I 116th CONGRESS 2d Session H. R. 8747 IN THE HOUSE OF REPRESENTATIVES November 12, 2020 Mr. Smith of Washington introduced the following bill; which was referred to the Committee on Education and Labor A BILL To direct the Secretary of Labor to award formula and competitive grants for layoff aversion activities, and for other purposes.

1. Short title This Act may be cited as the Emergency Economic and Workforce System Resiliency Act . 2. Definitions (a) In general Except as otherwise provided, the terms used in this Act have the meanings given the terms in section 3 of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3102 ). (b) Employee ownership trust The term employee ownership trust is an indirect form of employee ownership in which a trust holds a controlling stake in a company on behalf of all its employees and provides an incentive for owners to sell a controlling stake in their business. (c) Employee stock ownership plan The term employee stock ownership plan has the meaning given the term in section 4975(e)(7) of the Internal Revenue Code of 1986. (d) Worker cooperative The term worker cooperative means a values-driven business that puts worker and community benefit at the core of its purpose, and in which— (1) workers own the business and they participate in its financial success on the basis of their labor contribution to the cooperative; and (2) workers have representation on and vote for the board of directors, adhering to the principle of one worker, one vote. I Supplemental Formula Grants for Emergency Layoff Aversion and Workforce Training Activities 101. Formula grants (a) In general Not later than 1 year after the date of the enactment of this Act, the Secretary of Labor shall award 5-year grants in accordance with subsection (b), to States to support efforts to— (1) reduce and prevent unemployment; and (2) limit the impact of disruptions (economic, pandemic-related, transitions of retiring business owners, automation-related, trade-related, or other forces) on labor markets. (b) State allotments (1) In general From the amount appropriated under section 105, the Secretary shall— (A) reserve not more than 1/4 of 1 percent of such amount to provide assistance to the outlying areas; and (B) make allotments to the States under paragraph (2) to— (i) make allocations under subsection (c); or (ii) carry out the State activities described in subsection (d). (2) Allotments The Secretary shall make an allotment in accordance with section 132(b)(1)(B)(ii) of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3172(b)(1)(B)(ii) ) to each State that submits a State plan under section 103. (c) Within State allocations The Governor of a State shall use not less than 60 percent of the allotment received under subsection (b)(2)— (1) to allocate funds to each local area in the State in accordance with section 133(b)(2)(A)(i) of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3173(b)(2)(A)(i) ) to carry out the activities under section 103, in accordance with the State plan under section 102, and in consultation with the State board and the Governor; and (2) of which not more than 10 percent may be used for administrative purposes. (d) State activities The Governor of a State shall use the remaining amount of the allotment received under subsection (b)(2)— (1) to carry out the activities under section 103 in accordance with the State plan under section 102, and in consultation with the State board; and (2) of which not more than 10 percent may be used for administrative purposes. 102. State applications (a) In general (1) Submission by States To receive an allocation under section 101, a State shall submit a State Workforce Economic Recovery plan (in this Act referred to as a State plan ), developed by or in consultation with the State board and approved by the Governor, to the Secretary at such time and in such manner as the Secretary may reasonably require, and containing the information described in subsection (b). (2) Secretarial response Upon receipt of a State plan, the Secretary shall— (A) approve the State plan; or (B) provide the State— (i) with an explanation as to how the State plan does not meet the goals and requirements of the grant program under this title; and (ii) with an opportunity to submit an updated State plan or to appeal the decision of the Secretary. (3) Resubmission (A) Required State plan updates At the end of the first 2-year period of the grant, a State shall— (i) update the State plan to reflect changes in the labor market and other economic conditions affecting the implementation of the activities funded under the grant; and (ii) submit to the Secretary such updated State plan modifications to the State plan. (B) Authorized State plan updates A State may submit to the Secretary any necessary updates to the State plan at any point during the grant period. (b) Contents A State plan shall include the following: (1) A description of how the State plan is aligned with, enhances, expands, or fills service gaps to the plan submitted by the State under section 102 or 103 of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3112 , 313). (2) A State strategic vision, including— (A) a summary of the State’s goals— (i) for preparing an educated and skilled workforce for meeting the skilled workforce needs of employers (particularly in existing and emerging in-demand industry sectors and occupations), an identification of the median income for in-demand sectors and occupations, and how the State will work to ensure worker access to jobs and industries with higher median wages, opportunities for workers to share in the ownership or profits of their companies, and high