II 

115TH CONGRESS 

1ST SESSION S. 1651 

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

IN THE SENATE OF THE UNITED STATES 

JULY 27, 2017 

Mr. REED (for himself, Mr. CASEY, Mrs. GILLIBRAND, Ms. HASSAN, and Mr. 

WHITEHOUSE) introduced the following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To provide for temporary financing of short-time 

compensation programs. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) IN GENERAL.—This Act may be cited as the 

5 ‘‘Layoff Prevention Act of 2017’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Temporary financing of short-time compensation payments in States 

with programs in law. 

Sec. 3. Temporary financing of short-time compensation agreements. 

Sec. 4. Grants for short-time compensation programs. 

Sec. 5. Assistance and guidance in implementing programs. 


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1 SEC. 2. TEMPORARY FINANCING OF SHORT-TIME COM2 PENSATION PAYMENTS IN STATES WITH PRO3 GRAMS IN LAW. 

4 (a) PAYMENTS TO STATES.— 

5 (1) IN GENERAL.—Subject to paragraph (3), 

6 there shall be paid to a State an amount equal to 

7 100 percent of the amount of short-time compensa8 tion paid under a short-time compensation program 

9 (as defined in section 3306(v) of the Internal Rev10 enue Code of 1986) under the provisions of the 

11 State law. 

12 (2) TERMS OF PAYMENTS.—Payments made to 

13 a State under paragraph (1) shall be payable by way 

14 of reimbursement in such amounts as the Secretary 

15 estimates the State will be entitled to receive under 

16 this section for each calendar month, reduced or in17 creased, as the case may be, by any amount by 

18 which the Secretary finds that the Secretary’s esti19 mates for any prior calendar month were greater or 

20 less than the amounts which should have been paid 

21 to the State. Such estimates may be made on the 

22 basis of such statistical, sampling, or other method 

23 as may be agreed upon by the Secretary and the 

24 State agency of the State involved. 

25 (3) LIMITATIONS ON PAYMENTS.— 


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1 (A) GENERAL PAYMENT LIMITATIONS.— 

2 No payments shall be made to a State under 

3 this section for short-time compensation paid to 

4 an individual by the State during a benefit year 

5 in excess of 26 times the amount of regular 

6 compensation (including dependents’ allow7 ances) under the State law payable to such in8 dividual for a week of total unemployment. 

9 (B) EMPLOYER LIMITATIONS.—No pay10 ments shall be made to a State under this sec11 tion for benefits paid to an individual by the 

12 State under a short-time compensation program 

13 if such individual is employed by the partici14 pating employer on a seasonal, temporary, or 

15 intermittent basis. 

16 (b) APPLICABILITY.— 

17 (1) IN GENERAL.—Payments to a State under 

18 subsection (a) shall be available for weeks of unem19 ployment— 

20 (A) beginning on or after the date of the 

21 enactment of this Act; and 

22 (B) ending on or before the date that is 5 

23 years and 6 months after the date of the enact24 ment of this Act. 


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1 (2) FIVE-YEAR FUNDING LIMITATION FOR COM2 BINED PAYMENTS UNDER THIS SECTION AND SEC3 TION 3.—States may receive payments under this 

4 section and section 3 with respect to a total of not 

5 more than 260 weeks. 

6 (c) NEW PROGRAMS.—Subject to paragraphs (1)(B) 

7 and (2) of subsection (b), if at any point after the date 

8 of the enactment of this Act the State enacts a State law 

9 providing for the payment of short-time compensation 

10 under a short-time compensation program that meets the 

11 definition of such a program under section 3306(v) of the 

12 Internal Revenue Code of 1986, as added by section 

13 2161(a), the State shall be eligible for payments under 

14 this section after the effective date of such enactment. 

15 (d) FUNDING AND CERTIFICATIONS.— 

16 (1) FUNDING.—There are appropriated, out of 

17 moneys in the Treasury not otherwise appropriated, 

18 such sums as may be necessary for purposes of car19 rying out this section. 

20 (2) CERTIFICATIONS.—The Secretary shall 

21 from time to time certify to the Secretary of the 

22 Treasury for payment to each State the sums pay23 able to such State under this section. 

24 (e) DEFINITIONS.—In this section: 


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1 (1) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of Labor. 

3 (2) STATE; STATE AGENCY; STATE LAW.—The 

4 terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 

5 have the meanings given those terms in section 205 

6 of the Federal-State Extended Unemployment Com7 pensation Act of 1970 (26 U.S.C. 3304 note). 

