To amend title III of the Social Security Act to require a substance abuse risk assessment and targeted drug testing as a condition for the receipt of unemployment benefits, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Ensuring Quality in the Unemployment 
Insurance Program (EQUIP) Act''.

SEC. 2. DRUG SCREENING MADE A CONDITION OF BENEFIT RECEIPT.

    (a) In General.--Section 303 of the Social Security Act (42 U.S.C. 
503) is amended by adding at the end the following:
    ``(l)(1) For purposes of subsection (a), the State law (as defined 
in section 205 of the Federal-State Extended Unemployment Compensation 
Act of 1970 (26 U.S.C. 3304 note)) of a State shall provide the 
following:
            ``(A) No regular compensation may be paid to an applicant 
        for such compensation with respect to a benefit year unless, 
        before the receipt of any such compensation--
                    ``(i) the applicant has completed a substance abuse 
                risk assessment for such benefit year; and
                    ``(ii) subject to subparagraph (B), if the State 
                determines based on the results of such assessment that 
                the applicant is a high-risk applicant, not later than 
                1 week after the results of the assessment are 
                determined, the applicant tests negative for controlled 
                substances.
            ``(B) If a high-risk applicant tests positive for any 
        controlled substance--
                    ``(i) if such test result is the first positive 
                test result for such applicant in the benefit year--
                            ``(I) no regular compensation may be paid 
                        to such applicant for a period of 30 days 
                        beginning on the date that such test result is 
                        determined; and
                            ``(II) no regular compensation may be paid 
                        to such applicant during the remainder of such 
                        benefit year unless the applicant tests 
                        negative for controlled substances at the end 
                        of such period;
                    ``(ii) if such test result is not the first 
                positive test result for such applicant in the benefit 
                year, no regular compensation may be paid to such 
                applicant during the remainder of such benefit year.
            ``(C) A high-risk applicant receiving benefits with respect 
        to a benefit year shall be subject to testing for controlled 
        substances by the State at any time during the benefit year, 
        with limited notice provided to the applicant of such testing.
            ``(D) A high-risk applicant who is tested for controlled 
        substances under--
                    ``(i) subparagraph (A) or (C) shall be responsible 
                for the cost of such test if the individual tests 
                positive for any such substance; and
                    ``(ii) subparagraph (B)(i)(II) shall be responsible 
                for the cost of such test.
    ``(2) For purposes of this subsection--
            ``(A) the term `benefit year' means the benefit year as 
        defined in the applicable State law;
            ``(B) the term `controlled substance'--
                    ``(i) means a drug or other substance selected by 
                the State to be included in drug testing under this 
                subsection; and
                    ``(ii) does not include any drug or other substance 
                used by the applicant pursuant to a valid prescription 
                or as otherwise authorized by law;
            ``(C) the term `high-risk applicant', with respect to a 
        benefit year, means an individual who is determined by the 
        State to have a high risk of substance abuse based on the 
        results of a substance abuse risk assessment administered under 
        paragraph (1)(A)(i); and
            ``(D) the term `substance abuse risk assessment' means a 
        screening instrument, approved by the Director of the National 
        Institutes of Health, designed to determine whether an 
        individual has a high risk of substance abuse.''.
    (b) No Merit Staffing Requirements.--Section 303(a)(1) of the 
Social Security Act (42 U.S.C. 503(a)(1)) shall not be construed in 
such a manner as to apply the merit staffing requirements in section 
900.603 of title 5, Code of Federal Regulations, as in effect on 
October 1, 2011, to the implementation of section 303(l) of such Act 
(as amended by subsection (a)).
    (c) Funding for Substance Abuse Testing.--
            (1) Funding from ipab.--Section 1899A(m) of the Social 
        Security Act is amended--
                    (A) in paragraph (1), in the matter preceding 
                subparagraph (A), by striking ``to the Board to carry'' 
                and inserting ``for the purposes of carrying out 
                section 303(l), and, if any funds remain in the fiscal 
                year involved, for the Board for the purpose of 
                carrying''; and
                    (B) by striking paragraph (2).
            (2) Funding from the co-op program.--Section 1322(g) of the 
        Patient Protection and Affordable Care Act is amended by 
        striking ``to carry out this section.'' and inserting ``to 
        carry out section 303(l) of the Social Security Act, to the 
        extent funds are necessary to carry out such section after the 
        application of section 1899A(m)(1) of such Act.''.
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendment made by subsection (a) shall take effect on the date 
        that is 180 days after the date of the enactment of this Act.
            (2) Delay permitted if legislation pending.--If a State 
        applies to the Secretary of Labor to delay implementation of 
        the requirements of section 303(l) of the Social Security Act 
        (42 U.S.C. 503(l)) on the grounds that legislation to implement 
        such requirements is pending in the State legislature on the 
        date that is 180 days after the date of the enactment of this 
        Act, the Secretary shall not refuse certification for payment 
        to the State under section 302 of such Act solely on the basis 
        of the failure of the State to implement such requirements 
        before such date.

Summary: Ensuring Quality in the Unemployment Insurance Program (EQUIP) Act - Amends title III (Grants to States for Unemployment Compensation Administration) of the Social Security Act (SSA) to require state unemployment compensation (UC) laws to require, as a condition of UC eligibility for a benefit year, an applicant, before receiving any UC, to: (1) complete a substance abuse risk assessment; and (2) test negative for controlled substances within one week after the results of such assessment if the state determines that the applicant is a high-risk. Prescribes retesting requirements and UC payment suspensions for applicants who test positive.

Amends SSA title XVIII (Medicare) and the Patient Protection and Affordable Care Act to provide funding for such substance abuse testing out of current funds appropriated for the Independent Payment Advisory Board (IPAB) and, after application of those funds, for the Consumer Operated and Oriented Plan (CO-OP) program.