short-time compensation program' means a program 
under which--
            ``(1) the participation of an employer is voluntary;
            ``(2) an employer reduces the number of hours worked by 
        employees in lieu of layoffs;
            ``(3) such employees whose workweeks have been reduced by 
        at least 10 percent, and by not more than the percentage, if 
        any, that is determined by the State to be appropriate (but in 
        no case more than 60 percent), are eligible for unemployment 
        compensation;
            ``(4) the amount of unemployment compensation payable to 
        any such employee is a pro rata portion of the unemployment 
        compensation which would otherwise be payable to the employee 
        if such employee were totally unemployed;
            ``(5) such employees are not expected to meet the 
        availability for work or work search test requirements while 
        collecting short-time compensation benefits, but are required 
        to be available for their normal workweek;
            ``(6) eligible employees may participate, as appropriate, 
        in training (including employer-sponsored training or worker 
        training funded under the Workforce Investment Act of 1998) to 
        enhance job skills if such program has been approved by the 
        State agency;
            ``(7) the State agency shall require employers to certify 
        that the employer will continue to provide health benefits and 
        retirement benefits under a defined benefit plan (as defined in 
        section 414(j)) and contributions under a defined contribution 
        plan (as defined in section 414(i)) to any employee whose 
        workweek is reduced under the program under the same terms and 
        conditions as though the workweek of such employee had not been 
        reduced;
            ``(8) the State agency shall require an employer to submit 
        a written plan describing the manner in which the requirements 
        of this subsection will be implemented (including a plan for 
        giving advance notice, where feasible, to an employee whose 
        workweek is to be reduced) together with an estimate of the 
        number of layoffs that would have occurred absent the ability 
        to participate in short-time compensation and such other 
        information as the Secretary of Labor determines is 
        appropriate;
            ``(9) in the case of employees represented by a union, the 
        appropriate official of the union has agreed to the terms of 
        the employer's written plan and implementation is consistent 
        with employer obligations under the applicable Federal laws; 
        and
            ``(10) upon request by the State and approval by the 
        Secretary of Labor, only such other provisions are included in 
        the State law that are determined to be appropriate for 
        purposes of a short-time compensation program.''.
            (2) Effective date.--Subject to paragraph (3), the 
        amendment made by paragraph (1) shall take effect on the date 
        of the enactment of this Act.
            (3) Transition period for existing programs.--In the case 
        of a State that is administering a short-time compensation 
        program as of the date of the enactment of this Act and the 
        State law cannot be administered consistent with the amendment 
        made by paragraph (1), such amendment shall take effect on the 
        earlier of--
                    (A) the date the State changes its State law in 
                order to be consistent with such amendment; or
                    (B) the date that is 2 years and 6 months after the 
                date of the enactment of this Act.
    (b) Conforming Amendments.--
            (1) Internal revenue code of 1986.--
                    (A) Subparagraph (E) of section 3304(a)(4) of the 
                Internal Revenue Code of 1986 is amended to read as 
                follows:
                    ``(E) amounts may be withdrawn for the payment of 
                short-time compensation under a short-time compensation 
                program (as defined under section 3306(v));''.
                    (B) Subsection (f) of section 3306 of the Internal 
                Revenue Code of 1986 is amended--
                            (i) by striking paragraph (5) (relating to 
                        short-time compensation) and inserting the 
                        following new paragraph:
            ``(5) amounts may be withdrawn for the payment of short-
        time compensation under a short-time compensation program (as 
        defined in subsection (v)); and''; and
                            (ii) by redesignating paragraph (5) 
                        (relating to self-employment assistance 
                        program) as paragraph (6).
            (2) Social security act.--Section 303(a)(5) of the Social 
        Security Act is amended by striking ``the payment of short-time 
        compensation under a plan approved by the Secretary of Labor'' 
        and inserting ``the payment of short-time compensation under a 
        short-time compensation program (as defined in section 3306(v) 
        of the Internal Revenue Code of 1986)''.
            (3) Unemployment compensation amendments of 1992.--
        Subsections (b) through (d) of section 401 of the Unemployment 
        Compensation Amendments of 1992 (26 U.S.C. 3304 note) are 
        repealed.