quality work environments; (ii) for ensuring equitable access to quality jobs for all segments of the State’s population, and the plan for promoting quality career pathways that lead to high-quality jobs for displaced or incumbent workers; and (iii) for offering retiring business owners or business owners planning to close their businesses opportunities to plan that transition in order to ensure the continuity of high-quality jobs in the local economy; and (B) the primary strategies that will be used to achieve the State vision and goals, the proposed service delivery infrastructure, and the timeline for achieving such goals. (3) A description of the problems the State’s proposed activities aim to solve, and the reason for prioritizing selected problem areas. (4) A description of how the State will align with, and leverage funds from, the State’s workforce development system and higher education system, and public assistance programs, and the economic recovery efforts at the State and local levels. (5) A description of how the State will collaborate with other relevant State and local government entities, non-profit entities, and other relevant groups identified by the State to carry out activities under section 103, including the roles and responsibilities of each entity that will participate in the development, implementation, evaluation, and oversight of each component of the State plan. (6) An employer engagement strategy that describes how employers will be targeted and recruited to participate, and any expectations for employer participation, such as cash or in-kind contributions, wage release time for employees, provision of on-site child care or financial support for child care, employee participation incentives, work-based learning opportunities, or loaned instructors. (7) A description of the data sources (commercial or public) the State will use to identify growing, stable, and declining businesses and industry sectors or occupations. (8) A description of how the State will prioritize individuals with barriers to employment, people of color, youth, immigrants, formerly incarcerated adults, and individuals experiencing pandemic-related job displacement. (9) A description of how the State will prioritize access to high-quality jobs by establishing the standards of job quality that an employer is required to meet as a condition of receiving funds under this title, which— (A) are consistent with the minimum standards established by the Interagency Task Force under section 304, and a description of such standards; and (B) include a defined livable wage for the State or by subregion of the State. (10) Any other requirements as determined by the Secretary. 103. Uses of funds (a) In general A State may use, or ensure that a local area uses, the funds awarded under this title for any of the following purposes: (1) Training and education opportunities. (2) Adult basic education. (3) Incumbent worker training. (4) Dislocated worker training. (5) On-the-job training. (6) Job seeking assistance. (7) Layoff aversion, in advance of the notice required under the Worker Adjustment and Retraining Notification Act ( 29 U.S.C. 2101 et seq.), which may include assisting employers with product diversification, market expansion, and improving productivity. (8) Entrepreneurial development and coaching (helping individuals who need assistance with starting up, scaling up, or maintaining their own businesses), which may include the provision of loans through local boards of up to $8,000 to help with starting up a new business or preserving a business in financial distress. (9) Developing career pathway opportunities (including through industry or sector partnerships) to in-demand high-quality jobs in coordination with employers, community-based organizations, and State higher education systems, including the State registered apprenticeship system. (10) Related instruction for pre-apprenticeship, registered apprenticeship, or other work-based training in an occupational pathway. (11) Funding existing or establishing new State or non-profit employee ownership resource centers that offer education and technical assistance to retiring business owners, new entrepreneurs, or worker groups for the purpose of using broad-based employee share ownership in the form of employee stock ownership plans, worker cooperatives, or employee ownership trusts, to allow worker groups to buy out retiring business owners. (12) Capital for revolving loan funds managed by State or non-profit entities that offer loans to allow worker groups to buy out retiring business owners, worker groups, or entrepreneurs looking to save a declining firm through employee ownership, or workers using broad-based employee share ownership in the form of employee stock ownership plans, worker cooperatives, or employee ownership trusts. (b) Limitations No State or local area may use funds awarded under this title to— (1) recruit businesses, employees, or customers from another State; (2) assist employers that do not meet the standards of job quality under section 102(b)(9); or (3) assist proprietary institutions of higher education (as defined in section 102(b) of the Higher Education Act of 1965 ( 20 U.S.C. 1002(b) )). 