II 115th CONGRESS 1st Session S. 1651 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. Short title; table of contents (a) In general This Act may be cited as the Layoff Prevention Act of 2017 . (b) Table of contents The table of contents of 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. 2. 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) 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 the participating 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 5 years and 6 months after the date of the enactment of this Act. (2) Five-year funding limitation for combined payments under this section and section 3 States may receive payments under this section and section 3 with respect to a total of not more than 260 weeks. (c) New programs 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 2161(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). (f) Technical correction to definition Section 3306(v)(6) of the Internal Revenue Code of 1986 ( 26 U.S.C. 3306 ) is amended by striking Workforce Investment Act of 1998 and inserting Workforce Innovation and Opportunity Act . 3. 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). (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. (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 the participating 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, 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 2(b), shall be eligible to receive payments under section 2 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). 4. 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 paragraphs (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 301(a)(3) and 302(c), that does not meet the definition of a short-time compensation program under section 3306(v) of the Internal Revenue Code of 1986, and a State with an agreement under section 3, 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 $100,000,000 (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, 2016, 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, 2020. (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, $100,000,000 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. (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). 5. 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), 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.