Layoff Prevention Act of 2020

II 116TH CONGRESS 2D SESSION S. 3494 To provide for temporary financing of short-time compensation programs. IN THE SENATE OF THE UNITED STATES MARCH 12, 2020 Mr. REED (for himself, Mr. WHITEHOUSE, and Mr. SANDERS) 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. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3 (a) IN GENERAL.—This Act may be cited as the 4 ‘‘Layoff Prevention Act of 2020’’. 5 (b) TABLE OF CONTENTS.—The table of contents of 6 this Act is as follows: 7 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. VerDate Sep 11 2014 22:41 Mar 21, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\S3494.IS S3494 kjohnson on DSK79L0C42PROD with BILLS 2 •S 3494 IS SEC. 2. TEMPORARY FINANCING OF SHORT-TIME COM- 1 PENSATION PAYMENTS IN STATES WITH PRO- 2 GRAMS IN LAW. 3 (a) PAYMENTS TO STATES.— 4 (1) IN GENERAL.—Subject to paragraph (3), 5 there shall be paid to a State an amount equal to 6 100 percent of the amount of short-time compensa- 7 tion paid under a short-time compensation program 8 (as defined in section 3306(v) of the Internal Rev- 9 enue Code of 1986) under the provisions of the 10 State law. 11 (2) TERMS OF PAYMENTS.—Payments made to 12 a State under paragraph (1) shall be payable by way 13 of reimbursement in such amounts as the Secretary 14 estimates the State will be entitled to receive under 15 this section for each calendar month, reduced or in- 16 creased, as the case may be, by any amount by 17 which the Secretary finds that the Secretary’s esti- 18 mates for any prior calendar month were greater or 19 less than the amounts which should have been paid 20 to the State. Such estimates may be made on the 21 basis of such statistical, sampling, or other method 22 as may be agreed upon by the Secretary and the 23 State agency of the State involved. 24 (3) LIMITATIONS ON PAYMENTS.— 25 VerDate Sep 11 2014 22:41 Mar 21, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3494.IS S3494 kjohnson on DSK79L0C42PROD with BILLS 3 •S 3494 IS (A) GENERAL PAYMENT LIMITATIONS.— 1 No payments shall be made to a State under 2 this section for short-time compensation paid to 3 an individual by the State during a benefit year 4 in excess of 26 times the amount of regular 5 compensation (including dependents’ allow- 6 ances) under the State law payable to such in- 7 dividual for a week of total unemployment. 8 (B) EMPLOYER LIMITATIONS.—No pay- 9 ments shall be made to a State under this sec- 10 tion for benefits paid to an individual by the 11 State under a short-time compensation program 12 if such individual is employed by the partici- 13 pating employer on a seasonal, temporary, or 14 intermittent basis. 15 (b) APPLICABILITY.— 16 (1) IN GENERAL.—Payments to a State under 17 subsection (a) shall be available for weeks of unem- 18 ployment— 19 (A) beginning on or after the date of the 20 enactment of this Act; and 21 (B) ending on or before the date that is 5 22 years and 6 months after the date of the enact- 23 ment of this Act. 24 VerDate Sep 11 2014 22:41 Mar 21, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3494.IS S3494 kjohnson on DSK79L0C42PROD with BILLS 4 •S 3494 IS (2) FIVE-YEAR FUNDING LIMITATION FOR COM- 1 BINED PAYMENTS UNDER THIS SECTION AND SEC- 2 TION 3.—States may receive payments under this 3 section and section 3 with respect to a total of not 4 more than 260 weeks. 5 (c) NEW PROGRAMS.—Subject to paragraphs (1)(B) 6 and (2) of subsection (b), if at any point after the date 7 of the enactment of this Act the State enacts a State law 8 providing for the payment of short-time compensation 9 under a short-time compensation program that meets the 10 definition of such a program under section 3306(v) of the 11 Internal Revenue Code of 1986, the State shall be eligible 12 for payments under this section after the effective date 13 of such enactment. 14 (d) FUNDING AND CERTIFICATIONS.— 15 (1) FUNDING.—There are appropriated, out of 16 moneys in the Treasury not otherwise appropriated, 17 such sums as may be necessary for purposes of car- 18 rying out this section. 19 (2) CERTIFICATIONS.—The Secretary shall 20 from time to time certify to the Secretary of the 21 Treasury for payment to each State the sums pay- 22 able to such State under this section. 23 (e) DEFINITIONS.—In this section: 24 VerDate Sep 11 2014 22:41 Mar 21, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3494.IS S3494 kjohnson on DSK79L0C42PROD with BILLS 5 •S 3494 IS (1) SECRETARY.—The term ‘‘Secretary’’ means 1 the Secretary of Labor. 2 (2) STATE; STATE AGENCY; STATE LAW.—The 3 terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 4 have the meanings given those terms in section 205 5 of the Federal-State Extended Unemployment Com- 6 pensation Act of 1970 (26 U.S.C. 3304 note). 