104. Reporting requirements; National repository (a) Reporting requirements (1) States Each State that receives a grant under this title shall submit to the Secretary an annual report that, to the extent practicable integrates reporting requirements under the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3101 et seq.) and includes— (A) an evaluation— (i) of the performance of the activities funded under the grant— (I) with respect to indicators of performance under section 116(b)(2)(A) of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3141(b)(2)(A) ); and (II) with respect to meeting the goals of the State plan; (ii) of the satisfaction of each employer receiving assistance under this title, on the basis of the satisfaction measurement framework as determined by the Interagency Task Force under section 301; and (B) information on whether an employer that received assistance under the grant provided health benefits, paid sick leave, and paid family and medical leave to their employees. (2) Secretary The Secretary shall submit a report to Congress on an annual basis containing a summary of the reports received under paragraph (1), including promising emerging practices with respect to layoff aversion and job creation. (b) National Repository The Secretary shall, jointly with the Interagency Task Force established under title III, establish on a publicly accessible website, a national repository— (1) of data-driven, promising practices with respect to layoff aversion and job creation based on the evaluations described in subsection (a)(1); and (2) of recommendations for replicating and scaling up such practices. 105. Authorization of appropriations There are authorized to be appropriated $250,000,000 for fiscal year 2021 and each of the 4 succeeding fiscal years. II Competitive Grants for Innovative Layoff Aversion Models 201. Competitive grants (a) Grants authorized (1) In general The Secretary shall award planning grants and implementation grants, on a competitive basis and in accordance with paragraph (2), to States for innovative layoff aversion models. (2) Grant cycles In awarding grants under this title, the Secretary shall award— (A) a first cycle of grants that shall include— (i) planning grants, which shall be used during the 18-month period beginning on the date on which the grants are awarded; and (ii) implementation grants, which shall be used during the 5-year period beginning on the date on which the grants are awarded; and (B) a second cycle of grants that shall be new implementation grants— (i) to States that used planning grants in accordance with subparagraph (A)(i); and (ii) that shall be used during the 3.5-year period beginning on the date on which the grants are awarded. (b) Planning Grants (1) Applications (A) In general To receive a planning grant under this title, a State shall submit an application to the Secretary, at such time and in such manner as the Secretary may require, which shall include the information described in subparagraph (B). (B) Contents Each application shall include the following: (i) The need for a planning grant, and whether the State plans to submit an application for an implementation grant. (ii) A description of the planning activities the State will carry out with the grant. (iii) A description of each entity with which the State will coordinate to carry out such activities. (iv) A description of the data sources (commercial or public) that the State plans to use to— (I) investigate in-demand, stagnant, and declining industry sectors or occupations and employers in the State; (II) determine the needs of underserved and underrepresented populations to obtain and retain high-quality jobs; and (III) identify strategies and approaches to job creation and layoff aversion. (v) A list of individuals and organizations, including roles and responsibilities, of each member of the State grantee advisory council under title III. (vi) Potential State administrative policies or other conditions that may support or impede implementation of new approaches to job creation and layoff aversion. (2) Grant amount A planning grant under this title may not be less than $75,000, and may not exceed $350,000 for a State. (3) Uses of funds For a period that may not exceed 18 months after receipt of such grant, a State receiving a planning grant shall use such grant to carry out at least one of the following: (A) To research, develop a proof of concept, or pilot layoff aversion and job creation strategies prior to submission of an implementation grant application under subsection (c), if the State plans to apply for such a grant. (B) To help support the modification or removal of State administrative policy barriers to implementation of job creation and layoff aversion interventions. (c) Implementation Grants (1) Application Process (A) In general To receive an implementation grant under this title, a State shall submit an application to the Secretary at such time, in such manner, and containing the information described in subparagraph (B). (B) Contents Subject to subparagraph (C), each application shall include the following: (i) A description of the interventions that will be carried out including a minimum of one layoff aversion intervention aimed at a particular industry sector or occupation or segment of the workforce, or that is workforce system-wide, and the plan for deploying such interventions. (ii) Projected performance goals for such interventions, and a timeline for achieving such goals. (iii) An analysis of the need for the grant, the particular problems that will be addressed through such interventions, and the reasons for prioritizing such interventions. (iv) A description of efforts already underway in the State and that have been previously implemented to create jobs or avert layoffs, and a description of the success elements and lessons learned that have informed each type of intervention that will be funded under the grant. (v) An identification of the State agency for fiscal and contract administration, and description of its management capacity. (vi) A description of how the State