SEC. 3. TEMPORARY FINANCING OF SHORT-TIME COMPENSATION PAYMENTS IN 
              STATES WITH PROGRAMS IN LAW.

    (a) Payments to States.--
            (1) In general.--Subject to paragraph (3), there shall be 
        paid to a State an amount equal to 100 percent of the amount of 
        short-time compensation paid under a short-time compensation 
        program (as defined in section 3306(v) of the Internal Revenue 
        Code of 1986, as added by section 2(a)) under the provisions of 
        the State law.
            (2) Terms of payments.--Payments made to a State under 
        paragraph (1) shall be payable by way of reimbursement in such 
        amounts as the Secretary estimates the State will be entitled 
        to receive under this section for each calendar month, reduced 
        or increased, as the case may be, by any amount by which the 
        Secretary finds that the Secretary's estimates for any prior 
        calendar month were greater or less than the amounts which 
        should have been paid to the State. Such estimates may be made 
        on the basis of such statistical, sampling, or other method as 
        may be agreed upon by the Secretary and the State agency of the 
        State involved.
            (3) Limitations on payments.--
                    (A) General payment limitations.--No payments shall 
                be made to a State under this section for short-time 
                compensation paid to an individual by the State during 
                a benefit year in excess of 26 times the amount of 
                regular compensation (including dependents' allowances) 
                under the State law payable to such individual for a 
                week of total unemployment.
                    (B) Employer limitations.--No payments shall be 
                made to a State under this section for benefits paid to 
                an individual by the State under a short-time 
                compensation program if such individual is employed by 
                an employer on a seasonal, temporary, or intermittent 
                basis.
    (b) Applicability.--
            (1) In general.--Payments to a State under subsection (a) 
        shall be available for weeks of unemployment--
                    (A) beginning on or after the date of the enactment 
                of this Act; and
                    (B) ending on or before the date that is 3 years 
                and 6 months after the date of the enactment of this 
                Act.
            (2) Three-year funding limitation for combined payments 
        under this section and section 4.--States may receive payments 
        under this section and section 4 with respect to a total of not 
        more than 156 weeks.
    (c) Two-Year Transition Period for Existing Programs.--During any 
period that the transition provision under section 2(a)(3) is 
applicable to a State with respect to a short-time compensation 
program, such State shall be eligible for payments under this section. 
Subject to paragraphs (1)(B) and (2) of subsection (b), if at any point 
after the date of the enactment of this Act the State enacts a State 
law providing for the payment of short-time compensation under a short-
time compensation program that meets the definition of such a program 
under section 3306(v) of the Internal Revenue Code of 1986, as added by 
section 2(a), the State shall be eligible for payments under this 
section after the effective date of such enactment.
    (d) Funding and Certifications.--
            (1) Funding.--There are appropriated, out of moneys in the 
        Treasury not otherwise appropriated, such sums as may be 
        necessary for purposes of carrying out this section.
            (2) Certifications.--The Secretary shall from time to time 
        certify to the Secretary of the Treasury for payment to each 
        State the sums payable to such State under this section.
    (e) Definitions.--In this section:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor.
            (2) State; state agency; state law.--The terms ``State'', 
        ``State agency'', and ``State law'' have the meanings given 
        those terms in section 205 of the Federal-State Extended 
        Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note).

SEC. 4. TEMPORARY FINANCING OF SHORT-TIME COMPENSATION AGREEMENTS.