8 (f) TECHNICAL CORRECTION TO DEFINITION.—Sec9 tion 3306(v)(6) of the Internal Revenue Code of 1986 (26 

10 U.S.C. 3306) is amended by striking ‘‘Workforce Invest11 ment Act of 1998’’ and inserting ‘‘Workforce Innovation 

12 and Opportunity Act’’. 

13 SEC. 3. TEMPORARY FINANCING OF SHORT-TIME COM14 PENSATION AGREEMENTS. 

15 (a) FEDERAL-STATE AGREEMENTS.— 

16 (1) IN GENERAL.—Any State which desires to 

17 do so may enter into, and participate in, an agree18 ment under this section with the Secretary provided 

19 that such State’s law does not provide for the pay20 ment of short-time compensation under a short-time 

21 compensation program (as defined in section 

22 3306(v) of the Internal Revenue Code of 1986). 

23 (2) ABILITY TO TERMINATE.—Any State which 

24 is a party to an agreement under this section may, 


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1 upon providing 30 days’ written notice to the Sec2 retary, terminate such agreement. 

3 (b) PROVISIONS OF FEDERAL-STATE AGREEMENT.— 

4 (1) IN GENERAL.—Any agreement under this 

5 section shall provide that the State agency of the 

6 State will make payments of short-time compensa7 tion under a plan approved by the State. Such plan 

8 shall provide that payments are made in accordance 

9 with the requirements under section 3306(v) of the 

10 Internal Revenue Code of 1986. 

11 (2) LIMITATIONS ON PLANS.— 

12 (A) GENERAL PAYMENT LIMITATIONS.—A 

13 short-time compensation plan approved by a 

14 State shall not permit the payment of short15 time compensation to an individual by the State 

16 during a benefit year in excess of 26 times the 

17 amount of regular compensation (including de18 pendents’ allowances) under the State law pay19 able to such individual for a week of total un20 employment. 

21 (B) EMPLOYER LIMITATIONS.—A short22 time compensation plan approved by a State 

23 shall not provide payments to an individual if 

24 such individual is employed by the participating 


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1 employer on a seasonal, temporary, or intermit2 tent basis. 

3 (3) EMPLOYER PAYMENT OF COSTS.—Any 

4 short-time compensation plan entered into by an em5 ployer must provide that the employer will pay the 

6 State an amount equal to one-half of the amount of 

7 short-time compensation paid under such plan. Such 

8 amount shall be deposited in the State’s unemploy9 ment fund and shall not be used for purposes of cal10 culating an employer’s contribution rate under sec11 tion 3303(a)(1) of the Internal Revenue Code of 

12 1986. 

13 (c) PAYMENTS TO STATES.— 

14 (1) IN GENERAL.—There shall be paid to each 

15 State with an agreement under this section an 

16 amount equal to— 

17 (A) one-half of the amount of short-time 

18 compensation paid to individuals by the State 

19 pursuant to such agreement; and 

20 (B) any additional administrative expenses 

21 incurred by the State by reason of such agree22 ment (as determined by the Secretary). 

23 (2) TERMS OF PAYMENTS.—Payments made to 

24 a State under paragraph (1) shall be payable by way 

25 of reimbursement in such amounts as the Secretary 


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1 estimates the State will be entitled to receive under 

2 this section for each calendar month, reduced or in3 creased, as the case may be, by any amount by 

4 which the Secretary finds that the Secretary’s esti5 mates for any prior calendar month were greater or 

6 less than the amounts which should have been paid 

7 to the State. Such estimates may be made on the 

8 basis of such statistical, sampling, or other method 

9 as may be agreed upon by the Secretary and the 

10 State agency of the State involved. 

11 (3) FUNDING.—There are appropriated, out of 

12 moneys in the Treasury not otherwise appropriated, 

13 such sums as may be necessary for purposes of car14 rying out this section. 

15 (4) CERTIFICATIONS.—The Secretary shall 

16 from time to time certify to the Secretary of the 

17 Treasury for payment to each State the sums pay18 able to such State under this section. 

19 (d) APPLICABILITY.— 

20 (1) IN GENERAL.—An agreement entered into 

21 under this section shall apply to weeks of unemploy22 ment— 

23 (A) beginning on or after the date on 

24 which such agreement is entered into; and 


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1 (B) ending on or before the date that is 2 

2 years and 13 weeks after the date of the enact3 ment of this Act. 

4 (2) TWO-YEAR FUNDING LIMITATION.—States 

5 may receive payments under this section with re6 spect to a total of not more than 104 weeks. 