7 (f) TECHNICAL CORRECTION TO DEFINITION.—Sec- 8 tion 3306(v)(6) of the Internal Revenue Code of 1986 (26 9 U.S.C. 3306) is amended by striking ‘‘Workforce Invest- 10 ment Act of 1998’’ and inserting ‘‘Workforce Innovation 11 and Opportunity Act’’. 12 SEC. 3. TEMPORARY FINANCING OF SHORT-TIME COM- 13 PENSATION AGREEMENTS. 14 (a) FEDERAL-STATE AGREEMENTS.— 15 (1) IN GENERAL.—Any State which desires to 16 do so may enter into, and participate in, an agree- 17 ment under this section with the Secretary provided 18 that such State’s law does not provide for the pay- 19 ment of short-time compensation under a short-time 20 compensation program (as defined in section 21 3306(v) of the Internal Revenue Code of 1986). 22 (2) ABILITY TO TERMINATE.—Any State which 23 is a party to an agreement under this section may, 24 VerDate Sep 11 2014 22:41 Mar 21, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3494.IS S3494 kjohnson on DSK79L0C42PROD with BILLS 6 •S 3494 IS upon providing 30 days’ written notice to the Sec- 1 retary, terminate such agreement. 2 (b) PROVISIONS OF FEDERAL-STATE AGREEMENT.— 3 (1) IN GENERAL.—Any agreement under this 4 section shall provide that the State agency of the 5 State will make payments of short-time compensa- 6 tion under a plan approved by the State. Such plan 7 shall provide that payments are made in accordance 8 with the requirements under section 3306(v) of the 9 Internal Revenue Code of 1986. 10 (2) LIMITATIONS ON PLANS.— 11 (A) GENERAL PAYMENT LIMITATIONS.—A 12 short-time compensation plan approved by a 13 State shall not permit the payment of short- 14 time compensation to an individual by the State 15 during a benefit year in excess of 26 times the 16 amount of regular compensation (including de- 17 pendents’ allowances) under the State law pay- 18 able to such individual for a week of total un- 19 employment. 20 (B) EMPLOYER LIMITATIONS.—A short- 21 time compensation plan approved by a State 22 shall not provide payments to an individual if 23 such individual is employed by the participating 24 VerDate Sep 11 2014 22:41 Mar 21, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3494.IS S3494 kjohnson on DSK79L0C42PROD with BILLS 7 •S 3494 IS employer on a seasonal, temporary, or intermit- 1 tent basis. 2 (3) EMPLOYER PAYMENT OF COSTS.—Any 3 short-time compensation plan entered into by an em- 4 ployer must provide that the employer will pay the 5 State an amount equal to one-half of the amount of 6 short-time compensation paid under such plan. Such 7 amount shall be deposited in the State’s unemploy- 8 ment fund and shall not be used for purposes of cal- 9 culating an employer’s contribution rate under sec- 10 tion 3303(a)(1) of the Internal Revenue Code of 11 1986. 12 (c) PAYMENTS TO STATES.— 13 (1) IN GENERAL.—There shall be paid to each 14 State with an agreement under this section an 15 amount equal to— 16 (A) one-half of the amount of short-time 17 compensation paid to individuals by the State 18 pursuant to such agreement; and 19 (B) any additional administrative expenses 20 incurred by the State by reason of such agree- 21 ment (as determined by the Secretary). 22 (2) TERMS OF PAYMENTS.—Payments made to 23 a State under paragraph (1) shall be payable by way 24 of reimbursement in such amounts as the Secretary 25 VerDate Sep 11 2014 22:41 Mar 21, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3494.IS S3494 kjohnson on DSK79L0C42PROD with BILLS 8 •S 3494 IS estimates the State will be entitled to receive under 1 this section for each calendar month, reduced or in- 2 creased, as the case may be, by any amount by 3 which the Secretary finds that the Secretary’s esti- 4 mates for any prior calendar month were greater or 5 less than the amounts which should have been paid 6 to the State. Such estimates may be made on the 7 basis of such statistical, sampling, or other method 8 as may be agreed upon by the Secretary and the 9 State agency of the State involved. 10 (3) FUNDING.—There are appropriated, out of 11 moneys in the Treasury not otherwise appropriated, 12 such sums as may be necessary for purposes of car- 13 rying out this section. 14 (4) CERTIFICATIONS.—The Secretary shall 15 from time to time certify to the Secretary of the 16 Treasury for payment to each State the sums pay- 17 able to such State under this section. 18 (d) APPLICABILITY.— 19 (1) IN GENERAL.—An agreement entered into 20 under this section shall apply to weeks of unemploy- 21 ment— 22 (A) beginning on or after the date on 23 which such agreement is entered into; and 24 VerDate Sep 11 2014 22:41 Mar 21, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S3494.IS S3494 kjohnson on DSK79L0C42PROD with BILLS 9 •S 3494 IS (B) ending on or before the date that is 2 1 years and 13 weeks after the date of the enact- 2 ment of this Act. 3 (2) TWO-YEAR FUNDING LIMITATION.