    (a) Federal-State Agreements.--
            (1) In general.--Any State which desires to do so may enter 
        into, and participate in, an agreement under this section with 
        the Secretary provided that such State's law does not provide 
        for the payment of short-time compensation under a short-time 
        compensation program (as defined in section 3306(v) of the 
        Internal Revenue Code of 1986, as added by section 2(a)).
            (2) Ability to terminate.--Any State which is a party to an 
        agreement under this section may, upon providing 30 days' 
        written notice to the Secretary, terminate such agreement.
    (b) Provisions of Federal-State Agreement.--
            (1) In general.--Any agreement under this section shall 
        provide that the State agency of the State will make payments 
        of short-time compensation under a plan approved by the State. 
        Such plan shall provide that payments are made in accordance 
        with the requirements under section 3306(v) of the Internal 
        Revenue Code of 1986, as added by section 2(a).
            (2) Limitations on plans.--
                    (A) General payment limitations.--A short-time 
                compensation plan approved by a State shall not permit 
                the payment of short-time compensation to an individual 
                by the State during a benefit year in excess of 26 
                times the amount of regular compensation (including 
                dependents' allowances) under the State law payable to 
                such individual for a week of total unemployment.
                    (B) Employer limitations.--A short-time 
                compensation plan approved by a State shall not provide 
                payments to an individual if such individual is 
                employed by an employer on a seasonal, temporary, or 
                intermittent basis.
            (3) Employer payment of costs.--Any short-time compensation 
        plan entered into by an employer must provide that the employer 
        will pay the State an amount equal to one-half of the amount of 
        short-time compensation paid under such plan. Such amount shall 
        be deposited in the State's unemployment fund and shall not be 
        used for purposes of calculating an employer's contribution 
        rate under section 3303(a)(1) of the Internal Revenue Code of 
        1986.
    (c) Payments to States.--
            (1) In general.--There shall be paid to each State with an 
        agreement under this section an amount equal to--
                    (A) one-half of the amount of short-time 
                compensation paid to individuals by the State pursuant 
                to such agreement; and
                    (B) any additional administrative expenses incurred 
                by the State by reason of such agreement (as determined 
                by the Secretary).
            (2) Terms of payments.--Payments made to a State under 
        paragraph (1) shall be payable by way of reimbursement in such 
        amounts as the Secretary estimates the State will be entitled 
        to receive under this section for each calendar month, reduced 
        or increased, as the case may be, by any amount by which the 
        Secretary finds that the Secretary's estimates for any prior 
        calendar month were greater or less than the amounts which 
        should have been paid to the State. Such estimates may be made 
        on the basis of such statistical, sampling, or other method as 
        may be agreed upon by the Secretary and the State agency of the 
        State involved.
            (3) Funding.--There are appropriated, out of moneys in the 
        Treasury not otherwise appropriated, such sums as may be 
        necessary for purposes of carrying out this section.
            (4) Certifications.--The Secretary shall from time to time 
        certify to the Secretary of the Treasury for payment to each 
        State the sums payable to such State under this section.
    (d) Applicability.--
            (1) In general.--An agreement entered into under this 
        section shall apply to weeks of unemployment--
                    (A) beginning on or after the date on which such 
                agreement is entered into; and
                    (B) ending on or before the date that is 2 years 
                and 13 weeks after the date of the enactment of this 
                Act.
            (2) Two-year funding limitation.--States may receive 
        payments under this section with respect to a total of not more 
        than 104 weeks.
    (e) Special Rule.--If a State has entered into an agreement under 
this section and subsequently enacts a State law providing for the 
payment of short-time compensation under a short-time compensation 
program that meets the definition of such a program under section 
3306(v) of the Internal Revenue Code of 1986, as added by section 2(a), 
the State--
            (1) shall not be eligible for payments under this section 
        for weeks of unemployment beginning after the effective date of 
        such State law; and
            (2) subject to paragraphs (1)(B) and (2) of section 3(b), 
        shall be eligible to receive payments under section 3 after the 
        effective date of such State law.
    (f) Definitions.--In this section:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor.
            (2) State; state agency; state law.--The terms ``State'', 
        ``State agency'', and ``State law'' have the meanings given 
        those terms in section 205 of the Federal-State Extended 
        Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note).

SEC. 5. GRANTS FOR SHORT-TIME COMPENSATION PROGRAMS.

