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(l) of the Social Security Act (42 
U.S.C. 503(l)) is amended to read as follows:
    ``(l)(1) Nothing in this Act or any other provision of Federal law 
shall be considered to prevent a State from enacting legislation to 
provide for testing an applicant for unemployment compensation for the 
unlawful use of controlled substances as a condition for receiving such 
compensation, including legislation that provides for the following 
procedures:
            ``(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; and
                    ``(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 (42 U.S.C. 1395kkk(m)) 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 (42 U.S.C. 18042(g)) 
        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''.
Output: Ensuring Quality in the Unemployment Insurance Program (EQUIP) Act  This bill allows states to enact unemployment compensation laws that require an applicant for unemployment compensation, before receiving any such compensation, 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 determined to be high-risk. It prescribes retesting requirements and payment suspensions for applicants who test positive.