7 (e) SPECIAL RULE.—If a State has entered into an 

8 agreement under this section and subsequently enacts a 

9 State law providing for the payment of short-time com10 pensation under a short-time compensation program that 

11 meets the definition of such a program under section 

12 3306(v) of the Internal Revenue Code of 1986, the 

13 State— 

14 (1) shall not be eligible for payments under this 

15 section for weeks of unemployment beginning after 

16 the effective date of such State law; and 

17 (2) subject to paragraphs (1)(B) and (2) of sec18 tion 2(b), shall be eligible to receive payments under 

19 section 2 after the effective date of such State law. 

20 (f) DEFINITIONS.—In this section: 

21 (1) SECRETARY.—The term ‘‘Secretary’’ means 

22 the Secretary of Labor. 

23 (2) STATE; STATE AGENCY; STATE LAW.—The 

24 terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 

25 have the meanings given those terms in section 205 


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1 of the Federal-State Extended Unemployment Com2 pensation Act of 1970 (26 U.S.C. 3304 note). 

3 SEC. 4. GRANTS FOR SHORT-TIME COMPENSATION PRO4 GRAMS. 

5 (a) GRANTS.— 

6 (1) FOR IMPLEMENTATION OR IMPROVED AD7 MINISTRATION.—The Secretary shall award grants 

8 to States that enact short-time compensation pro9 grams (as defined in subsection (i)(2)) for the pur10 pose of implementation or improved administration 

11 of such programs. 

12 (2) FOR PROMOTION AND ENROLLMENT.—The 

13 Secretary shall award grants to States that are eligi14 ble and submit plans for a grant under paragraph 

15 (1) for such States to promote and enroll employers 

16 in short-time compensation programs (as so de17 fined). 

18 (3) ELIGIBILITY.— 

19 (A) IN GENERAL.—The Secretary shall de20 termine eligibility criteria for the grants under 

21 paragraphs (1) and (2). 

22 (B) CLARIFICATION.—A State admin23 istering a short-time compensation program, in24 cluding a program being administered by a 

25 State that is participating in the transition 


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1 under the provisions of sections 301(a)(3) and 

2 302(c), that does not meet the definition of a 

3 short-time compensation program under section 

4 3306(v) of the Internal Revenue Code of 1986, 

5 and a State with an agreement under section 3, 

6 shall not be eligible to receive a grant under 

7 this section until such time as the State law of 

8 the State provides for payments under a short9 time compensation program that meets such 

10 definition and such law. 

11 (b) AMOUNT OF GRANTS.— 

12 (1) IN GENERAL.—The maximum amount avail13 able for making grants to a State under paragraphs 

14 (1) and (2) shall be equal to the amount obtained 

15 by multiplying $100,000,000 (less the amount used 

16 by the Secretary under subsection (e)) by the same 

17 ratio as would apply under subsection (a)(2)(B) of 

18 section 903 of the Social Security Act (42 U.S.C. 

19 1103) for purposes of determining such State’s 

20 share of any excess amount (as described in sub21 section (a)(1) of such section) that would have been 

22 subject to transfer to State accounts, as of October 

23 1, 2016, under the provisions of subsection (a) of 

24 such section. 


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1 (2) AMOUNT AVAILABLE FOR DIFFERENT

2 GRANTS.—Of the maximum incentive payment deter3 mined under paragraph (1) with respect to a 

4 State— 

5 (A) one-third shall be available for a grant 

6 under subsection (a)(1); and 

7 (B) two-thirds shall be available for a 

8 grant under subsection (a)(2). 

9 (c) GRANT APPLICATION AND DISBURSAL.— 

10 (1) APPLICATION.—Any State seeking a grant 

11 under paragraph (1) or (2) of subsection (a) shall 

12 submit an application to the Secretary at such time, 

13 in such manner, and complete with such information 

14 as the Secretary may require. In no case may the 

15 Secretary award a grant under this section with re16 spect to an application that is submitted after De17 cember 31, 2020. 

18 (2) NOTICE.—The Secretary shall, within 30 

19 days after receiving a complete application, notify 

20 the State agency of the State of the Secretary’s find21 ings with respect to the requirements for a grant 

22 under paragraph (1) or (2) (or both) of subsection 

23 (a). 

24 (3) CERTIFICATION.—If the Secretary finds 

25 that the State law provisions meet the requirements 


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1 for a grant under subsection (a), the Secretary shall 

2 thereupon make a certification to that effect to the 

3 Secretary of the Treasury, together with a certifi4 cation as to the amount of the grant payment to be 

5 transferred to the State account in the Unemploy6 ment Trust Fund (as established in section 904(a) 

7 of the Social Security Act (42 U.S.C. 1104(a))) pur8 suant to that finding. The Secretary of the Treasury 

9 shall make the appropriate transfer to the State ac10 count within 7 days after receiving such certifi11 cation. 