    (a) Grants.--
            (1) For implementation or improved administration.--The 
        Secretary shall award grants to States that enact short-time 
        compensation programs (as defined in subsection (i)(2)) for the 
        purpose of implementation or improved administration of such 
        programs.
            (2) For promotion and enrollment.--The Secretary shall 
        award grants to States that are eligible and submit plans for a 
        grant under paragraph (1) for such States to promote and enroll 
        employers in short-time compensation programs (as so defined).
            (3) Eligibility.--
                    (A) In general.--The Secretary shall determine 
                eligibility criteria for the grants under paragraph (1) 
                and (2).
                    (B) Clarification.--A State administering a short-
                time compensation program, including a program being 
                administered by a State that is participating in the 
                transition under the provisions of sections 2(a)(3) and 
                3(c), that does not meet the definition of a short-time 
                compensation program under section 3306(v) of the 
                Internal Revenue Code of 1986 (as added by 2(a)), and a 
                State with an agreement under section 4, shall not be 
                eligible to receive a grant under this section until 
                such time as the State law of the State provides for 
                payments under a short-time compensation program that 
                meets such definition and such law.
    (b) Amount of Grants.--
            (1) In general.--The maximum amount available for making 
        grants to a State under paragraphs (1) and (2) shall be equal 
        to the amount obtained by multiplying $700,000,000 (less the 
        amount used by the Secretary under subsection (e)) by the same 
        ratio as would apply under subsection (a)(2)(B) of section 903 
        of the Social Security Act (42 U.S.C. 1103) for purposes of 
        determining such State's share of any excess amount (as 
        described in subsection (a)(1) of such section) that would have 
        been subject to transfer to State accounts, as of October 1, 
        2010, under the provisions of subsection (a) of such section.
            (2) Amount available for different grants.--Of the maximum 
        incentive payment determined under paragraph (1) with respect 
        to a State--
                    (A) one-third shall be available for a grant under 
                subsection (a)(1); and
                    (B) two-thirds shall be available for a grant under 
                subsection (a)(2).
    (c) Grant Application and Disbursal.--
            (1) Application.--Any State seeking a grant under paragraph 
        (1) or (2) of subsection (a) shall submit an application to the 
        Secretary at such time, in such manner, and complete with such 
        information as the Secretary may require. In no case may the 
        Secretary award a grant under this section with respect to an 
        application that is submitted after December 31, 2014.
            (2) Notice.--The Secretary shall, within 30 days after 
        receiving a complete application, notify the State agency of 
        the State of the Secretary's findings with respect to the 
        requirements for a grant under paragraph (1) or (2) (or both) 
        of subsection (a).
            (3) Certification.--If the Secretary finds that the State 
        law provisions meet the requirements for a grant under 
        subsection (a), the Secretary shall thereupon make a 
        certification to that effect to the Secretary of the Treasury, 
        together with a certification as to the amount of the grant 
        payment to be transferred to the State account in the 
        Unemployment Trust Fund (as established in section 904(a) of 
        the Social Security Act (42 U.S.C. 1104(a))) pursuant to that 
        finding. The Secretary of the Treasury shall make the 
        appropriate transfer to the State account within 7 days after 
        receiving such certification.
            (4) Requirement.--No certification of compliance with the 
        requirements for a grant under paragraph (1) or (2) of 
        subsection (a) may be made with respect to any State whose--
                    (A) State law is not otherwise eligible for 
                certification under section 303 of the Social Security 
                Act (42 U.S.C. 503) or approvable under section 3304 of 
                the Internal Revenue Code of 1986; or
                    (B) short-time compensation program is subject to 
                discontinuation or is not scheduled to take effect 
                within 12 months of the certification.
    (d) Use of Funds.--The amount of any grant awarded under this 
section shall be used for the implementation of short-time compensation 
programs and the overall administration of such programs and the 
promotion and enrollment efforts associated with such programs, such as 
through--
            (1) the creation or support of rapid response teams to 
        advise employers about alternatives to layoffs;
            (2) the provision of education or assistance to employers 
        to enable them to assess the feasibility of participating in 
        short-time compensation programs; and
            (3) the development or enhancement of systems to automate--
                    (A) the submission and approval of plans; and
                    (B) the filing and approval of new and ongoing 
                short-time compensation claims.
    (e) Administration.--The Secretary is authorized to use 0.25 
percent of the funds available under subsection (g) to provide for 
outreach and to share best practices with respect to this section and 
short-time compensation programs.
    (f) Recoupment.--The Secretary shall establish a process under 
which the Secretary shall recoup the amount of any grant awarded under 
paragraph (1) or (2) of subsection (a) if the Secretary determines 
that, during the 5-year period beginning on the first date that any 
such grant is awarded to the State, the State--
            (1) terminated the State's short-time compensation program; 
        or
            (2) failed to meet appropriate requirements with respect to 
        such program (as established by the Secretary).
    (g) Funding.--There are appropriated, out of moneys in the Treasury 
not otherwise appropriated, to the Secretary, $700,000,000 to carry out 
this section, to remain available without fiscal year limitation.
    (h) Reporting.--The Secretary may establish reporting requirements 
for States receiving a grant under this section in order to provide 
oversight of grant funds.
    (i) Definitions.--In this section:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor.
            (2) Short-time compensation program.--The term ``short-time 
        compensation program'' has the meaning given such term in 
        section 3306(v) of the Internal Revenue Code of 1986, as added 
        by section 2(a).
            (3) State; state agency; state law.--The terms ``State'', 
        ``State agency'', and ``State law'' have the meanings given 
        those terms in section 205 of the Federal-State Extended 
        Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note).