will collaborate with relevant State and local government agencies, non-profit entities, business and employer partners, and any other groups determined relevant by the State, and the roles and responsibilities of each such entity, which may include small business development entities, economic development entities, job training entities, unemployment compensation entities, institutions of higher education (including 2-year public institutions of higher education), labor unions, business associations, community-based organizations, and American Job Centers and one-stop centers. (vii) How the State will leverage State, local, and private resources from partnering entities, including the entities described in clause (vi). (viii) A description of how the State will identify and prioritize individual workers at risk of layoffs and employers or industry sectors with the most significant risks for decline and individual workers at risk of layoffs. (ix) A list of in-demand industry sectors or occupations that will be the target of the interventions, and the corresponding recognized postsecondary credentials necessary for workers to obtain jobs in such sectors or occupations, and how underrepresented populations and individuals with education and employment barriers will be supported to succeed in such sectors or occupations. (x) A description of the recognized postsecondary credentials necessary for workers to obtain in-demand high-quality jobs within targeted sectors or occupations, the corresponding education and training resources currently available to be leveraged, new education and training resources that must be developed, and the role of employers in helping to create the appropriate and adequate pipeline of workers with those credentials. (xi) A list of individuals and organizations, including roles and responsibilities, of each member of the State advisory council under title III. (xii) A description of how the State will prioritize access to high-quality jobs by establishing the standards of job quality that an employer is required to meet as a condition of receiving funds under this title, which are consistent with the minimum standards established by the Interagency Task Force under section 304, and a description of such standards. (xiii) Any other information required by the Secretary. (C) Simplified application process The Secretary shall establish a simplified application process for States that have received a planning grant under this title who are seeking to apply for an implementation grant. (2) Grant amount (A) In general Subject to subparagraph (B), an implementation grant under this title shall be made to a State in an amount that is not less than $5,000,000 and not more than $20,000,000. (B) Additional funds A State that is awarded an implementation grant under this section for piloting the following models may receive up to $5,000,000 in additional funds: (i) Establishing a State or local public holding company that invests and acquires ownership in distressed businesses to allow them to continue operating or reopen later. (ii) Piloting a model that seeks to improve individual economic security through every stage of career life, particularly for workers who are left out of traditional unemployment insurance, benefits, or worker training and retraining programs such as independent contractors, gig workers, business owners, and individuals who are caring for dependents or otherwise not working outside of the home. This may include efforts to provide broader lifelong access to income support, access to pensions or retirement savings accounts, health care benefits, paid family leave, medical leave, and other fringe benefits. (iii) Establishing sector-based or labor-management governance boards with shared oversight over a worker support fund. Worker support funds may be used to provide ongoing training and retraining opportunities, income support during unemployment, health insurance or other health and wellness benefits, flexible or compensation during alternative or flexible work schedules, paid sick leave or paid family leave, or other benefits as determined by the joint sector-based or worker-management governing body. (3) Priority In awarding implementation grants under this Act, the Secretary, in consultation with the Interagency Task Force, shall prioritize the following States: (A) States that demonstrate the greatest need. (B) States that have the most thorough plans for deploying interventions. (C) States that prioritize individuals with barriers to employment, people of color, immigrants, youth, formerly incarcerated individuals, and/or people experiencing pandemic-related job displacement. (D) States that are committed to forging career pathways with employers that provide high-quality jobs (as defined by the State in section 102(b)(10)), or in a case in which the State does not submit a State plan under title I, as defined in accordance with the requirements of section 102(b)(10). (E) States that have the most thorough, actionable and achievable plans for deploying interventions, and present reliable and relevant evidence for the interventions chosen. (d) Reporting Requirements (1) States Each State shall submit annual performance reports to the Secretary that demonstrate how the grant-funded activities are performing with respect to indicators of performance under section 116(b)(2)(A) of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3141(b)(2)(A) ), and the business satisfaction measures established by the Interagency Task Force established under title IV. (2) Secretary The Secretary shall submit to Congress, a report— (A) on an annual basis, containing a summary