12 (4) REQUIREMENT.—No certification of compli13 ance with the requirements for a grant under para14 graph (1) or (2) of subsection (a) may be made with 

15 respect to any State whose— 

16 (A) State law is not otherwise eligible for 

17 certification under section 303 of the Social Se18 curity Act (42 U.S.C. 503) or approvable under 

19 section 3304 of the Internal Revenue Code of 

20 1986; or 

21 (B) short-time compensation program is 

22 subject to discontinuation or is not scheduled to 

23 take effect within 12 months of the certifi24 cation. 


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1 (d) USE OF FUNDS.—The amount of any grant 

2 awarded under this section shall be used for the implemen3 tation of short-time compensation programs and the over4 all administration of such programs and the promotion 

5 and enrollment efforts associated with such programs, 

6 such as through— 

7 (1) the creation or support of rapid response 

8 teams to advise employers about alternatives to lay9 offs; 

10 (2) the provision of education or assistance to 

11 employers to enable them to assess the feasibility of 

12 participating in short-time compensation programs; 

13 and 

14 (3) the development or enhancement of systems 

15 to automate— 

16 (A) the submission and approval of plans; 

17 and 

18 (B) the filing and approval of new and on19 going short-time compensation claims. 

20 (e) ADMINISTRATION.—The Secretary is authorized 

21 to use 0.25 percent of the funds available under subsection 

22 (g) to provide for outreach and to share best practices with 

23 respect to this section and short-time compensation pro24 grams. 


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1 (f) RECOUPMENT.—The Secretary shall establish a 

2 process under which the Secretary shall recoup the 

3 amount of any grant awarded under paragraph (1) or (2) 

4 of subsection (a) if the Secretary determines that, during 

5 the 5-year period beginning on the first date that any such 

6 grant is awarded to the State, the State— 

7 (1) terminated the State’s short-time compensa8 tion program; or 

9 (2) failed to meet appropriate requirements 

10 with respect to such program (as established by the 

11 Secretary). 

12 (g) FUNDING.—There are appropriated, out of mon13 eys in the Treasury not otherwise appropriated, to the 

14 Secretary, $100,000,000 to carry out this section, to re15 main available without fiscal year limitation. 

16 (h) REPORTING.—The Secretary may establish re17 porting requirements for States receiving a grant under 

18 this section in order to provide oversight of grant funds. 

19 (i) DEFINITIONS.—In this section: 

20 (1) SECRETARY.—The term ‘‘Secretary’’ means 

21 the Secretary of Labor. 

22 (2) SHORT-TIME COMPENSATION PROGRAM.— 

23 The term ‘‘short-time compensation program’’ has 

24 the meaning given such term in section 3306(v) of 

25 the Internal Revenue Code of 1986. 


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1 (3) STATE; STATE AGENCY; STATE LAW.—The 

2 terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 

3 have the meanings given those terms in section 205 

4 of the Federal-State Extended Unemployment Com5 pensation Act of 1970 (26 U.S.C. 3304 note). 

6 SEC. 5. ASSISTANCE AND GUIDANCE IN IMPLEMENTING 

7 PROGRAMS. 

8 (a) IN GENERAL.—In order to assist States in estab9 lishing, qualifying, and implementing short-time com10 pensation programs (as defined in section 3306(v) of the 

11 Internal Revenue Code of 1986), the Secretary of Labor 

12 (in this section referred to as the ‘‘Secretary’’) shall— 

13 (1) develop model legislative language which 

14 may be used by States in developing and enacting 

15 such programs and periodically review and revise 

16 such model legislative language; 

17 (2) provide technical assistance and guidance in 

18 developing, enacting, and implementing such pro19 grams; 

20 (3) establish reporting requirements for States, 

21 including reporting on— 

22 (A) the number of estimated averted lay23 offs; 

24 (B) the number of participating employers 

25 and workers; and 


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1 (C) such other items as the Secretary of 

2 Labor determines are appropriate. 

3 (b) MODEL LANGUAGE AND GUIDANCE.—The model 

4 language and guidance developed under subsection (a) 

5 shall allow sufficient flexibility by States and participating 

6 employers while ensuring accountability and program in7 tegrity. 

8 (c) CONSULTATION.—In developing the model legisla9 tive language and guidance under subsection (a), and in 

10 order to meet the requirements of subsection (b), the Sec11 retary shall consult with employers, labor organizations, 

12 State workforce agencies, and other program experts. 

Æ 


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