SEC. 6. ASSISTANCE AND GUIDANCE IN IMPLEMENTING PROGRAMS.

    (a) In General.--In order to assist States in establishing, 
qualifying, and implementing short-time compensation programs (as 
defined in section 3306(v) of the Internal Revenue Code of 1986, as 
added by section 2(a)), the Secretary of Labor (in this section 
referred to as the ``Secretary'') shall--
            (1) develop model legislative language which may be used by 
        States in developing and enacting such programs and 
        periodically review and revise such model legislative language;
            (2) provide technical assistance and guidance in 
        developing, enacting, and implementing such programs;
            (3) establish reporting requirements for States, including 
        reporting on--
                    (A) the number of estimated averted layoffs;
                    (B) the number of participating employers and 
                workers; and
                    (C) such other items as the Secretary of Labor 
                determines are appropriate.
    (b) Model Language and Guidance.--The model language and guidance 
developed under subsection (a) shall allow sufficient flexibility by 
States and participating employers while ensuring accountability and 
program integrity.
    (c) Consultation.--In developing the model legislative language and 
guidance under subsection (a), and in order to meet the requirements of 
subsection (b), the Secretary shall consult with employers, labor 
organizations, State workforce agencies, and other program experts.''

SEC. 7. REPORTS.

    (a) Initial Report.--
            (1) In general.--Not later than 4 years after the date of 
        the enactment of this Act, the Secretary of Labor shall submit 
        to Congress and to the President a report or reports on the 
        implementation of the provisions of this Act.
            (2) Requirements.--Any report under paragraph (1) shall 
        include the following:
                    (A) A description of best practices by States and 
                employers in the administration, promotion, and use of 
                short-time compensation programs (as defined in section 
                3306(v) of the Internal Revenue Code of 1986, as added 
                by section 2(a)).
                    (B) An analysis of the significant challenges to 
                State enactment and implementation of short-time 
                compensation programs.
                    (C) A survey of employers in States that have not 
                enacted a short-time compensation program or entered 
                into an agreement with the Secretary on a short-time 
                compensation plan to determine the level of interest 
                among such employers in participating in short-time 
                compensation programs.
                    (D) Other matters related to the implementation of 
                the provisions of this Act as the Secretary of Labor 
                determines appropriate.
    (b) Subsequent Reports.--After the submission of the report under 
subsection (a), the Secretary of Labor may submit such additional 
reports on the implementation of short-time compensation programs as 
the Secretary deems appropriate.
    (c) Funding.--There are appropriated, out of any moneys in the 
Treasury not otherwise appropriated, to the Secretary of Labor, 
$1,500,000 to carry out this section, to remain available without 
fiscal year limitation.
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