of the reports submitted under paragraph (1); and (B) at the conclusion of each implementation grant period, the results of a rigorous, independent evaluation of the grants awarded under this title. (e) Authorization of appropriations There are authorized to be appropriated to carry out this title, $250,000,000— (1) of which up to 70 percent may be used to award the first round of grants under subsection (a)(2)(A); and (2) of which any remaining funds shall be used to award a second round of grants under subsection (a)(2)(B). III State Grantee Advisory Counsel 301. State grantee advisor counsel (a) In general Each State that receives a grant under title I or title II shall establish a State grantee advisory counsel. (b) Membership and duties (1) In general The State board shall serve as the State grantee advisory council and shall oversee and assess the performance of the activities carried out under the grant received under title I or II. (2) Other entities Representatives of the following entities shall be invited to serve as a member of the State grantee advisory council, if not a member of the State board: (A) The State workforce system. (B) The State unemployment compensation agency. (C) The State higher education system, including 2-year public institutions of higher education. (D) The State, local, or regional chambers of commerce. (E) Representatives of employer organizations. (F) Representatives of labor organizations or joint labor-management organizations. (G) Community-based organizations. (H) An established State-based employee ownership center that offers education and technical assistance to retiring business owners, worker groups, entrepreneurs, or declining firms, for the purpose of using broad-based employee share ownership in the form of employee stock ownership plans, worker cooperatives, or employee ownership trusts, to allow worker groups to buy out businesses. (I) Any other member relevant to the activities carried out by the State under the grant awarded under title I or II. IV Interagency Task Force 401. Purposes Not later than 6 months after the date of enactment of this Act, the Secretaries of Commerce and Labor (in this title referred to as the Secretaries ) shall, jointly, assemble a Federal interagency task force to— (1) identify any challenges that a State or local area receiving funds under this Act has had to overcome; and (2) collect and disseminate best practices, and develop and recommend policies at the Federal level to support ongoing efforts to limit the impact of market disruptions on workers, employers, and industry sectors or occupations, particularly with respect to individuals with barriers to employment, people of color, youth, immigrants, formerly incarcerated individuals, and people experiencing pandemic-related job displacement; (3) establish a framework for a State receiving a grant under this Act to measure employer satisfaction with respect to activities funded under this Act; and (4) establish the minimum standards of job quality that an employer is required to meet as a condition of receiving assistance under this Act, which shall consider the following: (A) Whether the employer provides wages at or above the minimum living wage standards for States and localities determined by research centers at public or private non-profit institutions of higher education or think tanks. Living wage models used by the Interagency Task Force must use a market-based approach that utilizes geographically specific expenditure data related to a household’s expected minimum food, child care, health insurance, housing, transportation, and other basic needs costs. (B) Whether the employer provides access to ongoing training and advancement opportunities. (C) Whether the employer provides paid sick days, paid family leave, or paid medical leave or short-term disability leave. (D) Whether the employer provides adequate hours and predictable schedules. 402. Composition The Secretaries shall appoint the following individuals to serve as members of the Task Force: (1) The Secretary of Labor. (2) The Administrator of the Economic Development Administration of the Department of Commerce. (3) The Administrator of the Small Business Administration. (4) The Director of the Community Development Financial Institutions Fund. (5) The Administrator of the Office of Career, Technical, and Adult Education of the Department of Education. (6) The Administrator of the Office of Postsecondary Education at the Department of Education. (7) A representative from the Employment and Training Administration. 403. Meetings The Interagency Task Force shall meet at least on an annual basis until the date on which the Task Force is terminated to evaluate the activities being carried out by each State receiving a grant grantees under this Act and impact of those activities on employers, incumbent workers, and job-seekers, including the effectiveness of such activities— (1) in keeping workers employed in high-quality jobs; (2) helping workers transition smoothly to high-quality in-demand jobs during economic disruption; (3) improving firm resiliency during economic disruption; and (4) expanding the number of jobs available in high-quality in-demand industry sectors and occupations. 404. Report Not later than 1 year after the funds awarded under the final grant under this Act are expended, the Interagency Task Force shall submit a report to Congress detailing recommendations for a Federal program based on the most promising practices carried out with the funds awarded under titles I and II. 405. Sunset The Interagency Task Force shall terminate after submitting its final report under section 404.