—States 4 may receive payments under this section with re- 5 spect to a total of not more than 104 weeks. 6 (e) SPECIAL RULE.—If a State has entered into an 7 agreement under this section and subsequently enacts a 8 State law providing for the payment of short-time com- 9 pensation under a short-time compensation program that 10 meets the definition of such a program under section 11 3306(v) of the Internal Revenue Code of 1986, the 12 State— 13 (1) shall not be eligible for payments under this 14 section for weeks of unemployment beginning after 15 the effective date of such State law; and 16 (2) subject to paragraphs (1)(B) and (2) of sec- 17 tion 2(b), shall be eligible to receive payments under 18 section 2 after the effective date of such State law. 19 (f) DEFINITIONS.—In this section: 20 (1) SECRETARY.—The term ‘‘Secretary’’ means 21 the Secretary of Labor. 22 (2) STATE; STATE AGENCY; STATE LAW.—The 23 terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 24 have the meanings given those terms in section 205 25 VerDate Sep 11 2014 22:41 Mar 21, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S3494.IS S3494 kjohnson on DSK79L0C42PROD with BILLS 10 •S 3494 IS of the Federal-State Extended Unemployment Com- 1 pensation Act of 1970 (26 U.S.C. 3304 note). 2 SEC. 4. GRANTS FOR SHORT-TIME COMPENSATION PRO- 3 GRAMS. 4 (a) GRANTS.— 5 (1) FOR IMPLEMENTATION OR IMPROVED AD- 6 MINISTRATION.—The Secretary shall award grants 7 to States that enact short-time compensation pro- 8 grams (as defined in subsection (i)(2)) for the pur- 9 pose of implementation or improved administration 10 of such programs. 11 (2) FOR PROMOTION AND ENROLLMENT.—The 12 Secretary shall award grants to States that are eligi- 13 ble and submit plans for a grant under paragraph 14 (1) for such States to promote and enroll employers 15 in short-time compensation programs (as so de- 16 fined). 17 (3) ELIGIBILITY.— 18 (A) IN GENERAL.—The Secretary shall de- 19 termine eligibility criteria for the grants under 20 paragraphs (1) and (2). 21 (B) CLARIFICATION.—A State admin- 22 istering a short-time compensation program 23 that does not meet the definition of a short- 24 time compensation program under section 25 VerDate Sep 11 2014 22:41 Mar 21, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S3494.IS S3494 kjohnson on DSK79L0C42PROD with BILLS 11 •S 3494 IS 3306(v) of the Internal Revenue Code of 1986, 1 and a State with an agreement under section 3, 2 shall not be eligible to receive a grant under 3 this section until such time as the State law of 4 the State provides for payments under a short- 5 time compensation program that meets such 6 definition and such law. 7 (b) AMOUNT OF GRANTS.— 8 (1) IN GENERAL.—The maximum amount avail- 9 able for making grants to a State under paragraphs 10 (1) and (2) shall be equal to the amount obtained 11 by multiplying $100,000,000 (less the amount used 12 by the Secretary under subsection (e)) by the same 13 ratio as would apply under subsection (a)(2)(B) of 14 section 903 of the Social Security Act (42 U.S.C. 15 1103) for purposes of determining such State’s 16 share of any excess amount (as described in sub- 17 section (a)(1) of such section) that would have been 18 subject to transfer to State accounts, as of October 19 1, 2019, under the provisions of subsection (a) of 20 such section. 21 (2) AMOUNT AVAILABLE FOR DIFFERENT 22 GRANTS.—Of the maximum incentive payment deter- 23 mined under paragraph (1) with respect to a 24 State— 25 VerDate Sep 11 2014 22:41 Mar 21, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S3494.IS S3494 kjohnson on DSK79L0C42PROD with BILLS 12 •S 3494 IS (A) one-third shall be available for a grant 1 under subsection (a)(1); and 2 (B) two-thirds shall be available for a 3 grant under subsection (a)(2). 4 (c) GRANT APPLICATION AND DISBURSAL.— 5 (1) APPLICATION.—Any State seeking a grant 6 under paragraph (1) or (2) of subsection (a) shall 7 submit an application to the Secretary at such time, 8 in such manner, and complete with such information 9 as the Secretary may require. In no case may the 10 Secretary award a grant under this section with re- 11 spect to an application that is submitted after De- 12 cember 31, 2023. 13 (2) NOTICE.—The Secretary shall, within 30 14 days after receiving a complete application, notify 15 the State agency of the State of the Secretary’s find- 16 ings with respect to the requirements for a grant 17 under paragraph (1) or (2) (or both) of subse [Text truncated for display. Full text available on Congress.gov.]